The technology industry’s newest high-powered political lobby, FWD.us, is unraveling just a month after it launched, as two of its biggest partners, Tesla’s Elon Musk and Yammer’s David Sacks, leave the organization. Begun with a reported $20 million of Mark Zuckerberg’s own money, and rare op-ed by the politically shy Facebook founder, FWD.us has faced a torrent of criticism over funding advertisements that praise Republicans who support the controversial Keystone pipeline (below).

Environmental groups were up in arms and circulated a boycott of FWD.us that had, ironically, had more supporters than FWD.us’s call to action. The Sierra Club, Progressives United and MoveOn.org were among a littany of progressive groups that are now boycotting Facebook advertisements.  “Immigration reform – fine. Oil expansion and pipelines? NOT fine. Where’s the transparency here, rich dudes? Or does FWD actually stand for Fine With Drilling?,” wrote one angry commenter on the FWD.us Facebook page.

Elon Musk, as founder of Tesla Motors, prides himself on a sterling environmental record, so it’s easy to see why he couldn’t tolerate being associated with a group indirectly funding pro-Keystone pipeline ads. But, David Sacks doesn’t have as much to lose publically as Musk, which means that Musk is likely hooking more high-level partners with his departure.

Nor is this the group’s first PR disaster. Even before the group began, FWD.us director and Zuckerberg’s old Harvard roommate, Joe Green, had to issue a statement of regret for a leaked perspectus. “Given the status of our funders and quality of our team, we will drive national and local narratives to properly frame our agenda,” read the brash strategy note.

As we’ve written about before, FWD.us has kept a tight lid on their funding and tactics. We do know that FWD.us splits its organization into Democratic and Republican teams, offering quid pro quo cash in exchange for support of its key initiative — immigration. This kind of back-door compromising may work in D.C., but it’s evidently not as well tolerated in the Valley.

In my own off-the-record conversations with supporters, no one is happy with FWD.us right now.

It’s going to become a political landmine to stay on board, let alone join the group. FWD.us is unraveling, and we predict it won’t be around much longer unless it becomes a lot more transparent and ditches the D.C. tactics. Stay tuned for more.

Article courtesy of TechCrunch

Access to online voter registration could spell doom for Republicans in the next election. Early research on California’s online voter registration system finds that “A larger proportion of Latinas/os under 35 registered online than whites or Asian Americans of any gender.” [PDF]. Namely, the very demographic widely credited for boosting Democratic victories in 2013 have an affinity for digital democracy.

The preliminary results are surprising, since technology is stereotypically assumed to have a lopsided impact on rich, white, iPad-toting Americans. “Advocates for online registration argued that it would make the registration process more open and accessible to a broader range of voters. Our analysis suggests this reform was successful in that regard,” write Lisa García Bedolla and Verónica N. Vélez of the Berkeley Center for Latino Policy Research.

1. Latino support for Democrats is skyrocketing

2. A high proportion of Latinos, especially Democrats, registered online

Now, these stats have to be taken with a grain of salt. We do not know whether online voter registration significantly boosts turnout. Some proportion of online registrants would have voted anyways.

One report from the University of California, Davis, shows that online registrants voted in higher numbers [PDF], but the figures are just descriptive, and the researchers don’t statistically control for other variables, which might tell us whether or not they would have voted anyways.

Still, as online systems expand for the next election, it’s not a good sign for the GOP.

Article courtesy of TechCrunch

An internet sales tax is inching its way to closer to being the law of the land: the U.S. Senate supported a non-binding vote of approval, 75-to-24, for a law that would allow states to collect taxes from Internet retailers. If enacted as is, it would allow states to levy taxes on some online retail purchases from businesses with over $1 million in gross receipts.

Internet retails can thank their mostly tax-free existence to a 1992 Supreme Court Case, Quill Corp. v. North Dakota, which declared that companies without a “substantial nexus” in a state didn’t have to pay sales tax. “Quill became a seminal case for online retailers: It meant, in essence, that they didn’t have to pay state and local sales taxes,” writes the Washington Post’s Ezra Klein,” That’s allowed them to undercut traditional brick-and-mortar stores on price. It’s also meant that state and local governments, which rely heavily on sales taxes, have lost enormous amounts of revenue as more and more commerce has moved online.”

There are some exceptions: Amazon currently charges California residents sales tax, and will soon charge residents of Massachusetts and Connecticut, after new offices and acquisitions gave it a significant presence in those states.

A score of Internet lobbies, such as Netchoice, representing Facebook, Yahoo, and (TechCrunch’s parent company) Aol, argue that the senate’s bill “does nothing to address what the Supreme Court says was an unreasonable burden on interstate commerce,” explains Steve Delbianco of Netchoice.

An equally self-interested set of lobbies, such as the National Retail Federation, representing the big box likes of OfficeMax, Macy’s, And Saks, argue that an Internet sales tax ban gives online retailers are unfair advantage and deprives states of billions in revenue.

The current law will give readers a flavor for the sausage factory that is the U.S. Congress. The tax was offered as a non-binding amendment to the Democratic budget, by Senators Mike Enzi and Dick Durbin.

“The strategy of the bill’s supporters is to offer this general amendment and then claim that all the senators that vote for it support the bill,” explains Brian Bieron, eBay’s senior director for federal government relations and global public policy, to Cnet. “That is not just a stretch, it is not accurate. But the game plan is to rack up a sizable vote and then make the claim the bill itself should jump over the Finance Committee and go right to the floor.”

So, nothing is law yet, but it’s getting closer.

Article courtesy of TechCrunch

FTC chairman Jon Leibowitz announced on Thursday that he will resign, one month after the agency reached a settlement with Google after a 20-month investigation into the tech giant’s alleged anticompetitive behavior. The resignation had been expected by antitrust lawyers since last summer and will take effect in mid-February. Leibowitz said that he plans to move to the private sector and will likely focus on competition policy and privacy.

“I felt like this was a good time to leave because we got through a number of things that I wanted the commission to address,” Leibowitz told the New York Times.

The FTC decided not to take any action in connection with the allegation that Google had used its algorithms to unfairly favored its own products over potential competitors, a move many companies and observers saw as letting the company “walk away scot free.”

Under Leibowitz, who served as a commissioner before commencing his two terms as chairman, the FTC also worked to expand the Children’s Online Privacy Protection Act and brought action against Intel for unfair business practices in the microprocessor market.

The New York Times says that Leibowitz’s successor will likely come from within the ranks of the FTC, with Democratic commissioners Julie Brill and Edith Ramirez seen as likely contenders.

Article courtesy of TechCrunch

Google is sounding a warning klaxon about a proposed law change in Germany which aims to strengthen copyright law for press publishers by requiring search engines and online news aggregators to pay a royalty to display snippets of copyrighted text — such as the first paragraph of an article displayed within a Google News search. If the ancillary copyright law passes, fines would be imposed for unlicensed use of publishers’ snippets.

The draft ancillary copyright law (online here in German) gets an expert hearing in a legal committee today, ahead of the second reading (German law requires three readings before a law can be passed), and is backed by the majority of the governing coalition — having being included in the coalition agreement between the Christian Democratic Union and the Free Democratic Party.

Currently displaying text snippets is free and legal in Germany so Google argues that the proposed amendement is a complete legal reversal. The issue is known as ‘Leistungsschutzrecht für Presseverleger‘ in German, and has also colloquially been dubbed a ‘Google tax’.

Mountain View is of course ideologically opposed to the proposal — calling it a “bad law” and arguing that it breaks the “founding principle” of the Web’s hyperlink-based architecture. From a business perspective the company questions why it should have to pay for helping publishers to acquire readers.  ”We are bringing massive traffic to the publishers’ websites,” Google Germany spokesman Dr. Ralf Bremer told TechCrunch. “We cannot see a reason why we should pay them for bringing them the readers.”

Setting aside the obvious inconvenience to its business, Google argues that the law will be damaging for web users because it will make it harder for them to find German documents because the context provided through use of snippets will be lost. Why should German publishers be treated differently to other publishers, it says. There’s surely little doubt that Google would refuse to pay for the snippets if the law passes — you can imagine the company viewing that path as a slippery slope leading to an avalanche of copyright claims falling on its head — although at this point Google said it is not in a position to specify how it will respond if the law passes.

What’s certain is that Mountain View is being directly targeted by the proposed law. It specifically cites search engines as the target entity for the additional publisher “protection” — and Google is far and away the dominant search engine in Germany. But Mountain View claims the law is not just going to cause it pain — but could also apply more broadly to other online companies and startups that make use of text snippets.

The text of the current draft of the law states that the proposed protection “is only against systematic access to the publishing performance by the search engine providers” (translated from German via Google Translate) – and goes on to add that other web users are not included (“such as Blogger, other industrial companies in the economy, Associations, law firms and private and voluntary users”). However Google points out that the wording of the draft law also references “suppliers of search engines and suppliers of such services, who process content similar to search engines” as falling within its remit — a vague definition that it says could even apply to social networks.

“The question — which services are meant by the latter [portion of the draft law's wording] — is controversially debated. The latest interpretations, we have seen, assume that Twitter, Facebook and the like will also be affected,” said Bremer. He argues that every web service or information-based startup that wants to use publishers’ snippets could potentially be affected.

“As soon as this law comes into place there will have to changes made by every platform working on the web,” he said. “It’s not just a law about Google… it’s about the entire startup scene that we have in Germany, and especially in Berlin. Because potentially every company that works on the web has to deal with snippets, more or less, in their business.”

“From the day this law comes into place, every company that wants to use these snippets… would have to reach out to publishers and call them individually — ‘hi, can you please allow me to use your snippets and what do I have to pay for that?’ And if you understand there are more than 1,200 publishers you can imagine that it is simply not possible,” he added.

Google is not alone in its opposition to the proposal. The German Association of Startups has put out a statement opposing the current proposal – in which it writes (translated via Google Translate): “The current proposed intellectual property right for press publishers has strong potential harm to Internet start-ups in Germany . Regulations such as the related right for press publishers slow innovation in Germany and lead to a competitive disadvantage, particularly in an international comparison.”

There is also political opposition — several of the smaller parties in the government put out a joint statement against the law. And a coalition of 25 German companies has also come out against it, to name a few of those opposed.

Another problem with the draft law, as Google and other opponents tell it, are the myriad legal gray areas it throws up. For example it does not nail down the definition of a snippet — meaning it could be left to courts to decide whether a snippet means a few sentences, a few words or even just a URL. “It is not even sure the pure hyperlinks are free because some hyperlinks contain part of the text,” said Bremer.

If the law is passed — which is certainly possible, despite widespread opposition, as it has the backing of the governing coalition — it’s unclear what Google would do at this point, i.e. in terms of whether they would have to pull German snippets from search results. “We have to look at the final wording, before we can come forward with a decision,” said Bremer.

According to Bremer Germany’s big publishing houses originally lobbied for the law change. He describes them as politically well connected — and also points out that it’s an election year in Germany this year. “Pressure from the publishers is really high to get this law done within the coming months,” he said.

Bremer said today’s expert hearing — which will involve input from a panel of nine experts (ostensibly independent but three of whom Google argues “belong to the publishers’ lobby”) and at which Mountain View has not been invited to speak – could be “the last change to get this law off the table or to shape it in a way that is not so dangerous today for the web architecture”. Google’s hope, says Bremer, is for the governing coalition to listen to the views of the independent experts and think again.

“The arguments against this law are very strong. The arguments for this law are very weak,” he added.

So what about the arguments for the proposed law? German publisher Axel Springer – whose publications include the newspapers Die Welt and Bild — is an active supporter of the proposals. Asked to respond to Google’s arguments against the copyright extension, Christoph Keese, Senior Vice President of Investor Relations and Public Affairs for the company and chair of the joint copyright committee of Germany’s newspaper and magazine association, told TechCrunch that “Google’s statements are unfair and disproportionate” and “in no way represent what this law is really about”.

Keese also rebutted criticisms about the potential scope of the law, claiming it will “have no effect on the right to quote or link”, and that “citations and links stay free”.

He continued:

It is neither “mad” nor will it harm users, the internet, open society or information pluralism. To the contrary: This reform brings German copyright law much closer to the US concept where publishers traditionally enjoy strong rights. Over here publishers have no rights on their own to this very date even though music, film, television and performing arts have enjoyed ancillary rights since the mid sixties.

What this reform does is very simple: It establishes on opt-in model for commercial copies of content and parts of content. This will lead to license agreements between publishers and aggregators.

On the specific point about the impact on startups, Keese argued that being as the pricing for licensing the snippets will be “reasonable” then “no business model shall be discouraged”, adding:

We have carefully considered impact on the thriving start-up culture especially in Berlin. There will be no negative effects. To the contrary: New innovative business models will arrive built on legally licensed content. Even before the law comes to effect we observe rising demand by start ups seeking investment and licensing opportunities.

This law will help establish a market for aggregator content which at the moment is non-existent. Google (>90% market share) displays monopolistic behavior by trying to impose its legal view on publishers to protect its margin. While publishers respect Google’s technological and entrepreneurial achievements we are not prepared to give content away for free. Search indexing is more than welcome. But aggregators have gone far beyond that.

The royalty rate that publishers would charge has not been determined yet. On the question of pricing, Keese said: “Parliament has not decided yet if it wants the right to be exercised through a collecting society or not. Absent this decision it would be premature to speculate about pricing.”

Article courtesy of TechCrunch

Google is sounding a warning klaxon about a proposed law change in Germany which aims to strengthen copyright law for press publishers by requiring search engines and online news aggregators to pay a royalty to display snippets of copyrighted text — such as the first paragraph of an article displayed within a Google News search. If the ancillary copyright law passes, fines would be imposed for unlicensed use of publishers’ snippets.

The draft ancillary copyright law (online here in German) gets its second reading today (German law requires three readings before a law can be passed), and is backed by the majority of the governing coalition — having being included in the coalition agreement between the Christian Democratic Union and the Free Democratic Party.

Currently displaying text snippets is free and legal in Germany so Google argues that the proposed amendement is a complete legal reversal. The issue is known as ‘Leistungsschutzrecht für Presseverleger‘ in German, and has also colloquially been dubbed a ‘Google tax’.

Mountain View is of course ideologically opposed to the proposal — calling it a “mad law” and arguing that it breaks the “founding principle” of the Web’s hyperlink-based architecture. From a business perspective the company questions why it should have to pay for helping publishers to acquire readers.  ”We are bringing massive traffic to the publishers’ websites,” Google Germany spokesman Dr. Ralf Bremer told TechCrunch. “We cannot see a reason why we should pay them for bringing them the readers.”

Setting aside the inconvenience to its business, Google also argues that the law will be damaging for web users because it will make it harder for them to find German documents because the context provided through use of snippets will be lost. Why should German publishers be treated differently to other publishers, it says. There’s no question of Google agreeing to pay for the snippets — you can imagine the company viewing that path as a slippery slope leading to an avalanche of copyright claims falling on its head.

There’s little doubt Google is being directly targeted by the proposed law. It specifically cites search engines as the target entity for the additional publisher “protection” — and Google is far and away the dominant search engine in Germany. But Mountain View claims the law is not just going to cause it pain — but could also apply more broadly to other online companies and startups that make use of text snippets.

The text of the current draft of the law states that the proposed protection “is only against systematic access to the publishing performance by the search engine providers” (translated from German via Google Translate) – and goes on to add that other web users are not included (“such as Blogger, other industrial companies in the economy, Associations, law firms and private and voluntary users”). However Google says the wording of the draft law also references “suppliers of search engines and suppliers of such services, who process content similar to search engines” as falling within its remit — a vague definition that it says could even apply to social networks.

“The question — which services are meant by the latter [portion of the draft law's wording] — is controversially debated. The latest interpretations, we have seen, assume that Twitter, Facebook and the like will also be affected,” said Bremer. He argues that every web service or information-based startup that wants to use publishers’ snippets could potentially be affected — adding that many such companies won’t have ‘Google-levels of resources’ to ensure they are able to comply.

“As soon as this law comes into place there will have to changes made by every platform working on the web,” he said. “It’s not just a law about Google… it’s about the entire startup scene that we have in Germany, and especially in Berlin. Because potentially every company that works on the web has to deal with snippets, more or less, in their business.”

“From the day this law comes into place, every company that wants to use these snippets… would have to reach out to publishers and call them individually — ‘hi, can you please allow me to use your snippets and what do I have to pay for that?’ And if you understand there are more than 1,200 publishers you can imagine that it is simply not possible,” he added.

Another problem with the draft law, as Google tells it, is that it does not nail down the definition of a snippet — meaning it would be left to courts to decide whether a snippet means a few sentences, a few words or even just a URL. “It is not even sure the pure hyperlinks are free because some hyperlinks contain part of the text,” Bremer added.

If the law is passed — and Bremer concedes it looks likely, thanks to the backing of the governing coalition – Google says it would have to pull German snippets from search results. Setting aside the ideological position of not being willing to pay for something it believes should be free to use, it argues that the legal risk of displaying snippets when the law is so ambiguous would be too “fraught”.

According to Bremer Germany’s big publishing houses originally lobbied for the law change. He describes them as politically well connected — and also points out that it’s an election year in Germany this year, arguing that politicians are more likely to want to cosy up to publishers than counter their wishes. “Pressure from the publishers is really high to get this law done within the coming months,” he said.

Bremer said today’s second reading — which will involve input from a panel of eight experts (ostensibly independent but three of whom Google argues “belong to the publishers’ lobby”) and at which Mountain View has not been invited to speak – could be “the last change to get this law off the table or to shape it in a way that is not so dangerous today for the web architecture”. Google’s hope, says Bremer, is for the governing coalition to listen to the views of the independent experts and think again.

“The arguments against this law are very strong. The arguments for this law are very weak,” he added.

So what about the arguments for the proposed law? German publisher Axel Springer – whose publications include the newspapers Die Welt and Bild — is an active supporter of the proposals. Asked to respond to Google’s arguments against the copyright extension, Christoph Keese, Senior Vice President of Investor Relations and Public Affairs for the company and chair of the joint copyright committee of Germany’s newspaper and magazine association, told TechCrunch that “Google’s statements are unfair and disproportionate” and “in no way represent what this law is really about”.

Keese also rebutted criticisms about the potential scope of the law, claiming it will “have no effect on the right to quote or link”, and that “citations and links stay free”.

He continued:

It is neither “mad” nor will it harm users, the internet, open society or information pluralism. To the contrary: This reform brings German copyright law much closer to the US concept where publishers traditionally enjoy strong rights. Over here publishers have no rights on their own to this very date even though music, film, television and performing arts have enjoyed ancillary rights since the mid sixties.

What this reform does is very simple: It establishes on opt-in model for commercial copies of content and parts of content. This will lead to license agreements between publishers and aggregators.

On the specific point about the impact on startups, Keese argued that being as the pricing for licensing the snippets will be “reasonable” then “no business model shall be discouraged”, adding:

We have carefully considered impact on the thriving start-up culture especially in Berlin. There will be no negative effects. To the contrary: New innovative business models will arrive built on legally licensed content. Even before the law comes to effect we observe rising demand by start ups seeking investment and licensing opportunities.

This law will help establish a market for aggregator content which at the moment is non-existent. Google (>90% market share) displays monopolistic behavior by trying to impose its legal view on publishers to protect its margin. While publishers respect Google’s technological and entrepreneurial achievements we are not prepared to give content away for free. Search indexing is more than welcome. But aggregators have gone far beyond that.

The royalty rate that publishers would charge has not been determined yet. On the question of pricing, Keese said: “Parliament has not decided yet if it wants the right to be exercised through a collecting society or not. Absent this decision it would be premature to speculate about pricing.”

Article courtesy of TechCrunch

Facebook today took one more step in making its advertising more accountable for media buyers: it has now rolled out a conversion measurement system  across its global footprint. Aimed at direct marketers, the optimization and conversion toll was first announced back in November; now it’s available globally, and can be used on all Facebook ads and sponsored stories, the company says, as well as in combination with any other targeting services. And, in a sign of increasing cross-platform marketing, Facebook says that its conversion measurement tool is  can report when a user views an ad on one platform, like mobile, but then converts on another, like a PC. It’s the only tool so far that can do this — but as Facebook continues to expand its advertising business, it’s not likely to be the last.

That is a win-win for Facebook: if it can show that marketers can save money by using these tools as part of their campaigns, it will also mean that they will ultimately spend more money and effort advertising on the social network. It’s also one more sign of how Facebook is continuing to extend its influence outside of its own platform and walled garden — although it’s still stopping short of advertising on third-party sites.

What the tool does is it allows advertisers to put some code on their sites to track when actions like checkouts/payments or registrations have been driven by an advert seen on Facebook. This then feeds back into how marketers run their campaigns on optimized CPMs for more effective responses.

The conversion tool is largely aimed at direct marketing campaigns tied to specific actions, and are most suitable for sites that have transactional elements to them, such as those for e-commerce, travel, retail, and financial services, says Facebook. It notes that hip home goods site Fab was an early tester, and it reduced its cost per new customer acquisition by 39%. 

Another early tester shows that the tool could be used for less commercial efforts, too: the Democratic Governors Association used it to track mailing list sign-ups, and using it reduced its cost-per-conversion rate by 85%.

Facebook says that the conversion tool is currently available for marketers using three of its different ad products power editor, the ads manager, and for its large-scale marketers that use Facebooks advertising API, and the service is now live.

Article courtesy of TechCrunch

Watching the live stream of President Obama’s inauguration on the official smartphone app could make you a lucrative target for liberal spam. Buried in the terms of service for the widely praised and gorgeous Inaugural 2013 application is permission for the non-partisan Presidential Inaugural Committee to share data “with candidates, organizations, groups or causes that we believe have similar political viewpoints, principles or objectives,” according to Politico.

“It seems like classic bait-and-switch,” said Kathy Kiely, managing editor of transparency watchdog, the Sunlight Foundation, “This is a committee that’s formed to throw a celebration for an event that should be nonpartisan. Theoretically, the whole country should be involved. It’s a patriotic, banners-and-bunting and parades kind of day. And oh, by the way, if you use this app, we may be harvesting your emails and sharing it with our friends in the Democratic Party.”

The app’s minor obsession with collecting telephone numbers, GPS data, and permission for notifications are all perfectly justifiable to help crowds navigate the chaotic and event-filled occasion. But, privacy advocates find it troubling that the fine-print on the PIC’s website says it can use activity data “without limitation in advertising, fundraising and other communications in support of PIC and the principles of the Democratic party, without any right of compensation or attribution.”

In an email to Politico, PIC spokeswoman, Addie Whisenant, explained the data mining policy, “Regardless of party, it is appropriate for a presidential Inaugural Committee to support and reflect their party’s ideals and causes.”

All of this hand-wringing could be over-hyped, but it would be difficult to track if users actually get put on liberal donor lists. The fact that the PIC hasn’t categorically denied efforts to hock spam at users is certainly troubling.

Its too bad, too. The Inauguration app is positively gorgeous. The navigation, layout, and features are all top notch. It’s like a sexy spy–a sexy, sexy, spammy spy.

Article courtesy of TechCrunch

As expected, the last great hope for immigration reform quickly died in the United States Senate, as the Democratic majority will likely follow through on a promise to kill the STEMS Jobs Act. Engineering-starved tech firms have become a casualty of partisan bickering over how to overhaul the entire immigration system, with both Democrats and Republicans refusing to allow more high-skilled immigrants without changes to low-skilled visas. In other words, congress will have to accomplish a great feat of compromise before there are more high skilled immigrants…so don’t hold your breath.

The proposal to allow 55,000 more high-skilled visas for brainy graduates of American universities got stuck on a provision that would have dissolved the Diversity Immigrant Visa program for underrepresented nations. Even if the Senate had voted on STEM Jobs, the President had vowed to veto the legislation, citing the need for comprehensive reform.

The current state of compromise in immigration was introduced with the GOP’s Achieve Act, which is similar to the Democrats proposal allow children of undocumented immigrants to stay in the country, but does not offer a pathway to citizenship. This satisfies the President’s desire to prevent deportation. The tech community has largely been hands-off with low-skilled immigration reform, but will have to get their hands dirty for Obama’s second term.

Article courtesy of TechCrunch