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LOS ANGELES, Nov. 2 /PRNewswire/ -- Brad Greenspan filed a
lawsuit today in Federal District Court in Los Angeles thru his LiveUniverse
company, accusing News Corp's MySpace of ramping up the
practice of censoring MySpace users from using or even
mentioning the name on their profile pages of products or websites that News
Corp deems to be competitive or a source of information adverse to News Corp.
The lawsuit makes use of the law in the United States to protect companies
and consumers from the attempts by MySpace to illegally
create a monopoly and extend its dominance of the internet social networking
market.
MySpace, since being taken over by News Corp, has used this
mass censorship technique in the past against some of the larger services
such as YouTube and Revver before user revolts forced MySpace
to temporarily reverse censoring these services. More recently, MySpace
has begun targeting and censoring smaller competitors such as social
networking startup Stickam.com and vidiLife.com, the social networking and
video site launched by Brad Greenspan over a year ago. It is clear that News
Corp and MySpace are determined to destroy competing video,
photo, and social networking products as they seek to launch and dominate
with their own products, while destroying MySpace users'
freedom of choice.
MySpace blocks usage of the products it deems competitive
and goes a step further by effectively slapping gags on the mouths of the
over 100 million MySpace users by replacing any attempts by
users to type the url of sites like 'stickam.com' or 'vidilife.com' into a
blog or profile with ' ... ... ' .
"The shocking mass censorship of the over 100 million MySpace
users that News Corp and MySpace are beginning to
aggressively engage in today is simply evil behavior," said Brad
Greenspan, whose company created MySpace in 2003. "When
we started MySpace in 2003, we empowered users by giving
them full control over their profile pages. MySpace has
flourished by partnering with users and protecting their rights to express
themselves and have freedom of choice on their profile page. News Corp's
moves to destroy and limit the freedom MySpace users have
enjoyed is analogous to the strategies a dictator would employ after seizing
control of a previously free nation."
Greenspan continued, "If News Corp is able to continue its censorship
and mass gagging techniques today, then tomorrow it should surprise no one
when News Corp deletes mentions of competitive news organizations to their
own Fox News by preventing users from typing CNN.com or ABCNEWS.com in their MySpace
blogs. Or when MySpace wants to promote the music artists on
its own label, it will simply block users from talking about or promoting
similar artists."
In addition to News Corp's crackdown on freedom of expression on MySpace, the MySpace users that over the past couple of
years have spent considerable time and effort uploading their video, photo,
and other media to outside websites like Photobucket.com, Imageshack.us, and
Slide.com, are now in imminent danger of losing the ability to use these
services to manage and enhance their MySpace pages.
"I noticed that one of the websites I am an investor in, vidiLife.com,
was targeted by News Corp's censorship strategy in mid October immediately
after a video interview appeared on vidiLife from a MySpace
user and shareholder named Mike McGuire that detailed his views on News
Corp's takeover of MySpace and how he was personally
harmed," explained Greenspan. "vidiLife in September alone,
according to comScore, was visited and used by over 800,000 MySpace
users. News Corp in its quest to stop the spread of information that paints
News Corp in an adverse light, has directly harmed at least 800,000 MySpace
users by cutting off and blocking their use of vidiLife as a video hosting
service provider. vidiLife's traffic has plunged since News Corp began
censoring MySpace users' ability to use or talk about
vidiLife. vidiLife and the MySpace users that used the
vidiLife service are just the first wave of casualties in a larger censorship
campaign that News Corp intends to increase if they are not stopped."
The goal of the lawsuit is to force News Corp and MySpace to
agree to permanently end their current and growing practice of mass
censorship on the MySpace service which harms consumers freedom
of expression and choice while stifling technological innovation that
benefits all consumers.
The lawsuit filed today is but one mechanism being employed to hopefully
force News Corp to permanently end what is the start of incredibly disturbing
behavior. However, MySpace users and the public at large
need to send a message to News Corp that censorship is wrong!
MySpace users can mobilize today and send a message to News
Corp and the guys directly responsible for carrying out this evil censorship
and demanding they stop harming MySpace user's rights!
Ross Levinsohn is head of Fox Interactive that controls MySpace.
Chris DeWolfe and Tom Anderson manage MySpace day to day and
are increasing harmful censorship everyday! Reach out and tell them how you
feel! Stand up and protect your rights!
EBAY
Despite a recent swoon in eBay Inc.'s
share price, Wall Street seems willing to give Chief Executive Meg Whitman
the benefit of the doubt. EBay's merchants beg to differ.
Some of those who sell merchandise through the Internet auctioneer's Web site
recently have called for drastic action and management change at the San
Jose, Calif., company. They are particularly upset at the deterioration in
the company's flagship auction site, where they say they are seeing fewer
transactions and declining sale prices.
"EBay's core (auction) performance is suffering
tremendously," says Steve Grossberg, a longtime videogame seller on eBay.
He says he now lists an item four times on average in order to sell it, up
from two listings two years ago. Adds Andy Mowery, an eBay
seller of home and garden gear: "It is time for new leadership at eBay."
The sellers' gripes about Ms. Whitman and some of her team come as eBay's
revenue- and earnings-growth rates have slowed, even as the company has
expanded into new countries and areas such as Internet calling, classified
listings and comparison shopping. In the second quarter, eBay's
auction-related listings grew 22 percent from a year earlier but were
unchanged from the first quarter, while less-profitable store listings grew
faster than auction listings.
Overall, transaction revenue per listing the average amount that eBay
receives on an auction or store listing declined to $1.67, down 10 percent
from a year ago, according to Citigroup Global Markets analyst Mark Mahaney,
who rates eBay a buy. Citigroup owns shares of eBay,
which has been an investment-banking client in the past 12 months.
EBay shares have declined almost 54 percent over
approximately the past 20 months. In 4 p.m. composite trading Friday on the
Nasdaq Stock Market, eBay's shares fell 42 cents, or 1.5
percent, to $27.25, giving the company a market capitalization of $38.43
billion.
Yet investor sentiment toward Ms. Whitman remains sanguine. "The
problems eBay's got are a function of the fact that they're
a large company," says Ken Smith, a portfolio manager at Munder Capital,
which owns eBay shares. "I don't think management
change is necessitated."
Piper Jaffray & Co. analyst Safa Rashtchy says, "The best team to
solve (any problems) is the team that knows the problem in and out. Meg knows
and understands the problem." Mr. Rashtchy, who doesn't own any eBay
shares, has a market perform rating on the stock. Piper Jaffray doesn't own eBay
shares, nor has it done any business with the company recently.
An eBay spokesman says the company has acknowledged some
issues the merchants have raised. "We've said the marketplace business
growth is good, but we can do better," says spokesman Hani Durzy. He
says the company is taking "aggressive steps," such as a fee
increase for store listings to "reinvigorate" the auction
marketplace. The increase may discourage some merchants, while prompting many
others to move more items more quickly through auctions. Mr. Durzy adds that eBay
has the right management team, including Ms. Whitman, to guide the company.
Why the dichotomy in opinion between Wall Street and the merchants? For one,
Wall Street may believe it has little choice but to stick with Ms. Whitman.
Some of eBay's most senior and experienced executives
recently have announced plans to exit the company, including Jeff Jordan,
president of eBay's PayPal online-payment unit, who is
leaving later this year. Mr. Jordan's departure has raised questions about
succession because he was considered by some as an heir apparent to Ms.
Whitman.
There have been questions about how long Ms. Whitman will stick around ever
since her dalliance last year with Walt Disney Co. regarding the top job
there. She has said in the past that no chief executive should stay at a
company for more than a decade, and she is approaching her 10-year
anniversary at the helm of the Internet auctioneer, which she joined in March
1998.
But Ms. Whitman appears to be working to tamp down such talk. She recently
said she has "no plans to go anywhere." Mr. Smith of Munder says eBay
has indicated to him that Ms. Whitman will stick around "for a minimum
of a few more years."
The company has been courting Wall Street in other ways. On eBay's
earnings call last month, Ms. Whitman addressed concerns about the company
head-on. "Today, there are doubts about the strength of our core
business and the potential of Skype," she said, referring to the
Internet-calling unit. But "you will see eBay stay on
track to deliver the community experience and financial results you have come
to expect."
EBay recently held a series of investor meetings in New York
and Boston. EBay also recently announced a $2 billion stock
buyback, its first such program.
Kevin Landis, chief investment officer of Firsthand Capital Management, which
owns eBay shares, says much of the hand-wringing by
merchants is overblown. EBay "isn't exactly a
turnaround situation," he says. "You still have a very healthy,
growing profitable company." He notes eBay's
price/earnings ratio of 36 is comparable with those of Amazon.com Inc. and
Yahoo Inc., which have multiples of 39 and 33, respectively. But eBay's
forward P/E multiple of 20, which incorporates earnings estimates for next
year, looks like a steal, he says. In contrast, Amazon's richer forward P/E
multiple is 40, and Yahoo has a forward P/E of 42.
"Unless these guys are done growing, that's cheap," says Mr.
Landis, who believes eBay will keep growing.
That long view contrasts with those of eBay sellers, who
feel a sense of urgency in fixing eBay's problems, as some
have livelihoods at stake. Some sellers say there is a growing gap between eBay's
confirmed registered users people who have registered information about
themselves on eBay's site and its "active" users,
who have bought, bid on or sold something in the past year. That suggests
buyers are exiting the site at a growing pace.
Jeetil Patel, a Deutsche Bank Securities Inc. analyst, adds that eBay's
advertising costs are rising amid slower growth and declining demand on its
site. "The talk of Meg leaving, coupled with the significant amount of
departures, suggests that they need to overhaul the management ranks and take
a fresh look at the business in the context of slower growth and higher
advertising costs," says Mr. Patel, who has a hold rating on eBay.
Deutsche Bank owns eBay shares and has done investment
business with the company.
Mr. Durzy, the eBay spokesman, says the company is "pleased"
it has been able to retain much of its management team while adding new blood
to its ranks. "We're confident we're on the right path," he says.
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