'Farmville' creator Zynga files for IPO

SAN FRANCISCO -- Social-gaming sensation Zynga filed an initial public offering today that could raise up to $1 billion and value it at up to $20 billion.

The maker of the popular FarmVille and CityVille games, played by tens of millions, has picked Morgan Stanley to lead the offering, according to a government filing. Goldman Sachs Group, J.P. Morgan Chase, Barclays Capital and Bank of America Merrill Lynch will also play a role in the IPO.

A valuation of $20 billion would be nearly equal to Yahoo's market value of $20.1 billion.

Beyond making Zynga's investors and executives filthy rich, the IPO should prove a boon to the fledgling $2.5 billion social-gaming market, say gaming executives.

"Zynga has had a massive positive impact," says Vikas Gupta, CEO of TransGaming. Its service, GameTree TV, delivers casual games via set-top TV boxes. "Zynga has made video games more mainstream than ever before. It has shattered all the rules about monetization about free games. And it has changed the industry's thoughts about the need to create multimillion-dollar games."

In the filing, Zynga said it posted a $100 million profit last year, most of it courtesy of its gaming partnership with Facebook. Indeed, gaming has proven to be a reliable moneymaker on Facebook.

Adds Rajat Paharia, founder and chief product officer at Bunchball, "It raises our profile with consumers and business partners."

Zynga's planned stock offering comes hard on the heels of IPOs by HomeAway, LinkedIn, Pandora and Groupon. The tech wave has helped propel second-quarter IPO revenue past $10 billion for the third straight quarter, with $11.9 billion on 47 IPOs, according to market researcher PwC.

The feverish trading of recent IPOs, and anticipation for Facebook and Groupon, has fed into what many market observers are calling a tech bubble. The last one, more than 10 years ago, popped amid overvalued stocks in spite of underwhelming revenue.

Many of the backers of Zynga and its flamboyant CEO, Mark Pincus, are some of Silicon Valley's biggest influencers. They inclue venture-capital heavyweight Kleiner Perkins Caufield & Byers, in the form of partners John Doerr and Bing Gordon; LinkedIn co-founder Reid Hoffman; Digital Sky Technologies, the firm run by Russian investor Yuri Milner; VC firm Andreessen Horowitz, headed by Netscape co-founder Marc Andreessen; and Facebook board member Peter Thiel.

The 4-year-old Zynga, which boasts about 270 million unique monthly users, is widely available on Facebook, Yahoo and other digital platforms. It is expected to ring up $1.5 billion in sales of virtual goods and advertisements this year, says research firm GreenCrest Capital.

Nortel sells patents to consortium for $4.5 billion

NEW YORK — A consortium that includes leading smartphone makers Apple and Research In Motion is paying $4.5 billion in cash for about 6,000 patents and patent applications belonging to bankrupt telecom-equipment maker Nortel Networks Corp.

The group prevailed in an auction this week over Google Inc., which had said it planned to bid $900 million in cash for all of Nortel's remaining patents and patent applications. Phones running Google's Android system compete with Apple's iPhone and RIM's BlackBerry devices.

Nortel's patents cover many technologies, including data networking, semiconductors and next-generation wireless systems known as fourth generation, or 4G. Nortel said the portfolio "touches nearly every aspect of telecommunications and additional markets … including Internet search and social networking."

A former tech highflier in the 1990s, Nortel at its zenith had more than 95,000 employees and a market capitalization of nearly $300 billion. At one point in 2000, Nortel accounted for a third of the market value of the Toronto Stock Exchange. But it grew too quickly and overpaid for acquisitions. Nortel also ran into problems, including an investigation into its accounting practices, which led to shareholder lawsuits.

• MORE: U.S. issues partial ruling against Kodak in patent dispute

Nortel filed for bankruptcy protection in the U.S. and Canada in January 2009, hobbled by a sharp downturn in orders from phone companies and looming debt payments. The filing came one day before it was due to make a debt payment of $107 million.

It has been selling its operations off one piece at a time since then.

In a statement Friday, Google General Counsel Kent Walker called the outcome "disappointing for anyone who believes that open innovation benefits users and promotes creativity and competition. We will keep working to reduce the current flood of patent litigation that hurts both innovators and consumers."

Google had said it wanted the patents to defend itself against patent lawsuits from other companies until Congress enacts broader changes to the patent system to help reduce such litigation. Google gives away its Android software for free, counting on its wider use to drive usage of other Google services, such as search and maps.

The winning consortium consists of:

• Apple Inc. of Cupertino, Calif., maker of the iPhone, iPad and other popular devices;

•Research in Motion Ltd. of Waterloo, Canada, which makes the BlackBerry;

•Microsoft Corp. of Redmond, Wash., which is pushing phones running on its Windows operating system and operates the search engine Bing;

•EMC Corp. of Hopkinton, Mass., which makes companies for data storage;

• LM Ericsson AB of Stockholm, Sweden, which makes wireless equipment; and

•Sony Corp. of Tokyo, which makes a range of consumer-electronic devices and has a joint venture with Ericsson for mobile phones.

The patent auction, which was originally slated to take place June 20, had been postponed by one week as Nortel cited "the significant level of interest" in the sale of its patent portfolio.

Nortel Chief Strategy Officer George Riedel said "the size and dollar value for this transaction is unprecedented, as was the significant interest in the portfolio among major companies around the world."

Ericsson said it had contributed $340 million to the bid. Ericsson had already purchased many of Nortel's other assets, including its wireless network business in 2009 for $1.13 billion.

It was not known how much each of the other companies paid. EMC would only describe the amount as "not material" to its overall finances.

The deal is expected to be completed in the third quarter of this year and will need approval from U.S. and Canadian bankruptcy courts in a joint July 11 hearing.

Reports say FTC investigating Twitter

WASHINGTON (AP) — Federal regulators are looking into the interactions between Twitter and a company called Ubermedia, which develops applications that help users follow and communicate with each other on Twitter's popular online messaging service, according to two published reports.

The Federal Trade Commission inquiry is still at a preliminary stage and the focus remains unclear, the Wall Street Journal reported Thursday.

The Business Insider blog, which first reported the probe, said FTC antitrust investigators are studying how Twitter deals with outside companies that build applications for its messaging platform — such as photo-sharing, URL-shortening and advertising services — and whether it is trying to limit competition by buying or banning outside developers.

The FTC regularly looks into complaints — often filed by rivals — of anticompetitive behavior by companies in the technology sector. The initial probes do not always turn into full-blown investigations.

• MORE: U.S. issues partial ruling against Kodak in patent dispute

The Journal reported that Twitter blocked UberMedia from accessing messages on its platform, called "tweets," earlier this year, but has since restored access.

The FTC and Twitter declined comment. Ubermedia did not immediately respond to a request for comment.

'Rio' home video version to offer 'Angry Birds'

Some highflying birds of a feather — the video game Angry Birds and the movie hit Rio— are sticking together for a lofty home video release.

The Finnish game designers at Rovio, the studio that developed Angry Birds, have created 15 new Rio-themed levels that will be available to buyers of the DVD and Blu-ray versions of the Fox film, out Aug. 2 for $17 to $25.

Fox and Rovio's earlier teaming on a special version of the game for the movie's theatrical release in March was "a perfect alignment of planets," says Mary Daily, head of marketing for Twentieth Century Fox Home Entertainment. "They have a worldwide phenomenon in the Angry Birds game, and we have the colorful, beautiful movie all about birds. … We are going to continue the relationship."

Included in the DVD and Blu-ray releases are codes to download the new levels for various devices including Android phones and tablets, Apple iPhones, iPod Touches and iPads, as well as Windows and Macintosh computers. "This is the only way they can get it," Daily says.

Fox's Rio would be expected to be a home video success without added plumage. The film, which grossed $473 million worldwide, is one of the year's top hits, ranking No. 7 on boxofficemojo.com.

But the addition of exclusive Angry Birds Rio levels should help the home video version take flight even faster. The addictive game, in which players fire birds at targets using a slingshot, has a frenetic following. Players have downloaded more than 250 million copies since the game launched in Apple's App store in December 2009.

Both the DVD and Blu-ray editions include a digital copy that can be downloaded for use on computers or mobile devices.

On the Blu-ray disc is a "Coloring with Blu" app for Apple and Android tablets that stars the film's leading macaw (voiced by Jesse Eisenberg) with 60 pages of pictures that can be colored, then printed or shared via e-mail or Facebook.

Fox is also releasing a slightly-more expensive "quad pack" that includes a 3-D version of the movie on Blu-ray (3-D compatible disc player and TV required) along with the DVD, Blu-ray and digital copies.

The studio has seen more families opt for Blu-ray releases than expected.

Judge rejects Google argument, allows Wi-Fi suit to proceed

SAN FRANCISCO — A judge ruled that Google Inc. overstepped its bounds by enabling its vehicles to collect emails, Internet passwords and Web surfing behavior while photographing neighborhoods for the search giant's popular "Street View" mapping feature.

Google has apologized for the snooping, promised to stop collecting the data and said what it did was inadvertent but not illegal.

But a federal judge late Wednesday rejected Google's claim that data transmitted wirelessly without password protections are essentially publicly accessible radio broadcasts. It's the first such court ruling of its kind.

U.S. District Court Judge James Ware said that wireless networks accessed by millions in their homes, coffee shops and wherever Wi-Fi is offered are not exempt from the Wiretap Act, which makes it illegal to eavesdrop on electronic communications that are not "readily accessible to the general public" such as cell phone conversations.

Ware said that Google employed sophisticated computer tools, including use of a so-called "wireless sniffer," to capture, store and decipher "data packets" transmitted wirelessly.

Google said in a statement that it was reviewing the decision to determine whether to appeal. The company said it still believes the allegations that it violated the Wiretap Act are "without merit."

Jim Dempsey, an Internet privacy expert at the Center for Democracy & Technology, said the wiretap law needs updated to address this issue. Dempsey said the law was last amended in 1986 to address "CB radios and baby monitors" and doesn't discuss wireless networks.

"I don't think anyone doubts that it should be illegal to intercept someone's communications," Dempsey said. "It should clearly be a crime to intercept those things. But I think it's equally clear that the law doesn't clearly cover that issue right now and that the law is really a mess."

German regulators uncovered the data collection in 2010 when they asked Google about the type of data its specialized street view vehicles were collecting. Each vehicle was equipped with nine cameras to photograph 360-degree images of streets and powerful antennas with custom software to capture wireless signals. Google said it used the captured data to improve its location-based services such as its Street View feature unveiled in 2007.

The company blamed overzealous engineers for creating software to collect sensitive data it had no intention of using and has promised to destroy the information as soon as it's legally permissible. Aside from the lawsuits consolidated in Ware's courtroom, the company is the target of government investigations in the United States and abroad.

The Federal Trade Commission, for instance, criticized Google in 2010 for collecting potentially sensitive information over unsecured wireless networks for several years before realizing it. But the FTC said it was satisfied that Google improved its internal privacy controls, including privacy training for all 23,000 of the company's employees.

A Federal Communications Commission probe is still ongoing.

Tech security spending to rise in wake of attacks

Big companies and government agencies likely will have to rethink their approach to tech security in the wake of the disbanding of hacktivist group LulzSec, security analysts say.

Spending on information technology security already is growing faster than spending on general technology. And corporate and government tech buyers will have to dole out even more to defend against profit-minded cyberthieves and spies looking to swipe state and corporate secrets.

In fact, global spending on security products and services is expected to reach $71 billion by 2014, up from $55 billion today, according to Lawrence Pingree, research director for Gartner.

The recent hacking escapades of LulzSec underscore how hacktivists, motivated by the desire to express an ideology, have shaped a new kind of threat that's gaining steam.

• STORY: Businesses, governments, people caught in hacker crossfire

• STORY: LulzSec says it's disbanding

"We're seeing loose communities of like-mind people combine their abilities and harness the power of crowds," says Jonthan Penn, strategy analyst at Forrester Research. "This is the dark side of the same kinds of things we're seeing support the popular uprising in the Middle East."

Saturday, LulzSec cut short cyberattacks that included a burst of hacks following the June 21 arrest of 19-year-old Ryan Cleary of Essex, England, accused of operating the group's communications server.

Over a 50-day period the gang disrupted websites and stole data from the likes Sony, PBS and Fox and Nintendo as well as agencies ranging from the FBI and CIA to the Brazilian government and Arizona Department of Public Safety. Then as abruptly as it arrived, LulzSec closed up shop."LulzSec disintegrated because they are afraid," says Luis Corrons, research director of PandaLabs. "This case is really important for law enforcement agencies, as they cannot afford to have criminals running free after so much damage has been done."

If captured and convicted, LulzSec members likely will face stiff sentences, says Josh Shaul, chief technology officer of Application Security. But members appear to be dispersed around the globe, making jurisdiction complex. "It is difficult to pinpoint a single person or group of individuals who may be responsible," says John D'Arcy, information technology professor at University of Notre Dame.

Whatever happens, LulzSec is expected to help tech security suppliers gain a more sympathetic ear from prospective customers. Penn says LulzSec's spree heightens the concerns raised by the celebrated case of U.S. Army Private Bradley Manning, who is being prosecuted for releasing Pentagon and U.S. embassy documents to the anti-secrecy group, Wikileaks.

Security companies remind tech buyers that in addition to new hardware and software, they need to be "educated on the potential repercussions of a data breach," says Pat Clawson, CEO of security firm Lumension. "Without education, we will never gain any ground."

Tablet computer, e-reader ownership explodes in U.S.

NEW YORK — A study finds that 12% of U.S. households now own a reading device for electronic books, such as Amazon's Kindle.

That's three times the number of households that owned an e-reader just a year ago, pointing to rapid acceptance.

The phone survey published Monday was conducted in April and May by the Pew Internet and American Life Project.

Prices for e-readers have fallen rapidly over the past year. Barnes & Noble's Nook is growing as a competitor to the Kindle. The cheapest models are now available for just above $100.

AOL soaks up Silicon Valley spirit to inspire new apps

PALO ALTO, Calif. — AOL to start-ups: Come work with us and share our cool new digs.

The former Internet darling, attempting a tough comeback, has a new strategy that goes beyond buying properties such as The Huffington Post and TechCrunch and building out its media presence with Patch, a network of struggling hyper-local news sites.

The scheme: Lease a building from Google in the heart of the Silicon Valley, let engineers go wild — just as they do at Google and Facebook — and hope it pays off with innovative new products.

"The space you work in is a reflection of the kind of company you are," says Brad Garlinghouse, AOL's president of the Applications and Commerce Group. "You get innovation," he insists, from "working in a space that's very open and doesn't have offices … where people can work together and play together."

For years, AOL has been trying to stem the erosion of its audiences by buying brands, introducing products and tweaking old ones. CEO Tim Armstrong has undertaken a number of high-profile initiatives to jump-start growth following the company's failed merger with and eventual spinoff in 2009 from Time Warner and the resulting hundreds of layoffs. But while AOL has been spending heavily to turn around its fortunes, its financial picture has yet to inch upward. In its most recent quarterly earnings report, AOL posted earnings of $4.7 million, down from $34.7 million, on revenue of $551 million, down from $664 million a year ago.

So AOL, which is based in New York, decided to open a West Coast unit and hire Garlinghouse. The former top Yahoo executive made the building one of his top priorities.

Ping-pong or pool, anyone?

AOL moved in last August and spent the year working with San Francisco-based architecture firm O+A to gut the insides and remake it into the showplace Garlinghouse envisioned.

The mood at the 225,000-square-foot, three-story building here is more like that of a technology start-up. Employees are encouraged to draw on the walls, play pool and ping-pong, and come to work whenever they like. All they have to do in return is produce hot websites and mobile apps.

Across the street from Stanford University, AOL's West Coast campus is a technology facilitator. AOL occupies only about one-third of the new space. The rest was open initially rent-free to several start-ups, including e-mail management firm Xobni and feedback researcher Medallia. (AOL has begun charging rent.)

Disney's Playdom gaming division subleases the second story. The goal is to draw creative, entrepreneurial energy from the start-ups, AOL says, by working with them on various projects. In return, young entrepreneurs benefit from being housed alongside the likes of AOL, Disney and other start-ups.

But can a cool headquarters truly pay off with increased online traffic to AOL and its many properties?

"It will get them a lot closer to their goal," says Charlene Li, founder of San Francisco-based research firm Altimeter Group. "Instead of having to fly across (the country) to see new talent, they're right here. That makes a huge difference."

Just ask Sol Lipman. After launching Rally Up, a mobile check-in site similar to Foursquare that operated out of a shared office space in Santa Cruz, he was tapped by AOL to sell his company in return for under $10 million, office space in AOL's new building, and the fancy title of senior director of mobile.

At first, "The thought of going to a big company like AOL that's in the middle of a rebirth didn't sound like my cup of tea," Lipman says. But he was invited to come in and look at the office space before making a decision. The visit sold him.

"I couldn't believe you could write on the walls," he says.

New apps in the works

At AOL, Lipman has been bringing classic AOL properties such as MapQuest, Moviefone and AIM to the iPhone and Android mobile phones. He is also working on an iPad app, called Editions, that is expected to be launched later this summer. The app is similar to Zine, Flipboard and others that turn various online media into a newspaper/magazine-like reading experience. Unlike Flipboard, which is geared toward articles that end up in Twitter feeds, AOL will be able to fill it with its own properties.

"We call it Pandora for content," Lipman says. "You tune the reader based on the content that interests you, for a deeper experience."

Lipman says AOL has 50 apps in the iTunes App Store, but analyst Greg Sterling of Sterling Market Intelligence says none is a "really hot app." Most are mobile versions of PC websites, says Sterling, who suggests that AOL "may need to buy an up-and-coming property."

On iTunes' list of its 200 most downloaded apps, only one, MapQuest for Mobile, appears. However, AOL says its AIM instant messaging app, due for a revamp later this year, is the 11th-most-downloaded iPhone app. And on Tuesday, AOL announced its AOL Music app is adding access to online radio station Slacker to its offerings. The app will re-launch later this summer for Apple devices, followed by an Android re-launch.

Co-founder Biz Stone leaving Twitter

LOS ANGELES (AP) — Isaac "Biz" Stone is moving on from Twitter, just five years after co-founding the microblogging site that has become integral to the social media scene around the globe.

Stone, 37, said Tuesday on his blog that he will work with the company "for many years to come," but that the most effective use of his time now is to "get out of the way" of Twitter's crew and leadership team until he's called upon to be of some specific use.

Stone says he plans to focus on helping schools, nonprofits and company advisory boards. He's also relaunching Obvious Corp. with fellow Twitter co-founder Evan Williams to develop new projects.

The move comes as Twitter has been trying to build upon its popularity to make more money by selling more ads. The privately held company doesn't disclose its finances, but research firm eMarketer Inc. estimates Twitter will bring in advertising revenue of about $150 million this year.

Stone's departure caps a year of executive changes at the San Francisco-based company. Last fall Williams handed over the reins to Twitter's current CEO, Dick Costolo, and moved on to explore new business ideas. In March, Twitter's third co-founder and original CEO Jack Dorsey returned to oversee product development as executive chairman.

Red-letter day for ailing photo pioneer Kodak?

ROCHESTER, N.Y. — Embattled photography pioneer Eastman Kodak is nearing the end of a high-stakes patent-infringement fight with smartphone giants Apple Inc. and Research in Motion Ltd.

The 131-year-old Rochester, New York-based company argued in a January 2010 lawsuit that image-preview technology it patented in 2001 was infringed by iPhone maker Apple Inc. of Cupertino, California, and BlackBerry maker Research in Motion Ltd. of Ontario, Canada.

Chief Executive Antonio Perez estimates Kodak could draw up to $1 billion from its deep-pocketed rivals if it gets a favorable ruling Thursday before the U.S. International Trade Commission in Washington, D.C.

Because the federal agency can block imports of patent-infringing products, Apple and RIM could be forced to spend hundreds of millions of dollars in licensing fees to bring in smartphones made overseas.

Both Apple and RIM have declined to comment on the case.

A triumph for Kodak would also lift some pressure on the maker of cameras, film, photo kiosks and inkjet printers as it struggles to redefine itself as a 21st-century powerhouse in digital imaging.

Its dispute with Apple and RIM centers on technology Kodak created for extracting a still image while previewing it in the camera's LCD screen. In 2009, the trade commission ruled that South Korean mobile phone makers Samsung Electronics and LG Electronics infringed the same patent, resulting in $964 million in payouts.

Kodak has amassed more than 1,000 digital-imaging patents since the 1970s, and almost all of today's digital cameras rely on those inventions. It has licensed digital technology to at least 30 companies, including mobile-device makers such as Motorola Inc. and Nokia Corp.

Mining its rich array of inventions for repeated cash infusions has become an indispensable tactic driven in large part by Kodak's long and painful digital turnaround.

Since 2004, Kodak has reported only one full-year profit — in 2007 — and anticipates another annual loss this year before crossing back to profitability sometime in 2012. It has trimmed its work force to 18,800 from 70,000 in 2002.

Kodak has a promising array of new businesses, but it needs to tap other sources of revenue before investments in those areas have time to pay off.

It is hoping four growth businesses — consumer inkjet printers, high-speed commercial inkjet presses, workflow software and packaging — will more than double in size to nearly $2 billion in revenue in 2013, accounting for 25 percent of all sales.

Tech titans in Top States for Business 2011

California is the undefeated winner but others are not far behind in the Technology and Innovation category of CNBC's Top States For Business 2011.

Ranking No. 1 for the 5th year running, California surpassed even its own 2010 performance. Yet, tech-savvy runners-up to the Silicon Valley state aren't that far behind.

California reigns with three of the "Gang of Four" — Google Chairman Eric Schmidt's phrase for the fastest growing tech companies Google, Apple and Facebook headquartered in its boundaries. (Amazon.com is based in Seattle).

Earning 219 out of a total 225 points, California surpassed even its own 2010 performance due in large part, to the number of patents issued to its residents. At 27,337, California residents received more patents than the next four runners-up combined.

• STORY: Virginia named Top State for Business

• MORE: Most expensive states

• MORE: States with best cost of living

And yet New York, which held on to the second spot with 212 points, followed by Massachusetts, Texas, and Washington are hot on the heels of Silicon Valley.

There are several tools with which to challenge Golden State supremacy. This study's criteria evaluates states not only on patents issued, but also broadband penetration, federal health and scientific grants. So, to compete, you've got to have the infrastructure for innovation — and deliver the goods.

While the top-five states were unchanged from 2010, rankings 6 to 10 saw a few surprise movers. Illinois gained 8 spots (14/6) from last year, bumping Pennsylvania down to 7th place. What happened?

As it turns out, Illinois' improvement is the result of the amount of scientific grant money awarded to the state — $185 million to be exact — from the National Science Foundation to the University of Illinois at Urbana/Champaign.

While many know the state for politics and sports, Illinois' Technology and Research Corridor is a major scientific hub in northeastern Illinois, linking intellectual capital and corporate innovation.

Big name companies such as Motorola Solutions and Mobility, Boeing, and Telephone and Data Systems spacer among others are headquartered in Illinois in large part to benefit from the concentration of technical expertise.

Which begs the question: Is there a correlation between education and technology rankings?

In this year's study, four states made the top ten for both — New York, New Jersey, Massachusetts and Maryland. While there are many other factors at play, our evidence suggests that states supporting robust scientific research on campuses ultimately foster tech-sector growth.

Bruce Mueller, Director of Emerging Technologies, Motorola Solutions, says, "Graduates of [Illinois' university] programs become some of our strongest staff, guiding key engineering and business teams. Furthermore, the flock of entrepreneurial companies that surround research institutions create partners."

Rounding out tech's top ten are Michigan and New Jersey, which tied for 8th place with a 179 point score, and Maryland in 10th place with 176 points.

On the other side of the spectrum, tech duds may still be running Windows '95.

West Virginia (47), North Dakota (48), South Dakota (49), haven't moved from the bottom four spots they held last year. Indeed, stuck in a repeat performance - the Cowboy State Wyoming scored stone last with only 11 points out of 225 for Tech & Innovation.

Specific Media acquires Myspace in $35M deal

SAN FRANCISCO — Myspace on Wednesday was sold to ad-targeting firm Specific Media for $35 million, a fraction of the $580 million that News Corp. paid for the once-highflying social network during its heyday in 2005.

As part of the long-rumored deal, Myspace CEO Mike Jones will depart. But there were no details on the rumored layoffs of half of Myspace's 500 remaining workers, also believed to be part of the sale's framework.

"There are many synergies between our companies as we are both focused on enhancing digital media experiences by fueling connections with relevance and interest," Specific Media CEO Tim Vanderhook said in a statement. Justin Timberlake is among the new investors.

Synergy has been lacking for some time with Myspace, analysts say. Despite several redesigns and changes in strategy, it continued to hemorrhage users. By May, Myspace had 34.9 million unique monthly visitors in the U.S., compared with 67.2 million in May 2010, according to market researcher ComScore. In that same time, Facebook vaulted to 157.2 million from 130.3 million.

"Myspace was like a ghost town in the Wild West," says Jennifer Jacobson, a social-media expert and author on the topic. "It proves that if you lose sight of what customers want, you risk losing relevance very fast. You have to keep the customer experience meaningful."

The fire sale underscores a dramatic fall from grace for Myspace, which once boasted more than 100 million members and was a haven for entertainers. Myspace lost its mojo several years ago when Facebook became available to everyone. And it continued to suffer at the hands of Facebook, Twitter and other social-media services. This week, Google began to roll out its social-networking service, called GooglePlus.

The discrepancy is stark when comparing ad revenue worldwide. In 2009, Facebook passed Myspace for the first time, $738 million to $470 million. This year, eMarketer says, Facebook will haul in $4.1 billion to Myspace's $184 million.

Facebook is gearing up for an initial public offering in 2012 that could push its value to $100 billion — roughly 3,000 times the sale price for Myspace.

Tests show proposed wireless network could harm GPS systems

WASHINGTON — Test results filed with federal regulators Thursday show that a proposed high-speed wireless broadband network being planned by a Virginia company called LightSquared could interfere with GPS systems used for everything from aviation to high-precision timing networks to consumer navigation devices.

The results were filed with the Federal Communications Commission by a technical working group created to study the extent of potential GPS interference that the LightSquared network would cause. The findings add to the debate about whether the FCC should permit LightSquared to proceed with its plans to launch a new nationwide wireless network that would compete with AT&T and Verizon Wireless.

Although the FCC gave LightSquared approval in January, the agency said it would not let the network be turned on until GPS interference problems are resolved.

Survey: Smartphone purchases on the rise

During the past three months, more consumers purchased a smartphone than a traditional cellphone, says a survey conducted by Nielsen.
From March through May of this year, 55% of consumers who participated in the survey say they bought a smartphone. That's up from 34% in 2010.
Overall, 38% of U.S. consumers own a smartphone.
Android remains the dominant operating system, finds Nielsen, with a 38% share. The Google smartphone OS is followed by Apple's iOS at 27% and BlackBerry at 21%.
However, Nielsen says Apple has shown the most growth over the last three months among recent smartphone buyers, up 7%.

Can GooglePlus shoulder way into social circle?

As social-networking devotees boot up computers, they may need to add a site alongside their already bookmarked Twitter, Facebook and LinkedIn accounts: GooglePlus.

After Google on Tuesday unveiled its next foray into the social-media world, critics were left wondering if it will be worth their while.

GooglePlus promises easier communication between small groups, but networking giant Facebook has no need to sweat that its estimated 750 million members worldwide will abandon the site, says Josh Bernoff, analyst at Forrester Research.

"They're very unlikely to dump Facebook for GooglePlus," Bernoff says. "GooglePlus will be successful for people who want to have a simple connection with a social circle that they have, whether it's their book club or their Boy Scout troop."

• STORY: Google+ bids for social (network) standing

GooglePlus' developers have a mission: to humanize the Internet. Google says the nuances of real-world interactions get lost in today's online tools. Such tools are broken and need to be fixed, Google says. "It's certainly our first attempt that spans all of Google," Google engineer Vic Gundotra says. "It's a social circle. We don't believe it's a social network."

Among GooglePlus features:

•Circles. You can divide your friend list into Google's Circles. Perhaps a "circle" for parents or college buddies or work colleagues — and only share status updates with a particular circle.

•Huddle. There's a text-messaging system that allows multiple on-the-go users to all communicate together; sending one message will go to all others in the group huddle.

If you're part of a "small group of people who go out every Thursday night to go drinking, it's much easier to use some of the features that GooglePlus has supplied," Bernoff says

•Hangouts. When people want to alert friends that they want to chat by video, they can log into "Hangouts" and chat with many people at once or one-on-one. Facebook doesn't yet offer this feature.

•Sparks. Tweaking Facebook News Feed concept a touch, GooglePlus' "Sparks" is a content feed that streams from various interests that users type into a search engine.

While Google has a huge case of Facebook envy in social networking, GooglePlus is not much of a threat right now. The social-networking giant would have plenty of time to match Google's features, Bernoff says.

Facebook said in a statement: "We're in the early days of making the Web more social, and there are opportunities for innovation everywhere."

However, what's unknown is how consumers will respond to GooglePlus. It's still in trial among a small group of people for testing. And several Google products — including Buzz, social site Orkut and Google Talk— never really caught fire with consumers.

GooglePlus is far more promising than the other pieces they've put together, but the "devil's in the details," Bernoff says. "It has a good chance to be successful, but that success is going to be really relatively modest compared to the huge juggernaut that is Facebook."