A lousy quarter for Dell: The computer maker reported higher than expected sales, but profits missed by a long shot as gross margins dropped. And Dell said conservatism in I.T. spending is spreading beyond the U.S., extending into Western Europe and “several countries in Asia.” Shares dropped 10% in after-hours trading.

Dell laptops continue to sell well — unit sales increased 44% — but revenue only increased 26%, meaning people are buying cheaper computers. And Dell shot itself in the foot by dropping prices too aggressively in Europe — or as it calls it, taking “advantage of strategic growth opportunities in advance of cost improvements.”

CEO Michael Dell and CFO Brian Gladden took a lashing from analysts during their conference call: One wondered why they were bothering to grow market share with no regard for profitability; another compared the current Dell administration to an old HP executive team. Ouch.

Key Stats:

Revenue: $16.4 billion vs. $15.95 billion consensus
EPS: $0.31 vs. $0.36 consensus

LIVE Conference call notes:

5:06 Know we can improve performance on profitability. Many concerned that growth initiatives will come at expense of long term profitability. Took strategic pricing movements in EMEA ahead of cost improvements, shift to retail.

5:07 Excluding acquisitions, headcount was down 8500 from last year. Will reach goal of 8900 this quarter. Over time, will continue to scale headcount and improve productivity.

5:09 About $5 billion left in current share repurchase authorization.

5:10 Rev increased 5% on 7% unit increase in Americas. More numbers from release.

5:13 Storage revenue up 11%, improved profitability.

5:15 Designing to value! Pricing to value!

5:18 Going over look-ahead from release. Working aggressively on cost initiatives.

5:19 More nonsense about innovation and value. Will update when something of substance.

5:20 Strongest solutions portfolio in history!

5:24 Q&A to begin.

5:25 Gross margins: How much GM decline came from deferrals vs. pricing. Europe deferrals forced us to defer more. 2-3 cents per share impact in quarter. How play out rest of year? As continue to grow services business, some continued impact. A potential issue for us.

5:26 Why so aggressive interest in EMEA in July? Whenever restarting growth, imprecise process. See some parts of business where probably a bit too aggressive, modulating for that now.

5:28 Would have to say problems more self-inflicted than competition-driven.

5:32 Dramatic falloff in July? Aggressively pricing, tactfully to accelerate growth rate? One possible thing you left out: Dell has high share of commercial space in Europe, very low share of consumer. Gained share in commercial segment in Europe. Biggest difference relative to industry is we have small consumer business, not participating it in Europe. Prioritizing Asia, U.S.

5:35 Going forward answer a combination of better pricing and execution.

5:38 Holy hell! Analysts are GOING NUTS on this call about going for market share over profits. Just compared Dell to old HP administration. Consumer profitbility “in the next four quarters,” Dell says.

5:40 What management system putting in place? Look at every week as leadership team. Sometimes hard to judge when pushing it too far.

5:44 $3 billion commitment between now and 2011. You’ll see more in second half than first half. Accelerating and momentum is good.

5:57 Focused on executing strategy, focused on improving profitability over time. Expect more to happen in second half of the year. Expanding solutions portfolio.

More: continued here
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As we’ve noted, John McCain’s campaign has indeed figured out YouTube, and he leads Barack Obama in total video views on his YouTube channel over the past month. Now, we’re told by the WSJ, the McCain camp has trumped Obama in search engine marketing.

The McCain campaign snapped up search terms like “Joe Biden” and “Biden” and refer traffic to a campaign ad where Biden talks in an earlier debate about he’d “be honored” to run on a ticket with John McCain. He’s also bought up terms like “U.S. economy” and “housing crisis,” which link to his campaign site.

Now, given the well-documented Web-savvy of the Obama campaign, any small victory from 71-year-old McCain seems newsworthy. But some perspective is in order: Obama’s campaign Web site gets more than double the traffic of McCain’s, and cumulatively, Obama has racked up 53 million YouTube channel views, to McCain’s 10 million.

See Also:
As Dem Convention Begins, Obama Fights McCain For YouTube Views, Loses
Meet (Some Of) Barack Obama’s Digital Gurus
Why Is McCain Crushing Obama On YouTube This Month?
Is Barack Obama Losing His YouTube Mojo?

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Thanks to the always reliable Coolfer for digging up this video from IFC, which features a two-part interview with Vimeo founder Jakob Lodwick, Idolator’s Maura Johnston and Muxtape founder Justin Ouellette. Since Justin has been incommunicado since his service went down earlier this month, we’re assuming the intereview was taped before that. Double thanks to Coolfer for watching and transcribing the most relevant part for us:

In part two, some questions were posed to Ouellette about Muxtape (his music sharing site that has attracted the attention of the RIAA):

How is that legal? A non-answer.

How to make money with Muxtape? Another non-answer.

This is exactly why we don’t think Muxtape is coming back anytime soon.

See Also:Roll-Your-Own Muxtape Kit “Opentape” Doesn’t Solve Muxtape’s Biggest Problem
Why A Muxtape Comeback Won’t Last
Muxtape Shut Down By RIAA?
Muxtape: Make A Mix Tape, Make Some Cash?

More: continued here

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DigiMeld, a midtown-based video distribution company, has raised $2 million Series A round

The company was founded by CEO and serial entrepreneur Alex Mashinsky, a holder of 52 patents and founder of Arbinet-thexchange (ARBX). Essentially, it’s a P2P delivery system for video, which makes it sound akin to Pando to us.

The company currently has a staff of 10, mostly technical. Mashinsky plans to use the new capital to add four or five people to his team, focusing on sales and marketing.

More: continued here

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The McCain camp is telling CNN they’re hatching an “exciting and unprecedented” campaign ad that will run during Barack Obama’s address at Mile High Stadium Thursday night. We’ve got no idea what could be “exciting” about a campaign ad (a live response, maybe?). But we do know two things:

• We won’t be able to see it on TV, because it’s only going to run in “battleground states” and New York is decidely not one of those. (Don’t get us started on the ridiculousness of the electoral system)
• We don’t need to worry, because as soon as it airs, it’s going straight up on YouTube, where it’s likely to become McCain’s next Web hit.

As we’ve pointed out, the Obama campaign is posting video at a furious pace: 12 videos on Wednesday alone, for example. But it’s the TV ads that are having the most impact on the Web, and the prime reason the 71-year-old McCain is getting more YouTube channel views this month than Obama.

See Also:
First, YouTube, Now McCain Trumps Obama On Search
As Dem Convention Begins, Obama Fights McCain For YouTube Views, Loses
Meet (Some Of) Barack Obama’s Digital Gurus
Why Is McCain Crushing Obama On YouTube This Month?
Is Barack Obama Losing His YouTube Mojo?

More: continued here

Popularity: unranked [?]

Despite cratering ratings, network TV had a big upfront sales period last spring. Just ask them. One problem: as always, the upfront represents promises to buy ads, not actual orders. Those are supposed to start coming in now, but it sounds like some palms are starting to sweat.

Typically, when firm orders materialize in the fall they’re 2% to 3% lower than committments in the spring. But media buyers are predicting that number could climb above 4% this year, as advertisers get cold feet. WPP’s Group M chief investment officer Rino Scanzoni tells Advertising Age the networks probably assumed a higher level of “breakage” this year than in year’s past.

Evidence is already in, however, that advertising is taking a hit. General Motors’ recent decision to walk away from advertising in ABC’s coming telecasts of the Emmys and the Oscars shows what happens when corporate and economic weaknesses start to press hard. “We are not abandoning TV by any means; it remains a key part of our media mix,” a GM spokeswoman said. The choice to leave the awards telecasts is part of a corporate “decision to reduce and consolidate sales and marketing budgets, with a focus on protecting launch products and brand advertising,” she said.

One buyer suggested that the auto category is where networks will see signs of slippage, while movie studios may want to add to what they have already reserved.

See Also:
TV Upfronts: Every Network’s A Winner! (Please Don’t Read The Fine Print)
Kagan: Ad Recession Hits Cable TV Next Year
Car Crash Killing TV, Print Ads, But Merely Denting Online

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Popularity: unranked [?]

Firefox owner Mozilla has extended its lucrative search deal with Google (GOOG) for three more years, through Nov. 2011, chair Mitchell Baker writes. What’s that mean? The Web browser dot-org will continue to make a lot of money — we estimate about $150 million of revenue this year, and close to $100 million in pre-tax profit. In our eyes, it’s yet another reason why CEO John Lilly should unlock the $4 billion we think Mozilla could be worth via an IPO.

See Also:
The Mozilla/Firefox IPO
Mozilla IPO Part 2: John Lilly Responds
Mozilla: John Lilly Promoted to CEO. IPO Now a Go?

More: continued here

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The latest tech company to fall prey to a patent troll: Sony, which is being sued for allegedly violating a patent with its Blu-ray discs that an unknown company holds on “optical disc recording.”

Orinda Intellectual Properties is suing Sony for violating patent 5,438,560, which was originally granted in 1995 to Hyundai Electronics Industries, and patents ‘an optical disk-shaped recording medium comprising a plurality of tracks.’ The company is seeking an injunction on manufacturing, selling and distributing Blu-ray devices, as well as a “reasonable royalty,” the video game site Edge reports.

But companies file patent lawsuits like this all the time — Sony was hit with one about Blu-ray already last year and it was dismissed. So what makes this one different? It’s filed in East Texas, a region that has some friendly judges who are very broad in their interpretation of patent infringement. In May, Nintendo fell prey to an East Texas judgment and had to pay $21 million to no-name Anascape Ltd. for violating a patent regarding game controllers.

See Also:
Nintendo Sued To Stop Importing Wii To U.S.
Don’t Mess With East Texas! Nintendo Loses A $21 Million Patent Suit

More: continued here

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A mixed quarter for Dell: The computer maker reported higher than expected sales, but profits missed by a long shot. And Dell said conservatism in I.T. spending is spreading beyond the U.S., extending into Western Europe and “several countries in Asia.” Shares dropped 10% in after-hours trading.

Dell laptops continue to sell well — unit sales increased 44% — but revenue only increased 26%, meaning people are buying cheaper computers.

We’ll cover Dell’s (DELL) earnings call LIVE at 5 p.m. ET; refresh for the latest.

Key Stats:

Revenue: $16.4 billion vs. $15.95 billion consensus
EPS: $0.31 vs. $0.36 consensus

LIVE Conference call notes:

5:06 Know we can improve performance on profitability. Many concerned that growth initiatives will come at expense of long term profitability. Took strategic pricing movements in EMEA ahead of cost improvements, shift to retail.

5:07 Excluding acquisitions, headcount was down 8500 from last year. Will reach goal of 8900 this quarter. Over time, will continue to scale headcount and improve productivity.

5:09 About $5 billion left in current share repurchase authorization.

5:10 Rev increased 5% on 7% unit increase in Americas. More numbers from release.

5:13 Storage revenue up 11%, improved profitability.

5:15 Designing to value! Pricing to value!

5:18 Going over look-ahead from release. Working aggressively on cost initiatives.

5:19 More nonsense about innovation and value. Will update when something of substance.

5:20 Strongest solutions portfolio in history!

5:24 Q&A to begin.

5:25 Gross margins: How much GM decline came from deferrals vs. pricing. Europe deferrals forced us to defer more. 2-3 cents per share impact in quarter. How play out rest of year? As continue to grow services business, some continued impact. A potential issue for us.

5:26 Why so aggressive interest in EMEA in July? Whenever restarting growth, imprecise process. See some parts of business where probably a bit too aggressive, modulating for that now.

5:28 Would have to say problems more self-inflicted than competition-driven.

5:32 Dramatic falloff in July? Aggressively pricing, tactfully to accelerate growth rate? One possible thing you left out: Dell has high share of commercial space in Europe, very low share of consumer. Gained share in commercial segment in Europe. Biggest difference relative to industry is we have small consumer business, not participating it in Europe. Prioritizing Asia, U.S.

5:35 Going forward answer a combination of better pricing and execution.

5:38 Holy hell! Analysts are GOING NUTS on this call about going for market share over profits. Just compared Dell to old HP administration. Consumer profitbility “in the next four quarters,” Dell says.

5:40 What management system putting in place? Look at every week as leadership team. Sometimes hard to judge when pushing it too far.

5:44 $3 billion commitment between now and 2011. You’ll see more in second half than first half. Accelerating and momentum is good.

More: continued here
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Saving up for Kindle 2.0? You’ve got some time. New York Times writer Brad Stone interrupted his vacation to pick up the phone and actually ask Amazon PR dude Craig Berman when he could buy one of the new Kindles we’ve heard so much about recently:

‘Don’t believe everything you read,’ Mr. Berman said. ‘There’s a lot of rumor and speculation about the Kindle. One thing I can tell you for sure is that there will be no new version of the Kindle this year. A new version is possible sometime next year at the earliest.’

Mr. Berman declined to speculate about the new model or if it will be aimed at a particular audience - though the $5.5 billion textbook market, and all those heavy student backpacks, certainly seems like an appealing target for e-book publishers.

See Also:How Can Kindle Crack The College Market
Amazon: Kindle Isn’t That Big A Hit; College Edition In The Works
Citi: Yep, The Kindle’s A Huge Hit. $1 Billion For Amazon In 2010
Amazon May Actually Have Sold A Bunch Of Kindles
Wildly Bullish Analyst: Kindle is New iPod, Amazon Will Sell $2.5 Billion In eBooks By 2012
Found! A Real Amazon Kindle User
The Kindle vs. The Gadget Hall Of Fame: How Will Amazon’s Sales Stack Up?
SAI Tech Tips: A New Use For Your Kindle

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Remember way back when, way back in June, when there was a big blogosphere hubbub about the Associated Press not letting bloggers regurgitate its copy without compensation? Whatever became of that? In any case, amidst the fuming and harrumphing, Dorian Benkoil pointed out the AP’s real problem wasn’t that it had irked some bloggers — it was that the co-operative’s own members might be bailing on it.

Smart guy. Editor & Publisher:

The Star Tribune of Minneapolis has become the latest, and so far the largest, daily newspaper to inform the Associated Press that it plans to drop the service in two years.

MinnPost.com reports that the paper informed AP that it will no longer use the service as of the fall of 2010. AP requires that member newspapers give two years’ notice before dropping the service.

The Star Tribune joins a string of other daily papers who have either given notice or revealed plans to cut the service in recent months. Those include The Spokesman-Review of Spokane, Wash.; The Post Register of Idaho Falls; The Bakersfield Californian; and The Yakima Herald-Republic and Wenatchee World, both in Washington.

The recent decisions to drop AP service follow a planned AP rate structure change, which was announced in 2007 and takes effect in 2009. The rate change has already prompted complaints from numerous newspapers, including two groups of editors who wrote angry letters to AP to complain in late 2007 and early 2008.

As MinnPost and E&P point out, this isn’t a philosophic dispute, just one about price. And we’re not convinced that the Strib will really walk away — it’s sort of hard to imagine what they’ll fill their pages with if they don’t have AP copy. Then again, the Strib’s free fall has been steeper than most mid-sized daily papers, which means that it’s been plummeting like a stone over the last decade. So perhaps Avista Capital, the NY-based PE company that has been bleeding money ever since it bought the paper in early 2007, thinks it can find an even cheaper news source. Where would that be?

See Also:The AP’s Biggest Problem Isn’t Bloggers. It’s Its Own Newspapers

More: continued here

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Comcast bandwidth pigs won’t just have to deal with a slower Internet connection — they’ll reportedly have to pay more per month to use the Internet, too.

In May, Broadband Reports reported that Comcast (CMCSA) was considering capping the amount of bandwidth its cable modem subscribers could use each month as part of their all-you-can-eat subscriptions. Today, the site reports that those caps are official, that they’ll be announced soon, and that they’ll be rolled out on Oct. 1. Comcast rep Charlie Douglas doesn’t deny the report; in an email to SAI, he simply says, “Please stand by “

UPDATE: Charlie has delivered. Here’s Comcast’s official policy:

Today, we’re announcing that beginning on October 1, 2008, we will amend our Acceptable Use Policy (AUP) available at http://www.comcast.net/terms/use/ and establish a specific monthly data usage threshold of 250 GB/month per account for all residential customers… Currently, the median monthly data usage by our residential customers is approximately 2 - 3 GB.

What does this mean for most Comcast subscribers? Nothing. According to Broadband Reports’ source, the caps will only affect 14,000 of Comcast’s 14.1 million broadband subscribers. (The top 0.1%.) That sounds about right to us.

As we noted in May, 250 gigabytes per month is a lot — much more reasonable than Time Warner Cable’s 5- to 40-gigabyte monthly caps. In practical terms, 250 gigabytes is:

- A LOT of Web usage. Your typical daily Web/email/IM usage is probably somewhere between 10-50 megabytes — maybe 100-200 if you’re watching some low-quality YouTube, or 300-500 if you’re watching a few hours of Hulu every day. So normal Web users won’t have any problems. (1000 megabytes = roughly 1 gigabyte.)

- A LOT of World of Warcraft. Downloading game patches uses a bunch of bandwidth once in a while, but normal game play tops out around 30-60 kilobytes/second, or maybe a 100-200 megabytes an hour run rate, according to one blog. Another user says normal usage is closer to 1-5 megabytes per hour. Continue to play until your eyes bleed.

- 2500-4000 MP3 albums, or 50,000 3-minute songs. Depending on quality/length, an MP3 album is somewhere between 60 and 100 megabytes. Amazon says its 3-minute MP3s are about 5 megabytes. There are only 43,200 minutes in a 30-day month, or enough time to listen to 14,400 3-minute songs. So you’ll be ok.

- 170-250 iTunes movie downloads. Digital movies in standard-def run between 1 and 1.5 gigabytes. “No Country For Old Men” is about 1.3 gigs, friend-o.

- 50-60 HD movie downloads. These run closer to 4-5 gigabytes each. So theoretically, this could be a problem, one day, for people who download more than 2 movies a day. Do you know any of those folks?

So: If you download one HD movie a week, six standard-def movies a week, 5 albums a week, play a ton of WoW, and surf a lot of YouTube and Hulu, you’ll still struggle to use 100 gigabytes of bandwidth per month. We think you’ll also struggle to listen to all that music and watch all those movies. Also, you should get out more. It’s nice outside! Go for a walk.

This cap would be in addition to the “network management” techniques Comcast will also be rolling out by the end of the year: Slowing down heavy downloaders’ speeds if Comcast thinks they’re slowing down its network.

Are these techniques ideal? No. Are they a reasonable compromise? Yes. Will they slow down Web innovation? Probably not. Comcast has every right to manage their network — it’s theirs, and any competition is welcome. And until hi-def Web video becomes massively popular, 250 gigabytes of Internet consumption per month is a niche behavior that any Internet provider should be able to charge extra for.

See Also:
Comcast’s Diet For Bandwidth Hogs: A 20-Minute Timeout
Cable Broadband Growth Beats Telcos 3-To-1 In Q2
Comcast, Slapped By FCC, Expands Testing New Tech To Slow Down Your Internet

More: continued here

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Dell recently showed us that it’s finally starting to figure out design — its new line of PCs looks actually Mac-like. But the new machines won’t figure in to its Q2 earnings, which we’ll see this afternoon after the bell. What we are looking for: Clues from CEO Michael Dell about his consumer and enterprise prospects for this fall, and potentially, the rest of the year.

We’ll cover Dell’s (DELL) earnings LIVE today, including live analysis of its results at 4 p.m. ET and live coverage of the earnings call at 5 p.m. Join us; refresh this page or our homepage later for a link to our live coverage.

We don’t expect Dell to give specific guidance for Q3 or the full year — it didn’t last quarter — but three months ago, the company did say it was seeing “conservatism in IT spending.” So we’ll especially be listening for any color on how the enterprise market is shaping up, or any broader commentary on how the macro downturn is affecting Dell.

Also, any actual plans for Dell to re-enter the MP3 player market? The mobile/smartphone market? And, just asking, how long will Michael Dell stay on as CEO? While shares are up 41% since their five-plus-year low in April, they’re still down 17% from their two-year high, hit last October — and barely up 6% since Dell took the seat back on Jan. 31, 2007.

Key Stats:

Revenue: $15.95 billion consensus (up 8% y/y)
EPS: $0.36 consensus

See Also:
Dell Taking On iPod Again? Thank/Blame Disappearing DRM
A Nice Surprise: Dell’s New Mini PC Looks Good
Apple’s Mac Continues Growth Streak, Beats HP In Unit Growth

More: continued here

Popularity: unranked [?]

Dell recently showed us that it’s finally starting to figure out design — its new line of PCs looks actually Mac-like. But the new machines won’t figure in to its Q2 earnings, which we’ll see this afternoon after the bell. What we are looking for: Clues from CEO Michael Dell about his consumer and enterprise prospects for this fall, and potentially, the rest of the year.

We’ll cover Dell’s (DELL) earnings LIVE today, including live analysis of its results at 4 p.m. ET and live coverage of the earnings call at 5 p.m. Join us; refresh this page or our homepage later for a link to our live coverage.

We don’t expect Dell to give specific guidance for Q3 or the full year — it didn’t last quarter — but three months ago, the company did say it was seeing “conservatism in IT spending.” So we’ll especially be listening for any color on how the enterprise market is shaping up, or any broader commentary on how the macro downturn is affecting Dell.

Also, any actual plans for Dell to re-enter the MP3 player market? The mobile/smartphone market? And, just asking, how long will Michael Dell stay on as CEO? While shares are up 41% since their five-plus-year low in April, they’re still down 17% from their two-year high, hit last October — and barely up 6% since Dell took the seat back on Jan. 31, 2007.

Key Stats:

Revenue: $15.95 billion consensus (up 8% y/y)
EPS: $0.36 consensus

See Also:
Dell Taking On iPod Again? Thank/Blame Disappearing DRM
A Nice Surprise: Dell’s New Mini PC Looks Good
Apple’s Mac Continues Growth Streak, Beats HP In Unit Growth

More: continued here

Popularity: unranked [?]

Dell recently showed us that it’s finally starting to figure out design — its new line of PCs looks actually Mac-like. But the new machines won’t figure in to its Q2 earnings, which we’ll see this afternoon after the bell. What we are looking for: Clues from CEO Michael Dell about his consumer and enterprise prospects for this fall, and potentially, the rest of the year.

We’ll cover Dell’s (DELL) earnings LIVE today, including live analysis of its results at 4 p.m. ET and live coverage of the earnings call at 5 p.m. Join us; refresh this page or our homepage later for a link to our live coverage.

We don’t expect Dell to give specific guidance for Q3 or the full year — it didn’t last quarter — but three months ago, the company did say it was seeing “conservatism in IT spending.” So we’ll especially be listening for any color on how the enterprise market is shaping up, or any broader commentary on how the macro downturn is affecting Dell.

Also, any actual plans for Dell to re-enter the MP3 player market? The mobile/smartphone market? And, just asking, how long will Michael Dell stay on as CEO? While shares are up 41% since their five-plus-year low in April, they’re still down 17% from their two-year high, hit last October — and barely up 6% since Dell took the seat back on Jan. 31, 2007.

Key Stats:

Revenue: $15.95 billion consensus (up 8% y/y)
EPS: $0.36 consensus

See Also:
Dell Taking On iPod Again? Thank/Blame Disappearing DRM
A Nice Surprise: Dell’s New Mini PC Looks Good
Apple’s Mac Continues Growth Streak, Beats HP In Unit Growth

More: continued here

Popularity: unranked [?]