For quite some time now, YouTube has been one of the most popular sites on the Internet and provides its users with a variety of content ranging from personally made videos to sporting events, live concerts, breaking news and a lot more.

They have now expanded this service by tying up with some major Hollywood studios to roll out about 3,000 titles for rental in due course of time. These movies will be accompanied by reviews from popular movie rating site Rotten Tomatoes and behind-the-scenes information.

New releases for rent on YouTube Movies

Some of the major studios that have agreed to tie-up with YouTube for this service include Sony Pictures Entertainment, Warner Bros, Universal pictures and Lionsgate.

Older movies such as ‘Good Fellas’ and ‘The Dark Knight’ will be available for a lower fee of $2.99. New releases such as ‘Inception’ and ‘The King’s Speech’ will be charged at $3.99. Movies that were previously offered for free will remain free to view on the new service as well.

This service is expected directly compete with sites such as Netflix and Redbox. However, these sites are currently priced a lot cheaper than YouTube, and so YouTube might eventually have to rethink their pricing strategy, which currently seems closer to old-fashioned rental services such as Blockbuster.

Expanded movie rental services from YouTube will help to further consolidate the video-sharing site’s position in the market, while at the same time narrowing the gap between online video and television.

This service has only been started in the U.S. as of now, and it will serve their 105 million customers. Once Google expands this service and realigns prices in other regions such as Europe and Asia, they could make it a real success as online rental services are not very popular there and theirs would be the only popular service to offer immediate legitimate streaming movies.

Happy Feet movie rental page with reviews, previews and related videos

Warner Bros. is the first studio to go in for this kind of service on a social network. The partnership makes a lot of sense. Users are likely to watch movies on Facebook and ‘Like’ them, thereby immediately letting their friends know about the movie and allowing those friends to watch the movie right there.

The Batman movie, The Dark Knight, will be the first feature film to be rented out on Facebook.

The official Facebook page for the movie shows a tab called, ‘Watch’. When users click on the tab / link, they will be able to view the movie. Users will be able to pay for the rental through their Facebook credits. The cost of the movie has been fixed at 30 Facebook credits or $3.

Viewers will have the facility to watch the movie at their convenience over the next 48 hours. Movies will be viewable in full-screen mode. The viewer will also be able pause and resume the movie at will. If the viewer exits Facebook, returning to the official Batman: The Dark Knight fan page and selecting the Watch tab will resume the movie. Alternatively, users can select The Dark Knight application that appears on the left side of their Facebook profile page to re-open the video player window.

It will also be possible for users to update their status, post comments and interact with Facebook friends while watching the movie.

President of Warner Bros. Digital Distribution, Thomas Gewecke says, “Facebook has become a daily destination for hundreds of millions of people. Making our films available through Facebook is a natural extension of our digital distribution efforts. It gives consumers a simple, convenient way to access and enjoy our films through the world’s largest social network.”

Considering the fact that box office collections have gradually been falling, this could be a new source of revenue generation for the studios.

It is also good for the viewers as it gives them the facility to watch a movie at their convenience, within the website that they spend most time on. It could also be very economical for them as more than one person can see the movie at a time.

This service is only being introduced in the U.S. for now, and other titles will be added later.

Watch The Dark Knight on Facebook

Google is reported to have said that during the second quarter of the year, marketers were more likely to agree to pay a higher charge for their ads to appear online. This was probably a result of the fact that users were more likely to click on the ads.

The largest newspaper publisher in the U.S. Gannett Co. has also reported a positive trend in the print media after a gap of 31/2 years. The decline of print ads has dropped to 6% during this period.

General Electric Co. has also reported a recovery in the local ad market and the percentage of growth is quite substantial.

The first two months of the quarter were good for Yahoo!, but in the month of June they noticed a sudden drop in the ad spend of several of their advertisers. Though the total search advertising revenue fell by 8%, the display advertising sector has shown a growth of 19% compared to the same period last year.

The Omnicom Group Inc. has shown a 4.2% growth of quarterly net income. There overall revenue grew by 5.9% and in the U.S. alone, it grew by 7.4%.

The New York Times has reported a quarterly growth in revenue after a gap of 3 years. Digital ad sales grew by 21% but the print media saw a drop of 6% in advertising generated revenue.

Online ad revenue on Bing has increased Microsoft’s revenue by 19%. Fox Cable Network reported a growth in their advertising revenue. Time Warner Inc. also saw a surge in growth due in part to increased ad revenue.

When the newly constituted Yahoo! board met for the first time, one of the major points on their agenda was to settle the matter of whether or not to proceed with discussions with Time Warner, for the possible purchase of their Internet arm, AOL, which Time Warner has wanted to get rid of for a while now.

The board has been given the go ahead to pursue the matter with Time Warner, but no negotiations have taken place yet according to sources.

The two companies had been in discussions with each other over this matter earlier, but failed to reach a settlement then.

If Yahoo! And AOL can reach an understanding, it might help to improve their position in the Internet advertising and content market, but more importantly, such a deal is likely to dissuade any future takeover attempt by Microsoft, who have also shown an interest in AOL. As things stand,

Microsoft is certainly in a better position to pay a much higher amount than Yahoo!, which would be the bottom line for Time Warner. However, a Microsoft-AOL merger would do absolutely nothing for the software giant’s search marketing business, and such a move would be nothing but a petty attempt to get back at Yahoo!
Interestingly, in an interview with CNBC last Friday, Mr. Icahn still felt that eventually Yahoo! would have to “do something” with Microsoft or Google Inc. would “kill” the company.

Speculation, however, continues to persist about Time Warner washing their hands off AOL, by selling it to some big player in the online advertising market.

The second quarter results show that it was not a very lucrative season for AOL. Revenue has fallen to $1.1 billion, which is a drop of 16 percent. Only their advertising revenues have gone up by 2 percent (i.e. $8 million), but that gain is certainly not sufficient to make up for the losses suffered by the Internet access division.

The once popular internet service provider has lost 2.8 million customers since last year, bringing down their subscriber base to just 8.1 million users. They have lost 604,000 subscribers in the second quarter itself. In monetary terms, that is a loss of $200 million. Ironically, the company had increased its charges for the dial-up services in late June.

The operating income of AOL has dropped by a steep 36 percent and is now pegged at $230 million. Unconfirmed reports state that AOL’s access business may find a buyer in EarthLink.

In the meantime, CEO of Time Warner Cable, Glenn Britt, says that revenues are up 7 percent, seeing a decline only in television pay-per-view. An additional 214,000 people have subscribed to the ‘triple play’ offering of cable TV, broadband Internet and telephone service.

Microsoft are adding new features to their Windows Mobile and BlackBerry services, such as improved mapping and a voice interface for the Blackberry. InformationWeek reports that these new services will allow clients to speak into their Blackberry handsets, instead of having to enter queries through the number pads, which can be quite a tedious process.

Users will now be able to find directions to restaurants, theatres, offices and other places of interest by simply speaking the name of the place they want into their mobile devices. It is also expected that customers will shortly be able to map a contacts address, and view custom maps on Virtual Earth on their mobiles.

Bill Gates has long been in favor of technologies such as voice, touch and pen-based computing, but there were several obstacles to this in the past. Voice recognition technology has made a lot of progress in the last year and has been available on Microsoft Live Search Mobile for Windows Mobile devices since October of last year. The support for additional devices will make this service especially useful in cars as the driver will no longer have to look away from the road.

AOL has also launched a new mobile service. The Market Intelligence Service reports that the beta version of AOL MyMobile will allow BlackBerry users to access personalised AOL services through mobile phones. They have also started an AIM TXT short-code service for all major carriers in the U.S.

AOL MyMobile

Windows mobile users will now be able to receive personalised services by downloading AOL MyMobile. This platform will provide integrated relevant Web and mobile search results. AOL MyMobile has drop-down lists and menus, which are easy to access. It will also remember user favorites and recent requests.

Users will be able to save directions to various places and even access them off-line or outside their network range. News of these innovations has raised the share price of AOL’s parent company Time Warner Inc, which has been rumoured to be on the lookout for a buyer for the former Internet giant.

Jerry Yang, co-founder of Yahoo! stated in an official letter that Microsoft’s offer of $31 per share “massively undervalues” Yahoo! and they will not consider any negotiations unless the price goes up to at least $40 per share, or an additional $12 billion.

Yahoo! will however have to reassure its share holders, that they can bring the stock prices back up, which will not be easy to do by themselves, given that their balance sheet has shown a fall in profits over the last two years and they continue to lose market share to Google.

In the past AOL and Yahoo! have failed to reach a mutually acceptable deal. However, given the crises both companies are facing (Time Warner are rumoured to be on the lookout for a buyer for AOL), one might think they may be able to settle their differences and work together amicably. However, the reality of the situation is plainly obvious to most – Yahoo! is desperate and trying everything possible to avoid a takeover or get Microsoft to bump up their offer.

A Yahoo! – AOL merger seems highly unlikely. Both the companies are struggling, they do not supplement each others’ shortcomings, and bringing them together will most probably accelerate their decline. Among other reasons, Yahoo! does not have sufficient cash to entice already debt-ridden Time Warner. Also, Google, which has a 5% stake in AOL would resist such a deal, as Yahoo! would then replace Google’s paid search partnership with AOL. And most importantly, Yahoo! would still have to compete with Google, with no additional armour to arrest its fall.

Most analysts believe that with time the Yahoo! Microsoft deal will eventually happen. Talking to AOL is probably just Yahoo!’s way of making execs at Microsoft envious and get them to raise their bid. Microsoft would be wise to just wait this out, allow shareholders to voice their opinions, and when the stocks fall back down, buy Yahoo! in a hostile take over. Others believe that Microsoft should actually pay up right now, in order to make some quick and decisive moves to stem Google’s growth.

The Wall Street Journal reports, “Microsoft’s management is conscious of the risk that a hostile bid could spark resentment among Yahoo’s rank-and-file engineers and other employees whose cooperation is crucial to the company’s success.” However, in his original letter to Yahoo!, Microsoft CEO Steve Ballmer had clearly stated, “Microsoft reserves the right to pursue all necessary steps to ensure that Yahoo’s shareholders are provided with the opportunity to realize the value inherent in our proposal.”

Update:

Since the time this post was authored, Microsoft have responded to Yahoo!’s rejection of their bid, calling it “unfortunate” and clearly indicated that they will not back down and are ready to take more drastic steps to acquire the company.