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Spotify is one of your distribution partners. That’s the site everybody is talking about in Europe right?

McDaniels: We’ve just signed Spotify. There certainly has to be a music solution out there that’s getting all the buzz. In the seven years we’ve been doing this I can’t tell you the number of times that one of my employees has come into my office and told me this is going to change the way we consume music or this is going to spell the end of us. Snocap was one at one point. Spotify is certainly getting all the buzz now. It’s a streaming-based model that allows music fans to effectively access millions of songs and share playlists and I think their music interface is catching on with fans.

But just don’t call the privately held INgrooves a music label. “I don’t like the label… label,” quipped Robb McDaniels, the company’s CEO.

What is your relationship like with retailers and services such as YouTube?

McDaniels: We deliver content into YouTube, audio and video, for INgrooves clients. We sit in the middle. We’re like a clearinghouse between content owners, typically labels or artists, and online and mobile retailers. We’re like the Visa of media. We receive back from all of the retail channels all of the sale statements and process all of the paybacks to the content owners. We see all of the sales data, all of the content. We know who’s buying what, where, when and how much.

You’re doing only UMGD. Why aren’t you doing delivery for all of its labels, such as Geffen?

McDaniels: Universal is obviously a very big client for us. They have a large catalog. The digital logistics business is very complex. Nobody really other than the people involved understands the complexities involved. To take on that large of a catalog with all the intricacies of distributing out to dozens if not hundreds of different retailers is a large undertaking so we decided to stage the migration of their catalog to our system.

So, if I’m a label or artist, I hire you to do what?

McDaniels: We’re agnostic to whether you’re a label, artist, production company; really we work for anybody that controls the rights to media, images, video, and of course audio.

McDaniels recently spoke with CNET News to discuss where digital distribution was headed.

(Credit:
INgrooves)

I think what’s really happening is consumer behavior patterns are changing. It used to be when we’re moving from the CD to the digital download everybody was saying that music fans still want to hold something, hold the physical good in their hand and that’s why CD sales would stay strong. Now consumer behavior is moving more towards digital downloads and everybody is saying everybody wants to own the download and they want to carry it with them wherever they go and streaming models aren’t going to take off. Well now the consumer is saying I don’t need to own the download. I’m happy with a cloud model where all my media is housed somewhere in an Internet locker for me and I can access it at any time. One of the reasons that consumer behavior is changing is because streaming is becoming more portable and interoperable.

We provide sort of a menu of services that you can pick and choose from. It starts with distribution and it’s really the entire supply chain process for content managers. What we’ve built is more of an asset management system rather than just a distribution infrastructure.

Tell me about what you’re doing for Nokia.

McDaniels: This is an extension of our deal with Nokia for their online stores. Comes With Music is their new initiative based out of the United Kingdom but I understand it’s about to launch in the U.S. and a few other territories. It’s another retail outlet for us. It’s another way to reach the consumer and a great outlet for our independent music. We sort of approach the retail model in much the same way we approach the client model. We’re agnostic to the manner to in which music fans consume music.

What are you doing for Universal?

McDaniels: About a year ago they made a strategic investment in us and we are providing them with digital distribution services. They looked at our software platform and they felt that it would be the right thing for the delivery of their content in North America. What our system does is handle the Universal Music Group Distribution labels and we deliver all their content under their contracts in all of North American retailers.

I can access that music for more devices and more places and so it’s becoming more convenient. I think that Spotify is hitting the market at the right time. I don’t know it’s that novel of an idea but I think it’s got great timing and great user functionality.

Q: Do you consider yourself a label?

McDaniels: I don’t like the label…label. We provide some services that an artist would expect from a label. We provide some services that an independent label would expect from a major label. I think we are as good as anyone out there in terms of digital distribution and marketing.

McDaniels says INgrooves is a service company that acts much like an indie record company, such as IODA or The Orchard, but has no wish to compete against record labels. And in fact, one of the 7-year-old company’s most important clients is Universal Music Group, the largest of the top four recording companies. Universal last year invested in INgrooves.

INgrooves, a digital distribution company, is fast becoming a favorite of music acts embarking on comebacks.

Tell me what artists you work with and give me an example of what you do for them.

McDaniels: We provide services to Universal Music Group, K-Tell and VP Records as well as successful artists that are going out on their own: people like Dolly Parton and Too Short. We did Dolly Parton’s last release worldwide digital. Dolly formed her own label called Dolly Records and was looking for a digital partner for distribution and digital marketing. We signed her to an agreement and she opted into our worldwide digital distribution and our strategic marketing services. Our marketing group did an analysis of which retail partners would be the best ones, would do exclusives on the Dolly album, “Backwoods Barbie.” We then set about executing the marketing plan leading up to the release and then pushed it out to all of our online and mobile outlets on the day of the release. It was Dolly’s highest Billboard debut ever. We did very well digitally for her. The album has gone on to sell over 130,000 copies.

Last year, San Francisco-based INgrooves oversaw digital distribution and marketing for the release of Dolly Parton’s album “Backwoods Barbie.” The record debuted as the No. 1 country album on iTunes. This spring, when the spoof metal group Spinal Tap releases its first album since 1992, the boys in the band are trusting INgrooves to distribute the material to iTunes, Amazon, and other online retailers.

Who else have you done that for?
McDaniels: Artists we’ve worked for directly are Too Short, Tila Tequila, Snoop Dogg’s Doggystyle Records, Thievery Corporation, and the Crystal Method.

Yahoo, meanwhile, laid out the logistics of attending its shareholders meeting on August 1. Only shareholders of record as of June 3 are allowed to attend the meeting, which will begin at 10 a.m. PDT at the Fairmont hotel in San Jose, Calif.

Better not leave the wallet or purse in the
car. You’ll lose your place in line and it’s likely to be a packed house…

Any shareholder who plans to attend needs to also keep this in mind, according to Yahoo’s filing with the Securities and Exchange Commission:

You should be prepared to present photo identification for admission. If you hold your shares in street name, you should provide proof of beneficial ownership on the record date, such as a brokerage account statement showing that you owned Yahoo! common stock as of the record date, a copy of the WHITE voting instruction form provided by your broker, bank or other nominee, or other similar evidence of ownership as of the record date, as well as your photo identification, for admission.

We strongly disagree with Plaintiff’s statements made in support of their Motion for a Trial Date (and supplemental letter) in connection with Yahoo!’s Change in Control Employee Severance Plans. It is obvious that Plaintiffs devoted much time in preparing their submissions in support of the Motion. We intend to oppose the Motion and plan to submit our opposition papers to the Motion by Monday. We also plan to file a Motion to Dismiss the Amended Complaint no later than Monday. We very much hope that this schedule is acceptable to the Court.”

In its filing to Delaware Chancery Court Chancellor William Chandler, Yahoo states:

If you do not provide photo identification or comply with the other procedures outlined above upon request, you will not be admitted to the annual meeting.

As previously reported, the employee severance plans could be triggered if Yahoo shareholder and investor activist Carl Icahn successfully unseats Yahoo’s current board with some of his dissident directors slate. For full-time employees to cash out on the severance package, over the next two years following the election, these workers would either need to be terminated or resign due to a change in their job or responsibilities. If all full-time employees take advantage of the severance plans, Icahn and the lawsuit noted it could potentially cost the company more than $2 billion in severance costs.

Yahoo on Wednesday said it plans to ask the court to dismiss an amended shareholders lawsuit and noted it would also oppose the plaintiffs’ motion to seek a speedy trial to invalidate its employee severance plans.

The brief note foreshadows actions Yahoo plans to take by Monday to preserve its controversial employee severance plans.

In order to attend the annual meeting, you must be a stockholder of record or a beneficial owner as of the close of business on June 3, 2008, or hold a valid proxy for the annual meeting. If you are the stockholder of record, your name will be verified against the list of stockholders of record prior to your admittance to the annual meeting.

The purported talks, if successful, could spare Microsoft the trouble and time of a hostile bid for the search company, if indeed it chooses not to walk away from its three-month-long attempt to acquire Yahoo.

Microsoft’s discussions with Yahoo “intensified” Friday as the two companies considered possibilities for a last-minute friendly acquisition, The Wall Street Journal reported, citing anonymous sources.

The talks are no guarantee a deal will close, but investors found the evidence convincing. Yahoo’s stock rose $1.82, or 7 percent, to $28.63, in late-day trading.

This report was jointly written by News.com staff writer Stephen Shankland.

But posturing is par for the course in any serious negotiation.

It should be noted that Microsoft’s position, as viewed through the “people familiar with the matter” who have The Wall Street Journal on speed dial, has changed dramatically in a short period of time. In the last day, Microsoft has moved from threatening to walk away, to threatening go hostile with the acquisition, to back in “intense” talks.

Microsoft has various options to consider in its attempt to acquire Yahoo. Hostile ones include making a tender offer directly to shareholders and offering an opposing slate for election to Yahoo’s board of directors.

While a deal is far from imminent, the two sides are talking more directly than they have for some time, a source familiar with the situation told CNET News.com. The talks, which picked up steam on Friday, are being held in the San Francisco Bay Area, with at least some of the parties on both sides meeting in person, the source said.

And The New York Times had a similar assessment, citing a source who said talks were back on and that Microsoft had increased its offer by “several dollars.” Late Friday afternoon, the Journal said that the two companies were “discussing a possible price in the mid-$30s range per share.”

If you’re buying a
car, for example, threatening to walk away and then insisting you won’t settle for a higher price can help minimize the amount you end up paying.

It was great to meet them in person to follow-up on their story and I look forward to posting more about their endeavors.

Since I arrived here last night, I have met with local leaders, a former government minister, top nongovernmental leaders, and students. I’ve had the opportunity to hear speeches from Microsoft officials, a Brazilian mayor, and an Argentinian senator. It’s all part of a Microsoft conference of Latin American politicians and non-governmental agency executives known as the Government Leaders Forum.

Among the people I caught up with were these Brazilian techies who I wrote about two years ago when they won Microsoft’s Imagine Cup. They’ve taken their invention to use technology to guide the visually impaired and are starting a company to bring it to market, with $500,000 in funding from the Brazilian Government.

MIAMI–I’m not in Latin America yet, but I’ve certainly gotten greater exposure to the region in the last 24 hours than I had in the 33 years prior.

I’ve been meeting and listening more than writing today, but that should change Friday. I’m scheduled to cover two speeches by Bill Gates, one at the Government Leaders Forum and another at a meeting of the Inter-American Development Bank.

I’m also traveling to a senior center here in Miami, part of the city’s effort to close its own digital divide. I will have more to say about Miami and its projects, which include wiring the city’s parks, putting computers in senior centers as well as a program known as Rights of Passage that offers all sixth grade public school students the opportunity to earn a free computer for their family.

But first, I’m off to experience another important part of Latin American culture–Cuban food.

Lenny Kravitz is launching a similar giveaway in Great Britain on Feb 3.

The music industry is preoccupied with giveaways these days.

While it must be noted that the Daily News is compensating EMI for the songs, it’s still important to point out that to the public, these days the word “music” trails the word “free” like a caboose.

Subscribers punch the code into the newspaper’s Web site, Nydailynews.com and the music is theirs. They have over 120,000 tracks to choose from.

The latest example will come on Sunday, when New York Daily News subscribers will find an access code in their paper that they can use to retrieve three free songs from EMI Music.

There’s plenty of people in the music industry that fret that giveaways devalue music.

Radiohead redefined music giveaways with its “pay-what-you-want” offer in October.

Combining music with newspapers (two industries being pummeled by the Internet) was a powerful mixture for rocker Prince last year. The rocker made news last July by giving away copies of one of his CDs to readers of a London tabloid.

Among the songs available is an unreleased track, “It’s Love” by Ringo Starr. The promotion will also run on the following Sunday, the day of the Grammy awards.

See also: Swaggle, which lets parents swap and loan out used toys to one another.

If you've used Netflix before, BabyPlays.com's system is no different.

Toys are an important part of being a child. When we get older they become shinier and more expensive, but for many, they’re fun to play with for a short time and we lose interest.

In case you were wondering, the toys are sterilized between rentals. Also, if your little one is in love with the toy and you feel like buying it permanently you can do so for 20 percent of its cost.

(Credit: BabyPlays.com)

To help curb the potential costs and storage required, there’s BabyPlays, a service that approaches toy enjoyment in a similar fashion to Netflix. BabyPlays is a subscription service that lets you pick what toys you want delivered to your house each month. Each of the plans lets you receive a different amount of toys. There are no late fees, and when you want a new ones shipped out you simply pack up the old ones and send them in.

But if Microsoft goes hostile and launches its own slate of directors to oppose Yahoo’s board at the next annual shareholders’ meeting, the deal could potentially be delayed until October, said one Delaware attorney.

Microsoft would likely face antitrust hurdles with a Yahoo merger and need to divest of some assets of the combined company, the source said, ranking the chances of a deal going through as 7 on a scale of 1 to 10.

Although there are reports that Yahoo is holding talks with AOL and News Corp., neither has announced a competing bid. And Yahoo, as a result, hasn’t taken the time to take a hard look at antitrust issues that might crop up in a merger with either of those companies, but has for Microsoft, said one source familiar with the matter.

Microsoft could go to the Delaware Chancery Court on July 13, one year and a day after Yahoo held its last shareholders’ meeting, and ask the judge to force a shareholders’ meeting, said Stephen Jenkins, a director with Delaware law firm Ashby & Geddes, which has handled a number of proxy fights.

The quarterly conference call is usually a big deal for investors, who typically like to hear the CEO address the outlook for the company. Yahoo has set its first-quarter earnings release for April 22, according to a spokeswoman. Last year, Yahoo held its first-quarter conference call on April 17.

The close of the quarter, after all, will be accompanied by a conference call the company will hold with analysts to discuss its financial results.

“I think the first-quarter earnings will be a hard deadline,” said one investment banker. “They’ll need to address things like their restructuring initiatives, earnings, and how it would look if they merged with company X, verses remaining as a standalone company.”

Yahoo’s first quarter is coming to a close at the end of the month, potentially increasing pressure on the company to decide whether it will negotiate with Microsoft over its unsolicited buyout bid.

But will any potential antitrust risk translate into a higher purchase price for Yahoo? So far, not yet.

The investment banker, who requested anonymity, said most plain-vanilla mergers tend to take four to six months from kick-off to close.

Thirty-five days have passed since Microsoft trotted out its buyout bid. And to date, Yahoo has not formally responded to the offer.

Microsoft’s next steps have yet to be revealed, now that Yahoo announced Wednesday it was delaying the deadline for Microsoft to name its opposition slate. Yahoo extended its deadline in the hope it would buy the company more time to consider Microsoft’s offer and talk with other suitors, without simultaneously having to deal with a proxy fight with Microsoft.

The Duette plugged into the Creative Zen's headphone jack.

Editors’ note: The eWest Super Mini Stereo Speaker is the same product as the IceTech Duette but with different branding.

Not smitten yet? Consider, then, the accordion-like extendable subwoofer. I can’t help myself: I love gadgets that look like little creatures. The Duette, which is roughly the size of a golf ball, features a built-in battery that can be recharged via USB (cable included). A standard 3.5mm plug flips out from between the speaker’s legs for use with any MP3 player or other audio source. There is a single switch on the side for turning the unit on or off, or boosting the volume. If you want the most compact speaker possible and aren’t super picky about audio quality, the Duette is a great option.

(Credit:
Jasmine France/CNET Networks)

I’m a sucker for teeny, tiny tech. It’s terribly easy to lose, but it’s also great for travel and transport, since it doesn’t take up too much space in a pocket or bag and won’t weigh you down. I’ve certainly come across plenty of super small MP3 players, and I’ve had my hands on some reasonably compact portable speakers. But the IceTech Duette is easily the tiniest standalone speaker I have ever seen. It’s downright adorable, in fact. Plus, it’s super cheap ($12) and it doesn’t sound utterly horrible–it even gets rather absurdly loud for its size.

Carl Icahn

The Google-Yahoo partnership was struck in June as a way to fend off acquisition attempts by Microsoft.

Google has been stepping up its moves to try to keep the deal on track despite opposition from a newspaper group in the U.S. and regulators and a newspaper trade group in Europe.

Icahn did not immediately return a phone call seeking comment.

The new Yahoo board–which now includes Carl Icahn and two new directors he backed–plans to meet next week, The Wall Street Journal reported on Friday.

It’s likely the board will discuss antitrust challenges and scrutiny of the company’s proposed search ad deal with Google, as well as ongoing talks with Time Warner on a possible combination, according to the newspaper.

A Yahoo spokeswoman said the company does not comment on board meetings or agendas.

Icahn, Frank Biondi, and John Chapple joined the board this summer as part of an agreement in which Icahn agreed to drop his campaign against the directors for rejecting acquisition offers from Microsoft.

The board will meet at dinnertime on Monday and then again on Tuesday, but it was unclear whether Icahn would attend in person or not given that he often attends board meetings by phone, the report said, citing unidentified sources.

Glam Media has continued its international expansion, appointing former DoubleClick and Excite executive Yukihiro Yamamura as CEO of its Glam Japan division. Glam Japan hasn’t actually launched yet, but is slated to go live later this year.

Flush with venture cash, Glam has been growing like crazy–hiring former Google sales executive Michael Adair as vice president of corporate development and finance, acquiring overseas properties to help fuel international growth, and launching new divisions.

“The appointment of Yukihiro Yamamura is a strategic addition to the Glam team as we continue to leverage the fragmentation of the Web globally,” Glam CEO Samir Arora said in a release Monday. “With an accomplished background in online advertising and operations from DoubleClick and Excite Japan, Yamamura brings local expertise that will be invaluable as Glam Media expands its position as the leading vertical content network.”

Yamamura had been head of DoubleClick Japan previously, and before that he had been CEO of Excite Japan since 1999.