Good morning, it’s Monday, January 3, 2011, and this is your first early morning digital briefing.  If you would like to read this or any other Cynopsis edition online, click here. 

MySpace is about to undergo some more belt tightening as News Corp. executive Jack Kennedy prepares the recently reinvented social networking site for a sale, according to a report in AllThingsD. The Beverly Hills, CA-based company may lay off as many as half of its 1,100 employees as it tries to dress up its sagging bottom line. News Corp. COO Chase Carey gave a strong indication that MySpace was on a short leash in a recent conference call with analysts, noting that a decision would be made “in quarters not years.”
                                                                                                                  

 
Retailer Sears Holdings Corp. has struck a deal with Sonic Solutions to develop an online movie download service allowing Sears and K-Mart customers to rent digital copies of new releases the day they are released on Blu-ray and DVD. Running on Sonic’s RoxioNow platform, the “Alphaline Entertainment” service will integrate with PCs, portable media players, smartphones, tablet devices, Blu-ray players and broadband-connected televisions. Sonic, which partners with Best Buy to sell and rent movies through CinemaNow, agreed to be acquired by Rovi Corp. last week in a deal worth $720 million.
 
Viacom sold Rockband developer Harmonix Music Systems to VC firm Columbus Nova for an estimated $200 million. The platform’s last big hurrah was the release of “The Beatles” version of the game in 2009.
 
Same day-as DVD VOD releases have spurred movie rentals for Comcast as 9 of the MSO’s top 10 VOD releases for 2009 fell into the “day-and-date” category. Last year’s Best Actress Oscar winner “The Blind Side” was the top grossing VOD rental, followed by “Couple’s Retreat” and “The Twilight Saga: New Moon.” Comcast says it released more than 200 day-and-date titles in 2009.
 

 
Boxee announced that its Vudu HD movie streaming application for the new D-Link Boxee Box is being delayed until later this month when a new version of its Netflix streaming app is also planned for launch.
 

 
A debate has emerged about whether or not connected devices such as the iPad should be permitted for use on the floor of the U.S. Congress. While previously outlawed altogether, the amended rule on the matter reads: “A person on the floor of the House may not smoke or use a mobile or electronic device that impairs decorum.”
 
Rovi announced an integration with Catch Media‘s Play Anywhere music discovery platform on the web and via mobile devices.
 
Skype provided an explanation of why it suffered such a massive outage just before the holidays. Apparently an older version of its Windows client got hung up trying to process a backlog of offline instant messages and ended up effecting 20% of all Skype users.
 
Cloud-based digital video management services provider KIT Digital announced plans to launch a subsidiary in China in Q1 2011 in a partnership with Morse Chen, founder of Webs-TV (now called Yam.com). KIT China, which already has numerous client in Southeast Asia, will launch with a 30-person management team based in Taipei and Chengdu.
 

 
Facebook topped Google as the most visited website in the U.S. in 2010 receiving 8.9% of all web visits between Jan. and Nov., according to panel-based researcher Experian Hitwise. When including common search terms Facebook accounted for 3.48% of all searches in the U.S. among the top 50 terms, which represents a 207% increase versus 2009. Google’s main search site was the second most visited destination with 7.2% of all visits, followed by Yahoo! Mail (3.52%), Yahoo! (3.30%) and YouTube (2.65%). Computer Hardware (including iPads and eReaders) ranked as the top growing category with a 23% increase versus last year.
 
Retail e-commerce spending for the first 56 days of the November – December 2010 holiday season increased sharply this year, according to ComScore, reaching a record $30.81 billion season-to-date – a 13% spike from the corresponding days last year. The most recent week (ending Dec. 26) amassed $2.45 billion in spending, an increase of 17% y/y.
 
2010 Holiday Season To Date vs. Corres. Days in 2009 Non-Travel (Retail) Spending
(Excludes Auctions and Large Corporate Purchases Locations)
                                                                    Millions ($)                                    
                                                          2009       2010       Percent Change
November 1 – December 26           $27,368    $30,810          13%
Thanksgiving Day (Nov. 25)                 $318        $407          28%
Black Friday (Nov. 26)                          $595       $648           9%
Cyber Monday (Nov. 29)                       $887     $1,028          16%
Green Monday (Dec. 13)                        $854       $954          12%
Free Shipping Day (Dec. 17)                   $586       $942          61%
Week Ending Dec. 26 (Dec. 20-26)      $2,098     $2,450          17%
Source: comScore, Inc.                                                   
 

 
iPhone users now have a way to make video calls without using up their precious AT&T minutes. Voice and Video-over IP service Skype has launched a new version of its iPhone app that adds video calling capability to the iPhone 4, iPhone 3GS and current 4G iPod Touch. Version 3.0 of Skype requires a Wi-Fi connection of 600 kbps to make a decent video connection. The app also allows you to make free audio calls and works over AT&T’s 3G network.
 
Reports have surfaced that Logitech has frozen production of its expensive Google TV-powered Revue set-top box until Google makes promised updates to the software. An earlier report in the NYTimes claimed that Google has asked several manufacturers to postpone their Google TV unveilings at CES unit it completes the overhaul.
 

 
Wireless network pioneer Craig McCaw announced he is stepping down as Chairman of 4G WiMax broadband start-up Clearwire, which has been scrambling to raise additional funds to meet its debt obligations. Former Clearwire CEO Ben Wolff has been nominated to replace him on the board. The resignation took effect on Friday.
 
Former THR sales executive Paul Mauriello has joined Tribune Media Services as a part of Zap2it‘s National Advertising Sales team. He will be based in New York.
 

 
Predicting the next big tech company is a parlor game that stokes the nation’s imaginations as well as its stock portfolios. When one company breaks through with a new model it often creates a ripple effect that creates opportunities for others. 2011 may be called the year of the couponing site, led by the rise of Chicago-based Groupon, which boldly turned down a $6 billion offer from Google in favor of raising some $950 million from the sale of preferred stock, according to a regulatory filing. Groupon is a pure digital marketer that relies on email, smartphone apps and social networking to spread the word about local restaurant, spa and entertainment deals. One of the cool things about it is its paperless delivery method – somehow showing a smartphone to your waiter instead of a clipped coupon has less of a stigma attached – and it has cobbled together more than 35 million registered users in a little over two years. Look for more companies to emerge this year that figure out how to utilize powerful platforms like Facebook and Android to help local and national businesses reach new customers.
 
Later –
Wayne Karrfalt for Cynopsis Digital
01.03.11

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