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The media sector performed well in 2009, recovering $200 billion of value, or 63 percent of what it lost in 2008, online content providers and distributors made up more than half of these gains, according to a new report by consulting firm Oliver Wyman.

The largest gains were in China, where the media sector market value increased by 200 percent. The report indicates that the trend toward online media cannibalizing traditional platforms could push the industry toward a "zero-sum game" and increase the pressure on existing companies to sharpen online strategies.

Online video viewing minutes increased in 2009 by 50% in the U.S. and 30% in Spain, with TV shows and movies accounting for around half of these minutes. "These averages, however, mask the full extent of the change among the subset of the population that watches long-form content online," said Robert C. Fox, a Partner in Oliver Wyman’s Communications, Media, and Technology practice.

"In the U.S., for example, among those who watch long-form video online, 15% of their total long-form viewing is online and their linear TV and DVD viewing decreased in 2009. Similarly among all 18-34 year-olds, a key advertising demographic, all forms of viewing other than online and mobile dropped in 2009."

"The pace of growth in online-video viewing is striking," said Mr. Fox. "However, while the platform is still in its infancy, the behavior of today’s online population suggests that much of this growth will come at the expense of traditional platforms. Video could be headed for a zero-sum game," he added.
 

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Although Nexus One sales estimates haven’t exactly blown everybody’s minds so far, it seems that the cell-phone-you-can-only-buy-from-Google experiment is going to continue.  Motorola’s co-CEO announced today that his company is working on device for it.

According to Scott Moritz, co-CEO Sanjay Jha said while discussing Motorola’s Q4 earnings that his company will release "one direct-to-consumer device with Google" sometime this year.  Jha also mentioned introducing 20 Android smartphones in 2010.

These statements help clear up some issues that surfaced last week, when a vice president at Motorola said the company intended to release 20-30 Android devices.  Even allowing for regional variations, it was a little hard to imagine how they could all be markedly different from each other.

Unfortunately, Jha provided little else in the way of Android- or cell phone-related information this morning, so other details regarding what’s on tap remain unknown.  It’s just a fair guess that the direct-to-consumer advice will be another range-topping model, and that it isn’t too close to coming out.

As always, we’ll see what happens.  Finally, for the record: Motorola’s Q4 report didn’t go particularly well, with its stock down 11.42 percent so far today as a result.

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Since the widely publicized turbulence between Google and the Chinese government erupted, there has been a lot of speculation about whether or not Google would continue to do business in China in any capacity whatsoever. The company stopped censoring search results in its Chinese search engine, and threatened to pull out of China before it would again do so. Talks between Google and China are expected in the near future.

Based on the latest words from the Chinese government on the matter, Google’s Android business should at least be safe in the country. Ministry of Industry and Information Technology spokesman Zhu Hongren is quoted as saying at a news briefing:

"As long as it complies with Chinese laws and regulations, and as long as it has good cooperation with operators…their use of the system won’t be limited."

The Chinese government has maintained since the incident took place that as long as services comply with Chinese law, they will not block anything. There are still a lot of opportunities for Google to make money in China without the presence of its search engine, and it remains to be seen just which Google will continue to pursue.

The whole situation has been largely murky at best. The U.S. government has been involved because Google has alleged that the Chinese government was involved with the cyber attacks that kicked this whole thing into motion, and the Chinese government has denied any involvement and said that either way it should be viewed as a "business dispute" as opposed to anything that should effect relations between the two countries.

For our past coverage on the Google China situation, browse through our China tag.

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About 10 days ago, Steve Ballmer indicated that he didn’t share Google’s views with regards to China; Ballmer said that Microsoft would continue operating in China regardless of recent hacks and a policy of censorship.  Today, Bill Gates more or less echoed those sentiments.

Some free speech advocates might have hoped Gates would feel otherwise; after all, now that he’s let Ballmer take the reigns at Microsoft, Gates seem to have focused his energies on doing good in the world, and Google’s claimed the moral high ground in this dispute.

Nonetheless, according to Reuters, Gates said on Good Morning America, "You’ve got to decide: Do you want to obey the laws of the countries you’re in, or not?  If not, you may not end up doing business there."

Gates also argued, "The Chinese efforts to censor the Internet have been very limited.  It’s easy to go around it, and so I think keeping the Internet thriving there is very important."

There’s further confirmation that Microsoft will stay the course in China, then.  Of course, we have yet to see what will become of Google’s own protest.

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Game developers – or at least the game developers who attend the Game Developers Conference in San Francisco – are likely to hold Google and Android in much higher regard after March 9th and 10th.  Google’s announced that it will give away quite a lot of Android devices on those dates.

Google’s employed this strategy to build hype before.  You may remember, for example, that the 4,000 or so people who attended Google I/O received HTC Magics free of charge.  Most folks were quite grateful (and those who weren’t probably became happier after selling the phones for $800 on eBay).

Now, as stated on the Android Developers Blog, "Google and GDC will . . . be providing complimentary Android phones to attendees who register for All Access or Tutorials and Summits passes by the Early Bird deadline of February 4, 2010.  Qualified attendees will receive either a Nexus One or a Verizon Droid by Motorola, so they can quickly apply what they learn from the various Android sessions."

Nice, eh?  And relatively smart, too.  Games are popular with all sorts of people, so if game developers create some good ones for Android, the mobile operating system might seem a little more attractive as a result.

A note to cynics: the only real "catch" concerning this offer appears to be that the Droid and Nexus One recipients "may be asked to take a short 10-15 question survey, post-GDC."

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The U.S. remains the largest search market worldwide, while Google holds on to a commanding position in the global search market, according to a new study from comScore.

"The global search market continues to grow at an extraordinary rate, with both highly developed and emerging markets contributing to the strong growth worldwide," said Jack Flanagan, comScore executive vice president.

"Search is clearly becoming a more ubiquitous behavior among Internet users that drives navigation not only directly from search engines but also within sites and across networks. If you equate the advancement of search with the ability of humans to cultivate information, then the world is rapidly becoming a more knowledgeable ecosystem."

The total global search market had more than 131 billion searches conducted by people 15 or older from home and work locations in December 2009, representing a 46 percent increase in the past year.

Broken down, it represents more than 4 billion searches per day, 175 million per hour, and 29 million per minute. The U.S. is the largest individual search market in the world with 22.7 billion searches, or about 17 percent of searches conducted globally. China landed in the second spot with 13.3 billion searches, followed by Japan with 9.2 billion and the U.K. with 6.2 billion. Among the top ten global search markets, Russia had the biggest gains in 2009, growing 92 percent to 3.3 billion, followed by France (up61% to 5.4 billion) and Brazil (up 53% to 3.8 billion).

Google sites were the top search property worldwide with 87.8 billion searches in December, or 66.8 percent of the global search market. Google sites saw a 58 percent increase in search query volume over the past year. Yahoo sites ranked second globally with 9.4 billion searches (up 13%), followed by Chinese search engine Baidu with 8.5 billion searches (up 7%).

Microsoft sites saw the largest gains among the top five properties, growing 70 percent to 4.1 billion searches, on the strength of its new search engine Bing. Russian search engine Yandex also saw solid gains, growing 91 percent to 1.9 billion searches.
 

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Motorola is allowing Internet users in China to use Baidu or other search engines on its handsets with Google’s Android operating system.

Baidu is Google’s chief rival in the search market in China. "Users will be able to select their search experience from a number of providers including Baidu and others, with whom Motorola has signed strategic agreements," the company said.

Motorola also said it is launching a store for Android applications called SHOP4APPS (or Zhi-Jian-Yuan, which means "Place for Apps Wisdom" in Chinese). Motorola’s Android app store for smartphones is set to launch in time for the Chinese New Year, which begins February 14.

"Our ability to offer SHOP4APPS and choice in search is a testament to the openness of the Android platform.  SHOP4APPS will provide developers the opportunity to market and promote their applications on Android handsets within the Chinese market," said Christy Wyatt, corporate vice president of software and services, Motorola Mobile Devices.

"In addition to our close collaboration with the Android community, we are working closely with our carrier partners in China, and with ecosystem partners like Baidu to provide consumers with a full suite of services.  These services will include search, email and maps for our newest China smartphones."
 

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It appears that not all is well (or at least normal) at Baidu.  Last week, the company’s COO abruptly resigned, and today, its CTO followed suit.  Both men cited "personal reasons" for their departures, and Baidu’s made little other information available.

Either exit might have been considered unremarkable on its own.  The COO, Peng Ye, left before Google made its big statement about China, and also before hackers attacked Baidu, so "personal reasons" sounded like a semi-plausible explanation.

As for the CTO, Yinan Li, he could have gotten a pass if his colleague hadn’t left so recently.

It’s the combination of the two departures that makes for such an odd situation.  And the curt way in which Baidu’s announced everything is also suspicious, with the press release about Peng Ye and his replacements consisting of about 180 words, and the release concerning Yinan Li hitting just over 50.

Still, Baidu hasn’t badmouthed its former execs.  Robin Li, Baidu’s CEO, stated, "We appreciate all that Yinan has contributed to Baidu and we wish him every success in his future endeavors."

Finally, it’s important to note that investors don’t seem worried.  In fact, they’ve sent Baidu’s stock up 0.74 percent so far today, even as the Dow and Nasdaq are down 0.94 and 1.24 percent, respectively.

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Reactions to Google’s announcement about a possible withdrawal from China have been mixed so far; there have been objections from individuals who think its absence will deprive the Chinese people of information, while others approve of what they consider a moral stand.  But Baidu’s investors probably aren’t too conflicted, as the company’s stock imitated a bottle rocket today.

Today, Baidu’s stock gained 52.99 points, which works out to 13.71 percent.  That’s the sort of improvement many investors would be happy to see take place over a full year, especially considering how the recession has lowered expectations.

Baidu’s stock didn’t soar in accordance with any sort of market trend, either.  The Nasdaq rose just 1.12 percent today, and the Dow gained an even less impressive 0.50 percent.  So this is just a matter of many people realizing that Baidu would perform better than ever in a Google-less China.

Google’s stock, meanwhile, was less fortunate, sinking 0.57 percent today.  Although we should note that multiple factors could have influenced both developments.  (One more side note: the numbers in the graph are off because it covers a slightly different timeframe.)

Anyway, it should be interesting to see how these stocks continue to fluctuate as the Google China drama plays out.  One way or another, it’s likely that a lot more money will change hands before the end.

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Consumers want online retailers to be more interactive and offer more personalization features according to a new a survey from IBM.

The changing economy has led to a smarter consumer who uses technology to make more informed buying decisions, exchange information with others, make purchases on-the-go and shop multiple channels.

More than three-quarters (79%) of consumers want to use websites to access and print coupons, while 75 percent want to use mobile phones to find out where the nearest store is located and 66 percent want to see what items are in stock before going to a store.

"We are in a shopper’s market today, because consumer access to technology and information gives them all the power," said Jill Puleri, IBM Global Industry Retail Executive, IBM Global Business Services.

"Retailers cannot afford to sit still as this digital revolution happens. They must engage plugged-in consumers in new and different ways, on their terms, and with more bi-directional feedback and dialogue."

From the consumer’s point of view, the top areas of improvement for online retailers were around offering customized promotions and ensuring product availability. More than half (61%) of respondents said they would spend more with a retailer if they got these two areas right.

While IBM’s analysis found that consumers are increasingly ready to use technologies to interact with retailers and with other consumers, this trend is even more pronounced in growth markets. Consumers in India, China and Brazil, are almost twice as willing to use multiple technologies for shopping and making purchases. This is mainly because the adoption of new technologies is often faster in emerging countries.
 

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