Bits: F.T.C. Member Starts ‘Reclaim Your Name’ Campaign for Personal Data

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DealBook: Dell Begins Campaign to Support Leveraged Buyout

Kimihiro Hoshino/Agence France-Presse — Getty ImagesMichael S. Dell, the founder of the computer company that bears his name.

Dell Inc. on Friday began its official campaign to support a proposed $24.4 billion sale of itself to Michael S. Dell and the investment firm Silver Lake, amid continued opposition to the deal.

The computer company filed its definitive proxy materials after receiving final approval from the Securities and Exchange Commission. And it set July 18 as the date for a shareholder vote on the transaction.

In a letter to shareholders, the company stressed that its special committee had carefully reviewed all possible alternatives to the $13.65-a-share offer by Mr. Dell and Silver Lake and fought hard to get to that price.

“Our analysis led us to conclude unanimously that a sale to the Michael Dell/Silver Lake group for $13.65 per share is the best alternative available — in a challenging business environment it offers certainty and a very material premium over pre-announcement trading prices,” the company wrote.

Dell also argued that a full sale eliminates shareholders’ risk of the company’s fortunes tumbling further, something that would not be possible if it pursued a huge stock buyback and dividend plan. That runs counter to what two of its biggest investors, Southeastern Asset Management and the billionaire Carl C. Icahn, have demanded.

Advertising: A Campaign to Help People Learn Internet Skills

THE Advertising Council and Connect2Compete, a nonprofit group whose goal is to eliminate the digital divide in the United States, are introducing a public service campaign to help those who are not digitally literate find free training to obtain these skills.

In remarks prepared for a speech in Washington last month about Connect2Compete’s efforts, the Federal Communications Commission chairman, Julius Genachowski, said approximately one in three Americans, or 100 million people, still do not have broadband in their homes, with low-income Americans and minorities “disproportionately on the wrong side of the digital divide.”

This matters, he continued, because “over 80 percent of Fortune 500 companies post job openings exclusively online. Over half of today’s jobs require technology skills, and nearly 80 percent of jobs in the next decade are projected to require digital skills.”

According to the National Telecommunications and Information Administration, one in five American adults — about 62 million people — do not use the Internet. The 2012 Pew Internet and American Life Project said the main reason these people “don’t go online is because they don’t think the Internet is relevant to them.”

To reach adults who share this sentiment, Connect2Compete approached the Advertising Council last year for help creating a public service campaign “with messages that get at the relevance of the Internet, how you can do something, or do something better that you may already do, by being online,” said Zach Leverenz, chief executive of Connect2Compete.

To that end, the Ad Council and the New York office of Young & Rubicam, part of the WPP Group, created a multimedia advertising campaign that begins on Thursday, a date chosen because its numbers (3-21) stand for a three-two-one countdown to get “everyone on” the Internet. The campaign’s Web site is EveryoneOn.org.

Advertising being distributed by the Ad Council includes a TV spot featuring Reginald, an actual truck driver from California whose instructor shows him how to use a computer, get on the Internet, and buy a plane ticket as a surprise for his wife. “She’s going to love me all over again now,” he says. The spot concludes, “But first, he’s going to surprise himself. Get online. Find a free class near you.”

Radio ads feature actors portraying individuals who do not know how to use the Internet. One is a man named Peter, whose instructor shows him how to look for electrician jobs online. The voice-over says, “This is Peter. Recently he got help going on the Internet for the first time to look for a new job. In the past, Peter’s gotten work through people he knew. But he heard there were more jobs online.”

One outdoor ad features a row of people — resembling paper doll cutouts — holding hands; the text says “1 in 5 Americans don’t use the Internet. Luckily help is all around.” These ads include the campaign’s toll-free telephone number.

Once the audience for all advertising — which is running in both English and Spanish — calls the toll-free number, they are asked for their ZIP code and given the location of free training classes nearby. Class information is also available via texting. In addition, the campaign’s Web site locates classes — which are being offered by over 21,000 libraries and other centers — by ZIP code.

The advertising being introduced on Thursday was preceded this month by related digital advertising and Facebook and Twitter outreach, directed at those who are already digitally literate and encouraging them to help those who are not.

Cheryl Chapman, a creative director at Young & Rubicam in New York, said the agency “knew we couldn’t scare people into using the Internet, so we wanted the advertising to feel disarming, to capture the real emotion of learning something new.”

According to Dzu Bui, campaign director of the Advertising Council, the campaign is directed primarily at adults who are not digitally literate, “since they are the ones who have control over accessing the Internet, they are the decision makers, they make choices for their families.”

Peggy Conlon, president and chief executive of the Ad Council, said the goal of the campaign — the group’s first to address digital literacy issues — was to “overcome the barriers people have to going online.”

She also predicted media outlets — which donate time and space to run all Ad Council advertising — might be motivated to carry this campaign, because it could “help increase their audiences. An informed citizenry is a stronger citizenry. There are many reasons this is good for everybody.”

Experts differed about the campaign and its strategy.

Erik Brynjolfsson, a professor who teaches the economics of information at the M.I.T. Sloan School of Management, called the campaign’s goals “on target,” since, he said, the median wage of Americans today is lower than it was 15 years ago, in part because they have “not kept up with digital technologies.”

Ruth Small, director of the Center for Digital Literacy at Syracuse University, commended the campaign for addressing specific subjects that interest people, like job hunting.

Although Dan Wagner, Unesco chair in learning and literacy at the graduate school of education of the University of Pennsylvania, said “anything that helps people, especially the poor, get access to technology is good,” he called creating relevant content for those who are not digitally literate just as important as showing them how to get online.

James McQuivey, who follows consumer technology adoption for Forrester Research, questioned the campaign’s prospects. “I don’t think it will have the impact they want it to have because most people who are not connected to the Internet are not there by choice. It’s not that these people are sitting and waiting for the Internet and can’t get it.”

City Room: Technology Leaders Endorse Effort to Overhaul Campaign Finance

A group of more than 30 technology industry leaders has endorsed an effort to overhaul the state’s campaign-finance laws, and is urging Gov. Andrew M. Cuomo to push for a system of public financing for state elections.

The technology industry leaders include Dennis Crowley, a founder of Foursquare, and Kevin P. Ryan, the founder of Gilt Groupe. The effort has also won the support of the venture capitalist Fred Wilson and his partners at Union Square Ventures, which has invested in start-ups including Meetup, Etsy, Twitter, Tumblr and Zynga.

Arguing for a campaign fund-raising system that would provide public matching funds to candidates who solicit small donations from individuals, the technology leaders pointed to the success of crowd-funding platforms like Kickstarter, through which people can pool resources to support projects.

“It is time to bring this same way of doing things to campaign finance in New York State, and create a national model that will strengthen small-d democracy,” they wrote on Thursday in a letter to Mr. Cuomo, a Democrat who has said overhauling the state’s campaign-finance system is one of his top goals.

The letter to Mr. Cuomo was also signed by a founder of Meetup, Scott Heiferman; the scholars Yochai Benkler, Lawrence Lessig and Clay Shirky; and the founder of the Personal Democracy Forum, Andrew Rasiej, who is the chairman of the New York Tech Meetup.

Mr. Rasiej, who ran unsuccessfully for New York City public advocate in 2005, said as technology leaders sought to advance their policy agenda in areas like privacy rights, broadband access and immigration reform, they were growing concerned that the political system in New York State and across the country had been “severely compromised by the influence of money.”

“It’s pretty obvious that the governor is presenting himself to the public as a reformer and as an innovator, and we as innovators believe that innovation doesn’t just stop at the computer terminal, it should continue on in our political system,” Mr. Rasiej said in an interview. “If the governor wants to be an innovator, the way to do it is not just by talking about it, but by actually doing it, and we think that comprehensive campaign-finance reform in New York State would be a validating step by the governor to show his innovation credibility.”

Advocates of public financing for state elections had hoped that Mr. Cuomo might be able to reach a deal with lawmakers in a lame-duck legislative session before the end of the year. But Hurricane Sandy and the continued uncertainty about which party will control the State Senate next year have combined to make such a session less likely, according to lawmakers. The next regularly scheduled session of the Legislature is to begin in January.

Advertising: Adobe Marketing Campaign Works With Coarse Language

In this instance, the brand is Adobe, which in a campaign getting under way this week seeks to support efforts by marketers to prove to their bosses that spending on advertising is not a waste of money. The campaign portrays products like Adobe Analytics, Adobe Media Optimizer and Adobe Social as valuable tools for marketing executives who want to debunk myths like “Social media is worthless” and “Marketing is baloney.”

Except that Adobe Systems and its agency — Goodby, Silverstein & Partners in San Francisco, part of the Omnicom Group — do not say “baloney” in the ad. Rather, they use an abbreviation for a word that a family newspaper would describe as a barnyard epithet.

The full epithet, with an asterisk replacing a letter, appears on a document that Adobe is circulating internally to explain that the purpose of the campaign is to prove that marketing can no longer be dismissed with the epithet because “today’s campaigns are rooted in hard data and powerful insights.”And the epithet appears unexpurgated in Web video clips that are part of the campaign, visible briefly on a Dymo-style label affixed to a fanciful detector contraption in scenes set in (make-believe) focus group sessions.

Adobe Systems will spend an estimated $10 million to run the campaign in the United States for the next three months. The decision to use the provocative language is indicative of a trend for ads to speak more in the vernacular than in the formal phraseology that was standard for so many decades. The frank language and colloquial expressions follow the loosening of societal standards for discourse, reflecting how marketers seek to mirror changes in consumers.

For instance, Procter & Gamble, for decades a model of rectitude in its ads, is now often adopting the look and feel “of YouTube video” when producing television commercials, said Marc S. Pritchard, global marketing and brand building officer at Procter.

That is why in a recent commercial for Tide detergent, in which a couple talk about the value of Tide versus lower-priced alternatives, the actress playing the wife tells the actor playing the husband that he stinks at folding clothes — only she uses a far more direct verb.

“We’re a family company,” Mr. Pritchard said in a speech at the 2012 annual conference of the Association of National Advertisers, and “there was more than a little discussion about that line.”

But new efforts for Tide that include the franker commercial have helped the brand grow “more than two-and-a-half share points in the last three months alone,” Mr. Pritchard said, referring to market share.

For Adobe, said Ann Lewnes, chief marketing officer at Adobe Systems in San Jose, Calif., the language represents “a bold and provocative way to get attention.”

“I think Adobe is not known for being provocative or bold,” Ms. Lewnes said. “We’re ‘a nice software company.’ ”

“But in this crowded space, with a lot of competition, the intent is to break through, jolt the market,” she added.

Asked if the strategy was risky, Ms. Lewnes replied: “I don’t think so at all. I think good advertising is always somewhat polarizing.”

The campaign is based on the premise that “marketers feel angry about being misunderstood,” she said, and the language in the campaign is meant to reflect that.

The campaign includes, in addition to the Web video, advertisements in newspapers and magazines, and online; sponsored content on mashable.com and theonion.com; sharing the metrics of the campaign, in real time, on adobe.com; and social media like Facebook, LinkedIn, Twitter and YouTube. On Twitter, Adobe will use the hashtag “#MetricsNotMyths” to underline the campaign’s theme.

The barnyard epithet is appropriate for the campaign because “for a long time, people did not know if the work was working, so you had to use a little” baloney in discussing the effectiveness of the advertising with other executives in the C-suite, said Keith Anderson, associate partner and executive design director at Goodby, Silverstein.

“It made you feel less confident,” Mr. Anderson said. “But now, you can know, you don’t have to guess, you can have hard facts to back you up.”

The frankness of the campaign also signals that the agency and Adobe Systems realize “if we were flowery, overly clever, jargony, the more it would feel like we were doing the same thing we were saying people don’t need to do anymore,” he added.

“We did look at other ways of making that statement” than to use the epithet, Mr. Anderson said, but it was decided to proceed because “the goal is to be provocative and reset the conversation.”

The language also conveys that Adobe is “plain-spoken,” he added, “and talks the way people talk.”

The products being advertised in the campaign compose what Adobe Systems is calling the Adobe Marketing Cloud, which competes against products sold by many companies; among them, Ms. Lewnes listed Google, I.B.M., Kenshoo and Salesforce.

The campaign is supplementing a more mainstream effort for Adobe, Ms. Lewnes said, which is also created by Goodby, Silverstein and carries the theme “Adobe &.” To indicate the connection, the campaign carries the theme “Adobe & marketing.”

Meg Whitman’s Toughest Campaign: Retooling Hewlett-Packard

IT’S not as easy being Meg Whitman as Meg Whitman might have expected.

At 56, Ms. Whitman, the eBay billionaire who spent a fortune unsuccessfully trying to become the governor of California, has found her Act III. She has been chief executive of Hewlett-Packard for a little more than a year, and many people are still waiting for her to get her message out about the place.

Here it is:

Meg Whitman believes in H.P., and believes that this company matters to Silicon Valley, to California, to the world. She believes that Wall Street doesn’t quite get it — doesn’t quite see the promise she sees. She believes that mobile devices, cloud computing and Big Data will re-energize H.P., a company that for a decade has grabbed more headlines for boardroom soap operas than for bold innovation.

“I believe in creative destruction,” Ms. Whitman says in a conference room near her executive cubicle.

Even, it seems, when the stakes include her company and reputation. In all likelihood, this is Ms. Whitman’s last great public performance. She became rich by building eBay, then spent more money than any candidate for public office in the nation’s history trying to become California’s governor. She was sometimes portrayed in that race as an aloof 1 percenter — as someone who pushed around subordinates, once literally, and who was unkind to her housekeeper, an illegal immigrant. “I left a little bruised,” Ms. Whitman, a Republican, says of the 2010 race she lost to Jerry Brown. “It was hard, it was personally very hard.”

So now Ms. Whitman is focusing her energy on H.P., the company founded by the tech legends William Hewlett and David Packard. Bill and Dave, as they are referred to at the company, spawned Silicon Valley. Last year, H.P. posted revenue of $127 billion. It employs 320,000 people directly, and easily that many again through a network of manufacturers and computer resellers across 170 countries.

Ms. Whitman has plenty of impressive-sounding stats at her fingertips. H.P., she says, employs thousands of people in Costa Rica, Houston and Boise, Idaho. “In India, we have 60,000 people,” she says. A new program for selling printer ink is in exactly 87 countries. Every 15 seconds, the company turns out 60 new printers, 30 personal computers and one powerful computer server. Still, she yearns for even more data, something closer to the command of the day-to-day process she had at eBay.

THE fact is, H.P. isn’t what it used to be. Next to Apple or Google, it looks like a bit of a loser. In the most recent quarter, as Apple soared to new heights, H.P.’s revenue fell 5 percent and its operating margins dwindled. Profit margins at I.B.M. and Apple are several times that of H.P. And H.P.’s share price, at just over $17 on Friday, is about where it was in 1995.

“It’s staggering,” says A. M. Sacconaghi, an analyst at Bernstein Research. “This is now the cheapest big stock in the last 25 years. That reflects an industry belief that the company is going to decline.”

Ms. Whitman is impatient to move H.P. closer to a global computing explosion that is transforming the industry. Smartphones and tablets from Apple, Google and others are now flying into consumers’ hands worldwide. Those computers are tied via the Internet to cloud computing data centers operated by Amazon, Microsoft, and hundreds of multinational companies. Information from all the consumer devices, in addition to data from billions of sensors and Web-crawling robots, is crunched in these supercomputing clouds, creating a Big Data revolution full of business opportunities and dangers.

From Ms. Whitman’s high vantage, the trends of mobile, cloud and Big Data resolve into a single phenomenon: the creation and exploitation of Information Everywhere. H.P. makes consumer devices, in addition to servers for the cloud, sensor networks, and analysis software. Instead of standing at the confluence of the phenomenon, though, H.P. is on the sidelines, with most of the parts but none of the integration to make it a leader.

This article has been revised to reflect the following correction:

Correction: September 30, 2012

An earlier version of the text of the slideshow accompanying this article referred imprecisely to the reasons that Carly Fiorina left Hewlett-Packard.  She was fired amid uneven business execution and not because of a corporate spying scandal. (The spying incidents came to light after she left.) The slideshow also referred imprecisely to the dismissal of Mark Hurd. He resigned amid charges of inappropriate conduct with a female contract employee, not an female employee of the company.

The Campaign to Digitize Your Wallet Is Intensifying

That’s hardly certain, because any company offering mobile payments faces a big challenge: convincing people that paying with a phone is safer and more convenient than using cash or a credit card.

But the partnership will clearly give a lot more exposure to Square, a company in San Francisco with about 300 employees, and to the idea of mobile payments in general.

Square isn’t yet near getting the big numbers it needs to become a mainstream replacement for the wallet. To date it has 75,000 merchants using its technology to accept payments. It refuses to disclose the number of consumers using its Pay With Square app, presumably because there aren’t enough to brag about.

“The biggest friction has been places to pay,” said Jack Dorsey, the founder of Square, in an interview. He said that with so many different companies trying to get a piece of the market, paying with a phone has been a “fragmented” experience. But the Starbucks partnership should widen the use of Square specifically, he said.

Indeed, businesses of all kinds, including big companies like Google, Microsoft and Sprint and small start-ups like GoPago and Scvngr, are hoping to profit from mobile payments — if only they can figure out what kind of system appeals to consumers and merchants.

Google has developed a mobile wallet app that uses a technology called near-field communication, which allows a phone to communicate wirelessly with a nearby cash register. GoPago has an app that lets customers place an order before arriving in a store; it shows up on a tablet on the merchant’s counter. Square offers businesses software for the iPad that shows pictures of nearby customers who are using the Pay With Square app on their smartphone, so all they have to do is state their name to pay for an item.

Starbucks stores will begin accepting a less ambitious form of Square payments this fall, when customers will be able to show a Square bar code on their smartphone at the register. The companies expect 7,000 Starbucks stores in the United States to be hooked up to the new system before the holiday season.

Starbucks has already been accepting mobile payments through its own bar code app. With one million app transactions a week, Starbucks is the most successful example of mobile payments to date, according to Denee Carrington, an analyst at the research firm Forrester. She said the partnership should make Square the biggest player in mobile payments.

“They’ve been working with the moms and pops of the world, small coffee shops and that kind of thing, but this certainly gives them another level of presence in the market,” Ms. Carrington said. “Now in addition to the neighborhood coffee shop, they’ll be at every corner of New York City.”

But not everyone is convinced that Square’s close relationship with a behemoth like Starbucks is such a good idea. Seth Priebatsch, chief executive of Scvngr, a start-up that offers a mobile payment app called LevelUp, said the move could risk alienating other big retailers.

Square has invited Howard D. Schultz, Starbucks’s chief executive, to its board. That would give the coffee company influence over how the payment system is developed, which could scare other big retailers away from adopting it, Mr. Priebatsch said.

“If I was Dunkin’ Donuts or 7-Eleven or Peet’s Coffee, I wouldn’t touch Square with a 10-foot pole,” Mr. Priebatsch said. “Giving one retail partner undue influence over a whole payment ecosystem is a dangerous precedent to set.”

Mr. Dorsey said he didn’t think of it that way. He said that for retailers considering a mobile payment system, what mattered most were the numbers of customers it brought to the table and the overall cost of operation.

“I don’t think this sets the tone in a negative way in those conversations,” he said. He added that retailers had been asking Starbucks for advice because of its success in innovations.

But if Starbucks was already so good at getting people to pay with their phones, why should it hand over the keys to someone else? Mr. Schultz said using Square might eventually help Starbucks reduce some of the expense of credit card transactions, known as interchange fees.

Square says that it makes moving money around more efficient by cutting out middlemen and dealing with a unit of JPMorgan Chase to handle its credit and debit card transactions, which helps lower costs. Mr. Dorsey explained that as a younger company, Square had the advantage of using newer technologies to improve the transactions process and save money. Square’s current fee for merchants is 2.75 percent of each transaction. Adding millions more purchases through Starbucks could improve efficiency further and bring that fee even lower, he said.

“A lot of the industry is working off legacy code from the ’70s,” Mr. Dorsey said. “All this has been rewritten, vetted and audited, and that allows us to be much more agile and reduce the overall cost of the system.”