TIME mergers

Meet the Man Who Brought AOL Back From the Dead

AOL Inc. Chief Executive Officer Timothy Armstrong Interview
Bloomberg via Getty Images Timothy "Tim" Armstrong, chairman and chief executive officer of AOL Inc., listens to a question during a Bloomberg Television in New York, U.S., on Friday, June 27, 2014.

Tim Armstrong's work led to the $4.4 billion Verizon deal

When Tim Armstrong took over America Online in 2009, Wired wondered whether he had lost his mind. Armstrong was a top ad executive at Google, a still-ascendant Internet giant. America Online wasn’t even America Online anymore. It had been officially redubbed AOL in 2006, and was indeed a shrunken version of its former self. The once-hot consumer tech company was preparing to be spun off from parent company Time Warner in a rebuke of the mega-merger between the two firms in 2000.

(Time Warner merged with AOL in 2000. Time Warner spun off AOL in 2009. Time Warner spun off Time Inc. in 2014)

AOL’s ride has been bumpy since 2009, complete with constant acquisition rumors, public firings of executives and a perplexingly consistent dial-up Internet business. But by refocusing the company’s efforts on new opportunities such as programmatic ad buying and online video, Armstrong has helped the company escape the aged branding of its old free Internet CDs. There’s now a future in AOL–at least that’s the belief held by Verizon, which announced Tuesday that it will buy the company for $4.4 billion in cash, a 23% premium on the company’s share price over the last three months. Armstrong is likely to thank for that.

Armstrong, 44, began his career with stints at Disney and Snowball.com, a youth-focused Web portal that ascended during the dot-com bubble. He joined Google in 2000 to help the fledgling Internet company develop better relationships with advertisers. Armstrong opened Google’s New York “office” at a Starbucks in Manhattan’s Upper West side in 2000. He eventually became the president of Google’s Americas Operations, with one of his primary tasks being to lure lucrative brand advertisers from Madison Avenue onto Google’s myriad ad products. When Armstrong departed the search giant for AOL, former Google CEO Eric Schmidt called him “one of the most creative, fun and respected leaders in the ad industry.”

At AOL, Armstrong has worked to transform the company into an ad tech and media platform. AOL bought The Huffington Post for $315 million in 2011, and it has also snapped up smaller publishing outlets such as TechCrunch and Engadget. The company has been investing heavily in ad tech, with its AOL Platforms network helping publishers place ad units across the Web. Today, less than a quarter of AOL’s revenue comes from its Internet subscriptions, compared to more than 40% in 2010. In 2013, the company posted its first year-on-year revenue gain in eight years, and closed out 2014 with $126 million in profit, a 36% increase over the previous year.

But Armstrong has also been at the helm for some misfires. While still at Google, he co-founded Patch, a news website focused on hyperlocal reporting in communities around the United States. AOL bought Patch after Armstrong took over in 2009, but the site failed to live up to its lofty ambitions. Armstrong ended up publicly firing Patch’s creative director in a conference call with all Patch employees. He later apologized for his brash manner.

Verizon is less interested in Armstrong’s media forays than the ad tech platform he’s helped build out. AOL’s tech will likely be used to power a new mobile video streaming service that Verizon is planning to launch as soon as this summer. The wireless carrier also bought Intel’s failed streaming platform technology OnCue to help develop that service.

Armstrong, who will remain in charge of AOL as it becomes a Verizon subsidiary, sees big opportunities in the new partnership. He wants to kill the memory of those dialup disks once and for all, for instance. In a memo to employees announcing the merger, he boasted, “We are building toward becoming the largest media technology company in the world.”

TIME Autos

Google Blames Humans for Accidents Involving Its Self-Driving Cars

Google Self-Driving Car
Mark Wilson—Getty Images Google's Lexus RX 450H Self Driving Car is seen parked on Pennsylvania Ave. on April 23, 2014 in Washington, DC.

Its fleet has been involved in 11 accidents in six years

Car accidents can and do occur in self-driving vehicles, but you can’t just blame the computer, Google says.

The tech giant revealed in a post on Medium Monday that its fleet of autonomous vehicles have been involved in 11 minor accidents since first hitting the road six years ago. However, the company says the mishaps, which did not cause any injuries, were the result of human error.

“Even when our software and sensors can detect a sticky situation and take action earlier and faster than an alert human driver, sometimes we won’t be able to overcome the realities of speed and distance; sometimes we’ll get hit just waiting for a light to change,” Chris Urmson, the director of Google’s driverless cars program, wrote. “And that’s important context for communities with self-driving cars on their streets; although we wish we could avoid all accidents, some will be unavoidable.”

Seven of Google’s accidents involved being rear-ended, the company said. Two of the accidents were side-swipes, and one was a collision with a car rolling through a stop sign. Eight of the accidents occurred on city streets.

Google offered the additional data about its program following an Associated Press investigation that found three of Google’s driverless cars have been involved in accidents in California since September. An anonymous source told the AP that in at least one of the incidents, the car was in driverless mode when the accident occurred.

Google’s cars have driven a total of 1.7 million miles (combining manual and self-driven mileage), giving them an accident rate of about 6.5 per million miles traveled. That’s considerably higher than the 2.8 property-damage-only accidents per million miles traveled that involved passenger cars nationally in 2012, according to the National Highway Traffic Safety Administration. However, Google is quick to point out that a large number of fender benders and other minor accidents are never reported to police, making it hard to compare Google’s record.

Google has invested heavily in autonomous car technology. It’s racing other tech companies, such as Uber, as well as traditional car manufacturers to bring the vehicles to market. Urmson has said that self-driving cars could be ready for widespread use by 2020.

TIME social networks

Facebook Has a New Way to Keep You Off Google

TIME.com stock photos Social Apps iPhone Facebook
Elizabeth Renstrom for TIME

It will let you find links without having to visit a search engine

Some mobile users on Facebook’s iPhone app are now being offered an “Add a Link” option when they post status updates. After selecting the button, users can type in keywords and see search results listing articles on a given topic that have already been shared on Facebook.

A company spokesperson said the option is simply a pilot for now.

The feature is another step in Facebook’s continued expansion of the uses of its massive trove of more than one trillion indexed user posts. Last year, the company made it easier for users to use keywords to pull up old posts about any topic, but the results often appear haphazardly and in seemingly random order. This new functionality seems to provide a more focused application of Facebook’s search feature by focusing on links to other content online.

The “Add a Link” option, if rolled out fully, could pose a threat to Google. If Facebook can keep people within its walls even when they’re looking for stories, it will have more opportunities to have them engage with more content, including ads in the News Feed. The company can also use the feature to nudge people toward sharing the kinds of “high-quality” articles that Facebook gives a preference to in the News Feed over meme images and similar content.

Read next: Check Out How Much Fancier Facebook’s New Digs Are

Listen to the most important stories of the day.

TIME Currency

This Experiment Shows Why You Should Take Bitcoin Seriously

Newest Innovations In Consumer Technology On Display At 2015 International CES
Ethan Miller—Getty Images A general view of the Bitcoin booth at the 2015 International CES at the Las Vegas Convention Center on January 8, 2015 in Las Vegas, Nevada.

NASDAQ is using a key bitcoin technology

The technology that powers the cryptocurrency bitcoin could soon become much more important to the global financial system.

NASDAQ is planning to pilot a new transaction-tracking system on one of its smaller markets that makes use of blockchain technology, a key component in the bitcoin system. A blockchain is a public ledger that keeps track of transactions within a digital currency by logging them across various computers. The computers work in tandem to ensure the authenticity of a transaction. This automated process allows for transactions to be decentralized from a central bank or money issuer, which speeds up the rate at which a buy or sell can occur.

Instead of using bitcoin, NASDAQ will apply this technology to securities bought and sold on a market for private companies. Shares in these companies are often bought and sold using a slow, informal system in which lawyers must manually verify transactions, according to the Wall Street Journal. The blockchain could significantly increase the pace at which trades can be executed.

NASDAQ calls the plan to use blockchain technology an “enterprise-wide initiative.” The financial sector has expressed a keen interest in bitcoin and its tech. The New York Stock Exchange and Goldman Sachs, among others, have already invested in bitcoin-related companies. Even if bitcoin fails as a currency, many observers have said the blockchain technology behind it could have promising use cases in finance and other fields.

TIME Media

How Spotify Is Getting Ready For Apple’s Musical Onslaught

US-IT-MUSIC-SPOTIFY
Emmanuel Dunand—AFP/Getty Images A Spotify logo is seen as founder and CEO Daniel Ek addresses a press conference in New York, December 11, 2013.

The music streaming service could use original video to ensure its future

Spotify is the undisputed king of on-demand music services, but that crown alone may no longer be enough.

The Swedish streaming company is planning to host original videos on its service, according to the Wall Street Journal. Spotify has been in talks with YouTube programmers such as Maker Studios as well as traditional media companies for a move that would vastly expand the scope of what the music service offers. A Spotify spokesperson declined to comment, but the company is holding a media event in New York on May 20 where the video offering could be unveiled.

If Spotify steps into the video arena, it will be entering a crowded market dominated on one end by YouTube, which has 1 billion monthly users watching mostly short-form videos, and on the other end by Netflix, which has more than 60 million paying subscribers binge-watching television shows and movies. But video may be just what Spotify needs to ensure its long-term viability, music industry analysts say.

Though Spotify easily eclipses other streaming services in size with its 15 million paying subscribers, the pool in which the company is playing is shallow. The music industry generated about $15 billion in revenue for recorded music globally in 2014, according to the International Federation of the Phonographic Industry. Meanwhile, online video services made about $19 billion, according to the firm Digital TV Research, while they’re expected to generate more than $40 billion by 2020. It makes sense that Spotify wants a piece of that fast-growing pie.

“The music business is nice because people use it every day, but the problem is you don’t make a lot of money per minute of music listened to,” says James McQuivey, a media analyst at research firm Forrester. “Video has the ability to command more revenue.”

Original video would also help differentiate Spotify from its competitors at a key juncture. The company’s feature set and song library are extremely similar to services such as Tidal and the Apple-owned Beats Music, which makes Spotify highly susceptible to being knocked off its perch if a larger foe emerges. That could happen next month, when Apple may unveil an on-demand streaming service tied to the iTunes brand. Truly original video content will give customers a better reason to hang onto their Spotify subscription even after the arrival of an Apple service.

“I really do view this as being pre-emptive strike in what has become an increasingly competitive space,” says Larry Miller, a music business professor at New York University.

Spotify’s big-picture strategy could be similar to Netflix’s playbook, Miller says. Netflix was a digital warehouse for old TV shows and movies, facing escalating costs to license the rights for other studios’ content. Through orignal shows, the company has retooled its branding to make programs like House of Cards its primary draw. A Spotify with its own original content would feel less heat if some artists removed their music from the service, as Taylor Swift did last fall.

Still, there are drawbacks to the video plan. McQuivey says streaming video could dilute Spotify’s brand and confuse consumers who simply enjoy using the service as an online jukebox. And the costs for premium video would be considerably more than for music. Spotify is already losing money every year, but a recent funding round means it may have cash to throw at content makers.

“They’d have to go pretty big,” says McQuivey, who believes Spotify should pursue premium TV-like content rather than short-form videos found on YouTube. “You can’t just dabble in content. It’s not all or nothing, but it’s pretty close.”

More than anything, a shift to video would signal to fans and investors that Spotify has no intention of simply ceding its control of the streaming space to Apple or other big-name competitors. The startup made on-demand music streaming viable, and it wants to be around when the financial rewards are finally reaped.

“Strategically, this represents a significant risk that could end up paying enormous long-term dividends for Spotify if they are successful,” Miller says.

TIME Mobile

You Can Now Order Food Right From Google Search

Google Food
Google Google Food

Google continues to add more functionality to mobile searches

Google is making it even easier to be a lazy eater.

Starting Friday, users will be able to order food directly from a Google search. Users who search for nearby restaurants on their phones will see a “Place an order” option in the information card that appears in the search results. Select that button and you’ll have the option of going directly to the restaurant’s page on one of six food-ordering sites: Seamless, Grubhub, Eat24, Delivery.com, BeyondMenu and MyPizza.com.

Google says it plans to add more options in the future.

Embedding more functionality in mobile searches makes sense for Google, which has seen its search dominance put under pressure by the emergence of single-purpose apps. Instead of using Google to find restaurants, for example, users might use Yelp’s app. The tech giant is doing everything it can to make sure Google search results are a kind of one-stop-shop that lets users execute many different types of actions, including ordering lunch.

TIME Companies

Why Nintendo is Suddenly Profitable Again

A video gamer tries out the Nintendo's new touch screen game pad controller with gyroscopic controls and their newest game 'Splatoon'  at a pre-launch event in New York, U.S., on Wednesday May 6th 2015.  Photographer: Peter Foley/Bloomberg *** Local Caption ***
Peter Foley—© 2015 Bloomberg Finance LP A video gamer tries out the Nintendo's new touch screen game pad controller with gyroscopic controls and their newest game 'Splatoon' at a pre-launch event in New York, U.S., on Wednesday May 6th 2015.

Hit software is keeping industry's oldest console maker alive

It was only a year ago that Nintendo seemed to be in dire straits. The Wii U failed to capture the public’s attention in the way the Wii did, and even the successful 3DS handheld was struggling to match the sales of the original Nintendo DS. But a sudden return to profitability and a string of forward-thinking announcements indicate that the video game industry’s most storied developer may yet right its ship.

Nintendo posted its first operating profit in four years Thursday, earning 24.8 billion yen ($208 million) for the fiscal year, compared to an operating loss of $390 million last year. Net profit was $350 million, up from $195 million in 2014. The numbers beat company forecasts largely because of a weak yen. However, revenue continued a years-long decline, sliding from $4.8 billion last year to $4.6 billion.

The video game maker’s recovery is largely due to a string of blockbuster hits. Pokemon Omega Ruby and Alpha Sapphire for the 3DS sold almost 10 million units between them for the fiscal year. Super Smash Bros. sold a similar amount when combining its 3DS and Wii U versions. And Mario Kart 8 became the best-selling game on the Wii U, selling more than 5 million copies. As in years past, Nintendo has been able to use software to dig itself out of trouble.

Still, the future of the company remains murky. Sales of the 3DS are continuing to decline, dropping from 12 million last fiscal year to 8.7 million in the most recent year. And while the Wii U’s sales have increased a bit from its disastrous start, its sales of 3.4 million for the year were still off from company projections of 3.6 million. The 3DS has sold 52 million units in its lifetime, while the Wii has sold just 9.5 million.

Read more: Nintendo’s New Game Could Save the Wii U

The biggest reason to be positive about Nintendo’s financial future isn’t because of what the company sold last year but rather because of what it has announced for the future. The game maker in March revealed that it will be developing original software for mobile devices making use of its world-famous IP. And following Thursday’s earnings release, Nintendo announced plans to partner with Universal Studios to develop theme park rides starring its mascots. The success of Amiibo, Nintendo’s line of mascot action figures, indicate that there’s a big appetite to see Mario and company in places outside the Wii U and 3DS. With the company’s core hardware products continuing to struggle, Nintendo is finally starting to leverage its famous characters across a variety of different platforms.

TIME policy

Here’s How Google Plans to Hire More Minorities

Google Offices in Berlin
Adam Berry—Getty Images The Google logo is seen inside the company's offices on March 23, 2015 in Berlin, Germany.

It's investing $150 million in diversity initiatives this year

Google looks to be getting serious about increasing the diversity of its workforce. The company told USA Today this week that it’s planning to invest $150 million in workforce diversity initiatives this year, up from $115 million in 2014.

Among Google’s plans, which have been percolating over the last year: doubling the number of schools where it actively recruits to find potential job applicants (Alabama A&M, a historically black college, is among the new schools Google is targeting). The company is also encouraging workers to take workshops to lessen any unconscious bias in the workplace, as well as letting Googlers use 20% of their work time to focus on diversity projects.

To help broaden the pool of people potentially qualified to work at Google, the search giant has also released a free curriculum to help teachers launch computer science clubs and introduced Made With Code, an initiative aimed at helping girls identify with the world of computer programming.

The fact that Google is tackling diversity on a number of different fronts is a smart approach, says Kimberly Bryant, the founder of Black Girls Code, a nonprofit that teaches programming skills to girls of color. “Google is being very deliberate about addressing the systemic issue,” she says. “They recognize that you can’t fix diversity by just focusing on just one area. You have to build a pipeline.”

For now, Google’s employees remain strikingly homogeneous. As of the beginning of 2014, 70% of Google employees worldwide are men, while in the U.S. 61% are white and 30% are Asian. The company has plans to release updated demographic data soon, but the figures will likely be similar.

 Diversity Report
GoogleGoogle Diversity Report

 

“With an organization of our size, meaningful change will take time,” Google vice president for people operations Nancy Lee said in a blog post. “From one year to the next, bit by bit, our progress will inch forward.”

Still, the very fact that Google is talking about this issue openly is a marked shift from even a year ago. In the past, diversity data was a closely guarded secret among many tech firms. After Google released its first diversity report last May, competitors such as Facebook, Apple and Twitter also coughed up their respective data. While their demographics were shown to be largely similar, the fact that the information is now public has created a greater level of accountability among the world’s biggest tech firms. “Just the fact that they are having the conversation now,” Bryant says, “is a big step.”

TIME Virtual Reality

The Best Virtual Reality Headset Goes on Sale Early Next Year

Oculus Rift
Oculus VR Oculus Rift

Oculus Rift has put a release date on the commercial version of its device

The long-awaited commercial version of the Oculus Rift virtual reality headset will begin shipping to customers in the first quarter of 2016, Oculus VR announced Wednesday. The Rift, which has been widely praised for its high level of immersion, has so far only been available in a developer’s version. Oculus will begin accepting pre-orders for the device later this year.

Facebook bought Oculus for $2 billion last March in a move both surprising and a sign that virtual reality is one of the next-big ticket bets in Silicon Valley. While Facebook CEO Mark Zuckerberg has long-term plans to develop Oculus into a “communication platform,” the Rift for now remains primarily focused on gaming experiences.

“It’s a system designed by a team of extremely passionate gamers, developers, and engineers to reimagine what gaming can be,” Oculus said in a blog post announcing the new shipping window.

Further details about the commercial version of Rift are expected to be announced at E3, an annual California gaming expo set for June 16-18.

Facebook is not the only tech giant investing in VR. Sony has a virtual reality headset called Morpheus in the works for PlayStation 4, while Microsoft is taking a slightly different tack with its augmented-reality headset HoloLens. HTC and Samsung are also working on virtual reality headsets, though the latter’s product is the result of a partnership with Oculus.

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