Two fallen internet titans are trying to regain their footing“THEY never come back” may be an ironclad law of boxing, but AOL and Yahoo! are trying to prove that it does not apply to lumbering online giants. On December 9th Time Warner span off AOL, undoing a famously ill-conceived merger. A couple of days earlier Yahoo! and Microsoft finalised an agreement to merge their web-search and much of their advertising businesses, freeing Yahoo! to hone a new strategy. Peculiarly, both firms’ comeback plans hinge on giving away content to attract traffic and thus advertising—an online strategy that has disappointed many media companies.AOL and Yahoo! came of age a decade ago in different corners of the internet: one as the biggest provider of dial-up access, the other as the leading web directory. Both soon turned into “portals” providing both content and communications tools, such as web-mail and instant messaging. More recently, both have drifted while the internet evolved around them. A series of weak bosses failed to do away with fiefs, professionalise management and keep the brands fresh, even as competition—from broadband in the case of AOL, and from rivals such as Google and Facebook for Yahoo!—ate into revenues. ...

  A row over climate change e-mails grows louderAS POLITICIANS, policy wonks, businessmen, NGO types, hacks and hangers-on converge in Copenhagen for the forthcoming climate conference, a row over a set of e-mails from a previously obscure part of Britain's University of East Anglia is becoming ever louder, if no more illuminating. Two weeks ago e-mails and other documents that had been leaked or hacked from the university's Climatic Research Unit (CRU) were sent to various websites. Those with a longstanding opposition to action on climate change, from bloggers to members of the American Senate to the Saudi government, are touting the e-mails as a resource with which to derail the Copenhagen talks. CRU's researchers use various techniques to reconstruct the temperatures of times past. Some of the reconstructions they have been party to have long been the subject of technical criticism, sometimes in peer-reviewed literature, more frequently on blogs, notably Climate Audit, an award-winning blogby Stephen McIntyre. The critics have made many attempts to get CRU to distribute the raw data and computer codes which its scientists work on. The e-mails and other documents read as though the researchers were obstructive in dealing with some of these requests, that some of the data they used were in poor shape, that they may have indulged in spin when presenting some results and that they really did not care for their critics. ...

  More bad news for the embattled newspaper businessTHE decision to give away newspaper content free online is increasingly viewed as the business equivalent of Eve’s decision to munch on an apple. But any proprietor who wants to undo this error has a problem. If one newspaper starts charging, readers may migrate to those that remain free. If, on the other hand, a lot of papers begin charging at the same time, readers might be jostled into paying. This plan has always seemed optimistic. A study released this week suggests it may be completely wrongheaded.Oliver & Ohlbaum, a media consultancy, began by asking people what newspaper they tended to read and whether or not they subscribed to it (most get their papers from shops). Then they quizzed readers about where they went for news on the internet. The results were consistent: when it comes to online news, Britons are shamelessly promiscuous. ...

  Online spending in America is risingAFTER a poor year in 2008, retail spending is picking up again as heavy discounts and promotions are enticing shoppers to open their wallets. Online spending rose to $3.2 billion for the week ending on Sunday November 29th, over 6% more than during the same period last year, according to comScore, an online market-research firm. Internet shoppers splashed out $318m on Thanksgiving Day, over 10% higher than in 2008. Sales also rose by 11% to $595m on Black Friday, the start of the Christmas shopping season for bricks-and-mortar retailers but an increasingly important online shopping day too. Consumers continued to spend on “cyber Monday” November 30th. On Wednesday December 2nd new data showed that sales rose from $846m to $887m, the largest daily spend on record. But the signs of recovery offline are less clear. Shops rang up $10.7 billion in sales on Black Friday, a meagre 0.5% rise on 2008, reckons ShopperTrak, a retail consultancy. ...

  Bricks-and-mortar shops struggle to win customers back from virtual onesSHOPPERS on Black Friday, the traditional start of the holiday shopping season in America, which falls on November 27th this year, are notoriously aggressive. Some even start queuing outside stores before dawn to be the first to lay their hands on heavily discounted merchandise. Last year berserk bargain-hunters in the suburbs of New York City trampled a Wal-Mart employee to death. Despite the frenzy at many stores, however, the recession appears to have accelerated the pace at which shoppers are abandoning bricks and mortar in favour of online retailers—e-tailers, in the jargon. So this year Black Friday (so named because it is supposed to put shops into profit for the year) also marks the start of many conventional retailers’ attempts to regain the initiative.E-commerce holds particular appeal in straitened times as it enables people to compare prices across retailers quickly and easily. Buyers can sometimesavoid local sales taxes online, and shipping is often free. No wonder, then, that online shopping continues to grow even as the offline sort shrinks. In 2008 retail sales grew by a feeble 1% in America and are expected to decline by more than 3% this year, according to the National Retail Federation, a trade body. In contrast, online sales grew by 13% in 2008 to over $141 billion and are predicted to grow by 11% in 2009, according to Forrester, a consultancy. ...

  Auctions are moving onlineFOR centuries raising your hand was the way you bid at auction, whether you were buying sheep or Meissen shepherdesses. In the 1960s auction houses across the world introduced bidding by telephone, but the take-up was slow. Most would-be buyers used the phone to leave a bid with the auctioneer rather than to issue live instructions, round by round.Now technology has opened up another possibility: online bidding. The auction houses are divided. Matthew Girling, Bonhams’s chief executive for Europe and the Middle East, is against it: “We’re not building an online business.” Sotheby’s has an elegant website that allows customers to browse its catalogues, look at sales figures going back all the way to 1998 and get real-time auction results for several sales at once. But it stops short of letting clients take part in auctions online, except for wine. ...

  Will Facebook pay a price for its new two-tiered share structure?FROM the start, Facebook has assiduously imitated Google. The social-networking site has poached its chief operating officer and in-house chef from the search giant. Like the young Google, Facebook has turned down multi-million-dollar takeover offers in favour of going public. Then on November 24th came the news that it had prepared for a public offering by adopting a dual-class share structure, which gives some shares more votes than others—again, like Google. The assumption is that Facebook’s founder, Mark Zuckerberg, will keep control with the mightier shares after selling ordinary ones to the masses.In theory, Facebook ought to pay a price for this two-tiered structure, which makes it hard for a majority of shareholders to remove even dismal managers. Venture capitalists tend to hate dual-class structures, as they reduce the price at which they can sell their shares; no doubt Mr Zuckerberg has been given a tough time by his venture backers. ...

  Microsoft opens a new front in its battle with GoogleEVEN technology pundits can sometimes be right. Jason Calacanis, a blogging mogul, recently argued that there is a simple solution to the woes of both Microsoft and big media companies. The world’s largest software firm should pay Time Warner, News Corporation and others to block Google, the search giant, from indexing their content—and make it searchable exclusively through Bing, Microsoft’s new search service. Media companies would thus get badly needed cash, and Bing might take market share from Google.On November 23rd it emerged that Microsoft and News Corp are talking about just that. Although the discussions may come to naught, or prove a mere ploy in the media giant’s separate negotiations with Google, the news caused a stir. It is a sign not only of how far Microsoft is willing to go in order to turn Bing into a serious rival to Google, but also of how the entire internet could well evolve. ...

  Ever-increasing choice was supposed to mean the end of the blockbuster. It has had the opposite effectNOVEMBER 20th saw the return of an old phenomenon: the sold-out cinema. “New Moon”, a tale of vampires, werewolves and the women who love them, earned more in a single day at the American box office than any film in history. The record may not stand for long: next month “Avatar”, a three-dimensional action movie thick with special effects, will be released (see picture). This film’s production budget is reportedly $230m, which would make it one of the most expensive movies ever made. “Avatar” will be a great disappointment if its worldwide ticket sales fail to exceed $500m. Yet it is a reflection of how things are changing in the media business that such an outcome is unlikely.There has never been so much choice in entertainment. Last year 610 films were released in America, up from 471 in 1999. Cable and satellite television are growing quickly, supplying more channels to more people across the world. More than half of all pay-television subscribers now live in the Asia-Pacific region. Online video is exploding: every minute about 20 hours’ worth of content is added to YouTube. The internet has greatly expanded choice in music and books. Yet the ever-increasing supply of content tailored to every taste seems not to have dented the appeal of the blockbuster. Quite the opposite. ...

  More than ever, media is diverging into blockbusters and niches—with everything else strugglingJOE SWANBERG makes films about the romantic lives of young urbanites. He shoots quickly with a digital camera and asks actors to wear their own clothes. His films, which tend to cost between $30,000 and $50,000 to make, are almost never shown in cinemas. Instead they are available on pay-television as video-on-demand, as downloads from iTunes (Apple’s digital store) or as DVDs. By keeping his costs down and distributing digitally, Mr Swanberg is making a living. Technology was expected to help young artists like Mr Swanberg. In 2006 Chris Anderson, the author of “The Long Tail”, predicted that the internet would vastly increase the supply of niche media products and bring audiences to them. That has certainly happened. But so has the opposite. In film, music, television and books, blockbusters are tightening their grip on audiences and advertisers (see article). The growth ofobscure products has come at the expense of things that are merely quite popular. The loser in a world of almost limitless entertainment choice is not the hit, but the near-miss. ...

  Microsoft opens a new front in its battle with GoogleEVEN technology pundits can sometimes be right. Jason Calacanis, an entrepreneur and noted agent provocateur, recently argued that there is a simple solution to the woes of both Microsoft and big media companies. The world’s largest software firm should pay Time Warner, News Corporation and others firms to block Google, the search giant, from indexing their content—and make it searchable exclusively through Bing, Microsoft’s new search service. Media companies would thus get badly needed cash and Bing a chance to gain market share from Google.This week it emerged that Microsoft and News Corp are talking about just that. Although the discussions may come to naught, or prove a mere ploy in the media firm’s ongoing negotiations with Google, the news caused a stir. It is a sign not only of how far Microsoft is willing to go in order to turn Bing into a serious rival to Google, but also of how the entire internet could well evolve. ...

  Public wireless internet has had a tough time in America. Can Britain do better?ON A cold and drizzly autumn day, no one would mistake Swindon, a prosperous mid-sized town near Bristol, for northern California. But it does lie on the M4 corridor, a cluster of high-tech firms that includes several names familiar from Silicon Valley. Local employers include Intel, a chipmaker, and Motorola and Alcatel-Lucent, two telecoms firms. No surprise, then, that the borough wants to be the first in Britain to offer free wireless internet access to all its residents. Other cities have experimented—Bristol, for instance, offers wireless access in the city centre, and Norwich ran a trial between 2006 and 2008—but Swindon reckons it is the first to offer free access throughout the borough. The first phase, covering Highworth, a market town just north of Swindon itself, will be completed in December. The rest is due by April 2010, whereupon Swindonians will be able to stay online as they ride around on buses, lounge in parks or drink in pubs. ...

  Does local beat global in the professional-networking business?IN THE three-way fight between the biggest online professional networks—America’s LinkedIn, France’s Viadeo and Germany’s Xing—this week the French contender scored a victory. Last year LinkedIn had struck a deal with Apec, France’s best-known professional-recruitment service, to offer search functions to its huge customer base of over 30,000 companies and 500,000 executives. But on November 17th Apec made a new deal with Viadeo, having noted that although LinkedIn could reach executives at France’s biggest international companies, it failed to connect enough people in the country’s thousands of smaller firms.In professional networking, argues Dan Serfaty, Viadeo’s founder, having local depth is better than signing up a narrow slice of the highest-powered people around the world. A typical LinkedIn member would be an investment banker at Societe Generale, a French bank, he says, “too proud to invite his friends to join or to pay for it”. In contrast, Mr Serfaty claims, Viadeo signs up branch managers for Societe Generale, who use the site often and are happy to spend €5 ($7.50) a month on a subscription. Local entrepreneurs and provincial civil servants may be less impressive as members than Bill Gates, Microsoft’s co-founder, Mr Serfaty continues, but they are more engaged. (Mr Gates has been on LinkedIn since last year, and so far has made only five connections to other members.) At Xing, too, a hyper-local network which went public in 2006, the typical member is not a senior executive but a middle manager, says Stefan Gross-Selbeck, its boss. ...

  The battle against online music piracy is turning. A return to growth will take a good deal longer“ROCK and roll is dead,” sang Lenny Kravitz. It is certainly poorly. Music was the first media business to be seriously affected by piracy and has suffered most severely. Yet the prognosis is improving. While it is by no means over, the struggle against music piracy is going better than at any point since the appearance of Napster, a file-sharing service, ten years ago. It has been a brutal decade. In many countries music sales to consumers have fallen by more than a third. Even Apple’s popular digital iTunes store is little more than a niche service: fully 95% of downloads are illegal, according to the International Federation of the Phonographic Industry (IFPI), a trade group. Established bands have been able to raise ticket prices in response. But by reducing the money available to sign and tout new artists, file-sharing has made it harder for bands to become established. Paul McGuinness, who manages the band U2, says the whole “starmaking apparatus” is damaged. ...