2:15 p.m.: There are uncertainties from the overall economy, but like Eric Schmidt at Google, Yahoo was bullish: “We have a diverse advertiser base and expect ad budgets will continue to move online. Targeting continues to get more attractive during (economic) softness.

2:11 p.m.: Nothing much new on Microsoft’s attempt to acquire Yahoo: “The board’s decision to reject a proposal was based on our business and our plans,” Yang said. “Our board and management team continue to be open to any and all alternatives,” including a deal with Microsoft. The company is “exploring a number of strategic alternatives.”

2:59 p.m.: The advertising weakness among finance, travel, and retail advertisers has meant slower growth or “modest declines,” Decker said. The relative weakness hit both display and search ads. On the flip side, both types also stand to gain from online advantages, she said: “There are strong return-on-investment components that are very measurable in both search and display.” In other words, advertisers can measure bang for their buck.

Yahoo CEO Jerry Yang

2:30 p.m.: Lots of happy talk about display ads. Yang: “While we believe in search, our largest opportunity is in display. We have positioned ourselves to gain share in this huge opportunity.” Decker: Yahoo is “on the verge of fundamentally changing the game” in the display-ad business.

3:04 p.m.: Asked if advertisers were spooked by the Microsoft offer, Yang said it was a relatively minor point. “We are watching the economy a lot more than the Microsoft uncertainty. It’s hard to say (there was) any impact.”

(Credit:
Dan Farber/CNET Networks)

2:52 p.m.:
Variable minimum bids have launched with a limited number of search keywords in the U.S. “We’ll be rolling it out to larger markets outside the U.S. later this year and to emerging markets most likely next year,” Decker said.

Yahoo President Susan Decker

2:39 p.m.: CFO Blake Jorgensen says the overall ad market in the first quarter was strong among advertisers in the automotive and consumer packaged goods areas. But there was “some softening” in finance, travel, and retail. And of online advertising in general, he said: “Advertisers’ budgets may fall, but we believe the return on investment of online ads compared to other media may cushion the impact on our industry.”

2:09 p.m.: Yang adds, Yahoo’s results “are all the more remarkable when you consider the environment and the uncertainty resulting from Microsoft’s unsolicited proposal.”

2:50 p.m.: Decker said things are doing well on user clicks on ads. “We’re very pleased where we stand on click yield,” which is ad coverage times click-through rate.

(Credit:
Yahoo)

2:18 p.m.: President Sue Decker said search has improved, including relevance scores that show how well ads match what searchers are looking for. “We’ve come from behind and closed the relevancy gap,” she said. Citing various statistics, she added, “These are the most material gains in key numerical indicators…since five years ago.”

2:07 p.m.: Chief Executive Jerry Yang: “We are very proud of our first-quarter results…We are raising our cash flow guidance for the year.”

The following is a record of a live report of Yahoo’s conference call with financial analysts discussing the company’s first-quarter results.

Yahoo CFO Blake Jorgensen

2:19 p.m.: Yahoo stock is down 19 cents to $28.35 in after-hours trading.

2:23 p.m.: Video is getting more important. The launch of Flickr video earlier this month already “quadrupled video uploads by users across the entire Yahoo network,” Decker said.

2:49 p.m: Traffic acquisition costs (TAC)–the commission rates Yahoo pays to partners that host Yahoo ads–are up 4 percent because the company has to compete, Jorgensen said. “There is still upward pressure on TAC rates and (what we) pay partners as the competitive dynamics get more difficult,” he said.

3:02 p.m.: “We did see very strong growth in paid clicks in the U.S. vs. the market,” Decker said. Paid clicks are a very important measurement for search ads, both in terms of relevance and as a way to actually generate revenue.

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Yahoo)

2:02 p.m.: It’s starting.

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Yahoo)

2:01 p.m. PDT: The call is getting started. For background, here’s a link to Yahoo’s financial results for the first quarter of 2008. To recap, Yahoo’s net income was essentially flat, excluding a gain from its stake in business-to-business site Alibaba, but revenue excluding commissions paid to partners rose 14 percent to $1.532 billion.

“We are rapidly building out and differentiating our advertising network,” Yang said. The company is adding to capabilities in video, mobile, search, and display ads.

3:05 p.m.: Yang bids everybody adieu without any closing arguments or discussing the various elephants in the room–stay tuned for further thoughts on that point. So we’ll close by mixing two of his earlier metaphors: “Our results this quarter demonstrate we are on the right track. We are pursuing the right strategy and it’s beginning to bear fruit.”

2:42 p.m.: Jorgensen: Yahoo’s headcount dropped from 14,300 at the end of last year to 13,800. That includes 600 new hires, offset by the company’s layoff.

2:32 p.m.: Decker has sweeping words for the company’s position. “We are innovating more rapidly and effectively, delivering on our roadmap, expanding our partnerships, and receiving positive customer reviews.”

“I’m very happy to be here today with you all,” he said. “As you may know, I had a liver transplant. So I have the liver of a mid-20s person who died in a
car crash, and was generous enough to donate their organs. And I wouldn’t be here without such generosity.”

He used the moment to encourage more people to do the same, calling on everyone to be an organ donor. He also thanked everyone at Apple and the Apple community for the support he received while he was gone.

Steve Jobs takes the stage Wednesday at Apple's music event.

(Credit:
Stephen Shankland/CNET)

Jobs was the host of the entire 75-minute event, just as he always had been at similar events in years past. Though other executives joined him, including Phil Schiller, Apple’s senior vice president of marketing, and Jeff Robbin, lead iTunes software designer, it was clearly his show. He also revived two well-known trademarks of his public appearances: his outfit of black turtleneck, jeans, and white tennis shoes, and his “one more thing” phrase.

He also hinted there’d be more public appearances to come, signing off the event by thanking everyone for coming and promising, “See you all again soon.”

The statement was clearly Jobs’ way of saying that he’s reassumed full responsibility as the leader of his company. There had been speculation that, though he was back at work, if he did appear at the event Wednesday he would use it as a way to say goodbye and step into the background while a new successor began to be groomed. That was not what happened.

“They really ran the company very ably during that time,” Jobs said. “So, I’m vertical, I’m back at Apple, and loving every day of it.”

At that point, it wasn’t yet clear whether this was a farewell or a welcome home event for Jobs. But it became very apparent soon after, when he thanked the man who had taken over day-to-day duties running Apple between January and June, COO Tim Cook, and all of the Apple executive team.

Jobs was the first person to emerge on stage at the Yerba Buena Center for the Arts here to open the now-annual September
iPod introduction. Appearing notably thin, he received a prolonged standing ovation from the audience, much of it composed of members of the media, but also a range of guests including app developers, entertainers, and music industry types. Jobs quietly took in the applause and then began to speak fairly candidly about the well-known medical problems that kept him away from work for the first half of the year.

Just the sort of company with which I’d want to do business. You?

Data is the future of lock-in, but some companies like Google are attempting to preserve user choice by signing up to data portability agreements. Not so Microsoft, which doesn’t seem to have learned much from its antitrust trial besides how to evade detection.

Its excuse for this amazingly bad policy? That the agreements it’s seeking to impose “merely represent what Microsoft wants–not what it will ultimately get in each instance.” Wow! What a soothing response. “When we told the villagers that we planned to rape and pillage, that’s just what we wanted to do. We figured we could make do with simply pillaging.

Microsoft will gain more by enabling more people to use MSN than it will by squeezing quarters out of startups. Connecting its IM service with Yahoo!’s was a step in the right direction. This attempt to extort money from startups is 10 steps in the wrong direction.

You’ve got to hand it to Microsoft. The company knows how to go against the grain. Just at the moment that the rest of the planet has discovered that there is huge value in opening up, Microsoft has been stalking the web, demanding payment from startups that want to allow users to import their MSN contact lists to other web services, as Fortune notes.

commentary

However, if a company wants to force its users to abandon 73% of their friends (assuming it’s roughly a three-way race between AIM (53 million active users), MSN (27 million active users), and Yahoo! (22 million active users), then they can use MSN for free! Wow! Dave Rosenberg calls this “bizarre and stupid.” I think he’s being overly generous.

If the company wants to offer other IM services (from Yahoo, Google or AOL, say), Messenger must get top billing. And if the startup wants to offer any other IM service, it must pay Microsoft 25 cents a user per year for a site license.

(Credit:
HP )

On Tuesday, HP added two new iPaq smartphones to its portfolio. But before you go getting too attached, you should know that for the time being, they’ll only be available in Europe. Partnering with Vodafone, the HP iPaq Data Messenger and the HP iPaq Voice Messenger will first be offered in the United Kingdom and then eventually make their way to the rest of Europe.

Will they ever reach the United States and join the HP iPaq 910c Business Messenger? Well, we asked our HP contact, who said she hasn’t heard anything about a stateside release but would let us know as soon as she did. (Oh, if I had a nickel for every time I heard that phrase.)

While the two models share a lot of shared features, they have different focuses–if you couldn’t tell by their names. The HP iPaq Voice Messenger is more of a phone-centric device and has a 2.4-inch QVGA non-touch display and 20-button keypad. Meanwhile, power business users might be more attracted to the HP iPaq Data Messenger and its slide-out QWERTY keyboard and touch screen. The Data Messenger will go for around 499 euros ($652), while the Voice Messenger is priced at 399 euros ($521).

HP iPaq Data Messenger

Last week, I interviewed Reznor about the online promotion of rapper Saul William’s album The Inevitable Rise and Liberation of NiggyTardust. In that interview, Reznor said he was disappointed that only 18 percent of the more than 150,000 people who downloaded the album paid for it. He and Williams offered two options: pay nothing or obtain a higher-quality audio version for $5.

It’s also interesting to note that Radiohead’s manager, in an interview with The New York Times, said he doubted the choose-your-price promotion would ever work again.

Artists who sign with a label don’t perform these chores. Executives packing MBAs and years of business expertise do. Is that a good thing? Not necessarily, but that division of labor helps.

Perhaps an old-fashioned record label doing all the behind-the-scenes work isn’t the best idea for the future of music. But someone has to do it.

“Finding music at record stores has always been tough,” Castle said. “If you go into a store knowing what you want, or you’re a music aficionado, it’s easy. For the superficial buyer it’s harder. Those are the people that are going to be influenced by displays at end caps of aisles or the stuff that’s featured at listening posts. You don’t get that spot because you’re a nice person. All that stuff is paid for.”

Even so, Castle said Reznor and Williams shouldn’t give up the good fight.

EMI said this week that only 5 percent of its acts are profitable. This kind of prospecting requires a huge investment.

What about Radiohead, you say? Many argue giving away the digital version of In Rainbows was a wild success for the British supergroup. The band hasn’t revealed the album’s Internet sales figures, but last week more than 122,000 physical copies were sold, making it the No.1 album in the U.S. Nearly everybody on the Web credited the online promotion for the booming CD sales.

Does that mean, gasp, that record labels aren’t entirely evil? Well, maybe. Charges of musician exploitation and plain old bad taste aside, they certainly have a purpose. The music business is primarily about promotion, Castle said. You build name recognition through all sorts of methods: radio play, getting write-ups in music magazines, making sure a CD is prominently promoted in record stores. That takes money. Castle offered this example.

“Trent thinks that (150,000 downloads) is bad?” Castle asked. “I’ll tell you bad. Bad is zero. Bad is when you spend $100,000 on marketing and tour support and you got nothing. Do you know how hard it is to go from a cold start and just get 1,000 people to listen to an album? Welcome to the music business, Trent.”

We certainly learned that through Radiohead and Trent Reznor’s separate experiments with choose-your-price album promotions.

But Radiohead is one of the world’s best-known acts. The vast majority of musicians have more in common with Williams, a little-known rapper, poet, and filmmaker. Their name recognition, unlike the British superband, doesn’t count for much outside a small, loyal following.

Musicians aren’t merchants.

And who does all that? “If you’re going to market someone, you’re going to have to have a publicist,” Castle said. “And you’re going to have to have tour support, somebody to care about you while you’re on the road.”

“What’s unsettling is that you can’t help fall into a familiarity with what works and what has worked,” said Reznor, who left Universal Music Group last year. “As much as one structure of a record deal is unfair and how little you get is bad, there was some comfort in knowing that things would work, that things like promotion and marketing would work.”

But they also illustrated that the music business is probably better left in the hands of businessmen. Musicians are not the new labels. Artists need someone to provide financial support and business acumen. If we end up ridding the world of labels, we’ll only have to re-create them–in some other, probably more nimble form.

In October, Reznor, the leader of the band Nine Inch Nails, and Radiohead attempted to promote and distribute albums online without the help of a major record label. Both offered fans the opportunity to obtain the music for free. Both saw some success.

“What’s unsettling is that you can’t help fall into a familiarity with what works and what has worked. As much as one structure of a record deal is unfair and how little you get is bad, there was some comfort in knowing that things would work, that things like promotion and marketing would work.” –Trent Reznor

Reznor said he didn’t get involved with Williams to profit, but acknowledged that he spent too much making the album and said he hasn’t yet recouped his money. A record company can afford to make bad bets once in a while, said Chris Castle, a music industry insider who has worked as a vice president for both Sony Music and A&M Records. Musicians, even successful ones like Reznor, probably can’t.

(Credit:
Rob Sheridan)

“I like Trent, I like his heart,” Castle said. “So he shouldn’t get down. He should get Saul on the road and keep him on the road touring. He shouldn’t come off until they can figure out where his core audience is.”

Trent Reznor of Nine Inch Nails

“I’m spending a lot more time being the business guy than the musician and I really don’t like doing that,” Reznor said. He found the role of record executive more difficult than he had expected.

It’s not going out on a limb to say the current music industry business is broken and that’s why the likes of Radiohead, Reznor, and Madonna as well as consumers are revolting against it, said Jerry Del Colliano, professor of music industry at the University of Southern California. Nonetheless, he said that companies like the labels are needed to help develop talent and help the public discover that talent.

“The labels aren’t going anywhere,” Colliano said. “They’re just going to have different duties in the future.”

By backing Williams with his money, name, and know-how, Reznor essentially thrust himself into the role of a music label. That is, a music label with a lot to learn. The first lesson was that you don’t always back a winner. A music company’s fortunes can often rest on its ability to discover superstars. Profits generated by a few marquee acts have always kept the companies going while all the other performers break even or lose money.

BuzzFeed, a start-up trend-tracking site, has received $3.5 million in its first round of funding, the company said Tuesday.

For example, advertisers can use BuzzFeed’s data to see how their ads are faring among Internet users or to spot emerging trends. That kind of data could conceivably help clothing companies stay on top of the latest fashions.

New York-based BuzzFeed tracks and delivers the content that is grabbing the most eyeballs on the Internet. Hearst Interactive Media and Softbank were among the group of investors.

Jonah Peretti, one of the founders of The Huffington Post, was among those behind BuzzFeed and he says that the company is in the information business.

The company blends click tracking with its own algorithm and human editors to figure out which piece of content is about to go viral.

Sure, the company sounds like another Digg clone. What’s different about BuzzFeed is that it doesn’t rely on votes to determine the popularity of a video, blog, or photo.

Windows XP's Backup utility lacks the ability to create image backups of your drive, but it's better than no backup at all.

To use XP’s clunkier backup utility, click Start > All Programs > Accessories > System Tools > Backup, and step through the wizard, or click Advanced Mode, then the Backup tab, and choose which drives and folders you wish to back up.

In Vista, press the Windows key, type backup and restore center, and press Enter. Click Back up computer, choose a location for your backup (you can’t store it on the same drive you’re backing up), click Next, check the drives/partitions/devices you want to back up, click Next again, and then Start backup.

Newly installed software is only partially removed. System Restore deletes executable files and DLLs added after the restore point was created, but not the programs’ shortcuts and other files. Uninstall the applications using Windows Add or Remove Programs in Control Panel prior to the restoration, and then reinstall it afterwards, if you wish.

Avoid corrupt restore files: If your machine shuts down improperly while a restore point is being created, you may not be able to access that restore point. Likewise, making changes to a system file on a dual-boot machine can corrupt the restore point.

Click "Back up computer" in Vista's Backup and Restore Center to create an image backup of your hard drive.

If you rely solely on System Restore for your Windows backups, you’re asking for trouble. Yes, the restore points created automatically by XP and Vista, and those I create myself, have saved my system from a failure on many occasions. But too often I’ve attempted to turn back the clock only to be informed that my computer could not be restored, or some similar error message.

Here are some ways to fix XP’s System Restore:

New accounts will be wiped out. If you created any new user accounts since the last restore point was set, they’ll be erased, though any data files that user created will remain.

Disabling System Restore wipes out your restore points. When you turn off System Restore, all existing restore points are lost. Also, you can’t create a restore point while your system is in Safe Mode, so any restores performed in that mode cannot be undone.

Nothing beats an image backup
As I mentioned above, if you use
Windows Vista, there’s no excuse for relying on System Restore for your system backup. And XP’s built-in Backup utility is better than no backup, though it can’t replace a disk-imaging program for reliability and convenience. If you haven’t already, do yourself a favor and create an image backup of your hard drive.

Troubleshooting System Restore defeats the purpose, though it can be done; here are some instructions from Microsoft for doing so in Windows XP. If you use Vista, you’ve got much better backup tools at your disposal, so there’s really no excuse for being caught without a backup in that OS (see more on Vista’s backup utilities below). Here’s a rundown on how to keep System Restore healthy in XP.

Note that restoring from this type of backup can be tedious, so consider investing in an image backup program, such as Acronis’s $50 True Image Home (15-day free trial).

Don’t expect miracles. System Restore won’t protect your PC from viruses and other malware, and you may be restoring the viruses along with your system settings. It will guard against software conflicts and bad device driver updates. It doesn’t affect data files in My Documents, Favorites, Cookies, and elsewhere, nor will it back up e-mail, or graphics files.

Tomorrow: supercharge your browser.

Check your disk space: Right-click My Computer, choose Properties > System Restore, and move the slider left to reduce the amount of disk space reserved for restore points (thus reducing their total number), or right to add more space for more restore points. System Restore stops creating restore points when the amount of free space on the drive or partition falls below 50MB, and starts again when it reaches 200MB.

Peruse the event logs: Click Start > Run, type eventvwr.msc /s, and press Enter. Click System in the left pane, select the Sources tab in the right, and double-click entries with “sr” or “srservice” to view the description for hints at the source of the problem.

What with home foreclosures on the rise, crude oil prices breaking record highs, and the banking industry in its deepest crisis since the S&L mess of the early 1990s, there’s enough to worry even the most Panglossian optimist in the crowd. And so in the last couple of months, Apple shares have plummeted from the $200 level late last year to under $120.

Don’t lump in Macintosh customers with regular PC shoppers. These folks have always been ready to pay a premium because they believed the Mac offered special value. Save the fight about whether they’re right for another day. What’s important to recognize is that they groove on Apple. Recession or no recession.

Steve Jobs: What, me worry?

(Credit:
PiperJaffrey)

So here’s where I think we’re heading.

On the iPhone front, we’ll have to wait for Apple to disclose the latest numbers during its next earnings call. But the same worry warts bemoaning the rise in so-called unlocked iPhones remind me of the sturm und drang surrounding the early days of the iPod. It took a couple of years but Apple had a major hit on its hands by 2003. I’d be floored if the iPhone did not repeat that pattern.

So here’s the multiple choice test: Which headline does not fit with the rest? If you chose letter “D” you win a dream date with my colleague Michael Kanellos (No worries: Kanellos is off reporting on start-ups in Ireland this week, and so you’re safe.)

Browsing the headlines on Yahoo Finance this morning was enough to make anyone briefly consider jumping out the window. To wit:

I have to confess that the depth of emotion punctuating the “whither Apple” debate never ceases to baffle me. Throughout its history, Apple has always received more than its fair share of scrutiny. The commentary has usually been marked by extremes, pro and con, between the bulls and bears. That just went with the territory. And now a new element has been injected into the debate over Apple’s prospects: recession. On Monday, my ZDNET colleague, Larry Dignan, wrote eloqently about Apple: the angst versus the reality. And he’s right in many respects.

Eric Savitz from Barrons has a good synopsis of the current concerns being articulated by analysts at Bernstein Research, J.P. Morgan, and Morgan Stanley.

Which side has it right? Based upon the current stock price, you have to go with the bears–at least until the free fall ends. The gist of their argument is as follows:
•  Apple doesn’t have any upside surprises coming off one of its biggest product cycles.
•  Sales of iPhones are said to be coming up short of expectations, while the number of people unlocking the devices is higher than anticipated.
•  There are increasing signs of iPod saturation.
•  With the economy worsening, why assume strong demand for (relatively) expensive Apple electronics products will continue?

The problem I have with the bulls (maybe “perma-bulls is the better term?) is that they turn insane when the subject is Apple. These folks would ordain Steve Jobs dictator for life. Nothing he touches is unworthy of hushed reverence. And woe to the infidel reporter who dares breathe a syllable of criticism–the
Mac mujahadeen make no allowance for the 4th Estate (or the First, Second and Third, either.)

The problem I have with the bears is that they’ve been wrong for much of the last three years. Everyone knows that the iPod is maturing. That’s yesterday’s news. In fact, Piper Jaffrey analyst Gene Munster believes the debut of the iPod touch signals the start of more Internet- and Wi-Fi-connected iPods in the future. If he’s right, that may well turn out to be a game changer.

• Job worries sink consumer confidence
• S&P: U.S. home prices down sharply
• U.S. home foreclosures soar in January
• Harsh light shines on
iPhone,
iPod sales

iPod unit growth rates

(Credit:
CNET)

Original post (by Matthew Elliott):

(Credit:
CNET)

Time Capsule: Time for your close-up.

(Credit:
Phil Ryan/CNET Networks)

Apple’s Time Capsule began shipping yesterday, and after a run to The Westchester mall in White Plains, N.Y., this afternoon, we now have one in hand. Stay tuned for our full review, which we plan to bring you on Monday. In it, we’ll discuss throughput of the 802.11n router, transfer speeds of the 500GB drive (call us cheap–we bought the lower-end $299 model), and how it jibes with Leopard’s Time Machine feature for wireless backups. Anything else you want, let us know. In the meantime, read Rich Brown’s breakdown of Time Capsule here.

(Credit:
CNET)

We have Time Machine turned off here because when it’s on it gives you a 2-minute countdown before it performs a backup. We wanted to investigate the software some more before losing it to the hours-long backup process, but we’ll turn it on tonight to see how that goes.

(Credit:
Rich Brown/CNET Networks)

When Time Machine finds your Time Capsule, you know you set it up correctly.

We paired the Time Capsule with a MacBook Pro with a home cable modem providing the Internet connection. In order to keep it simple, we relied on hard-wired Ethernet all the way, linking the cable modem to the Time Capsule, and the Time Capsule to our laptop. Setup is easy. All you need to do is plug all of the appropriate cables in for your network and then plug in the Time Capsule’s power cord. There’s no power switch, so it comes right on.

Even though initial set up at home was relatively easy, we hit a few snags. We were able to use the Time Capsule successfully as a router for our home network, and we got online on both the MacBook Pro as well as a Windows XP desktop in the other room. We hoped the Time Capsule’s hard drive would just pop up in Windows, but it didn’t. And after we reconfigured the drive properties and restarted the Time Capsule, per its software instructions, it hung. Every time you make a settings change it seems to want to reboot itself, which takes a while. Worse, whenever it failed a restart, the Time Capsule and our Macbook seemed to lose each other, and we had to go through the whole setup process from scratch.

(Credit:
Phil Ryan/CNET Networks)

Assuming you make your way through the setup process (the default option on each screen was usually the right one, at least at home), you’ll know it’s successful when Time Machine, Apple’s automated backup software, finds the Time Capsule’s drive. “J Boogie” in the screen below would be our music-loving Associate Testing Analyst Julie Rivera, who’s testing the MacBook Pro laptop we’re using.

The first software screen you see when you insert the Time Capsule disc

The screen above pops up when you insert the Time Capsule’s CD, and from there you click on the Time Capsule icon to install the update to your
Mac’s AirPort Utility. The AirPort Utility serves as the primary software interface for the Time Capsule. Most of the software setup is easy, but a few screens might puzzle you if you’re not that network savvy.

Update:

After spending some time with Apple’s Time Capsule this afternoon, we have some impressions for you. We’ll dig deeper before our full review on Monday, but here are some initial thoughts.

From the left: the power cord, a USB port, one Gigabit WAN port, and three Gigabit LAN ports.

(Credit:
CNET)

Adding external storage to the Time Capsule is easy.

One feature Time Capsule offers is the ability to add more storage via its USB port. We connected a simple USB flash drive (the “NO NAME” volume in the shot below), and it popped up almost instantly on the Time Capsule’s devices screen. The only stipulation is that you have to enter the Time Capsule’s password, which you establish during setup, before it will allow you to access the new drive.

We’re going to spend more time with the Time Capsule tomorrow and we’ll have our full review up by Monday. In the meantime, Flickr user nakedmac posted a gallery of the Time Capsule’s internals (seems you can swap in a new hard drive). And Schmittroth, to answer your question in the comments about the power cable, nope, no brick. Just a thin white cord as you can see from the shot below.

Not every Time Capsule setup screen will make sense to the average user.

The problem first cropped up a couple years ago, noted Patricia Schroeder, head of the Association of American Publishers, of which the plaintiffs are members.

The publishers allege Georgia State University permitted its professors to reproduce vast amounts of copyrighted materials and combine them into course packets for students.

Although the problem of copyright infringement is believed to be widespread among colleges and universities, the majority of those institutions contacted by publishers generally cooperate and take steps to remedy the situation, Rich said.

The key issue for the publishers is harm to the market, Rich said. For example, he questioned whether professors would be able to continuing publishing their research, given the related costs involved, if their respective publishers were not compensated for providing the materials.

Although the reproduction of copyrighted materials is permitted under fair use laws, it’s limited in the extent the materials that can be copied, such as excerpts verses chapters upon chapters, Rich noted.

“Our clients believe this is a widespread problem,” said Bruce Rich, an attorney with Weil, Gotshal & Manges, who is representing the plaintiffs.

“A couple years ago, we noted a drop-off in universities seeking copyright permission as they shifted to the digital world,” Schroeder said. “Even though technology changes, the law doesn’t.”

Cambridge University Press, Oxford University Press, and Sage Publications allege the university “facilitated, enabled, encouraged, and induced” professors to upload the copyrighted materials to its online system for students to download, without first obtaining the necessary permissions or paying licensing fees.

The lawsuit, filed in a U.S. District Court in Georgia, may mark the first time publishers have challenged universities over the electronic distribution of written copyrighted works, noted the plaintiffs’ attorney.

A spokeswoman for Georgia State University declined to comment, noting the institution and the parties cited in the lawsuit have not yet been served with the complaint.