• 04.12.10

Today in Most Innovative Companies

News of note from our Most Innovative Companies, including HP, Spotify, and Microsoft.

HP: Today, HP completed its acquisition of 3Com at a price of $2.7 billion. The deal greatly improves HP’s networking solutions, its position against Cisco, and its presence in China’s market.


Spotify: The British Academy of Songwriters, Composers and Authors (Basca) took Spotify to task today, complaining that the cloud-music service only “generates ‘tiny’ payments,” BBC news reports. What’s worse is that many Basca members–and assumedly other artist guilds–never know if their materials are worth more than they receive, since the deals between publishers and labels are typically private. “The danger is that these deals all become so secret that the mist that descends creates uncertainty, creates fear,” said Basca head Patrick Rackow. “I think that harms Spotify, it harms the writers’ perception of Spotify and this is a service that they want to support.” As Spotify gears up for its launch in the U.S., one can only hope such issues are ironed out beforehand. While their business model is one of the most promising we’ve seen yet, with so many players in the industry vying for a piece of the pie, it’s unclear whether Spotify will translate into revenues with American companies and audiences.

Microsoft: PS3 has the highest percentage of consoles connected to the Internet, according to research group Diffusion–but don’t go on rejoicing yet, Sony. While this sounds like great news for the PS3, which has been trailing the Xbox 360 and Wii in reviews and revenues, Microsoft’s Live service is right behind in broadband penetration, reaching 73% of consoles, compared with the PS3’s 78%. What’s significant about this is that Xbox’s online service is by subscription, whereas Sony’s is free. To be only 5% ahead of Microsoft’s paid service must be a difficult statistic for Sony to swallow, especially since they must’ve lost a significant amount of revenue by opting for a free online model–and it hasn’t paid off in users. Of course, Xbox Live does distinguish between its gold and silver services–so it’s not necessarily an indiction of a complete burn for Sony–but with recent reports showing that over half of all Xbox Live subscribers pay to play, perhaps the PS3 should start revising its business model.

About the author

Austin Carr writes about design and technology for Fast Company magazine.