1. **
M E D I A & C O M M U N I C A T I O N S
BUSINESS10 International Herald Tribune
Monday, November 7, 2005
Microsoft heads dance card as Time Warner shops AOL
By Richard Siklos
NEW YORK: Microsoft has emerged
as the front-runner in the talks sur-
rounding the potential sale of a stake in
America Online, two people involved in
the negotiations have said. But despite a
flurry of interest in AOL from Micro-
soft, Google and others, reaching a deal
has been harder than Time Warner may
have hoped.
Behind the scenes, a number of ques-
tions remain that could hold up or even
derail a potential transaction.
One is whether such an alliance would
represent yet another new and unproven
partnership for Time Warner, a com-
pany that has spent much of its energy in
recent years trying to unwind complicat-
ed alliances and simplify its business.
Another is whether, five rocky years
after the AOL-Time Warner merger,
bringing in a new partner at AOL would
help Time Warner’s wide-ranging media
businesses navigate the digital world.
These issues suggest that Time
Warner would be loathe to do anything
unless it gives AOL a higher value in the
eyes of investors and has clear advant-
ages over moving ahead alone.
Were Microsoft to prevail, it would do
so with an investment and partnership
that includes folding its MSN Internet
service into a venture with AOL. But
Google remains interested in a deal that
may also involve Comcast, while Yahoo
and News Corp. are in the wings, the
two people said, waiting to see if AOL
will give up its insistence on retaining
control.
While the AOL sweepstakes is predic-
ated on newfangled concepts like devel-
oping models for advertising and meld-
ing software applications with
entertainment products, what is afoot is
roughly the cyberspace equivalent of
two of the Big Four broadcast television
networks trying to merge in order to
dominate prime time for viewers and
advertisers.
According to ComScore Media Met-
rix, Time Warner’s sites attracted 119
million users in September, most view-
ing AOL and related sites. That made
Time Warner the second-most visited
Internet destination in the United States
after Yahoo, with 123 million users.
MSN and other Microsoft sites at-
tracted 114 million unique users, while
Google attracted 87.6 million. An AOL-
MSN deal would catapult the resulting
venture into the No. 1 spot, and thus
make it especially attractive to advert-
isers seeking the broadest audiences.
Microsoft approached AOL several
months ago to discuss potential joint
ventures. Despite much behind-the-
scenes jockeying, any agreement is be-
lieved to still be weeks away. When
Time Warner released its quarterly
earnings last Wednesday, its chairman
and chief executive, Richard Parsons,
for the first time acknowledged the
talks but tried to dampen expectations.
‘‘Because the discussions are fluid,
we don’t know if they will result in any
transaction or what form any transac-
tion will take,’’ Parsons said.
An investment could help place a
higher value on AOL’s business than in-
vestors have been giving it credit for
within Time Warner over all — some-
thing that might help it appease cranky
investors, particularly Carl Icahn, who
dial-up Internet access business, has be-
come the rage because of the burgeon-
ing market for online advertising and
the fact that both its AOL service for
subscribers only and its revamped
AOL.com free Web portal attract mil-
lions of consumers each day.
Richard Greenfield, a media analyst
for Fulcrum Global partners, last week
called Microsoft the most likely partner
for AOL and predicted a deal valuing
AOL at $15 billion to $20 billion, signif-
icantly more than he estimates it now
represents in Time Warner’s $81 billion
market capitalization.
A chief sticking point in a potential
Microsoft deal is how it would be gov-
erned, and thus far Time Warner has
taken the position that, barring a very
rich offer, it will not cede control.
Bill Gates, chairman of Microsoft, said
last week in a meeting with reporters and
editors at The New York Times that his
interest in AOL is about playing a greater
role in the future of advertising. A com-
bination with AOL would potentially re-
suscitate the languishing MSN Internet
portal and find broader distribution for
its new Internet search service, striking a
blow against Google, which has emerged
as the latest rival for Microsoft’s primacy
in desktop software.
Aligning with MSN would also bolster
AOL’s Web presence abroad, in markets
like Japan and Canada, where MSN has a
much stronger position than AOL. Also,
allowing people on AOL’s AIM instant
messaging service to communicate with
MSN and Yahoo’s messaging products
— it was recently announced that those
services will become interoperable —
can lay the groundwork for a vast com-
munications network for both text and
free voice products.
Three people involved in the talks
said Gates was largely motivated by his
determination to stem the rise of
Google. Under a deal between AOL and
Google that comes up for renewal each
year, Google provides the Web search
on AOL’s services, and manages the ad-
vertising related to it. This year, 11 per-
cent of Google revenue came from ad-
vertising it placed on AOL sites.
Internally, senior executives at AOL
and Time Warner have lamented that
while they benefit from the growing ad-
vertising Google places on their sites,
they have no direct involvement in the
running of a business that is the fastest-
growing sector of the ad market.
While discussions with Microsoft
percolate, that leaves the door open for
Google. The Internet search leader has
discussed a partnership that might not
involve cash trading hands but would
give AOL more involvement in the ad-
vertising relationship, according to one
person involved who declined to be
identified because of the ongoing nego-
tiations.
The New York Times
ON ADVERTISING
Outdoor ads,
once local,
go global
By Eric Pfanner
LONDON
O
utdoor advertising, the busi-
ness of planting posters on
everything from billboards to
bus stops to public toilets, might
seem like the most local of market-
ing media. But like so much else
these days, it is going global.
No, the ads haven’t suddenly
sprouted wings, though Ryanair, the
Irish no-frills airline, recently an-
nounced plans to sell space on the
fuselages of its planes, and even
lowly buses are being embellished
with video ads using digital displays.
What is really turning outdoor ad-
vertising into an international busi-
ness is the increasing wanderlust of
consumers. In a more mobile society,
even if most of the billboards don’t
move, their audiences do, and that
means marketers can reach ever
more of them with this kind of adver-
tising.
So while ad spending on other
‘‘old media’’ stagnates, outdoor ad-
vertising is enjoying steady growth
of around 8 percent a year, with
much higher rates in some develop-
ing markets.
The companies that operate bill-
boards are also looking to expand in-
ternationally, turning themselves in-
to global rather than regional players
and fueling a consolidation of the
outdoor business, which used to be
highly fragmented.
China, where consumer spending
is booming and billboards are seen
as an alternative to state-run televi-
sion, is the target of much of this ac-
tivity. But even in more mature ad-
vertising markets like Europe and
the United States, leading global
players are competing aggressively
for lucrative, consolidated contracts
from transit systems and municipal
governments.
JC Decaux, the Paris-based bill-
board operator, has made three major
acquisitions in China this year, most
recently agreeing to buy a 73 percent
stake in Media Partners International
Holdings, a Hong Kong-based outdoor
advertising company, for 715 million
Hong Kong dollars, or $92 million.
The agreement will give Decaux
control of a variety of transit adver-
tising contracts in Hong Kong,
Beijing, Shanghai, Guangzhou,
Chongqing, Nanjing and Chengdu,
said Jean-François Decaux, co-chief
executive of the company. It will
Claro Cortes 4th/Reuters
Real Madrid, the ‘galáctico’
of building a branding empire
By Doreen Carvajal
PARIS: When Real Madrid’s international soccer stars,
David Beckham and Zinédine Zidane, play this season,
the multimillionaire ‘‘galácticos’’ will be starring in no
fewer than four full-length movies and on two new 24-
hour television channels in English and Spanish.
Also coming soon are manga-style cartoons, a Muppets
television show, mobile phone clips, video games, podcast-
ing and, perhaps, even theme parks in Madrid and Miami.
‘‘Our colloquial term for this is that we’re a multimedia
cathedral,’’ said Michael Novack, a former Spanish jour-
nalist and Real Madrid’s managing director for media.
Club executives speak with religious fervor about their
effort to search for fans beyond the Santiago Bernabéu
stadium and its 80,000 seats in Madrid.
Foreign territory is the ripest source of potential
growth for rich clubs with pricey players like Real Madrid
or Manchester United, in England, which has a pay-tele-
vision channel of its own and an official team Web site in
Mandarin. But the globalization of top teams and the
transformation of clubs into media empires is raising
some alarms about future access to players and the poten-
tial for independent, critical coverage.
Last week, for instance, the club manager for
Manchester United pulled a regular feature, ‘‘Plays the
Pundit,’’ after the team captain, Roy Keane, criticized the
performance of five teammates in a 4-1 loss against
Middlesbrough. The British press seized on the issue,
quoting United fans who accused the club’s television
channel of demonstrating as much independence as
Pravda under the Soviet regime. The British press report-
ed that the club manager had ordered the program to be
pulled after hearing Keane’s scorching comments.
‘‘It’s a big problem,’’ said Jens Sejer Andersen, director
of Play the Game, a nonprofit research group in Denmark
that seeks to provoke debate about ethics and freedom of
expression in world sports. ‘‘The little independence that
is left starts to disappear, and players will be like isolated
rock stars. The big companies want to control the photos
that are coming out of the games. They have too good a
product to leave it to independent journalists.’’
Real Madrid, which this autumn issued financial re-
sults showing that it was the world’s richest soccer team,
with revenue of ¤275.5 million, or $325.8 million, is the
most aggressive club to plunge into foreign territory.
The advantage that Real Madrid has over other wealthy
teams like the New York Yankees is that soccer is more
international than baseball, whose core audiences are
concentrated in North America and the Pacific Rim.
‘‘As growth in broadcasting values has slowed across
Europe, more clubs have looked to expand the brand
overseas and to try and develop new revenue streams,’’
said Paul Rawnsley, a consultant in the sports business
group at Deloitte. ‘‘For football’s biggest brands, their
power and money-spinning potential reaches across the
globe, and clubs have been targeting the Far East, China
and the United States in particular.’’
Last month, Real Madrid took a booth for the first time
at Mipcom, the global television trade show in
Cannes, to seek alliances with cable and satel-
lite operators to distribute 24-hour Real Mad-
rid TV.
Miniature soccer balls littered the floor of
the exhibit booth, and free DVDs were
passed around with Real Madrid TV pro-
gramming highlights, not to mention classic
matches starring Real Madrid, a record nine-
time European champion. This year the club
has assured qualification for the round of 16 in the
lucrative Champions League but is seeking to avoid a
third straight season without a trophy.
The new channels have hired journalists from the BBC,
CNBC and MTV for its programs, and the club intends to
send them to cover the athletes when they play for indi-
vidual national teams in the World Cup.
An early version of Real Madrid TV started in 1999 as a
subscriber option on basic cable, which reached only
65,000 customers. In February, the Spanish version trans-
formed into a free channel, and the English version star-
ted in July. Club officials say they cannot estimate the
new viewership yet.
Real Madrid TV is already carried on seven satellite
stations reaching Asia, Europe, the United States and the
Middle East. Novack, Real Madrid’s managing director
for media, said the company was trying to strike agree-
ments with cable operators in the United States as well.
So far, the club has not revealed how much it has spent on
its budding media empire, and the two newly created tele-
vision stations are losing money.
But its latest accounts for the fiscal year that ended in
June illustrate the critical importance of business beyond
the stadium. Marketing revenue for merchandising and
sponsorships nearly tripled from a year earlier to ¤116.8
million. That amounts to more than 42 percent of the
club’s income, far eclipsing gate receipts of ¤70.8 million
and ¤65 million for broadcasting.
Within that category, international development and
new technology brought in ¤16.8 million for the club,
which is privately owned and recorded a pretax profit of
¤8.05 million for the year.
To promote the Real Madrid global brand, the team’s
president, Florentino Pérez, has actively encouraged
movie productions involving the team. The club
was a co-producer on the first of four planned
movies, ‘‘Real: The Movie,’’ which had its
premiere in August at the team stadium with
a green carpet promenade for strolling soc-
cer stars.
‘‘Real: The Movie,’’ was directed by Borja
Manso, a confirmed Real Madrid soccer fan
whose brother, Luís, was a co-producer. The
movie was a mix of fact and fiction that followed
the lives of five soccer fans from New York to Japan.
Ticket sales, however, were disappointing in the land of
Los Merengues, as Real Madrid is nicknamed, and some
critics scorned the movie as a team love letter or advertori-
al. Even so, the film is now moving on to theaters in Asia.
‘‘What did people expect? It’s strategic communica-
tions,’’ said Novack, who said the team remained satisfied
with the results so far because it reaped promotional ben-
efits and expected more revenue from DVD sales.
Real Madrid is organizing a premiere of the movie in
Washington, although a date has not been set, Novak said,
to press the Real Madrid brand in the United States.
‘‘Obviously, it was a movie about Real Madrid and I
wasn’t looking for the bad news in the house,’’ said
Manso, who added that filming was initially difficult be-
cause he had to gain the confidence and trust players.
‘‘But we tried to strike a balance.’’
In the globalization of
top sports teams, some
clubs are being
transformed into media
empires. Real Madrid TV
is carried on seven
satellite stations
reaching Asia, Europe,
the United States and the
Middle East. Above,
from left, Zinédine
Zidane, David Beckham,
Raúl González and Iker
Casillas posing for an ad
to promote Real’s media
ventures. The actor
Alessandro Nivola, inset,
upper left, preparing for
his role in ‘‘Goal2.’’ Inset,
lower left: Special high-
definition cameras were
used to film ‘‘Real: The
Movie.’’
BRANDING, Continued on Page 11
help lessen the company’s reliance
on the slower-growing European
market, which still accounts for 85
percent of sales, he added.
‘‘If you want to be a global adver-
tising partner, this is not a market
you can ignore,’’ Decaux said about
the move into China.
Even in Europe, however, there are
opportunities. Decaux was recently
placed on a short list of two bidders
for what may be the largest single
transport advertising contract in the
world: operating more than 30,000
billboards in London Underground
stations and more than 80,000 adver-
tising sites in the subway trains
themselves, a deal with an estimated
value of £1.2 billion, or $2.1 billion,
over 10 years.
Decaux’s rival for the London deal
is Viacom Outdoor, a unit of the
American media conglomerate Via-
com that currently holds the contract.
Viacom Outdoor is mounting a vig-
orous defense of its business, rolling
out new features like video displays
on London buses, as well as a digital
ad in an Underground station.
These formats are intended to
make outdoor advertising more com-
petitive with other media, said An-
drew Oldham, joint managing direc-
tor of Viacom Outdoor in Britain.
Video makes billboards more like
television, and digital ads can also be
updated daily or even more fre-
quently, something that generally
has been practical only with newspa-
per, radio or online ads.
A decision on the London contract
is expected early next year.
While Decaux, Viacom and Clear
Channel Communications, through
its Adshel division, are the three
leading players in the business, they
are facing new competition lured by
the lucrative contracts.
Cemusa, a unit of the Spanish
company Fomento de Construc-
ciones & Contratas, was the surprise
winner of a recent competition to
provide New York City with so-
called street furniture — public toi-
lets, bus shelters, newsstands and the
like — in exchange for the right to
sell the advertising that will adorn it.
The deal is worth more than $1 bil-
lion over 20 years.
International Herald Tribune
————
Eric Pfanner can be reached at
adcol@iht.com.
Google remains
interested, too, as are
Yahoo and News Corp.
has built a 2.9 percent stake in Time
Warner with three hedge funds and has
criticized its management and board.
Despite AOL’s newfound sexiness in
the market — evidenced by the compa-
nies vying for its attentions — and the
decision last week to increase a stock
buyback program to $12.5 billion, from $5
billion, Time Warner stock languishes
near its levels in the spring of 2002. That
was when Parsons took the reins of the
company, two years after its stock
plunged in the wake of the merger with
AOL at the height of the dot-com bubble.
AOL, despite its large but declining

2. 11International Herald Tribune
Monday, November 7, 2005
**
Germans protest foreign incursion into newspaper business
By Eric Pfanner
LONDON: Unusually for a British
newspaperman, David Montgomery is
complimentary about Germany, a
country in which he has just made a big
investment.
Despite the political mess in Berlin
and more than a decade of economic
malaise, he said, the trains still run on
time, a sharp contrast to those in Brit-
ain. And the German papers tend to be
more thoughtful and serious than their
British counterparts, he added.
Unfortunately for Montgomery, who
runs a London-based media investment
company called Mecom, the welcoming
sentiments have not been reciprocated.
When Mecom and an American firm,
Veronis Suhler Stevenson, recently
agreed to acquire the publisher of two
newspapers in Berlin, the news was met
with an outpouring of protest from Ger-
man journalists and intellectuals, and
even some politicians.
The cause of the alarm was Mont-
gomery’s reputation as a fearsome cost-
cutter at British newspapers like The
Mirror and The Independent, which he
ran as chief executive in the 1990s.
While Montgomery insists that tales
of his ruthlessness have been exagger-
ated by Fleet Street and that the papers
might not have survived without the
cuts, his arrival in Berlin last month
touched a sensitive nerve at a time
when foreign capital was already a bête
noire. One of the papers that he has
agreed to invest in, Berliner Kurier, put
a photo of Montgomery on its front
page, alongside a picture of a locust.
Montgomery says he is undaunted.
The sale of the publisher, Berliner Ver-
lag, which in addition to the tabloid
Kurier also owns the more serious Ber-
liner Zeitung, is expected to close by the
end of the year, pending regulatory
clearance. And Montgomery, who is
originally from Northern Ireland, is
already talking about expanding his
nascent German media holdings.
‘‘We see this as a starting point for a
long-term presence in Germany,’’ Mont-
gomery said in an interview last week
in his London office.
Montgomery sees Germany’s news-
paper industry as ripe for consolida-
tion. There are more than 350 daily pa-
pers there, most owned by small,
family-controlled proprietors, unlike
the sprawling, publicly traded chains
that dominate markets like the United
States and Britain.
After several years of an advertising
slump, exacerbated by the country’s
economic woes, German newspapers
are showing signs of a modest turn-
around. Though circulation has been
sliding, it remains high, with 75 percent
of Germans over the age of 14 regularly
reading a paper, according to the Federal
Association of German Newspaper Pub-
lishers. That compares with only 45 per-
cent in France, the organization said.
Germans’ preoccupation with news-
papers makes it a potentially attractive
business. It could become even more at-
tractive, from Montgomery’s standpoint,
if he could assemble a group of newspa-
pers, introduce more sophisticated mar-
keting techniques and eliminate overlap-
ping business and support operations.
But that may be easier said than done.
Though Germany has no official barri-
ers to international investment in the
newspaper industry, the unofficial
hurdles to the creation of a foreign-
owned newspaper chain remain high.
Some of this is an effect of the seri-
ousness with which Germans approach
their newspapers. Most of them were
founded in the period after World War
II, when diversity in publishing was
seen as a paramount virtue after 12
years of central control of information
under the Nazis. As a result, German
regulators are among the strictest in the
world when scrutinizing potential mer-
gers, and they are particularly reluctant
to allow geographical concentration.
A few years ago, as German papers en-
dured their worst crisis since the war,
the Social Democratic government of
Chancellor Gerhard Schröder said it
would introduce legislation making it
easier for papers to merge. But that effort
foundered after opposition from compa-
nies like Axel Springer, which publishes
one of the few papers with nationwide
distribution, the best-selling Bild.
Sometimes politicians take a more di-
rect interest in how papers change
hands. Schröder’s party owns a media
holding company that includes several
papers. Last year, the company, DDVG,
invested in a troubled newspaper, Frank-
furter Rundschau, keeping it out of the
hands of potential foreign investors.
‘‘It’s quite indicative of the state of af-
fairs in Germany, where politics and
media and business all interact,’’ said
Robert Pfeiffer, a principal at Compass
Advisers, which provided investment
banking advice to Mecom and Veronis
Suhler Stevenson.
When Montgomery and his partners
approached Berliner Verlag, a number of
German luminaries including the author
Günter Grass joined in a public chorus of
concern, signing a petition stating that
‘‘press freedom does not mean the free-
dom of financial jugglers to gamble with
the future of newspapers.’’
The Berliner Zeitung and Berliner
Kurier editorialized against the
planned sale, though they have moder-
ated their stance since the deal was
signed in late October. Though the price
for the parent company was not dis-
closed, German news reports put it at
around ¤150 million, or $178 million.
Brigitte Fehrle, deputy editor of Ber-
liner Zeitung, said that the journalists
remained worried about Montgomery’s
intentions, but she acknowledged that
there was little concrete information to
go on at the moment. The biggest fear,
she said, is that the paper will be forced
to cut costs to raise its profit margin to
the near-20 percent levels favored by fi-
nancial investors, from the current 7
percent. In that case, Fehrle said, editor-
ial quality would suffer. ‘‘We’re living
on top of a volcano that might erupt, but
we don’t know if or when,’’ she said.
Montgomery last week declined to
discuss his specific intentions for Ber-
liner Verlag, where he will serve as
chairman. But he cited as evidence of
his good intentions the agreement of an
eminent German publisher, Gerd
Schulte-Hillen, a former chief executive
of Gruner & Jahr, to serve as vice chair-
man. And he expressed deference for
what he called Germany’s ‘‘stakeholder
culture,’’ in which social protection is
considered at least as important as eco-
nomic growth.
‘‘You can’t just go in and not make a
contribution,’’ he said. ‘‘You have to
make a commitment to the community.’’
But, in a comment that could renew
the hand-wringing in Berlin, he added,
‘‘The way newspapers operate will have
to change.’’
International Herald Tribune
Markus Wächter/Berliner Zeitung, via The Associated Press
David Montgomery has a reputation as a fearsome cost-cutter at British newspapers.
BOOKS A sample of the week’s best sellers
BRAZIL
Fiction
1. ‘‘As Intermitências da Morte,’’ by
José Saramango (Cia das Letras)
2. ‘‘O Caçador de pipas,’’ by Khaled
Hosseini (Nova Fronteira)
3. ‘‘Memória de Minhas Putas Tristes,’’
by Gabriel García Márquez (Record)
4. ‘‘O Código Da Vinci,’’ by Dan Brown
(Sextante)
5. ‘‘Fortaleza digital,’’ by Dan Brown
(Sextante)
Nonfiction
1. ‘‘Jesus, o Maior Psicólogo que Já
Existiu,’’ by Mark Baker (Sextante)
2. ‘‘A Dieta do Abdômen,’’ by David
Zinczenco (Sextante)
3. ‘‘Por Dentro do Governo Lula,‘’ by
Lucia Hippolito (Futura)
4. ‘‘Freakonomics: O lado…,’’ by
Steven D. Levitt and Stephen J.
Dubner (Campus)
5. ‘‘Chaves: Foi Sem Querer
Querendo?’’ by Luís Joly (Matrix)
BRITAIN
Fiction
1. ‘‘Thud!’’ by Terry Pratchett
(Doubleday)
2. ‘‘The Sea,’’ by John Banville
(Picador)
3. ‘‘The Lighthouse,’’ by P.D. James
(Faber)
4. ‘‘The Take,’’ by Martina Cole
(Headline)
5. ‘‘The Penelopiad,’’ by Margaret
Atwood (Canongate)
Nonfiction
1. ‘‘Guinness World Records 2006,’’
(Guinness)
2. ‘‘Talk to the Hand,’’ by Lynne Truss
(Profile)
3. ‘‘Margrave of the Marshes,’’ by John
Peel and Sheila Ravenscroft (Bantam)
4. ‘‘Jamie’s Italy,’’ by Jamie Oliver (M.
Joseph)
5. ‘‘Untold stories,’’ by Alan Bennett
(Faber)
FRANCE
Fiction
1. ‘‘Le souffle des dieux (Tome 2),’’ by
Bernard Werber (Albin Michel)
2. ‘‘Les charmes discrets de la vie
conjugale,’’ by Douglas Kennedy
(Belfond)
3. ‘‘Lunar Park,’’ by Bret Easton Ellis
(Robert Laffont)
4. ‘‘Trois jours chez ma mère,’’ by
François Weyergans (Grasset)
5. ‘‘Ma vie avec Mozart,’’ by
Eric-Emmanuel Schmitt (Albin Michel)
Nonfiction
1. ‘‘Tant que battra mon coeur:
mémoires,’’ by Mireille Darc (XO)
2. ‘‘Si la gauche savait: Entretriens
avec Georges-Marc Benamou,’’ by
Michel Rocard (Robert Laffont)
3. ‘‘L’amour dans le sang,’’ by
Charlotte Valandrey (Le Cherche Midi)
4. ‘‘Le monde comme je le vois,’’ by
Lionel Jospin (Gallimard)
5. ‘‘Mon Dieu…pourquoi?’’ by Abbé
Pierre (Plon)
GERMANY
Fiction
1. ‘‘Harry Potter und der
Halbblutprinz,’’ by Joanne K. Rowling
(Carlsen)
2. ‘‘Die Vermessung der Welt,’’ by
Daniel Kehlmann (Rowohlt)
3. ‘‘Sakrileg,’’ by Dan Brown (Lübbe)
4. ‘‘Ein Hauch von Schnee und
Asche,’’ by Diana Gabaldon
(Blanvalet)
5. ‘‘Eisfieber,’’ by Ken Follett (Lübbe)
Nonfiction
1. ‘‘Wiedersehen in Barsaloi,’’ by
Corinne Hofmann (A 1)
2. ‘‘Schluss mit lustig,’’ by Peter
Hahne (Johannis)
3. ‘‘Die kürzeste Geschichte der Zeit,’’
by Stephen Hawking / Leonard
Mlodinow (Rowohlt)
4. ‘‘Schotts Sammelsurium Essen &
Trinken,’’ by Ben Shott (Bloomsbury
Berlin)
5. ‘‘Abgezockt und totgepflegt,’’ by
Markus Breitscheidel (Econ)
All rights reserved. All reproduction, transfer, transmission or dissemination prohibited.
SOURCES: Brazil, Saraiva/AP (data for week ended Oct. 22); Britain,
Waterstone’s Booksellers/AP (Oct. 22); Germany, Der Spiegel/AP (Oct. 22);
France, Ipsos (Oct. 30).
The New York Times list of best-selling books in the United States appears
every Wednesday in the IHT.
NEXT WEEK’S MEDIA: Popular movies from around the world.
BRANDING, From Page 10
Real Madrid,
‘galáctico’
Manso said he was disappointed in
the film’s advertising campaign be-
cause he believed that some women
avoided the film, mistakenly thinking
that the entire focus was on soccer in-
stead of human drama.
That lesson was mastered by the pro-
ducers of ‘‘Goal2,’’ another movie with
Real Madrid taking a star turn. ‘‘Goal2’’
is the second part of a trilogy of movies
that charts the ‘‘Rocky’’-like rise of a
young Mexican soccer player from the
English Premier League to Real Madrid
and finally to World Cup star.
Milkshake Films, a Los Angeles pro-
duction company, is producing the film
with the backing of Icon Productions,
Mel Gibson’s studio. The producer,
Mike Jefferies, said his company chose
Real Madrid to feature in the second
movie because he wanted to make a
film with realistic football scenes.
Soccer has generally fared poorly in
the theaters, dating back to when
Sylvester Stallone played goalkeeper in
John Huston’s 1981 World War II film,
‘‘Victory,’’ about a team of Allied sol-
diers taking on the Nazis on the field.
The sport is harder to film than a
movie baseball game because of the
speed of play, said Manso, who used spe-
cial high-definition Sony cameras that
let him shoot constantly at lower cost.
In April, Douglas Gordon, a Scottish
artist, and Philippe Parreno of France
placed 15 special U.S. military surveil-
lance cameras, which can magnify im-
ages 300 times, around Madrid’s stadi-
um, focusing the powerful lenses on
Zidane. Their 90-minute-long movie,
tentatively named ‘‘Zidane: A Portrait of
the XXI Century,’’ may help Real Ma-
drid reach yet another elusive demo-
graphic group among the 93 million fans
that one Harvard business case study
estimates may lean toward the club.
‘‘This one is going to be shown in mu-
seums,’’ Novack said. ‘‘It’s an art film.’’
International Herald Tribune
WIRELESS
Qualcomm and antitrust echoes
By Eric Sylvers
Q
Qualcomm is not as dominant
in its field as Microsoft in soft-
ware or Intel in computer chips,
but it does play a leading and
fundamental role in the mobile phone
industry. And, like the other two cor-
porate institutions, it is occasionally
accused of anticompetitive practices.
Late last month, six companies, in-
cluding Ericsson,
Nokia, Texas Instru-
ments and Broad-
com, filed a com-
plaint with the
European Union al-
leging that Qual-
comm offers lower
prices for the royal-
ties on its cell-
phone-chip patents
if its customers also
buy the chips. If the
accusations are
borne out, the result
could have far-
reaching effects on
the industry.
Qualcomm, a
$5.7 billion compa-
ny based in San
Diego, makes cell-
phone microchips
and holds many pat-
ents necessary for
other phone technology. Qualcomm
holds about a 23 percent share of the
global market in such chips, trailing
only Texas Instruments, and they can
be found in phones made by Motorola
and other major manufacturers.
Its main technology is CDMA, or
code division multiple access, which is
used in U.S. networks operated by Veri-
zon Wireless and Sprint Nextel. But
Qualcomm also sells chips for W-
CDMA, a third-generation technology
in use in Europe and Asia.
Landmark cases against Microsoft
and Intel began with similar com-
plaints from competitors.
The European Union has not shied
away from making ground-breaking de-
cisions to stop what it considered anti-
competitive behavior, and that has not
been lost on Qualcomm, which is pre-
paring to meet with EU officials to dis-
cuss the matter.
The EU will very likely take several
months before it decides if it will even
open a formal inquiry against Qual-
comm, which has denied any wrongdo-
ing, and an inquiry
could take several
years.
‘‘Proving that a
company is over-
charging is very dif-
ficult to prove in
antitrust law,’’ said
Cristoforo Osti, an
antitrust lawyer
with Clifford
Chance in Rome,
‘‘because you have
to show that the
price is higher than
it would have been
with competition
and it’s difficult to
find a benchmark
to compare with.’’
He added: ‘‘Prov-
ing the discriminat-
ory practices is
easier. The situation
is complex because
European law in this area is in a transi-
tional phase, and that makes it difficult
to get an idea of what the EU might de-
cide.’’
Several other legal experts agreed
that it was premature to guess if the EU
would open an inquiry or what a likely
outcome would be. Yet they agreed that
if the EU did investigate, a decision in
favor of Ericsson and the other li-
censees could slow the adoption of a
third-generation mobile phone stan-
dard.
To ensure that a single standard is
used when a new technology is being
developed, competing companies often
agree to license patents to one another
for what is considered to be a fair fee.
In the case against Qualcomm, the six
complainants argued that the company
was asking for unreasonable fees for
use of its patents in the technology
needed for W-CDMA, which allows for
faster data transfers and multimedia
features like video calls.
It was this system of cooperation on
licensing patents among competitors
that helped the GSM technology be-
come the standard in Europe in the
early 1990s — encouraged by the Euro-
pean Commission itself — and similar
cooperation is helping make W-CDMA
a widespread standard for new net-
works today.
Spokesmen for Ericsson, Nokia,
Broadcom and Texas Instruments de-
clined to elaborate after announcing
the complaint, which they brought
along with NEC and Panasonic.
For Nokia and Ericsson, the concern
is that Qualcomm’s behavior leads to
more expensive phones because some
of the extra cost is passed on to con-
sumers. For Qualcomm’s rival chip
makers, the complaint is that Qual-
comm is trying to illegally corner the
market.
In a conference call with analysts,
Qualcomm’s president, Steven Altman,
reaffirmed his company’s stance last
week: that it has respected licensing ac-
cords and that this was evidenced by
the fact that five of the six complain-
ants are already using Qualcomm pat-
ents.
Lance Wilson, director of wireless
research at the consulting firm ABI
Research in New York, said: “Qual-
comm has a very viable patent portfo-
lio, and they are trying to extract the
maximum amount of money out of it
that they can while at the same time
the licensees are looking to spend as
little as possible for the right to use the
patents. It is likely that what is going
on is some business maneuvering on
both sides.”
International Herald Tribune
Felipe Galindo
BUSINESS &MEDIA
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