DealBook: Privacy Concerns a Challenge for Retailers

What Can Be Sold in 140 Characters? That’s Now the Challenge for Twitter

So get ready, Twitter users: you are going to see more ads in your message stream, especially if you live overseas.

You may also see Twitter become more like a flash-sale site, with offers to buy products appearing in your message stream along with a way to buy them with a quick click or tweet.

In documents filed on Thursday to inform investors ahead of its initial public offering of stock, Twitter noted that it has been greatly expanding its inventory of advertising slots, especially for promoted tweets, which are sponsored messages that use the same format as the 140-character postings, or tweets, that are the core of the service.

The company, based in San Francisco, said that across its base of 218 million users, the average person is checking the service more frequently — about 230 times a month, compared with 197 times a month a year ago. And users are also interacting with more ads.

But Twitter revealed that it has also significantly increased the number of ads it sells, and prices for those ads have fallen. The company said it believes cheaper, more targeted ads will draw in more advertising, more than making up for the price drop.

So far, the strategy seems to be working — the company said advertising revenue more than doubled in the first six months of this year, to $221 million, compared with the same period last year.

Joy Baer, executive vice president of Strata, which makes software that helps advertisers and ad agencies buy online ads, said that the 1,000 ad agencies that use Strata had been rapidly increasing their purchases of Twitter ads over the last two years. Although Facebook still dwarfs Twitter in overall revenue, she said that for every $100 in Facebook ads her customers buy, they are buying $33 of Twitter ads.

“There is a huge opportunity for them to get more of the dollars,” Ms. Baer said. “What they have to do is make it easier for a media buyer to click a button and buy Twitter.”

Right now, the company’s ad-buying process is less automated than for competitors like Facebook and Google.

Twitter declined to comment, citing regulations limiting what a company selling stock to investors could say beyond its official filings.

But analysts say that Twitter faces several growth challenges.

More than three-quarters of the company’s users are outside the United States, and it must find a way to make money from those global users. Right now, only 25 percent of its revenue comes from overseas. In the second quarter of the year, each American user represented about $2.17 in ad revenue to Twitter. Each one outside the United States brought in about 30 cents during the quarter.

Twitter’s big challenge is to convince a company outside of the United States why it should spend advertising money with Twitter, and not with other outlets, said Daniel Knapp, director of advertising research at the consultant IHS Screen Digest in London.

Twitter also has limitations as a medium, compared with more visually robust services like Facebook or Google, which can also count on revenue from video and display ads. And the competition isn’t standing still — Instagram, a fast-growing photo sharing service owned by Facebook, announced on Thursday that it would begin putting ads in the photo feeds of its users, something that advertisers have been eagerly awaiting.

Although Twitter has struck deals with television networks in the United States and some other countries to run video clips that are sponsored by advertisers, those are still a small proportion of revenue compared with its sponsored tweets.

The company’s robust presence on mobile devices — 75 percent of its users access the service that way, and two-thirds of revenue is from mobile ads — can also be a limitation where smartphones are not common.

In India, for example, Twitter is widely used by Bollywood stars like Amitabh Bachchan, who has 6.5 million followers on the service.

The service has also become one of the most important platforms for political debate there.

David Jolly and Mark Scott contributed reporting from London and Peter Eavis and Jenna Wortham from New York.

Bits: YouTube’s Founders Challenge Vine and Instagram With New Video App

Pogue's Posts: SmugMug Revamps Its Site, in a Challenge to Flickr

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Disruptions: Ride-Sharing Upstarts Challenge Taxi Industry

Richard Perry/The New York Times Uber, like the other services, does not have its own fleet of cars. The company teams with existing luxury car services and acts as a digital dispatcher for people booking a car through its mobile app.

Last week, when I arrived at the Los Angeles airport on a flight from San Francisco, I made my way to the taxi stand and waited 10 minutes for a cab. Just as I was about to hop in, the driver and the dispatcher began fighting over whose job it was to put my suitcase in the trunk. After a few minutes, I dealt with the bag myself. We then drove off in a filthy taxi that smelled like cigarette smoke and had suspension so old that it felt as if it had square wheels.

This made me think once again: the taxi industry is ripe for disruption.

Several companies in Silicon Valley — like Uber, Lyft and Sidecar — are acting on that very thought.

Uber, like the other services, does not have its own fleet of cars. The company teams with existing luxury car services and acts as a digital dispatcher for people booking a car through its mobile app.

Although Uber determines price the same way taxis do, calculating fares by time and distance, the service can cost 50 percent more than a normal city cab. Another service offered by Uber, called UberX, offers passengers a lower-cost ride in hybrid cars and is comparably priced to traditional taxis.

But companies like Uber are continually confronting the obstacle of entrenched government bureaucracy, resistant unions of taxi drivers and dispatchers, and overlapping and sometimes conflicting systems of state and city regulation.

The latest roadblocks have come up in Los Angeles, where Uber began offering its service in March.

Travis Kalanick, the company’s co-founder and chief executive, said it received a cease-and-desist letter from the city of Los Angeles, “even though this is not under their jurisdiction.” He added, “The taxi industry feels it is getting disrupted and they are doing whatever they can with their lobbying relationships to try and stop us.”

The letter, issued by the Los Angeles Transportation Department, says that Uber is “operating an unlicensed commercial transportation service” in the city. Jonathan Hui, an agency spokesman, wrote in an e-mail that it was working with the mayor’s office “to determine ways to address ride-sharing companies,” but he declined to comment further.

William Rouse, general manager of Yellow Cab in Los Angeles, one of the largest taxi companies in the city, and president of the Taxicab, Limousine and Paratransit Association, a trade group, said that making sure taxis were officially licensed was a matter of public safety.

“Our roadways are a scarce resource,” he said. “When you have an oversupply of taxi cabs, you have more congestion, depressed driver incomes and poor service. It’s also an issue of public safety, where drivers aren’t insured and there are felons driving some of these ride-sharing apps’ cars.”

Uber and other ride-sharing apps say that all their cars are insured over the required taxi insurance limits and that drivers must undergo stringent background checks.

“This isn’t about safety,” said John Zimmer, co-founder of Lyft, which also received a cease-and-desist letter from Los Angeles regulators. Mr. Zimmer said he believed the real opposition from taxi companies was not about customer safety, but fear of competition.

Mr. Zimmer also pointed out that state regulators had approved his service.

The California Public Utilities Commission, he said, lets it operate “because we go above and beyond all of their guidelines.”

Uber has been dragged through regulatory hurdles in New York City since its introduction there in 2011. But last month Uber had a victory of sorts, winning a ruling allowing it to operate in Cambridge, Mass. This came after city officials, at the behest of local taxi companies, tried to ban Uber even though state regulators had already approved the operations of such ride-sharing services statewide.

The Federal Trade Commission has also recently issued a statement supporting the services; the agency said trying to snuff out ride-sharing apps would stifle competition and could hurt consumers.

The controversy in Los Angeles is par for the course for start-ups that have come up against regulators. They have been sued or received cease-and-desist letters from almost every city they operate in.

When it comes to protecting customers on pricing and overcharging, taxi regulation makes sense. But in some instances, regulatory bodies have done more harm than good. In 2009, for example, more than 30 people in Washington, including at least one city official, were indicted on bribery charges during talks of regulatory change.

Some lobbying groups, meanwhile, are using fear tactics. In March, Mr. Rouse’s taxi industry group issued a news release warning that companies like Uber and Lyft were “rogue transportation apps” and a “threat to public safety.” The release said that arguments involving payment “could turn violent,” but offered no examples.

Mr. Kalanick of Uber said cities should simply let the customer decide. “The taxi groups are so protected through these regulations that they do not have to offer a better service to customers.”

Mr. Rouse acknowledged that cab companies needed to do a better job, and said he was working with cabdrivers to increase quality of service. But he said taxi groups “will continue to advocate for law enforcement against these ride-sharing apps.”

Although the services do not share figures on how popular they are, the opposition suggests they are posing a real threat. As for me, I’m glad when I have a choice.

To get to the San Francisco airport, before my recent flight to Los Angeles, I called an Uber car. When the driver picked me up, he was nervous about taking me to the airport, he said, because its police were ticketing Uber drivers. The service is allowed in San Francisco, but the airport police follow different rules.

“I can take you,” the driver earnestly said. “But we will have to pretend to be related so I don’t get a ticket.”

When we pulled up to the airport, he got out of the car with great ceremony, handed me my bags and followed his script. “Have a safe flight!” he said, giving me a big hug while peering sideways for signs of the law. “I’ll see you soon.”

E-mail: bilton@nytimes.com

News Analysis: The Challenge of Creating a Unified Organizational Strategy

To be clear, it is hard to do. The default behavior for human beings is to think in terms of tribes. If you work in a small department in a big company, you’re naturally going to identify most closely with your immediate colleagues. You’ll have lunch or coffee together, and maybe even socialize with them outside the office.

Other colleagues you see in the hallway and on the elevator can seem like total strangers, even though you work for the same company. Divisions fighting for resources and attention can exacerbate the problem.

It’s a theme that has come up often in my interviews with more than 200 leaders for my column, Corner Office, and smart leaders recognize that us-versus-them behavior can ultimately destroy companies.

So what should leaders do? A few tips have emerged from my interviews.

Create a ‘One Company’ Culture

Symbolism is important, in both the language that leaders use and the organizational chart they create.

Here’s how Kathleen L. Flanagan, the chief executive of Abt Associates, tackled the issue.

“We’ve grown from $180 million in annual revenue a few years ago to $425 million today. As the company grew, more business units were created, and so we had more silos in the organization. My objective two years ago in coming into this job was to take down the silos. So I reorganized the company. It used to be organized around lines of business — international, U.S.-based, data collection — and there used to be senior vice presidents who led each of those big businesses. I took those senior V.P. positions away and hired one executive vice president for global business who shared my vision for what I call One Global Abt.

At the heart of that is taking down the walls so people can collaborate more freely, so that we can leverage all of Abt. We now ask people to pick their heads up out of their project work or their division focus and look across the whole company. So I now ask my managers to wear two hats. Everybody’s got their job in the big picture of the company, but they all have to wear an Abt hat. It’s really easy, given the time pressures and the pace of our work, to put blinders on and be very project-focused. It’s harder to take a step back and ask, “How does this apply to the whole company?”

Simplify the Scoreboard

A big part of a leader’s job is to establish a simple set of performance metrics so that everyone in the company can feel as if they’re part of a broader team, and can understand how the work they do contributes to the broader goals. Chief executives have to choose those metrics carefully because, as the saying goes, what gets measured gets managed.

A powerful example of this came from Shivan S. Subramaniam, the chief executive of FM Global, a commercial and industrial property insurer, who shared with me how his team worked hard to develop very simple goals.

“We call them key result areas, or K.R.A.’s. We’re multinational — we’ve got 5,100 people, 1,800 of whom are engineers. We’re very analytical. But we have three K.R.A.’s, nothing terribly fancy. And everybody focuses on them. One is on profitability. One is on retention of existing clients. And one is on attracting new clients. That’s it.

You can talk to people in San Francisco, Sydney or Singapore, and they’ll know what the three K.R.A.’s are. All of our incentive plans are designed around our K.R.A.’s, and every one of those K.R.A.’s is very transparent. Our employees know how we’re doing. And, most importantly, they understand them, whether they’re the most senior manager or a file clerk, so they know that ‘If I do this, it helps this K.R.A. in this manner.’”

Communicate Relentlessly to the Entire Staff

There’s a reason that so many companies hold regular all-hands meetings (and with technology, it’s possible to do them in large and sprawling companies now). Again, it’s about tribal behavior. You have to bring everybody together and speak to everyone as a group for people to identify themselves with the broadest group. Leaders then have to take their simple plan and hammer it home, again and again, even if they feel like everybody has heard it before a hundred times.

It’s a lesson that Christopher J. Nassetta, the Hilton Worldwide chief, told me that he learned over time.

“You have to be careful as a leader, particularly of a big organization. You can find yourself communicating the same thing so many times that you get tired of hearing it. And so you might alter how you say it, or shorthand it, because you have literally said it so many times that you think nobody else on earth could want to hear this. But you can’t stop. In my case, there are 300,000 people who need to hear it, and I can’t say it enough. So what might sound mundane and like old news to me isn’t for a lot of other people. That is an important lesson I learned as I worked in bigger organizations.”

Steve Ballmer’s challenge as the chief executive of Microsoft is not unlike the challenge that it faces with technology: how to take something very complicated — be it a software program or a sprawling organizational chart — and make it simple to operate. This may be the toughest task of his career.

Adam Bryant writes the Corner Office column, which appears on Fridays and Sundays.

Amazon and Overstock Lose Challenge to Online Sales Tax

Amazon.com, the biggest online store, and its much smaller competitor Overstock.com had separately sued to challenge a 2008 state law that required online retailers to collect sales taxes on purchases made by New York residents. That served effectively to raise prices on the sites by nearly 10 percent, reducing their competitive advantage against brick-and-mortar retailers.

In a statement, Amazon denounced the New York Court of Appeals ruling as conflicting with precedents by the United States Supreme Court and decisions by other state courts. Overstock said it was considering appealing to the federal Supreme Court.

Central to the dispute was the question of affiliates, which are independent sites that link to a retailer in return for a commission. Thousands of Amazon affiliates are based in New York.

“The bottom line is that if a vendor is paying New York residents to actively solicit business in this state, there is no reason why that vendor should not shoulder the appropriate tax burden,” the appeals court wrote in its decision. The suits had been dismissed by lower courts.

The struggle over Internet taxes has intensified in the last few years. Brick-and-mortar retailers have been increasingly insistent that Amazon in particular was unfairly avoiding its responsibility to make sure its customers paid sales taxes. Other states began debating measures like New York’s.

In response, Amazon struck deals in California, New Jersey and a few other states to build warehouses in exchange for finally agreeing to collect taxes. In states where it does not need warehouses, Amazon has generally refused to budge.

The retailer says it supports a national solution rather than a state-by-state effort. After many years of inactivity, progress is being made on that front, with a majority of United States senators indicating this month that they would support an Internet tax measure.

Bits Blog: I.B.M.’s Rometty on the Data Challenge to the Culture of Management

Graham Carlow/Feature Photo Service for IBM Virginia M. Rometty in February.

Five years ago, Samuel J. Palmisano, then chief executive of I.B.M., gave a speech at the Council on Foreign Relations on the big opportunity ahead for modern computing technology to help businesses, government agencies and other institutions operate more intelligently. His remarks captured an emerging trend that opened the way to a large, lucrative business for I.B.M.

On Thursday evening, his successor, Virginia M. Rometty, is scheduled to deliver a speech in the same setting, looking at how far technology has come and its implications for how business and government are managed.

In 2008, Mr. Palmisano spoke of the accelerating pace of computer processing, storage and software that exploited artificial intelligence. He pointed to the explosion in data from the Web, social networks and sensors. He mentioned I.B.M., if at all, only in passing.

But to the vision he sketched out Mr. Palmisano attached the term “Smarter Planet.” It became the tagline for I.B.M.’s highly successful campaign to sell software and services — and sometimes hardware, too — to corporations and governments for an array of “smart” projects.

For Ms. Rometty, the script is similar in the sense that it is intended for an audience beyond the business community and refers to I.B.M. by name only once.

Still, the context is quite different. Mr. Palmisano gave his talk in the fall of 2008, when the financial crisis was sending the world’s economies into a tailspin. His speech gained a wider audience only partly because of what he said about technology. He was the chief executive of a major global corporation declaring that it was a good time to invest for the long term rather than pull back in a defensive crouch.

Today the economy is growing, if slowly, and corporate America is thriving. Yet Ms. Rometty’s speech — like her predecessor’s — seeks to broaden the discussion of the opportunity and implications of technology trends. Hers, in some ways, is a more subtle message about the next step — the broad absorption of this advancing technology.

In an advance copy of the speech, Ms. Rometty points to three effects of the smart technology, which these days flies under the banner of Big Data. She calls them three lessons.

“Lesson 1: Decisions will be based not on ‘gut instinct,’ but on predictive analytics.”

“Lesson 2: The social network is not just the new water cooler; it’s the new production line.”

“Lesson 3: Value will be created not for ‘market segments’ or demographics, but for individuals.”

Each of the three themes or lessons is illustrated by examples: Memphis police using data analysis to curb crime; a Mexican cement maker tapping the crowdsourced intelligence of its workers in product development: and the Obama campaign’s sifting of data to pinpoint get-out-the-vote efforts.

Ms. Rometty concludes by saying, “The challenge is not the technology. The challenge, as always, is culture — changing our entrenched ways of thinking, acting and organizing.”

Her point echoes a message management experts have been making for some time. I shared a copy of the speech with Erik Brynjolfsson, director of the Center for Digital Business at MIT’s Sloan School of Management.

In an e-mail, Mr. Brynjolfsson said, “I agree very much with the speech. The technology has been available for a few years now to create a management revolution based on big data, and now we’re beginning to see more and more companies undertake the much harder job of reinventing their business processes and culture to take full advantage of those technologies.”

Any speech by an executive, especially one that aspires to reach a wider audience, walks a line: How much is it fresh information and thoughtful insight versus a self-serving sales pitch?

Decide for yourself. Ms. Rometty’s speech is scheduled to begin at 6 P.M. Eastern time on Thursday and to be webcast live on the Council on Foreign Relations site and on I.B.M.’s Smarter Planet blog

By 7:30 P.M. or so, the text of Ms. Rometty’s speech should also be on the I.B.M. blog.

Providing a Template to Challenge Apple

TAIPEI — In the China smartphone market, Apple has seen better days.

Despite having reported record sales of the iPhone 5, the U.S. technology giant’s presence on the mainland flagged in 2012; it was pushed out of the top five smartphone makers in that market during the third quarter, with just 8 percent of the market, according to the research firm Canalys.

As Coolpad, Huawei, Lenovo, Samsung and ZTE surged ahead of Apple, a major force behind their success was MediaTek, a Taiwanese chip maker whose products have drastically reduced the cost for manufacturers of getting new phones to market.

The company entered the smartphone business late, introducing its first chipset in 2011 inside a Lenovo phone. But within a year and a half, analysts say, MediaTek has taken 50 percent of China’s market for smartphone chips.

That success has come with the adoption of what MediaTek calls a “turnkey solution.” Rather than simply provide a chip, the company also offers instructions on how to build a phone, the software architecture to run it and dedicated consultants to advise phone makers through the production process. MediaTek’s chief financial officer, David Ku, describes this as a franchise model in which all the clients have to do is “turn on the burner.”

Peter Liao, an analyst at Nomura Securities who covers the industry, said MediaTek saved phone makers the often prohibitive cost of research and development.

“It typically takes a lot of money and time to develop a new handset model, but MediaTek comes in and provides a total solution,” Mr. Liao said.

The company has proved wildly popular among Chinese phone makers. Besides supplying Huawei, Lenovo and ZTE, MediaTek also supports lesser-known manufacturers, including those that make so-called bandit phones that imitate premium models from Apple, Samsung and HTC.

TCL Communication Technology Holdings, a Chinese phone maker that sells phones primarily in Europe and Latin America, uses MediaTek’s chips. Its chief operating officer, Wang Jiyang, said that when his company works with MediaTek, its only major design tasks are to make the software more user-friendly and to tailor the look and feel of the phone.

“In general, with MediaTek’s help, we’re able to achieve almost twice as fast time to market, compared to other solutions,” Mr. Wang said.

MediaTek was founded in 1997. It started out making chips for home entertainment electronics like DVD players and televisions before moving into components for CD and DVD-ROM devices. In 2004, it began making chips for small mobile phones.

MediaTek estimates that it will lead the Chinese market by selling 110 million smartphone chips in 2012, up from 10 million chips a year ago.

By comparison, Qualcomm, the global leader in smartphone chips, is expected to finish 2012 in second place in China with 82 million chips shipped, according to the research firm DigiTimes.

MediaTek has been powered by consumers like Zhang Ying, 31, who want to try the latest technology but not pay a premium for it. Mr. Zhang, a Shanghai resident, bought a knockoff HTC phone last year. “Every person has a price point,” he said. “At a time when some of my friends were buying Samsung or iPhone, I wanted to show that I can keep up with them. A lot of domestic phones are cheap and of fairly good quality.”

People who think like Mr. Zhang are dominating sales, especially among first-time smartphone buyers. In a September report, McKinsey, the global consulting firm, estimated that 69 percent of all smartphones sold in China would cost less than 1,500 renminbi, or about $240, by the second half of 2013.

And MediaTek is taking its business model to other emerging markets. The company’s products support features that are popular in developing countries, like noise-reducing speakers and slots for two SIM cards.

In India, local brands like Spice and Micromax are rolling out lower-priced smartphone models using MediaTek parts. In Brazil, phones by Motorola Mobility, as well as local brands like Gradiente and Multilaser, will also have MediaTek chips.

Court Cases Challenge Border Searches of Laptops and Phones

The government has historically had broad power to search travelers and their property at the border. But that prerogative is being challenged as more people travel with extensive personal and business information on devices that would typically require a warrant to examine.

Several court cases seek to limit the ability of border agents to search, copy and even seize travelers’ laptops, cameras and phones without suspicion of illegal activity.

“What we are asking is for a court to rule that the government must have a good reason to believe that someone has engaged in wrongdoing before it is allowed to go through their electronic devices,” said Catherine Crump, a lawyer for the American Civil Liberties Union who is representing plaintiffs in two lawsuits challenging digital border searches.

A decision in one of those suits, Abidor v. Napolitano, is expected soon, according to the case manager for Judge Edward R. Korman, who is writing the opinion for the Federal District Court for the Eastern District of New York.

In that case, Pascal Abidor, who is studying for his doctorate in Islamic studies, sued the government after he was handcuffed and detained at the border during an Amtrak trip from Montreal to New York. He was questioned and placed in a cell for several hours. His laptop was searched and kept for 11 days.

According to government data, these types of searches are rare: about 36,000 people are referred to secondary screening by United States Customs and Border Protection daily, and roughly a dozen of those travelers are subject to a search of their electronic devices.

Courts have long held that Fourth Amendment protections against unreasonable searches do not apply at the border, based on the government’s interest in combating crime and terrorism. But Mr. Pascal’s lawsuit and similar cases question whether confiscating a laptop for days or weeks and analyzing its data at another site goes beyond the typical border searches. They also depart from the justification used in other digital searches, possession of child pornography.

“We’re getting more into whether this is targeting political speech,” Ms. Crump said.

In another case the A.C.L.U. is arguing, House v. Napolitano, border officials at Chicago O’Hare Airport confiscated a laptop, camera and USB drive belonging to David House, a computer programmer, and kept his devices for seven weeks.

The lawsuit charges that Mr. House was singled out because of his association with the Bradley Manning Support Network. Pfc. Bradley Manning is a former military intelligence analyst accused of leaking thousands of military and diplomatic documents to the antisecrecy group WikiLeaks.

In March, Judge Denise J. Casper of Federal District Court in Massachusetts denied the government’s motion to dismiss the suit, saying that although the government did not need reasonable suspicion to search someone’s laptop at the border, that power did not strip Mr. House of his First Amendment rights. Legal scholars say this ruling could set the stage for the courts to place some limits on how the government conducts digital searches.

“The District Court basically said you don’t need individualized suspicion to search an electronic device at the border,” said Patrick E. Corbett, a professor of criminal law and procedure at Thomas M. Cooley Law School in Lansing, Mich. “What they were troubled with was the fact that the government held these devices for 49 days.”

Customs and Border Protection, part of the Department of Homeland Security, declined to discuss the policy in an interview, but a spokeswoman for the agency said in an e-mail: “Keeping Americans safe and enforcing our nation’s laws in an increasingly digital world depends on our ability to lawfully screen all materials — electronic or otherwise — entering the United States. We are committed to ensuring the rights and privacies of all people while making certain that D.H.S. can take the lawful actions necessary to secure our borders.”

The statement also referred to the agency’s policy on border searches of electronic devices, which says that officers can keep these devices for a “reasonable period of time,” including at an off-site location, and seek help from other government agencies to decrypt, translate or interpret the information they contain. If travelers choose not to share a password for a device, the government may hold it to find a way to gain access to the data.

Law Students in Austria Challenge Facebook Privacy Policy

The group, which calls itself Europe vs. Facebook, said it would begin collecting donations to challenge the policy in Ireland, where the company’s European business is incorporated. Max Schrems, an Austrian law student at the University of Vienna who organized the effort, said Facebook had no interest in adapting its service to meet stricter European privacy requirements.

“We have been pursing this for more than a year with Facebook, but the company has done only about 10 percent of what we had asked them to do,” said Mr. Schrems, 25. “Therefore, we are preparing to go to court.”

Facebook, in a statement, said its European privacy policy had been vetted and approved by Irish regulators and was in compliance with European law.

“The way Facebook Ireland handles personal data has been subject to thorough review by the Irish Data Protection Commissioner over the past year,” the company said. “Nonetheless, we have some vocal critics who will never be happy whatever we do and whatever the D.P.C. concludes.”

Mr. Schrems’s group, which he said was made up of about 10 students at the University of Vienna, filed 22 complaints in 2010 with the Office of the Data Protection Commissioner in Ireland, which regulates Facebook’s European business because it is incorporated there.

As a result of those complaints, the regulator conducted a public audit of Facebook’s privacy policies. In September it announced an agreement with the company that required, among other changes, that Facebook shorten the time it retained consumer data and refrain from building a photo archive on individuals without their prior consent.

But Mr. Schrems said in an interview that Facebook was still violating European law in many areas, including a requirement that Facebook provide users who request it with a full copy of all the data the company has collected on them. Mr. Schrems, a Facebook user since 2007, said he requested his own summary file from Facebook in 2010.

The company, whose global headquarters is in Menlo Park, California, responded by creating a self-service tool for users to extract the data, which Mr. Schrems said supplied him only with information going back to 2010. In addition, he alleged that Facebook’s privacy policy, which users are required to agree to before they can use the service, is too broad and violates European law.

“It is basically a collection of American legalese, which is intentionally vague and gives the company adequate leeway to do basically anything they want with your data,” Mr. Schrems said.

Thilo Weichert, the data protection supervisor for the German state of Schleswig-Holstein, which has also brought legal action against Facebook, said he supported the Austrian student group’s efforts.

“Facebook’s policy is much too vague and broad and does not conform with German or European law,” Mr. Weichert said in an interview. “We think that European privacy officials need to take common action on this.”

Mr. Weichert issued an administrative order in August 2011 that barred businesses in the state, which is located along Germany’s northern border with Denmark, from using Facebook’s social plug-ins like the Like button and Fan pages. The rationale for the order: Those applications collect information on users without their consent by inserting cookies, which track individual computers, through a user’s Web browser.

In November of last year, Mr. Weichert sued several local business organizations, including the state’s own Industrie- und Handelskammer, the equivalent of the local chamber of commerce, for creating their own fan pages on Facebook. The chamber and businesses that have not been identified have challenged that suit, which is pending in court in Kiel.

The privacy policies of Facebook, Google and some other U.S.-based Web companies have come under increasing criticism in Europe.

Xbox Music Leads Microsoft’s New Push to Challenge iTunes

SEATTLE — Music fans have often viewed Microsoft as something like a bad cover band, one that pumped out uninviting facsimiles of Apple’s iPod and iTunes with its Zune music players and service.

Now that the Zune brand is dead, Microsoft is once again in search of a hit in digital music. But this time, to improve its odds of success, it is marshaling some of its most powerful brands as never before: Windows and the Xbox.

On Monday, the company plans to announce a service called Xbox Music that will offer access to a global catalog of about 30 million songs. The service will let consumers listen free to any song on computers and tablets running the latest version of its Windows software, as well as on the Xbox console. Microsoft will not initially limit how much music can be streamed, though that could change over time.

The service is part of a broad set of bets Microsoft is making this fall to help regain ground it has lost to competitors, especially Apple and Google. In addition to Windows 8, a major new version of its flagship operating system that will start shipping Oct. 26, the company is close to releasing a new version of its Windows Phone operating system for mobile phones and its first Microsoft-designed computer, a tablet device called Surface.

In an aggressive push to persuade lots of people to use the service, Microsoft will package the software for Xbox Music with Windows 8. The arrangement could awaken antitrust concerns about Microsoft’s use of Windows to gain toeholds in new markets.

Microsoft’s do-over in the market is a sign of how a strong music service has come to be seen as a prerequisite for any serious player in the gadget business. Apple first showed the way with that strategy by making it simple to buy songs from the iTunes Store, helping it sell more iPods. Google and Amazon have also gotten in on the act, adding music stores to their Android and Kindle devices.

In addition to competing with those big companies, Xbox Music is entering a landscape thick with independent music services that offer their own variations on the listening experience. Spotify, for example, provides on-demand listening to a large library of music, while Pandora programs radio stations tailored to its listeners’ individual tastes.

Scott Porter, principal program manager for Xbox Music, said many music fans today relied on a variety of services like those, along with more traditional sellers of songs like iTunes, to satisfy all their musical needs. This approach, though, can be tedious.

“The dilemma is that music has become work,” he said. “Our vision for Xbox Music is that it shouldn’t have to be work.”

Xbox Music incorporates elements of all of those services. There is an option to buy songs, so a music fan can own them permanently with minimal restrictions. There are Pandora-like radio stations built around songs and similar-sounding music.

And there is an option akin to Spotify that lets users listen free to any music from their computer, though they will get audio and visual advertisements. (Some major bands, like the Beatles, are missing from the catalog.) Like Spotify, Xbox Music offers a $10-a-month ad-free service that includes many other features, like the ability to listen to music on smartphones and the Xbox 360 game console.

While finding music on other services can sometimes feel like studying a glorified spreadsheet, Xbox Music is much richer visually, with artist photos that can be flipped through quickly.

Analysts say the success of Xbox Music will depend on far more than whether the service itself is any good, since the strategy is to have it enhance the appeal of Microsoft-powered gadgets that have much broader functions. “This is not going to matter if no one wants the devices,” said Richard Greenfield, an analyst at BTIG Research. “You need to have a killer device.”

That will be tricky on phones. The first smartphones on which the service will be available are those running a new version of Microsoft’s mobile operating system, Windows Phone, which has struggled to gain traction.

Yahoo Quarterly Results Show Challenge Mayer Faces

Revenue and net income were stalled at last year’s levels. Although Yahoo has amassed an enormous audience, some advertisers are looking elsewhere.

But on Tuesday, for the first time in a long time, people took an interest in Yahoo. The day before, Ms. Mayer left a senior post at Google to lead the company that Google had left in its wake.

Analysts and shareholders — desperate for signs of life from the moribund company — are eager to see whether Ms. Mayer, 37, can lure back advertisers, reinvigorate a muddled brand and improve morale at a company marred by executive churn, constant cost-cutting initiatives and mass layoffs.

“Bringing in Marissa Mayer gets people’s attention,” said David Hallerman, a principal analyst at eMarketer. “The sheer attention that they are getting because of hiring her will be helpful for a while. But it will only carry them so far,” he warned.

The first problem she faces is Yahoo’s identity crisis.

Previous chief executives — and there have been four of them in the last five years, plus two interim chiefs — have had a difficult time trying to define what Yahoo actually does. Most people cannot explain the company in a single simple sentence. “The age-old question with Yahoo has been: Is it technology first or is it media or content first?” said David Cohen, the chief media officer at Universal McCann.

Most recently, under Ross Levinsohn, who has been the acting chief since May, Yahoo seemed focused on content. It announced a number of prominent deals with ABC News, including a new weekly Web video show starring Katie Couric called “Katie’s Take.” During a presentation made to a room full of advertisers in April in Manhattan, Mr. Levinsohn highlighted Yahoo’s own coverage of sports, finance, the presidential campaign and the coming Summer Olympics.

With 700 million users, Yahoo still draws one of the largest audiences on the Web. More people use Yahoo’s e-mail service than any other service. Yahoo Sports, Yahoo Finance and Flickr, the photo site, are the most popular destinations in their categories.

But over the last few years advertising technology has grown more sophisticated and advertisers themselves have come under financial pressures, prompting many of them to buy ads more cheaply and more quickly through ad networks and auction-based sales. Yahoo’s advertisers are now experimenting with new platforms, most notably Facebook.

To challenge Google’s ad dominance, Yahoo formed a partnership with Microsoft and AOL last year on a deal to sell advertising for one another. And in January, Yahoo bought the online advertising company Interclick, which allows marketers to tailor ads to specific demographics.

The two moves led to the creation of Genome, Yahoo’s new digital advertising product, which offers advertisers data about their users and crunches that data so marketers can create custom ad campaigns. But Yahoo’s revenue from online display ads rose just 2 percent in the second quarter compared with a year ago, and it continues to lose market share.

The choice of Ms. Mayer, who oversaw some of Google’s most successful products — the search engine business, Gmail and Google Maps among them — suggests that Yahoo may turn its focus to new products, like mobile technologies. “Yahoo has a very healthy search advertising and display advertising business,” Ms. Mayer said in an interview on Monday. “I’m interested in what Yahoo can do with video and mobile, both of which are very promising.”

Brian Wieser, a senior research analyst at Pivotal Research Group, said advertisers had grown largely indifferent toward Yahoo. “What would get them more money is if they have a sexier brand,” he said. That’s where Ms. Mayer’s Google sheen could help the company. “We don’t know that she’s not the next Steve Jobs,” Mr. Wieser said.

Ms. Mayer may have the hardest time taking Yahoo into the mobile advertising arena, a market dominated by her former employer. Unlike Yahoo, Google and Apple dominate the mobile advertising space with hardware and software options.

And that’s where it runs headlong into its identity problem. “Yahoo is still mainly a media company. It doesn’t have an operating system. It doesn’t have the devices,” Mr. Hallerman, of eMarketer, said. “I don’t know if there’s room in the market for a fourth mobile platform.”

Asked whether she plans to run Yahoo as a media company or a technology company, Ms. Mayer said, “It’s not the right question. The most important thing is to give end users something valuable, inspiring and delightful that makes them want to come to Yahoo every day.”

Ms. Mayer skipped Yahoo’s earnings call Tuesday. Thanks to cost-cutting initiatives and restructuring, Yahoo’s second-quarter earnings beat analysts’ expectations, but revenue was flat at $1.22 billion. The company reported Tuesday that net income in the second quarter fell 4.2 percent from the same quarter a year earlier, to $228.5 million, or 18 cents a share.

Nicole Perlroth reported from San Francisco and Tanzina Vega from New York.