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Comic-Con: I, Frankenstein Looks Crazy

Aaron Eckhart and Yvonne Strahovski joined writer-director Stuart Beattie and creator Kevin Grevioux at San Diego Comic-Con's huge Hall H today to debut footage from Lionsgate's I, Frankenstein.

Beattie kicked things off by explaining that this Frankenstein is like none we've ever seen before, an ageless creature who is caught up in a war between gargoyles and demons in a modern day dystopia -- with the two sides fighting to discover the secret behind his immortality.

The trailer shown to the crowd begins with Eckhart's Frankenstein saying, "I am not human. I am unlike none other." From there, a torrent of gothic, action-heavy imagery followed, with gargoyles -- stone gargoyles -- and winged men (demons?) flying, battling, and attacking. Frankenstein gets down to some stick-fighting, and also has a pair of big old blades that he uses. We also get glimpses of his past, seemingly when he was first created and, perhaps, discarded by his creator, and these are juxtaposed with modern images of a high-tech lab. It all culminates with an onscreen promise: The Legend Lives 2015.

Beattie didn't want traditional action scenes -- car chases, gun fights, etc., which is one of the reasons he wanted the character to use the Filipino art of Kali stick fighting. Strahovski plays one of only two humans in the film, she said, a scientist who when we first meet her is reviving a dead lab rat. So yeah, her and Frankenstein are a match made in heaven, even though at first she doesn't believe Frankenstein is real or, like most humans, even know that the gargoyles and demons exist.

Eckhart said his character tracks with the original Mary Shelley version in that he's very soulful and lonely, and Beattie explained that Eckhart's monster (who goes on to take his creator's name) looks quite different in the past. His scars and physical defects heal and change over the centuries, eventually leading to the main look that he has in the modern portion of the film.

The film is about good, evil, and how Frankenstein is looking for his soul and his place in the world. He also trained for six months in the stick fighting, and he did pretty much all of the fight scenes himself. Would you expect anything else from the man who was once Two-Face?!

Grevioux, who was also behind the Underworld series, said he created the graphic novel that the film is based on because he wanted to delve into another classic monster -- but only with more action. So more action than Underworld, huh? That's definitely more.

Talk to Senior Editor Scott Collura on Twitter at @ScottIGN, on IGN at scottcollura and on Facebook.

Bits Blog: With Windows 8.1, a New Start That Looks Familiar

Stuart Isett for The New York Times A customer at a Microsoft store gets an introduction to Windows 8 on a tablet.

Yes, Microsoft is bringing back some comforting hallmarks of its Windows operating system, including the Start menu. No, it is not chucking out the modern, touch-friendly, tile-based look of Windows 8, the new version of the software that has sent much of the PC industry, many pundits and some computer shoppers into a tizzy.

That’s the short version of what’s coming in Windows 8.1, an update to Windows 8 that will be out by the end of the year. In one of the first demonstrations of the operating system to an outsider, Microsoft executives showed off a bevy of changes the company has made to the operating system, a number of which were in direct response to some of the more pointed criticisms the operating system received from users after coming out last fall.

Hints from Microsoft in recent weeks about those changes, along with a slump in PC sales that analysts believe was worsened by Windows 8, have led to heated speculation that Microsoft was preparing to backpedal from the most radical changes it made in Windows 8. Not true, executives said.

“This isn’t a U-turn at all,” said Antoine Leblond, corporate vice president of Windows program management. “We really believe in the direction we started on with Windows 8.”

Indeed, Windows 8.1 looks virtually indistinguishable from Windows 8 in many respects. People who dislike its colorful mosaic of tiles will not find much in the new software to change their minds.

That’s because it is unlikely, as a practical matter, that people will be able to entirely escape the tile-based interface in Windows 8.1, even though Microsoft is making it easier to avoid it. As expected, the new operating system will allow people to configure the software so that they start in desktop mode — the “classic” Windows interface with a taskbar at the bottom of the screen, a background image and applications with traditional menus — whenever they boot up their PCs.

Microsoft didn’t allow this with Windows 8. Even if their destination was desktop mode, where Office and millions of legacy Windows applications run, Windows 8 users had to pass through the tile screen, an inconvenience to many. It’s noteworthy that Microsoft will still put users in the tile interface by default when they start up their machines.

Microsoft is also reincarnating the Start button with Windows 8.1, though it won’t behave exactly like the Windows Start buttons of yore, the primary way Windows users found and launched applications for decades.

There will be a Windows flag icon in the bottom left corner of the taskbar in the Windows 8.1 desktop. But clicking — or, if you have a touch device, tapping — the button will simply return you to the tile-based interface, from which you can launch apps. People can get to a more traditional looking menu of applications from the Start button, but they have to configure the system to do that.

What these changes mean is that someone who makes the effort to reconfigure the operating system will be able to spend most of their time in the classic desktop interface. In practice, Microsoft will keep nudging them in the direction of the tile-based interface at every opportunity because it believes that is the future of Windows.

The company thinks most devices are moving inexorably in the direction of touch screens, including laptop computers and desktops. The tile interface of Windows 8 and its successors is how the company is preparing for that future.

If developers want to distribute applications through Microsoft’s app store for Windows, they have to write them so they run through the modern Windows interface. Even if a customer only wants the old-fashioned Windows, they will be bounced into the new interface anytime they launch Netflix and any other modern app.

Over time, Microsoft believes users will become more comfortable in the modern interface. But it doesn’t want to rush them if they’re unready.

“There’s an opportunity here to help people feel more oriented if they don’t feel oriented,” said Jensen Harris, partner director of program management at Microsoft.

There are a variety of other changes in Windows 8.1 that are likely to receive less notice. People using Windows 8.1 in the modern interface will be able to have four different windows open at once, rather than two, which will make it easier for multitaskers to jump among different applications. A new built-in search function will automatically create a slick-looking mash-up of different types of data relevant to a search term, including songs, videos, photos and Wikipedia entries.

The underlying bet Microsoft is making with Windows has not changed, though. Unlike Apple, which has one operating system for the iPad and one for computers, Microsoft believes the software that powers both types of devices should be the same.

“The role of Windows is to unify that experience,” Mr. Leblond said.

Common Sense: Netflix Chief Looks Back on Its Near-Death Spiral

It was the thousands of e-mails that poured in from angry and disappointed customers.

“I realized, if our business is about making people happy, which it is, then I had made a mistake,” Mr. Hastings told me this week, in a rare public comment on an episode that could have destroyed the company. “The hardest part was my own sense of guilt. I love the company. I worked really hard to make it successful, and I screwed up. The public shame didn’t bother me. It was the private shame of having made a big mistake and hurt people’s real love for Netflix that felt awful.”

This week, Netflix announced that it gained three million subscribers globally in the first quarter and that revenue for the quarter exceeded $1 billion, a record for the company. On Tuesday, the stock jumped 22 percent, the first time it has traded over $200 since the Qwikster episode, and it is up 135 percent so far this year, making Netflix the best-performing company in the Standard & Poor’s 500-stock index. The company is basking in the critical glow of its original series, “House of Cards,” and this month narrowly surpassed HBO in total subscribers.

In the annals of corporate missteps, there are few parallels to such a rebound from what once looked like a death spiral, especially in the momentum-driven world of technology. Zynga, the online game maker, and Groupon, the Internet coupon company, are struggling with brutal competition. In an old-economy industry like retail, J. C. Penney was in the midst of a similarly bold attempt to reposition the company when it fired its chief executive, and is now fighting to survive.

How did Netflix simultaneously manage both a fundamental transformation of the company and a public relations disaster?

Mr. Hastings said he realized that the company’s attempt to both raise prices and separate into two companies, one the legacy DVD-by-mail business and the other the up-and-coming broadband streaming business, was trying to do too much too fast. Angry subscribers abandoned the company in droves (800,000 in the fourth quarter of 2011 alone), revenue missed estimates and the stock plunged.

“I messed up,” Mr. Hastings wrote in an unusually forthright September 2011 blog post. Citing the precedents of AOL and Borders Books, which struggled or failed to make the digital transition, “my greatest fear at Netflix has been that we wouldn’t make the leap from success in DVDs to success in streaming.” But in the rush to accelerate the transition, he wrote, “In hindsight, I slid into arrogance based upon past success.” He also made a video apology.

Mr. Hastings said he didn’t expect the apology alone to “turn it around,” adding, “I wasn’t naïve enough to think most customers care if the C.E.O. apologizes, but I thought it was honest and appropriate.”

The mea culpa resonated, though, with some important constituencies, including some Wall Street analysts, who were punishing the company’s stock. Richard Greenfield, an influential media analyst at BTIG, said that he was impressed that Mr. Hastings “realized his mistakes and openly admitted them.”

“He dusted himself off, stood back up and started running,” Mr. Greenfield said. “Very few people can do that.”

Still, Mr. Hastings said, “The situation made me nervous and very focused.

“I couldn’t say with confidence that we’d recover. We were in a place that was quite risky. We didn’t have the reserves to make a second stumble.”

On the other hand, he didn’t panic, and he didn’t lose confidence. Although he made some big changes, like scrapping Qwikster, he never questioned his original vision for the company, which he helped found in 1997. Nor did he lunge at supposedly transformative opportunities that were pressed upon him — a lesson he learned from a four-year war with Blockbuster that began in 2004, when Blockbuster, then the dominant and much larger DVD distributor, tried and failed to crush its upstart competitor.

“There were elements of panic in my reaction back then,” Mr. Hastings said. “We got desperate and we did some dumb things.” (He cited online advertising on the Web site; starting Red Envelope, an independent film producer and distributor, since shut down; and buying DVDs out of the Sundance Film Festival.) “After we eventually won the Blockbuster battle, I looked back and realized all those things distracted us. They didn’t help, and they marginally hurt. The reason we won is because we improved our everyday service of shipping and delivering. That experience grounded us. Executing better on the core mission is the way to win.”

As Profit Slips, Apple Looks to Reward Shareholders

On Tuesday, the technology giant announced that it planned to more than double its program to return cash to shareholders through stock buybacks and a higher dividend, spending $100 billion on the effort through the end of 2015. Its share repurchases alone will increase to $60 billion from the $10 billion it committed previously, the largest such plan in history, the company said.

The move to renew investors’ love affair with Apple’s stock came as the company announced its first profit decline in a decade. Apple said its net income fell 18 percent in its fiscal second quarter, as one of the most successful technology franchises in recent years, the iPhone, showed signs of slowing and other, less profitable products began to make up more of its sales.

The rarity of Apple’s profit decline, which was expected, underscores how one of the most remarkable winning streaks in business has come to an end, at least for now. Investors have battered the company’s stock for months, sending its shares down from their peak of more than $700 last year as warning signs began to emerge about its growth prospects.

In regular trading on Tuesday, Apple shares rose nearly 2 percent to close at $406.13, but they fell slightly in after-hours trading as investors digested the quarterly earnings news and Apple’s plan to return cash to shareholders. One thing that spooked investors is that Apple told them to expect little to no sales growth in this quarter.

“People are concerned they can’t return to growth,” said Walter Piecyk, an analyst at BTIG Research, an institutional brokerage firm.

One of the biggest questions facing Apple is whether it can innovate its way out of its funk by delivering a breakthrough new product, perhaps in a category like television, that rekindles growth and investors’ passion.

Timothy D. Cook, the company’s chief executive, said in a conference call with analysts that the decline in the stock price has been “very frustrating to all of us,” but that Apple remains strong. “Our teams are hard at work on some amazing new hardware, software and services that we can’t wait to introduce this fall and throughout 2014,” Mr. Cook said.

Mr. Cook even dropped a hint about “exciting new product categories” that Apple could enter, suggesting the company is preparing a move into a new market.

For its fiscal second quarter, which ended March 30, the company said that its net income dropped 18 percent to $9.55 billion, or $10.09 a share, from $11.62 billion, or $12.30 a share, during the same period a year earlier.

Revenue rose 11 percent to $43.6 billion from $39.19 billion a year before.

Wall Street analysts expected the company to report earnings of $10.07 a share and revenue of $42.59 billion, according to the average of estimates compiled by Thomson Reuters.

Months ago, Apple sought to brace investors by warning that profit could decline about 20 percent in the quarter. At that time, Apple forecast revenue of $41 billion to $43 billion.

Sales of iPhones, the company’s biggest business, grew only 3 percent to $22.96 billion in the second quarter.

The company has warned that new products like the iPad Mini have lower profit margins than older items like its full-size iPad sibling. It is also selling more of its older model smartphones, like the iPhone 4, which have lower margins. That has stirred up worries that Apple’s efforts to cater to more budget-conscious consumers with low-price products could steadily erode its considerable profits.

Apple is widely thought to be preparing a new low-cost version of the iPhone to compete more aggressively with smartphones based on Google’s Android operating system. A cheaper device could hold special appeal in huge markets like India and China where average incomes are far lower than in the West.

Pushing into inexpensive phones could hurt Apple’s admired profit margins, though. Last year, the company garnered almost 70 percent of the profit in the mobile handset business, according to estimates by Canaccord Genuity.

Apple’s gross profit margins, one of the most closely watched measures of how profitable it is, are already declining, falling to 37.5 percent in the second quarter from 47.4 percent a year ago. This is the fourth consecutive quarter of declining gross margins at Apple, the longest stretch of such declines since 1993, according to Bill Moore, director of corporate development for Bloodhound Investment Research, a provider of online investment management tools.

Apple warned that its gross margins would probably continue to fall in the fiscal third quarter, dropping to between 36 and 37 percent.

“Investors would love some sense of when gross margins will stabilize, and unfortunately Apple didn’t give us that,” said Rob Cihra, an analyst at Evercore Partners.

As Apple’s holdings of cash and cash equivalents have swelled — the figure is now over $140 billion — investors have clamored loudly for the company to step up its efforts to buy back shares or issue a bigger dividend.

The company said on Tuesday that its board had approved a 15 percent increase in its quarterly dividend. It declared a dividend of $3.05 a common share, which will be paid to shareholders on May 16.

Apple said it planned to borrow cash as part of its plan to return cash to shareholders. Even though Apple has far more capital than it needs in its coffers, much of it is held overseas and would be subject to taxes if the company were to bring it back to the United States. Apple can also help increase its earnings per share by lowering its outstanding share count through stock purchases.

“We believe so strongly that repurchasing our shares represents an attractive use of our capital that we have dedicated the vast majority of the increase in our capital return program to share repurchases,” Mr. Cook said in a statement.

This article has been revised to reflect the following correction:

Correction: April 25, 2013

Because of an editing error, an article on Wednesday about Apple’s second-quarter earnings misstated the company’s projections for its gross profit margins in the third quarter. It expects its margins to drop to between 36 and 37 percent, not to fall by that percentage amount.

Noted: On a Phone App Called Tinder, Looks Are Everything

Rather, the action is happening on a new smartphone app, and no, it isn’t Grindr.

“Anytime I’m at a dinner or an event, social or business, people are buzzing about Tinder,” said Erica Berman, 28, an events planner in Manhattan who said that she uses the app several times a day.

Ms. Berman is not alone. Technology has hit a new level of shallow, and New York’s 20-somethings are embracing it full speed.

Introduced to college campuses in September, Tinder taps into the most superficial aspect of the dating scene. After downloading the app and selecting their gender, location and whether they like men or women (or both), users swipe through a stack of profile photos (left for “nope,” right for “liked”), based on little more than the person’s appearance. If two users “like” each other, they can proceed to have an online conversation.

Tinder has been compared to Hot or Not, the once-popular photo rating site, as reimagined in the age of Facebook. Indeed, the app is linked to a user’s Facebook account, automatically pulling in a person’s profile, photographs and mutual friends.

“You don’t have to fill out a profile, you don’t have to put in info — you just have to like the way someone looks,” said Anne Ryan, a 23-year-old project manager in the West Village, who was introduced to Tinder over brunch. “Besides, if I don’t think someone is hot, or if they don’t think I’m pretty, no one ever finds out.”

Unusual for a dating app, Tinder appeals to men and women, homosexuals and heterosexuals. That was by design.

“Irrespective of preference, Tinder solves a basic human need, which is to meet and connect with new people,” said Sean Rad, 26, who started Tinder with Justin Mateen, also 26. “In the real world, you see someone’s face and you decide if you have an attraction to them.”

In the seven months since Tinder was released to iPhone users, the app has logged 2.4 billion profile ratings and 21 million matches, said Mr. Mateen, a high-tech entrepreneur who lives in Los Angeles.

To those who criticize the app for prizing looks over compatibility, Mr. Mateen noted that “approximately 70 percent of those matches have resulted in a two-way conversation.” Moreover, he said, the company has received six videos of couples who met on Tinder and are now engaged.

Jesse Morris, 25, a handsome marketing executive in Murray Hill, said that he won’t be getting engaged anytime soon, but he uses Tinder to cast a wider net. “Bars don’t attract everyone, and when you’re in a bar, all the best-looking girls are under a magnifying glass from every guy,” he said. “Because Tinder requires its users to independently indicate interest, you don’t need to work through that competition and clutter.”

Mr. Rad and Mr. Mateen would agree. They aren’t just the founders of Tinder, they are users, too.

“Justin met the girl he is dating pretty seriously right now on Tinder,” Mr. Rad said about his co-founder. “He is embarrassed to say the serious part.”

Beliefs: A Home-Schooling Pioneer Looks to the Future

“Bill and Mary Pride have eight kids, all of them home-schooled,” begins the short profile, under the headline “Crash-Tested Homework.” The family’s home classroom is “stuffed with a Mac, Apple IIGS, Amiga, a 386 clone, various CD-ROM devices, Nintendo, a Miracle piano system, and so on.”

The small photograph accompanying the article shows Bill Pride, with his beard and wide red suspenders, presiding over a gaggle of children and two stone-age desktop computers. “In between lessons,” the article continues, “Ma and Pa and their computer-savvy kids have evaluated every piece of educational software known to be on the market. The kids are ceaseless and merciless testers.” Curious readers could find the family’s judgments summed up in “Prides’ Guide to Educational Software,” published the previous year.

Today it is clear that Mrs. Pride, who would later have a ninth child, was ahead of her time. Not only has skepticism of birth control increased in the evangelical community, but home schooling has become more widely accepted, by Christians and secularists alike. In 2007, according to the most recent count by the National Center for Education Statistics, a federal agency, 1.5 million children in the United States were home-schooled. And Mrs. Pride has solidified her reputation as a hero to conservative Christians, a scourge of feminists, and a tribune to all home schooling families.

In 1985, in the first of her 11 books, “The Way Home: Beyond Feminism, Back to Reality,” Mrs. Pride chronicled her post-college embrace of evangelical Christianity, which led to her repudiation of what she saw as anti-biblical feminist ideals. But most of her books are resources for home-schoolers. She founded and edits Practical Homeschooling magazine, a popular resource for this growing population, and its companion Web site.

Mrs. Pride’s beliefs on religion and family life are, to use her word, “old-fashioned”: in addition to opposing birth control, she believes the man should be the head of the household. Yet in her embrace of technology and the Internet, Mrs. Pride is a total Webhead, as befits the wife of a Massachusetts Institute of Technology graduate whom she met when both were working “at the key-punch room in Raytheon,” the military technology company.

On closer look, she is a bit of a cantankerous misfit, both in the world of conservative Christianity and the world of Web-happy distance learners.

For example, right now Mrs. Pride, who lives with her husband and, at the moment, five of her children outside St. Louis, does not regularly attend any church, although they have regular “home church” on Sunday evenings. She offered many reasons none of her most recent churches had worked out.

“Abusive pastors,” Mrs. Pride said, a bit cryptically. “And then again,” she continued, “when you have written all these books and have this huge number of children, you cannot visit quietly anywhere. And frankly the way our schedule has been for years, it has been so exhausting that I was never awake on Sunday to go anywhere.”

Earlier in their married life, the Prides belonged to the Reformed Presbyterian Church, Evangelical Synod, a denomination that was folded into the Presbyterian Church of America in 1982.

Mrs. Pride was born in 1955 and nominally raised Catholic in Newton, Mass. Her parish church seemed to offer sermons only about the Vietnam War. “After this went on for months,” Mrs. Pride said, “I said if they’re never going to talk about God in church, I may as well stop going.”

Mrs. Pride skipped a grade in elementary school, after she was “discovered reading ‘Jane Eyre’ in first grade,” she said, and later graduated from Rensselaer Polytechnic Institute in Troy, N.Y., at 18. She started reading the Bible in college, where she was also influenced by the books of the evangelist Francis Schaeffer, which she was given by students sitting “at the Jesus Freak table.”

Mrs. Pride is as skeptical of many trends in technology and education as she is of many trends in churches. The early 1990s, she said, were “the golden age of educational software.” It was like Eden before the fall.

“It wasn’t all, ‘Let’s find a Hollywood voice actor, or ‘Let’s meet the Common Core standards,’” she said. “They were being innovative.”

Ms. Pride reminisced fondly about games like Rocky’s Boots and Robot Odyssey, “where you solved puzzles by inventing things.”

But now, “education software qua software has pretty much died,” she said. “There used to be this huge thriving market of stuff parents would buy their children, but if you look at Amazon now, it’s a few branded programs, like ‘Blue’s Clues,’ and it’s all very grade level and organized.”

Mrs. Pride initially chose home schooling, in part, because she deplored the liberal trends she remembered from the Newton public schools, where her books often contained what she called “sexually explicit information,” and from gym class, where students were taught “yoga and Transcendental Meditation.” She said one women’s studies class contained a “very out-there viewpoint” about “worshiping the goddess.” An English class was organized around Marxist notions of “power.”

Yet, like many liberal critics of public schooling, Mrs. Pride laments teaching materials geared to standardized tests. She misses the earlier more anarchic days of computer software. And while some Christian home-schoolers fear that the Internet may contaminate their children’s manners and morals, Mrs. Pride seems unworried. She and her children were beta testers for the first online academies, in the early 1990s, and she is excited by what is developing.

“Distance learning is coming on gangbusters,” Mrs. Pride said. “EdX will be very interesting. And what Harvard and M.I.T. are doing. And the MOOC initiative. ...”

And so she went on, sounding like a teenager with a major in computer science and a part-time job at Raytheon.

mark.e.oppenheimer

@gmail.com; twitter/markopp1

DealBook: T-Mobile Looks to Buy MetroPCS

Oliver Berg/DPA, via Agence France-Presse — Getty ImagesRene Obermann, chief of Deutsche Telekom.

9:06 p.m. | Updated The parent company of T-Mobile USA, the struggling cellphone service provider, is in talks to buy MetroPCS as it fights to compete against two bigger rivals.

A deal would be the latest chapter in an industry that has rapidly consolidated to a handful of major players. It would come after last year’s aborted attempt by AT&T to buy T-Mobile for $39 billion, an ambitious move thwarted by government antitrust regulators.

Both T-Mobile’s parent, Deutsche Telekom, and MetroPCS confirmed on Tuesday that they were in talks. A deal could be announced as soon as Wednesday, according to people briefed on the matter, who cautioned that final moves could derail an agreement.

Any possible transaction would most likely involve a stock swap, leaving Deutsche Telekom with a significant stake in a newly public T-Mobile.

Shares in MetroPCS climbed nearly 18 percent on Tuesday, to $13.57. That valued the company at $4.93 billion.

In recent years, AT&T and Verizon Wireless have seized increasingly bigger portions of the American cellphone market; together, they claim to have more subscribers than their next six competitors combined. Though a merger would not put the subscriber base of T-Mobile and MetroPCS anywhere near the two largest carriers, it would make the combined company a stronger competitor.

T-Mobile and its larger rival, Sprint Nextel, have both sought customers seeking lower-cost plans. Both have also raced to build their next-generation data networks to better service newer smartphones, like the Samsung Galaxy S III.

But T-Mobile has fallen well behind Sprint in its fight for users. As of midyear, the company claimed about 33.2 million customers, compared with Sprint’s 56 million. It still does not offer the Apple iPhone, which has deprived it of subscribers with higher-price data plans.

T-Mobile also lost 205,000 subscribers in its second quarter of this year, quadruple what it reported a year ago.

Buying MetroPCS, an 18-year-old wireless service provider based in Richardson, Tex., might solve those problems. The company had 9.3 million customers as of June 30, many located in major cities. And it has already begun introducing Long Term Evolution, or LTE, the high-speed network on which smartphones like the iPhone 5 run.

Merging T-Mobile and MetroPCS could prove tricky. While the two could eventually combine their LTE networks, the majority of their phones run on incompatible network standards, reducing any cost savings from a tie-up in the short run. And MetroPCS offers only prepaid plans, a business that T-Mobile has been eager to exploit — but which also carries lower margins.

Yet such headaches may prove worthwhile, because a deal would deprive Sprint of a suitable takeover target to fix its own problems. Sprint had neared its own deal for MetroPCS this year, only to walk away after its board vetoed those plans at the 11th hour. Sprint’s stock fell 5.4 percent on Tuesday as investors worried about what a T-Mobile-MetroPCS combination would mean for its ability to vie for consumers.

Sprint’s chief executive, Daniel Hesse, said at an industry conference last month that he expected his company to participate in what he saw as a continuing wave of consolidation.

“This leaves Sprint awkwardly independent and on the outside looking in,” Craig Moffett, an analyst at Sanford C. Bernstein & Company, said in a phone interview. He added that Sprint may feel compelled to make a higher bid because “the alternative is so unattractive.”

Shares in Leap Wireless International, another prepaid wireless service provider, closed more than 8 percent higher on Tuesday, as investors hoped the company would prove to be another merger target. But analysts said that Leap, with its focus on lesser markets and with major operational problems, may remain independent for a while longer.

“We don’t view Leap to be as attractive as MetroPCS; Leap has a smaller subscriber base, lower margins and burns cash,” Mike McCormack, an analyst at Nomura, wrote in a research note on Tuesday.

Should it reach a deal, Deutsche Telekom could sell down its stake in T-Mobile over time. That would eventually unwind its expensive experiment in the American marketplace, one that began with the German telecom’s purchase of VoiceStream Wireless at the peak of the dot-com era in 2001. Since then, however, troubles at T-Mobile have cost Deutsche Telekom dearly, including an $18 billion write-down a year later.

Executives at the German telecommunications company have openly spoken about possible deals for the American unit, including by staging an initial public offering or combining it with another industry player.

One uncertainty about any deal would be the reaction from antitrust regulators. But a transaction may draw less fiery opposition than the failed combination of AT&T and T-Mobile, given the smaller size of MetroPCS.

This post has been revised to reflect the following correction:

Correction: October 2, 2012

An earlier version of this article misstated the number of T-Mobile customers. There are 33.2 million, not 33,168.

DealBook: Its I.P.O. Botched, Facebook Looks Hard at Nasdaq

Illustration by The New York Times

Facebook’s debut was supposed to be Nasdaq’s ultimate coup.

But in the weeks since the social network’s much-ballyhooed — and ultimately botched — initial public offering, the relationship has soured.

In Facebook parlance, it’s complicated.

Executives at the Internet company are pinning much of the blame on Nasdaq, according to several people close to the company and its underwriters, who spoke on the condition of anonymity because of continuing shareholder lawsuits. Tensions remain so high that Facebook is still considering switching exchanges and is weighing the costs of such a move, these people said.

As the drama plays out, Nasdaq, the first electronic stock market, faces one of its hardest tests since it was founded 41 years ago.

For years, the exchange, considered friendly to start-ups, was the preferred place for up-and-coming technology companies. Now, Nasdaq is trying to salvage its reputation with Facebook and the rest of Silicon Valley while also fending off the advances of its archrival, the New York Stock Exchange, which has ramped up efforts in the industry.

Steven Senne/Associated PressMark Zuckerberg, the chief of Facebook.Lucas Jackson/ReutersNasdaq’s chief executive, Robert Greifeld, has apologized to Facebook for the way his exchange handled the company’s stock market debut.Mark Lennihan/Associated Press

“Nasdaq will be wearing that albatross for quite a while,” said Lise Buyer, founder of Class V Group, an advisory firm for initial public offerings. “The errors associated with Facebook’s I.P.O. will now be part of Nasdaq’s conversations.”

Nasdaq, for its part, has expressed contrition, with its chief executive, Robert Greifeld, publicly acknowledging the firm’s arrogance during the I.P.O. The exchange has also agreed to set aside $40 million for broker losses. Even so, Nasdaq defends its position as a major player in technology listings.

“For more than two decades, Silicon Valley has played a vital role in Nasdaq’s evolution,” said Joseph G. Christinat, a Nasdaq spokesman. “Nasdaq will always strive to be part of the Valley’s start-up ecosystem.”

Nasdaq’s troubles come at a challenging time for the industry.

The Securities and Exchange Commission is pressing exchanges to bolster controls, with open investigations on Nasdaq, N.Y.S.E. and others. Authorities are focusing on the Facebook I.P.O., trying to determine if Nasdaq acted improperly as it scrambled to push Facebook live and clear orders. So far, Nasdaq has not been charged with any wrongdoing, but the scrutiny represents a marked shift for the S.E.C., which has traditionally had a light touch with exchanges.

Facebook and its underwriters have been criticized for being too aggressive on the size and price of the offering. Still, many experts argue that it’s impossible to discount the psychological impact of Nasdaq’s problems.

“Very small actions can trigger very large dynamic mechanisms,” said Dan Ariely, a professor of behavioral economics at the Fuqua School of Business at Duke.

Nasdaq is navigating a forest of questions, as rival N.Y.S.E. settles onto its turf.

N.Y.S.E., once known as the dowdy exchange of blue chips, has aggressively courted Silicon Valley in the last five years, calling on executives and holding private dinners at places like the Four Seasons in East Palo Alto, Calif. The Big Board recently snapped up the listings of a number of technology start-ups, including LinkedIn, Pandora and Yelp.

While N.Y.S.E.’s sales pitch used to center on its established brand, it now talks about technology and client services. A few years ago, the exchange also revised requirements to make it easier for smaller technology companies to list. The two exchanges battled for months over Facebook. Nasdaq won, in part, because it agreed to shorten the so-called seasoning period for newly public companies. The move would allow Facebook to join the Nasdaq 100 three months after its listing, people with knowledge of the matter have said.

But the short-lived victory has become an ordeal.

In recent weeks, the divide between Nasdaq and Facebook has deepened, as both face a bundle of shareholder lawsuits. In June, Facebook filed a motion alongside its lead underwriters to combine these lawsuits in New York. Nasdaq, which faces some of the same suits, was left out of the motion. Shares of Facebook, which hit a low of $25, currently trade around $31.10, well below the offering price of $38.

Facebook is upset about Nasdaq’s lack of communication, according to people close to the company. Executives were left out of important decisions like whether the stock should begin trading at all given the crush of early issues. Once trading did begin on May 18, Nasdaq did not contact Facebook’s chief financial officer, David Ebersman, who was the main point person for the I.P.O.

Executives at the social network have also grown frustrated by the technology problems. Many order confirmations were delayed. These were eventually released hours later, along with stock that ended up in a separate Nasdaq account. But the unexpected flood of shares looked like a giant order of roughly 11 million shares, weighing on the stock, according people with knowledge of the matter.

Facebook executives believe Nasdaq added to the woes the next week. Before the second trading day, Nasdaq alerted traders to file claims by noon if they wanted financial “accommodations” for the I.P.O. Executives believe the notice encouraged investors to dump shares to prove a loss on Facebook, prompting the stock to fall more than $4 in the first hour of trading that day.

Perhaps most disconcerting was Nasdaq’s conference call with reporters on Sunday, just days after the I.P.O. On the call, Mr. Greifeld, Nasdaq’s chief, assured the press that Nasdaq’s errors had not affected the stock’s performance.

“It would lead a reasonable person to conclude that it didn’t have an impact on the stock price,” he said.

The statement was tantamount to an act of betrayal, according to those close to Facebook. Once again, the Facebook team was baffled. Why didn’t the exchange warn them about Mr. Greifeld’s comments? Incensed, a Facebook executive told Mr. Greifeld, “You don’t understand the hole you’re in.”

Most start-ups hoping to go public are not worried about encountering Facebook’s problems. As the largest Internet I.P.O. on record, Facebook attracted a barrage of coverage. Many industry insiders interviewed believe Nasdaq will move quickly to improve its controls. It is currently working with I.B.M., for instance, to review its entire technical system.

Still, the fumbles are ugly blemishes for an exchange that has prided itself on its tech heritage. After dominating technology listings for the last decade, Nasdaq’s ranking has slipped. So far this year, Nasdaq has accounted for 11 of the 24 technology listings, with the rest going to N.Y.S.E., according to Renaissance Capital, an I.P.O. advisory firm. “It might be an anomaly,” said Aaron Levie, the chief executive of Box, a data storage company. “But Nasdaq is getting more competition from N.Y.S.E., which has been really proactive out here.”

Amid mounting pressure, Mr. Greifeld made one more visit to Menlo Park three weeks ago.

In a meeting with Mr. Ebersman and other executives, he apologized, according to people briefed on the meeting. He acknowledged that he had said that Nasdaq’s problems did not impact Facebook’s price, but conceded that that assessment did not fully factor in the psychology of the market.

After that, a chill settled in the room, as several executives quietly scrawled his statement on their notepads.

This post has been revised to reflect the following correction:

Correction: July 2, 2012

An earlier version of this article misidentified the location of the Four Seasons Hotel. It is in East Palo Alto, Calif., not Palo Alto.