AOL Buys Advertising.com

America Online Inc, the world’s largest distributor of disposable CDs and apparently also an interactive services company, has announced that it has signed an agreement to hand over US$435 million (€359 million) in cash for Advertising.com, the internet’s third largest advertising network.

Advertising.com plans and optimises online campaigns for more than 800 advertisers, and also works with some 1500 online publishers to bring them 110 million unique visitors every month. About 70% of all US internet users encounter Advertising.com’s work in the course of a month’s surfing.

This is AOL’s biggest deal since it merged with Time Warner, and shows that there may be some life in online advertising after the bubble burst after all. AOL, having ditched its broadband product and now staring at declining dial-up business, is understandably keen to drive growth in other areas, and believes that content and services are what it’s best at.

Jonathan Miller, Chairman and CEO, America Online, Inc., said, “Online advertising is showing very strong growth across the industry, and the acquisition of Advertising.com underscores AOL’s determination to strengthen its competitive position. Advertising.com has built a profitable, scalable and highly attractive business. This acquisition is a strategic move that will bolster AOL’s advertising business, building on the strides made in the past year.”

Advertising.com

Company Websites Spreading Spyware

Symantec are warning web surfers of a new trend in spyware and adware infections – visitors to a number of corporate websites are getting a bit more than they bargained for.

It’s claimed that organised crime groups in Eastern Europe are hacking corporate sites and installing code that takes advantage of two flaws in Internet Explorer to install spyware and other unwanted applications on visitors’ PCs without their knowledge. Spyware can be used to harvest personal details about a computer owner such as bank details, whilst adware can be used to hijack browsers and display unwanted advertising to users.

Microsoft has not yet released a patch for the flaws, leaving millions of PCs open to infection. Although the browser flaw is well publicised, there is still some confusion surrounding how hackers are installing the script on web servers running Microsoft’s IIS service in the first place.

The ISC incidents site reports: “We still do not know how the IIS servers are originally infected with the JavaScript or the modification to the configuration files… The visitor’s browser is re-directed to the Russian URL listed below [Ed: Clearly we’re not showing this] where a known Trojan program (msits.exe) is downloaded, along with some additional malware. Again, if the user’s machine is updated with current AV software, this malware is detected and blocked.”

Without listing the companies responsible for spreading the infection, they state surprise that the unwitting culprits “include businesses that we presume would normally be keeping their sites fully patched.”

Free anti-spyware and anti-virus software:

Ad-aware

AVG anti-virus software

A browser with less security holes in it:

Mozilla 1.7

Hotmail Enters the Storage Wars

Hotmail is the latest contender to offer large amounts of storage to its subscribers – up to 2 gigabytes if you pay a US$19.95 (€16.46) subscription. Users of the free Hotmail service will get 250mb, as a response to GMail’s 1 gig, advertising-funded, service.

By GMail’s standards, 250mb seems almost mean, but then Hotmail aren’t going after the “never delete anything” crowd. The new 2 gig incarnation of Hotmail will be called Hotmail Plus, and will allow users to send attachments of up to 20mb – and will have no graphical adverts on the web frontend.

As a bonus, all 170 million subscribers will get email anti-virus checking and MSN Calendar. It’s about time that the anti-virus product was integrated as that’ll cut down on much of the infected spam that is flooding mailboxes worldwide. A frightening release from BT yesterday stated “46% of all email traffic in Europe will be spam in 2004 and by 2008 this will rise to 71%.”

Interestingly, a Neilsen report in May had the number of Hotmail subscribers down at around 34 million.

Hotmail Plus

European iTunes Stores Sell 800,000 Tracks in One Week

There was a distinct lack of surprised faces yesterday at Apple’s announcement that their European iTunes stores sold a total of 800,000 tracks in their first week of operation.

The most popular store was the UK version, accounting for 450,000 tracks out of the total. In the week that OD2 was acquired by Loudeye, iTunes sold 16 times more tracks than its closest competitor. Best cash that cheque as fast as you can, Peter. No figures are available from Napster.

One ploy for attracting sales was to release the first new track for 13 years from the Pixies exclusively on iTunes, though I’d like to see how much direct impact this had as there can’t be that many Pixies fans left still alive.

iTunes

Loudeye Acquires OD2

Loudeye, a business to business digital media company has acquired Peter Gabriel and Charles Grimsdale’s On Demand Distribution (OD2) business.

The move will effectively double Loudeye’s revenue, and has created the world’s largest digital media company.

OD2 provide outsourced digital distribution for companies like Coca Cola when they want to launch an online music store. Customers include HMV, MyCokeMusic and Wannadoo, but combined Loudeye and OD2 will have more than 200 customers across the world.

Jeff Cavins, Loudeye’s president and chief executive officer said in a statement: “By combining with OD2, the leading digital music service provider in Europe, we become the largest business-to-business digital media provider in the world with the largest licensed digital music catalogue in the industry,” “This significantly strengthens our solutions for our customers globally and immediately expands our customer relationships and partner opportunities. Together OD2 and Loudeye deliver a powerful, next-generation digital media platform to enable companies to launch complete digital music offerings around the world. In addition, this will globalize Loudeye’s content management, piracy protection and promotion services and will enable us to leverage OD2’s broad reach and strong customer relationships to expand our business into new markets.”

“OD2 and Loudeye share virtually identical goals, vision and passion for the future of digital music and I see tremendous opportunities for our combined company to drive digital media deployments worldwide,” said Charles Grimsdale, co-founder and chief executive officer of OD2. “Our proven success managing the specific challenges of pan-European digital media deployments will be a strong asset for Loudeye and significantly raises the barriers to entry for other service providers looking to enter the European market. Furthermore, Loudeye will enable us to offer a much broader range of new services to our current customers and extend our capabilities into such fast growing areas as the wireless arena.”

With online music sales across Europe predicted to reach €1.3 billion by 2007, there is a lot at stake in the industry – expect more mergers and disappearances over the next 18 months.

On Demand Distribtion

Loudeye

Exclusive: Mobile Gaming Goes 3D

Mobile gaming, that is playing games on your mobile phone, is growing rapidly. Advances in phones, displays and networks mean that the handset in your jacket pocket is a considerably more powerful games console than that NES you sat in front of just a few years ago playing Mario Kart. In fact, phones have grown in sophistication so quickly that it’s quite shocking to think that just five years ago our most immersive mobile gaming experience was a quick bout of Snake.

The success of mobile gaming can attributed to Java – Sun’s environment means that games can be written in Java and will run on any phone that has a J2ME (Java 2, Micro Edition) virtual machine embedded in its operating system.

Additionally, Gamers are now used to seeing graphics made out of millions of polygons on their GameCubes and PlayStation 2s and expect the same thing from their mobile gaming. Memory and processor advances now mean that games developers can now meet this demand, and so the JSR184 standard (now known as M3G) came into being, to provide a platform for developers to produce immersive 3D games.

As phones incorporate more memory, faster processors, dedicated graphics chips, stereo sound and 3D graphics, it means that games too require more resources to produce. As the games get more complex they require a multi-disciplined approach, with artists, coders, level designers and musicians all contributing to the final product.

This rapid increase in sophistication means that it’s now impossible to produce a decent game for modern phones without a suite of development tools, and as 3D graphics creep out onto our phones, tools are appearing that deal specifically with the unique problems of throwing around shaded, textured polygons on tiny screens with limited resources.

A new breed of tools, specifically designed to enable developers to squeeze the best performance out of M3G is appearing, and you’ll be playing games created with these tools on your phone in the very near future.

I had a chat with Stephan Groud from Superscape – one of the companies behind the M3G standard – and product manager for the first 3D toolkit for mobile phones, Swerve. We talked about the benefits of 3D and what’s up next for mobile phone gaming.


Tell me a little how Superscape got into 3D on phones, and how Swerve came into being.

Superscape is 3D company – we’ve done 3D for 18 years now. We’ve always worked in the 3D field, either around 3D games or tools. In short, the company has always been focussed on 3D for low processing power or low bandwidth.

We looked at the mobile market and decided that we had the expertise to take our experience and provide 3D for constrained devices and constrained networks, which is exactly what the mobile market is about.

We set out to develop this technology, Swerve, which is basically suited for 3D on mobile devices. To make it a success, we went to companies like ARM and Vodaphone – and came to the conclusion that unless there was a standard to do 3D on mobile phones, then it wouldn’t be a viable proposition.

We then went to Nokia and Sun and helped set up the JSR 184 standard, which basically states how you do 3D, in Java, on a mobile phone. The exact remit of the standard was to deliver 3D experiences on mobile platforms, over the air. The standard had to be generic enough to do not only games, but menus, user interfaces and potentially location-based services. It also needed to be a standard that could output content small enough to downloaded over the air.

The standard was ratified in November 2003, and since Swerve had been in the making for about three years, it was the first commercial implementation of that standard, both in terms of engine and tools.

What exactly is the Swerve platform?

The Swerve solution is an engine, compliant with JSR 184, that sits on your phone, within the Java architecture. We worked with companies such as Siemens and Motorola to embed our technology in handsets to make them JSR 184 compliant, or M3G compliant which is the new name for the standard. A M3G phone can run any JSR184 piece of content.

On top of releasing the engine on the day the standard was ratified, we announced the second generation of our tools, SwerveStudio. This allows you to export 3D scenes from 3dsMax – we took the most popular 3D package and built in every function that would be required to author or develop content for the M3G platform, without having to recreate everything from scratch. If you know 3dsMax and you have an understanding of the M3G API, you can use SwerveStudio because it’s basically the same thing, but with tools for optimising the scene for mobile phones, to preview the scene as it would look on a handset, to script behaviours, and to export the scene as a M3G file.

If you have SwerveStudio and you have 3dsMax you have an environment that allows you to create a good chunk of what a game is. The rest is done by a coder through a regular Java IDE [integrated development environment].

By integrating your toolkit in 3dsMax and using the Java VM on phones, that gives you a huge installed base of artists and coders that can use Swerve straight away – and a huge installed base of consumers that can run the content.

We’re working with mobile phone manufacturers to get the M3G API embedded onto handsets shipped from this summer onwards.

We’re not the only people to come up with a product based on the M3G standard, and there are other people announcing phones and tools based upon it, so that’s basically growing the market for games that are based on our tools.

What are the main titles coming out that use Swerve?

We realised quickly that it was all well and good to have a tool set, but the manufacturers and operators want games. What we’ve done over the past six to eight months is to create a catalogue of games – and most of those games are based on famous intellectual properties from Sony, Disney and 20th Century Fox, Universal, and Activision. We either developed those games in house or worked with external developers. The games are Independence Day, based on the 20th Cenutry Fox movie; Van Helsing, Universal’s blockbuster this summer; SWAT from Sony Pictures; and Evel Knievel – we have the rights for mobile platforms to develop games based on his brand; we’re working with Disney on TRON2.0, which will be focussed on Light Cycles, so we’re not cramming too much into a game that has to be downloaded over the air.

Big brands, big studios, big companies are all working with us because they’ve had a look at our technology and said “Hey, this is the best way to take our brand into the mobile space.”

M3G as a technology gives a truer representation of your brand. If you look at other technologies, even 2D, it’s sometimes difficult to recognise the brand you’re using.

We’re working with the guys behind the brands and studios to improve our tools, improve the engine and tackling IP holders, game developers, network operators, handset manufacturers and technology guys to make sure the whole system works together.

When will the first Swerve-developed titles be available for download?

That’ll be with the release of the first M3G handsets, in Q3 2004.

What do you think of handsets like the N-Gage QD that use dedicated games on memory cards, and attempt to be more of a games console rather than a phone? Do you think they’re a kind of stopgap, or that this will be a common way for distributing titles?

There are two ways to do mobile 3D games. One way is the N-Gage route, which is basically native games, megabytes of data, you buy a cartridge in a shop and you plug it into your handset. That’s something that has been proven in the past with the GameBoy and GameBoy Advance, there’s clearly a market for it. Whether there is room for a mobile phone player to create a market for it is another question.

The other way is what M3G is exactly about: It’s not native, it’s Java with none of the benefits of native because the engine is partly Java, partly native to keep performance up. It’s sub-250 kilobyte games, to be downloadable over the air, and you don’t have to go into a shop and buy it. You can be on a train or a taxi, you didn’t know you wanted to play a game, but you’ve got fifteen minutes in front of you and no newspaper at hand. You can download a game on impulse.

These are two very different propositions. If you’re talking about platforms like the N-Gage right now, the volumes are fairly limited, because of the price point, because of the market it targets, as opposed to Java handsets – there are going to be millions of those over the coming years. Java handsets are a cheaper proposition and are more accessible. A handset can have the M3G API embedded in it and still look like a professional handset.

We’ve chosen the M3G way because we believe that mobile handsets are inherently connected devices and, in the same way that add-on camera accessories for handsets never took off, potentially the same thing could happen to platforms like the N-Gage. If you have to think about what you’re going to be doing with the phone over the day, you lose the immediate satisfaction of downloading a game on impulse and being able to play it.

What N-Gage has done though, is to put mobile gaming on the map for a lot of people. Nokia is a big company and the fact that they’ve pushed this platform so much and invested so much money in it has raised a few heads around the industry and also around the console industry.

Our proposition is downloadable content and we’re sticking to that right now, because our technology can do it.

What’s next for Swerve?

We’ll be looking at how well customers react to 3D on mobile phones, and looking at the uplift that 3D on phones causes, in the same way that 3D on consoles caused such a big market.

We’ll also be growing the catalogue of games that we have in house, or that we develop with partners. We have about 25 right now – we’re going to need a lot more than that when there are several different handsets in the market.

Also, Swerve as a 3D technology can also run in BREW and native environments, as well as J2ME. Swerve BREW applications can be run on BREW handsets such as the recently announced Kyocera Koi, thanks to a downloadable BREW extension provided by Superscape to BREW network operators. Swerve Native applications can run on the same engine as Swerve J2ME applications as it is a dual language 3D engine. This makes the business case for embedding the engine on an upcoming handset even more attractive, especially as Swerve is a generic 3D engine.

The next challenge will be hardware graphics acceleration, and the M3G standard was built with hardware acceleration in mind. The hardware acceleration does the grunt work in terms of rendering polygons, shading and anti-aliasing and M3G gives the developers a nice API to work with to develop games quickly.

M3G is a high level API, with a scene tree with nodes for each object in the scene – what that means for an animator or a programmer that you move a car or an actor rather than move every single polygon that makes up the car. It’s object based.

M3G has a long life in front of itself, even when hardware acceleration comes along because it gives an entry point for developers and designers that is very easy to use without losing the benefits of hardware acceleration.

What do you think are the most important types of game for mobile phones? Will the connectivity change the types of games people play?

We’re developing a variety of games, single player games. Given the interface on mobile phones, we have racing games, first person shooters, sports games. These are quite well-suited because most handsets today have some form of joystick so it’s quite easy to navigate a car around.

In terms of multiplayer, you have to be concious that networks have latency and so turn-based games are the ideal target for the moment. Golf is a great example of a game that is quite interactive and visual, benefits from being in 3D and at the same time is simple to implement in multiplayer because you can actually play in turns.

I suppose bandwidth is less of an issue with golf because you’re only transmitting a vector?

The interesting thing with golf in 3D is that if you both have the same game and you’re playing with each other you don’t have to send that much data across the network because you’re not replicating that much data: the power of the shot, the swing. The game engine can understand this and replay it like a movie on your opponent’s handset.

There are a lot of tricks with 3D implementations of games, like being able to download new levels, new guns that we’re looking at also.

Do you think there is much of a market for selling add-ons to games like levels, skins and equipment?

If you look at ringtones and wallpapers, well who would have thought that people would be willing to pay millions of dollars to just have a different ringing sound on their phone?

We hope there is a market for game add-ons, and it depends on the way that a campaign is organised. In Formula One, for example a developer could release a game on the first day of the season, with the first track — and subsequently produce new tracks for every race available for download.

This makes a lot of sense because they can charge a little for each new track, but in terms of network usage it’s nothing. The data they need to send to recreate a new 3D track if the game is well built is minimal. The less data they send over the network, the better it is for them economically. The value for the user is extreme, because they have a new track and they can actually play the race that’s being run that weekend.

It’s a whole industry in the making!

3D brings a lot more. If you need to send a 2D track, then you’re in for a big download. You’re looking at sprites as opposed to rearranging pieces of track. You can have green trees in England and yellow trees in Spain, but in 3D it’s the same tree, it’s already on the phone – you’re just saying “this.tree = yellow”, rather than downloading an image of a new tree.

We’re learning every day – it’s exciting times. When you think about convergence, this really gives some meaning to the word: you have people from the PC world, such as developers, hardware and 3D guys, mobile phone operators, cinema studios – everybody is coming together.

It does seem that you need many different skills to produce a game these days – you need proper artists, programmers, musicians, you need to get the intellectual property from somewhere…

It’s not easy, but the results are quite impressive!

The JSR 184 Standard

Swerve

Superscape

A US$500 PS3?

A new report from industry analysts Wedbush Morgan is predicting that the usual things will happen when a new games console is released: it’s be very expensive on début, and decline in price afterwards.

WM’s report, The Definition of Insanity: Why the Next Console Cycle Will Start Off With a Whimper, bases its pricing of the PS3 on an assumption that it will be like Japan’s PSX – full of extra functions. I think this won’t be the case at all.

The PSX has a digital tuner, has PVR functionality and a DVD writer and is marketed as a home media centre that plays games. Gamers aren’t too worried about having a PVR that plays Killzone 2, PVRs appeal to a slightly older audience. Gamers aren’t too bothered about their games console having a DVD writer in it either – they have PCs for that.

WM predict that the PS3 will be priced on its US début at US$500 (€411) in 2005. I say it’ll be more like US$300 (€249), and because we always get fleeced here in the UK, call it UK£300 (€450) on its UK début.

The report predicts that PS2 games will be produced through 2008, which when you consider that PS1 games are still being made ten years after the original appeared, is not too much of a stretch of the imagination.

WM feel that the PS2’s backwards compatibility with PS1 titles was a key factor in its success, and with doubts over XBox 2’s compatibility with older titles we might just get to see this replayed and confirmed.

The report also attacks discounting of games, and they certainly have a point: gamers have come to expect prices of titles older than six months or so to drop dramatically, and so just wait until they do. WM’s recommendation to combat this isn’t going to win them any friends: keep supplies scarce at the beginning, and keep the price up.

See, I told you analysts were evil.

The report

US “Family Movie Act” Will Approve Parental Content Filtering

The Motion Picture Association of America is unhappy about HR4586, the “Family Movie Act”. The act will allow companies like Clearplay to manufacture software for filtering content from DVDs, without film studios suing over their product being tampered with.

As always, censorship is an emotive issue: parents should have the right to protect their children from inappropriate material… but then perhaps they should be more selective about what finds its way into the DVD player when their kids are parked in front of it?

“The technology my legislation allows does not alter any movie’s violence, sex and profanity,” said Lamar Smith, the Republican sponsoring the bill through Senate. “But it does allow parents to skip over the movie’s violence, sex and profanity. If they choose to designate a technology company to help them accomplish this, more power to them.”

Not being a parent, I’m somewhat baffled here: why would you want to sit your child through a film based around the themes of sex, violence and profanity, even if it is filtered?

Nevertheless, the studios are unhappy about someone else, the consumer with some software, having the final cut on their films. So this is all about artistic integrity is it? No, this is Hollywood.

Jack Valenti, MPAA CEO testified that legislation wasn’t necessary because studios are already working with movie filtering companies and directors to create new, edited versions of popular films that are more family friendly. Of course, having two versions of a film in the shops means more sales for the movie industry, whereas just one version means that it’s the filtering company that makes the money and not the studios.

Valenti’s statement

Lamar Smith on the Family Movie Act

Yahoo Launch Yisou Search Engine for China

Yahoo have launched Yisou! (which apparently means Number 1 Search! in Chinese, wonderfully compact language) to China’s 95.8 million internet users.

Yahoo, whose services are available in 36 languages, claim that their search technology is behind nearly half of all internet searches. Note that the Yisou portal offers a cheeky little MP3 search tab right on the home page, whereas the European and American versions don’t.

The Chinese market obviously has massive potential for internet companies – with a population of 1.2 billion, of which 88% have yet to get on the internet, growth is all but guaranteed. Google have already got in on it by buying a stake in baidu.com, another search engine. By the end of the year, there are expected to be some 111 million internet users in China.

Yisou

Baidu

Happy Birthday, DNS

The domain name service, DNS, is 21. If the service hadn’t been invented by Dr Paul Mockapetris, you’d be looking up internet protocol numbers manually, almost like using a phone directory.

“The idea was to devise a way for Internet users to communicate freely with each other through an easy to operate system. Having to remember a long numerical code was not feasible as more users joined the Internet community,” said Dr Paul Mockapetris. “One of our goals was to develop a system that would allow global networking and information exchange. One of the ultimate successes of the domain name is that it is a universal every day language for Internet users across all continents.”

Dr Mockapteris (now I’ve told you his name, you’re not going to forget it, are you?) worked on the system with the late Dr Postel as part of ARPANET, and is now chief scientist and chairman of Nominum, an internet address management provider.

He predicts even greater things are yet to come for his offspring: “This year alone more than a billion users will interact with DNS to do everything from send emails, to browse web pages, or track inventory through RFID. In the next five years, I expect to see a dramatic increase in the number of ways in which the DNS is used, reaching far beyond what we have seen in the past twenty-one.”

Nominum