Geek News and Musings

Today at the China 2.0 conference at Stanford, Alibaba Groups’s Jack Ma replied to a pointed question about buying Yahoo with, “We are very interested in Yahoo. Our Alibaba group is important to Yahoo and Yahoo is important to us … All the serious buyers interested in Yahoo have talked to us.”

Those “serious buyers” most likely include Alibaba Group investor Silver Lake Partners, Microsoft and Andreesen Horowitz, who have all reportedly reached out to Yahoo’s board.

Is Ma’s interest enough to spark consumer and shareholder interest in Yahoo? “Any and all interest [is] welcome,” one shareholder told me, “but Ma has real smarts.”

On the surface Ma is certainly the type of CEO that Yahoo needs post-Bartz, diplomatic, cunning, and a man of (relatively) few words. But would the deal make sense financially?

Alibaba Group’s recent funding from Silver Lake valued it at $32 billion, while Yahoo is at a 16 billion market cap. With Yahoo’s 40% stake in Alibaba Group valued at $12.8 billion, it seems like 80% of the company’s value is based on its Asian assets. Ma has apparently made it clear that he would like to buy back Yahoo’s stake in his own company, and now he can for a bargain basement $3 billion premium –with hundreds of millions of US users thrown in for good measure.

Is the rest of Yahoo worth $3 billion? Probably. Plus Ma has an additional incentive to buy Yahoo because getting all those shares back frees him from his largest albatross shareholder. It’s a no brainer for Alibaba.

Would the Yahoo board take an offer from Ma? That remains to be seen, as the relationship between the two companies has been notoriously strained, most recently suffering because of accusations of unfair play on the part of Yahoo when Ma transferred ownership of Alipay to a separate company.

The sentiment among the former Yahoo employees I spoke to seems to be that Yahoo is so dysfunctional that they can’t see anything like this happening. And then there’s stigma; the general idea is to sell to someone you’re proud of like Google and Microsoft, not someone you used to own. The cultural fit between the Chinese and American companies is also quite awkward, as Sarah Lacy has documented comprehensively.

Despite this, many shareholders are just hoping for a decent price to exit their long-held positions, and Ma might be the company’s only hope for survival intact, as he is interested in Yahoo in its entirety. This is surprising: Yahoo is the type of company that Richard Gere in Pretty Woman would buy, and then break up — the individual pieces are more valuable than the sum of the parts.

Related: Looking up that YHOO ticker on Yahoo Finance is just depressing.

Image: Mick Orlosky

We’ve seen a few other cases like this and never can understand how a court thinks it’s reasonable for a third party service provider to know how to block its system from being used for infringement, but that’s exactly what’s happened in the Court of Amsterdam. Dutch anti-piracy group BREIN has apparently won a lawsuit against Usenet provider News-Service.com (NSE). The court has ordered NSE to magically make all infringing works available via Usenet disappear. Of course, if you understood how third party systems work, you would know that the only way to do that is to no longer be an open platform, which takes away all the value of such a service. NSE responded pretty much as you would expected — in shock about the impossibility of the order:

We are very disappointed with the Court’s verdict. It is technically as well as economically unfeasible to check the contents of the 15 to 20 million messages that are exchanged on a daily basis. Added to which, there is no automated way of checking whether Usenet messages contain copyrighted material or whether permission has been obtained for the distribution of such material.

It’s kind of amazing that a court of law can’t understand how the internet works. For its part, BREIN claims that this is “a breakthrough step.” Yeah, taking down major communication platforms because the organizations you represent refuse to adapt. That’s a “breakthrough”?

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As you may recall, Psystar was a company that tried to make Apple Mac clones by legally purchasing Apple operating systems, and figuring out how to install them on other hardware. Apple sued the company in 2008 for violating its license. Psystar went through a variety of (often questionable) defenses before settling on the one I thought had the best chance: the first sale doctrine — basically claiming they legally purchased the software, and that they should be able to install it wherever they want. Psystar also claimed “copyright misuse,” against Apple, arguing that its EULA restricting installation to only Apple hardware was a form of copyright misuse to stifle competition. Two years ago, though, the court granted summary judgment to Apple, rejecting both arguments.

Psystar appealed, focusing on the copyright misuse argument and, while it took some time, the always slightly wacky 9th Circuit has upheld the ruling. The court, tragically in my opinion, buys Apple’s argument that its EULA does not unfairly restrict competition, because Psystar could go find a different operating system, rather than Apple’s. Here, the court relies on the awful Vernor v. Autodesk ruling that basically said, “as long as a software company claims it’s leasing the software to you, rather than selling it to you, your first sale rights disappear.” This is true even if the “sale” really is a sale rather than a lease. It all depends on what you call it.

So, in this case, the court ruled that the copyright misuse claim must fail, because it’s really an attempt to create a “right of first sale” for software — and because Apple pretends its software sales are licenses, there is no right of first sale. So, without that… no copyright misuse. If you think this logic is circular, you should see if you can become a judge on the 9th Circuit, since they appear to need help. Furthermore, it argues that since Psystar could just go write its own operating system there is no copyright misuse:

Apple’s
SLA does not restrict competitor’s ability to develop their own software, nor does it preclude customers from using non-Apple components with Apple computers. Instead, Apple's SLA merely restricts the use of Apple’s own software to its
own hardware. As the district court properly concluded, Apple's SLA has "not prohibited others from independently
developing and using their own operating systems." Apple I, 673 F. Supp. 2d at 939. Psystar produces its own computer
hardware and it is free to develop its own computer software.

As with the Vernor case, the reasoning here is convoluted. It’s really just another court decision that chips away at first sale rights, which are (were?) an important part of copyright law.

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“What constitutes due process in this case is a due process in war.” The Washington Post reports that a secret Justice Department memorandum authorized the killing of Anwar al-Awlaki. The operation involved the CIA, and military assets under CIA control.

Android and iOS: Untappd, the social network for beer lovers, is now available as a free download for Android and iOS. At its core Untappd is a beer rating and recommendation system. Using the service’s searchable database of brews you can rate each beer you drink, add a comment, and upload a photo of the brew. The service will recommend similar beers based on your rankings and share your reviews with your contacts. More »

[Photo by Jim Kiernan]

Michael Moore, holding a copy of the announcement that the New York City Transit Workers’ Union has voted unanimously to support the #occupywallstreet movement. The Transit Union has 38,000 members. More photos from the protests and from last night’s book signing with Michael Moore at the St. Mark’s Bookshop (which needs your help to stay around) are in this photo set by Jim Kiernan. And Moore’s new book is here: Here Comes Trouble: Stories from My Life
.

Hip-hop mogul Russell Simmons and my friend Glen E. Friedman, photographer and serial shit-stirrer, were in the house, too. So was this woman: one of the protesters who was pepper-sprayed.

(thanks, Glen E. Friedman!)

[Video Link] My friends at Crashspace are opening their doors to the public tonight for a fun event: its members are going to show me things they are working on and we are going to figure out the best way to present them in MAKE. There will be about eight 10-minute presentations. I can’t wait to see what the projects are. Hope to see you there!

Crashpace: 10526 Venice Blvd, Culver City CA 90232

Take a look at what the voice control interface in OS 5 might be like, the next Android update may have facial recognition built in, and Apple moves to discontinue the iPod Classic. More »

We’re back with a new episode of TC Cribs, and it’s featuring one of the most tricked-out offices yet: YouTube.

Yes, the world’s biggest archive of cute cat videos (among other things) invited us to take a stroll through their halls, which are brimming with nifty artifacts, viral video memorabilia, and gnomes. A lot of gnomes.

There’s also a big surprise that comes around two-thirds through the episode that had me hurting for a couple of days. Don’t miss it!

Here are some of our past episodes (oh, and don’t worry — we’ll feature some much smaller companies very soon!):

• Inside The Psychobox: A Tour Of Dropbox’s Bumping Office
• Take A Doc On The Wild Side At Scribd (With Bonus Go Karts!)
• Dogs, Unicorns, And Mysterious Gongs: Inside Yelp’s 5-Star Pad
• TC Cribs: IGN HQ Gets Its Game On With Lawn Gnomes, Plumbers, And Creepy Dinosaurs
• TC Cribs: From Frenchmen To Randy Raccoons, An Inside Look At Seesmic
• TC Cribs: Inside The Snuggified Home Of Posterous
• TC Cribs: Meebo’s Headbanging, Rocket-Flinging Office (With Magical Passageways)
• TC Cribs: Unlock The Secrets Of GroupMe HQ (Beware The Time-Out Chair)
• TC Cribs: Inside The Escheresque Home Of Justin.tv and Socialcam
• TC Cribs: Inside Tumblr’s Reblog-Worthy Digs
• TC Cribs: Inside Etsy’s Handcrafted Wonderland
• TC Cribs: A Magical Journey Through Box.net (In The Cloud)

This video, labelled as being recorded “moments after” NYPD DI Anthony Bologna’s now-infamous unprovoked mace assault on four women at the Occupy Wall Street demonstration, shows the same office in another mace attack. How many before we can call it a rampage? How many before the NYPD admits that it’s wrong and unacceptable?

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