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Posted at 8:25 AM ET, 01/ 3/2011

The Circuit: Goldman backs Facebook, Google to take on Apple, Apple to take on Netflix

By Hayley Tsukayama

LEADING THE DAY: Facebook has raised $500 million, thanks to Goldman Sachs and a Russian investor, raising the company's overall value to $50 billion. As Dealbook reported Sunday night, that means the social network is now worth more than companies such as eBay, Yahoo and Time Warner.

The new valuation has added fuel to rumors circulating that Facebook may be under pressure to go public as the Securities and Exchange Commission prepares to launch an investigation into Facebook, Twitter, LinkedIn and Zynga stock trades.

Google to take on Apple's iTunes store: With a range of tablets set to take on the iPad this year, Google is rumored to be planning a digital newsstand for its Android operating system that can compete with Apple's iTunes store. As The Wall Street Journal reported, people familiar with the matter say the search company has approached Time Warner Inc's Time Inc. unit, Condé Nast and Hearst Corp., to discuss the idea. Google has reportedly told publishers that it would take a smaller cut of sales on Android apps than Apple's 30 percent.

According to the article, Apple is planning on making changes to its apps in an effort to ease tensions with publishers. The rumored changes Apple is planning include giving publishers more access to customer information and offering discounts for long-term subscriptions.

Apple to focus on video rental: Meanwhile, an analyst told CNBC that Apple will most likely focus its efforts on streaming video rental in 2011, taking on Netflix. Apple has sold 1 million AppleTV set-top boxes and the company says users rent and purchase more than 400,000 TV episodes and over 150,000 movies per day.

On Wednesday, Brian Marshall, Gleacher & Co. analyst, told CNBC, “Over the past five years, Netflix’s subscriber base has quintupled while revenue more than tripled. If Apple can grow its related business similarly to Netflix’s historical growth profile, it is feasible iTunes’ annual rental revenue could exceed $1 billion by 2015.”

Expedia dumps American Airlines: The travel site Expedia has dropped American Airlines from its listings altogether, after burying the airline's flights last week. The tiff between the two companies started when American Airlines did not renew its contract with another travel site, Orbitz. In a statement to The Wall Street Journal, American suggested that customers buy their tickets through other travel sites such as Kayak.com or through the airline's own Web site.

AdKeeper raises $35 million: The online ad-clipping company AdKeeper has raise $35 million in its second round of funding. As VentureBeat points out, that's not too shabby for a company that has yet to launch its first product. The company's philosophy is that there is a market for online ad-saving, as consumers are often shown online ads at the wrong times. AdKeeper is in private testing and plans to launch early this year.

Smartphones change prison culture: The New York Times looked into the way smartphones and cellphones have changed prison culture, and the difficulties prisons face in keeping the gadgets out of the hands of inmates. One security company representative said smartphones are “the most lethal weapon you can get inside a prison.” One proposed solution would be to jam cell phone signals inside prisons, a move CTIA (the wireless advocacy group) and others say is illegal.

By Hayley Tsukayama  | January 3, 2011; 8:25 AM ET
Categories:  Apple, Facebook, Online Video  
Save & Share:  Send E-mail   Facebook   Twitter   Digg   Yahoo Buzz   Del.icio.us   StumbleUpon   Technorati   Google Buzz   Previous: The Circuit: VoIP to be banned in China, Clearwire chairman calls it quits, MySpace layoffs likely
Next: Post Tech heads to Vegas; tablets dominate

Comments

Post chaises. The funds rose on the news. The news didn't rise on the funds. News still comes first. Large bargains were made. Maybe it's worth $100 billion? It could always go the other way. Keep us Posted. I'm baffled.

Posted by: jobandon | January 3, 2011 9:29 AM | Report abuse

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