Reuters - Digital downloads spell end for video game stores?

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Digital downloads spell end for video game stores?

Wednesday, Jun 10, 2009 11:57PM UTC

By John Gaudiosi

LOS ANGELES (Reuters) - Will digital downloads kill the video games store? That's the multibillion dollar question facing retailers from Wal-Mart Stores Inc and Target Corp to GameStop Corp, as Internet distributors continue to grow.

Retailers like Target splashed out on large booths at last week's E3 Expo in Los Angeles, showcasing games like Activision's "Transformers: Revenge of the Fallen."

But gamers -- especially on personal computers -- are increasingly turning to alternative methods to play and buy games, such as downloading or "streaming" online games, rather than trekking to a store.

Take industry veteran Dave Perry, whose Gaikai online system lets PC gamers buy and stream games through their Web browsers without needing to download any content.

"Our solution is not to dive into a fight with Sony (Corp), Microsoft (Corp), Nintendo Co Ltd, as it wouldn't gain any 'new audience' for publishers," Perry said. "Instead, our strategy is 100 percent focused on being an ally to publishers and first-party hardware makers, by delivering them audiences they don't reach today."

Digital downloads are still a small, but fast-growing business. According to the NPD group, 17 percent of games sold in 2008 by PC gamers were digitally downloaded. Microsoft and Sony are trying to convert console gamers who have become accustomed to consuming music and movies digitally via services like Netflix and Apple Inc's iTunes.

Wedbush Morgan Securities analyst Michael Pachter estimates digitally downloaded games will account for roughly 2 percent of industry sales this year, or around $400 million. He expects demand to double annually for a few years, to $800 million in 2010 and $1.6 billion by 2011.

"As broadband penetration increases and the Internet connection migrates to the living room, downloads or cloud computing solutions will become much more viable," he said.

"Downloads will become 20 percent of the market within five years, and probably peak at around 50 percent of the overall market in 10 years," said Pachter. This assumes an overall market growth of 5 to 10 percent annually, he added.

INERTIA

With video game sales growth slowing somewhat, publishers and developers are seeking new channels to reach customers.

Yet some retailers resist the format, arguing that going through a third-party online distributor further saps margins for both developers and retail chains. Analysts say the big retail chains like Wal-Mart and Target have also yet to embrace and invest in digital sales.

"Nothing that has been digitally distributed retains the same value as a retail version; it's always less," GameStop CEO Dan DeMatteo said in September.

Getting content on demand is no stranger to households accustomed to watching movies over set-top boxes, or teens streaming music over the Internet. But spontaneously ordering a game is stymied somewhat by the limits of the gamers' personal computer system.

Some fledgling companies try to work around that.

Over the past seven years, entrepreneur Steve Perlman has been developing a digital distribution box called OnLive. He hopes to offer high-definition PC games on low-end hardware.

OnLive has struck deals with Electronic Arts Inc, Ubisoft, Take Two Interactive, Warner Bros. Interactive Entertainment, THQ, Epic Games, Eidos, Atari and Codemasters. While the company had 16 games on display in March at the Game Developers Conference, it had no presence on the E3 show floor.

OnLive this fall is slated to launch a subscription service similar to Microsoft's Xbox Live.

NPD estimates 18 percent of Xbox 360 users who have a "Gold" membership to Microsoft's Xbox Live service regularly download from Xbox Live Arcade, and 10 percent of PlayStation 3 users regularly buy digitally from Sony's PlayStation Network.

The largest independent games distribution network is Valve Software's Steam, which has 21 million users and 700 games.

Doug Lombardi, vice president of marketing at Valve Software -- known as the groundbreaking backers of the "Half-Life" shooter series -- said digital distribution has already been largely embraced by the industry.

But the real forte of digital distribution may be the ability to provide automatic updates and extras, keeping things new as with the Team Fortress multiplayer-shooter series.

"Now that games can be connected to their audience, they will last and grow well beyond their traditional 6-month to 1-year sales cycle," Lombardi said.

(Reporting by John Gaudiosi; Editing by Edwin Chan, Richard Chang)

Reuters - Who you going to play? "Ghostbusters" back as game

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Who you going to play? "Ghostbusters" back as game

Thursday, Jun 11, 2009 11:42PM UTC

By John Gaudiosi

NEW YORK (Reuters) - It's been 25 years since the Ghostbusters first saved Manhattan from the giant Stay Puft Marshmallow Man. Now, they're back in virtual form and talking about a third movie.

Actors Bill Murray, Dan Aykroyd, Harold Ramis and Ernie Hudson stepped into the recording studio to breathe life into their virtual characters for a new "Ghostbusters" game from Atari, which will be released June 16.

The setting is New York around 1991, two years after the events of the second movie in the series, "Ghostbusters II."

Players step into the role of a replacement prototype equipment technician and work with the Ghostbusters to resolve strange paranormal happenings that unfold just before the Museum of Natural History opens its "World of Gozer" exhibit.

Aykroyd and Ramis, who co-wrote the 1984 and 1989 films, worked with developer Terminal Reality to create the adventure, which both actors consider a third film in virtual form.

The game writers prepared the story line and the actors gave them feedback to make sure the dialogue was realistic for their characters.

They also checked out the new ghost-busting technologies introduced in the game, such as a beam for immobilizing ghosts and a slime launcher upgrade for the trustworthy proton pack.

"I was always taught ... to respect the writer, and I think we respect the programmers and engineers in this trade as creative people, which tends to result in the best product," said Aykroyd, who has championed the game through multiple publishers.

Sierra Games, a division of Vivendi, originally was slated to release the game last year, but after Activision purchased the company it passed on releasing "Ghostbusters" as well as "Chronicles of Riddick: Assault on Dark Athena."

Atari, however, stepped in and picked up both titles. Atari is owned by French game published Infogames.

POSSIBLE THIRD MOVIE

Todd Slepian, a producer for "Ghostbusters: The Videogame" at Atari, said the additional time gave the teams the opportunity to get the actors back in the studio for more dialogue.

The team also was able to add cooperative play to the cartoonish Wii and PlayStation 2 versions of the game while a game for the PlayStation 3 and Xbox 360 was fine-tuned with competitive four-player online gameplay.

"There are over 30 ghosts in the game ranging from the green glob, Slimer, to fishermen ghosts to an assortment of golems and a T-Rex," said Slepian. "Players will come face to face with the Stay Puft Marshmallow Man."

Ramis said getting everyone on board with the new game -- even Annie Potts reprised her role as the receptionist -- has rekindled their interest in doing a third live-action feature.

"It had sort of been contemplated before, and Dan had once written a spec script about it, which was not bad, but there was no group will that galvanized around that script," said Ramis.

"I think what the game did was revive our belief in it and certainly demonstrated that there was a public appetite and interest in it."

Columbia Pictures, a unit of Sony Corp, has optioned Emmy-nominated screenwriters Gene Stupnitsky and Lee Eisenberg ("The Office") to write a script for a third feature film.

But despite the brand appeal of "Ghostbusters," Michael Pachter, videogame analyst, Wedbush Morgan Securities, said he thought Atari would struggle to sell more than a million units.

"It's a fun concept, but it's really old, and my guess is that the game will fizzle after a few weeks," said Pachter.

(Editing by Belinda Goldsmith)

Reuters - Palm names Rubinstein CEO days after Pre launch

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Palm names Rubinstein CEO days after Pre launch

Thursday, Jun 11, 2009 4:1PM UTC

By Alexei Oreskovic

SAN FRANCISCO (Reuters) - Palm Inc named Jon Rubinstein its CEO on Wednesday, hoping the former Apple executive will usher in a new era for a company seeking to revive its fortunes with a fresh smartphone launched last weekend.

Rubinstein, who was brought in as Palm's executive chairman when private equity firm Elevation Partners bought a stake in the company in 2007, played frontman for the new "Pre" phone, popping up at various industry conferences and touring retail outlets.

Rubinstein, 52, takes the helm on Friday, succeeding Ed Colligan, a 16-year Palm veteran who will take some time off and then join Elevation, Palm said in a statement.

Analysts said Rubinstein's own elevation was no surprise.

"Rubinstein has been a product guy, a consumer guy who gets what the product has to be," said Avian Securities analyst Matthew Thornton.

Shares of Palm rose 3.4 percent to $12.40 in after-hours trading, after falling 5.6 percent in Nasdaq trade.

Palm pioneered the market for handheld digital devices in the 1990s, but it has fallen behind competitors like Apple Inc and Research in Motion Ltd in recent years.

Rubinstein joined Palm in October 2007 after Elevation Partners bought a 25 percent stake for $325 million.

Elevation -- based in Menlo Park, California, with investments in Forbes, online real estate information company Move and analytics firm MarketShare Partners -- claims as co-founders well-known tech investor Roger McNamee, former Apple CFO Fred Anderson and pop singer Bono.

News of Rubinstein's appointment came on the heels of Palm's launch on Saturday of its Pre, considered the company's best chance to compete against Apple and its popular iPhone.

Investors have grown accustomed to seeing Rubinstein, often casually dressed, hold forth for Palm at high-profile events.

"This has been their guy," Thornton said. "From an execution standpoint, he's probably the guy they want to lead the next leg of growth.

PIONEER AND LAGGARD

Palm was early to the market for smartphones, which combine a cellphone and a personal digital assistant into one device, with its Treo product. But the company's products have fallen out of favor as RIM's BlackBerry and Apple's iPhone gained share in the smartphone market.

In its fiscal third quarter ended February 28, Palm reported a $95 million net loss after the company's smartphone revenue fell 72 percent year-over-year to $77.5 million.

"It is true that Palm still has challenges," said RBC Capital Markets analyst Mike Abramsky. "It has to reestablish relationships and its reputation with users who have been disenfranchised by the old Palm."

But Abramsky believes Palm is poised to become a key player in the global smartphone market, armed with multiple smartphones based on its new WebOS operating system, which he said will be available through multiple wireless carriers.

Palm's first smartphone with the WebOS, the Pre, is priced at $199.99, after a $100 rebate, when purchased with a two-year service contract. A physical keyboard distinguishes it from the iPhone, which has an on-screen, software-based keyboard.

Sprint Nextel Corp, which has exclusive U.S. rights to carry the Pre, said it booked record sales of the Pre during its first weekend of sales and was restocking the phones "as quickly as Palm could make them."

Shares of Palm have fallen this week amid concerns that sales of the highly anticipated new phone, which has garnered good reviews, may be hampered by supply constraints.

On Monday, Apple introduced two new models of its iPhone and cut the price of its low-end iPhone to $99, turning up the competitive heat on the Pre as the new entrant seeks to gain a foothold in the market.

RBC's Abramsky, who has an outperform rating on Palm's stock, said the market for the Pre was much broader than for the iPhone, and said Palm is much better at building smartphones than cellphone vendors such as Motorola Inc or Samsung Electronics Co Ltd.

And he said Rubinstein has recruited several important hires from companies including Apple and Microsoft Corp.

"Jon is putting his stamp on the company, which is really key to the success of Palm going forward," said Abramsky.

(Reporting by Alexei Oreskovic; Editing by Edwin Chan, Gary Hill)

Reuters - MySpace prepares for "massive" layoffs: report

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MySpace prepares for "massive" layoffs: report

Thursday, Jun 11, 2009 6:32PM UTC

NEW YORK (Reuters) - News Corp's MySpace refused to comment on Thursday on a report the previous day that said the online social network will fire a "massive" number of employees.

The online social network is preparing to lay off as many as 500 of its 1,600 workers, the TechCrunch blog reported on Wednesday, as it cuts costs while trying to stay ahead of growing competition from rival Facebook.

MySpace is part of Fox Interactive Media, which houses some of News Corp's online properties. News Corp last month ousted co-founder and Chief Executive Chris DeWolfe and has shaken up management elsewhere in its digital operations.

"Like any company with new leadership, Fox Interactive Media is reviewing every aspect of our operations, performance and structure," a MySpace spokeswoman said in a statement.

"It's no secret that we are looking for ways to improve our products, increase the value of our digital assets and enhance the overall financial strength of the company," the statement said.

The TechCrunch report comes after the Los Angeles Times reported on June 6 that Fox Interactive Media canceled a plan to move to a 420,000 square-foot office space in Playa Vista, California.

The company had committed to a 12-year, roughly $350 million lease, the Times reported, adding that it was backing off the move because of its financial difficulties.

MySpace's statement to the Los Angeles Times about the Playa Vista building was the same statement that it sent to Reuters regarding the layoffs.

News Corp's $580 million purchase of MySpace's parent company in 2005 was considered among analysts and media experts as a brilliant move by Murdoch to enhance the media conglomerate's digital portfolio.

Since then, advertising revenue has deteriorated and Facebook and Twitter have surpassed MySpace in buzz and popularity in the technology and media worlds.

A search and advertising deal with Google Inc will expire in July 2010, and it is unclear whether the two sides will renew. MySpace derives $300 million a year from that deal, and most Wall Street analysts believe there is no chance that Google will forge a deal on similar terms.

News Corp shares rose 11 cents, or 1.05 percent, to $10.62 on Nasdaq at mid-afternoon.

(Reporting by Robert MacMillan; Editing by Richard Chang)

Reuters - Opera says Microsoft EU browser offer "not enough"

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Opera says Microsoft EU browser offer "not enough"

Friday, Jun 12, 2009 1:13PM UTC

By Tarmo Virki, European technology correspondent

HELSINKI (Reuters) - Norwegian browser maker Opera ASA said on Friday that Microsoft's plan to ship its Windows operating system in Europe without its Internet Explorer web browser was not enough to restore competition.

On Thursday the world's top software maker Microsoft, countering pressure from European regulators, said it plans to ship the newest version of Windows in Europe without its Internet Explorer web browser.

"I don't think what Microsoft announced is going to restore competition," Opera's Chief Technology Officer Hakon Wium Lie told Reuters.

"I don't think its going to be enough, I don't think it will get them off the hook," he said.

Shares in Opera leapt more than 6 percent to a three-year high on the news of Microsoft's plans and expectations for an upcoming announcement from the company, an analyst said.

Microsoft's abrupt reversal comes shortly before the European Commission is due to rule on antitrust charges brought against the company in January, claiming that it abuses its dominant position by bundling its Explorer browser, shielding it from head-to-head competition with rival products.

EU WATCHDOG

Until now, Microsoft has claimed that the browser was an integral part of the operating system and should not be pulled out, but it now plans to do that for a European version of Windows 7, due to be rolled out later this year.

A European Commission official said the EU watchdog will examine the conditions under which Microsoft will ship Windows 7 without browsers to manufacturers and suppliers, warning that the Commission will find out if there are any conditions attached.

"We never suggested that they have to sell Windows without Internet Explorer. We suggested that they might have to give the possibility to customers to chose between different browsers," the official said.

The official added that it was in Microsoft's interest to inform the Commission of any conditions attached to the rollout.

The Commission, which enforces competition rules in the 27-nation European Union, said it planned to decide shortly on its latest case against the U.S. tech giant.

It has to date fined Microsoft nearly $2 billion for various offenses. The Commission can impose a fine of up to 10 percent of a company's turnover and other remedies if found to have breached EU rules.

Last month, it slapped a record $1.49 billion fine on the world's biggest chipmaker Intel for anti-competitive practices.

(Additional reporting by Bate Felix and Ilona Wissenbach in Brussels; editing by Mike Nesbit and Rupert Winchester)

Reuters - Twitter helps Dell rake in sales

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Twitter helps Dell rake in sales

Friday, Jun 12, 2009 3:25PM UTC

By Clare Baldwin

SAN FRANCISCO (Reuters) - Social media company Twitter is struggling to craft a profitable business model, but the Web-based service has helped Dell Inc chalk up millions of dollars in sales.

Dell said on Thursday it has raked in more than $3 million from Twitter followers who clicked through its posts to its Web sites to make purchases. The company, which has posted to Twitter about two years and tracks the sales with proprietary software, made more than $1 million in the past 6 months.

"We're going to watch it over time to make sure it's tracking at the right level," said Lionel Menchaca, Dell's chief blogger. "It is trending upward and that's what we're going to be looking at overall."

Three million in sales over two years is a pittance for Dell, ranked by IDC as the world's second-largest PC maker in the first quarter of 2009. Dell posted $12.3 billion of revenue in the first quarter of this year, alone.

But the PC maker has become one of the first public examples of how companies might profit from Twitter.

Twitter does not charge companies for such benefits, but does not rule out doing so in the future.

"For now, monetization of this type of activity remains unknown," Twitter spokeswoman Jenna Sampson said in a statement. "However, as the network grows, the company will be committing more resources toward profitability."

Gartner analyst Allen Weiner said such financial success could provide a model for Twitter, itself, to make money.

"Certainly one of the ways Twitter can begin to think of itself as a money-making operation is to facilitate a lot of these things, build it as part of the infrastructure. So if you're a company, you can pay Twitter a certain amount of money and they can directly distribute coupons on your behalf, or clear transactions," Weiner said.

Twitter is building add-on tools and services for businesses and professional users, co-founder Biz Stone told the Reuters Global Technology Summit last month.

Dell said it posts 6 to 10 times a week to its DellOutlet account, which is where the majority of Twitter-based sales have come from. Stephanie Nelson, who manages the account, said almost every post includes a coupon or a link to a sale, and about half of the posts are Twitter-exclusive deals.

The PC maker, which has about 600,000 followers, is one of the Top 100 most-followed accounts on Twitter, according to private trackers TwitterCounter and Twitterholic.

Other non-media companies ranked in the Top 100 include Whole Foods Market Inc, Woot.com, Zappos.com, JetBlue Airways Corp.

Whole Foods and JetBlue said they have not tried to monetize their Twitter presence. Woot.com and Zappos.com were not available for comment.

Twitter had approximately 17 million unique U.S.-based visitors in April, and about 24 million worldwide, according to Nielsen. Its number of users has grown by more than a thousand percent over the last year.

Small companies are also finding financial success on Twitter. New Orleans-based Naked Pizza, which turns $1 million in sales annually, is "betting the farm" on its Twitter presence according to co-founder Jeff Leach.

The company, which created a Twitter presence about two and a half months ago and has about 4,300 followers, last week said nearly 69 percent of sales generated during a one-day Twitter advertising blitz came from customers drawn in from the site.

Leach posts 1 to 15 times a day and said his company sees a sustained 20 percent of sales dollars from its Twitter presence.

Leach recently put up a billboard advertising the company's Twitter presence and is planning mailings bearing the company's Twitter contact information instead of a phone number.

(Reporting by Clare Baldwin in San Francisco; Editing Bernard Orr)

Reuters - Microsoft exec sees lower margins from "cloud"

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Microsoft exec sees lower margins from "cloud"

Friday, Jun 05, 2009 2:32PM UTC

PALO ALTO, California (Reuters) - Microsoft Corp's chief software architect said on Thursday the profit margins on providing online services -- broadly known as cloud computing -- would likely yield a lower profit margin than the company's existing software business.

"The margins on services are not like the margins on software, so it (cloud computing) will increase our profit and it will increase our revenue, but you won't have that margin," said Ray Ozzie on Thursday at a Silicon Valley technology event.

Ozzie is the main driving force behind the world's largest software company's gradual move toward a cloud-based approach to its products. He has been in charge of Microsoft's long-term technical strategy since co-founder Bill Gates announced he was stepping down from day-to-day involvement with the company three years ago.

Microsoft has made only tentative steps into the cloud arena so far, but has been investing in data centers to house customers' data and later this year is expected to unveil its 'Azure' platform, which will allow developers to write applications to work on Microsoft's cloud.

"The margins at the low level, at the Azure level, are going to be lower than the top level, where you're delivering a solution or something like Exchange," said Ozzie, referring to Microsoft's popular e-mail and calendar application. "You're pricing that solution around a business value more than cost so the margins are still very, very good."

Companies have historically run their software locally, on servers, but as the Internet has grown in speed and ubiquity, some are starting to use the cloud to run their applications. In theory at least, customers save money on hardware and maintenance while suppliers get a new source of fees by storing data and providing services online.

Early pioneers of cloud computing have been Amazon.com Inc, Google Inc and Salesforce.com Inc, which may eventually pose a threat to Microsoft, whose software is still chiefly run on local systems.

Reuters - Fans gather for launch of "iPhone killer" Palm Pre

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Fans gather for launch of "iPhone killer" Palm Pre

Sunday, Jun 07, 2009 4:58PM UTC

By Sinead Carew and Jessica Wohl

NEW YORK/CHICAGO (Reuters) - Small crowds gathered on Saturday for the official launch of Pre, the smartphone seen as Palm Inc's best chance to claw back market share from Apple Inc's iPhone and Research In Motion Ltd's Blackberry.

The new high-end phone, considered a pivotal product for both Palm and Sprint Nextel, has been greeted by rave reviews.

Lines were far shorter than those that snaked around Apple stores for its first hugely popular iPhone two years ago, but many consumers said they were eager for the new product.

"I wanted their iPhone killer. I've been anticipating this for a while," said Peter Lewis, who bought phones for himself and his wife at a Sprint store in Chicago, where some 45 people were in line when the doors opened at 8 a.m.

"This is my birthday present to myself," said Wilma Rivera, 36, a heating technician who brought her 17-month-old daughter to Sprint's flagship store in Manhattan.

Rivera, a long-time Palm user, said while she had been tempted by iPhone, sold only by AT&T Inc in the United States, she "never wanted to leave Sprint."

Sprint, the No. 3 U.S. mobile telephone service, is depending on Pre to help stem defections and win back subscribers from rivals such as AT&T and Verizon Wireless, a venture of Verizon Communications and Vodafone Group Plc.

Sprint spokeswoman Jennifer Walsh Keifer said late on Saturday that Sprint had sold out of Pre phones at a number of different locations around the country and that the company was doing its best to restock stores.

Pre is hitting the shelves just before Apple is widely expected to announce a new iPhone on June 8.

PRICE AND KEYBOARD

The Pre costs $199.99, after a $100 rebate, for customers who sign a two-year service contract. It is priced in line with the $199 smaller-capacity iPhone. Pre's monthly service fees start at $69.99, including unlimited text messaging, lower than the cost of iPhone service plans with similar features.

"It's always nice to see a bunch of people waiting for a product you worked on," Palm Executive Chairman Jon Rubinstein, a former Apple executive who helped create the iPod, said at a Sprint store in San Francisco's financial district, where more than a dozen people lined up to purchase a Pre.

He said the opportunity for smartphones was big enough to sustain a market for three to five successful vendors.

"For us, the opportunity is not to take customers away from RIM or Apple," Rubinstein said, but rather to entice users of lower-level cell phones to upgrade to a more powerful smartphone.

Some who waited in line on Saturday were clearly more technologically savvy.

Juan Mondragon, a 33-year-old jewelry store manager in line at another San Francisco store, said he wanted to compare the Pre to his current iPhone, even if the experiment meant paying for two separate service plans.

"At least I can afford it for one month," Mondragon said.

The Pre's tiny keyboard is expected to attract some consumers who find it difficult to type on iPhone's virtual touchscreen, such as Lynne Margolin, a Chicago grandmother who traded up from a Palm 650 Treo to the Pre on Saturday.

Margolin said she was concerned the number of applications may be limited early on compared to the vast number of "apps" her friends can get on their iPhones.

Pre was the most talked about device at the Consumer Electronics Show in Las Vegas in January. It is the first Palm phone to use the company's new webOS operating system.

Palm investors have been waiting for its new mobile platform since June 2007, when Elevation Partners took a $325 million, 25 percent stake in Palm and brought in Rubinstein.

Sprint hopes to attract corporate clients, but the Pre could have a difficult time making inroads with often conservative corporate technology departments.

(Additional reporting by Alexei Oreskovic; editing by Will Dunham)

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Reuters - Just a few on Twitter do all the tweeting: study

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Just a few on Twitter do all the tweeting: study

Friday, Jun 05, 2009 5:45AM UTC

By Erin Kutz

BOSTON (Reuters) - A tiny fraction of those who use the fast-growing social network phenomenon Twitter generate nearly all the content, a Harvard study shows.

That makes it hard for companies to use the micro-blogging site as an accurate gauge of public opinion, the Harvard Business School study showed.

Twitter Inc is a social networking website in which users post messages of 140 characters or less -- known as "tweets" -- that can be viewed by other users who elect to follow them.

The Harvard study examined public entries of a randomly selected group of 300,000 Twitter users. The researchers studied in May the content created in the lifetime of the users' Twitter accounts.

It found that 10 percent of Twitter users generated more than 90 percent of the content, said Mikolaj Jan Piskorski, who led the research. More than half of all Twitter users post messages on the site less than once every 74 days.

The median number of lifetime "tweets" per user is just one, according the research.

Companies are increasingly turning to Twitter to improve their understanding of how consumers view them, he said.

But some users are far more active and vocal than others, limiting information gleaned from messages on the site, said Piskorski, an assistant professor of strategy at Harvard Business School.

"If you're trying to get what a representative cross-section of the public is thinking, you're probably better off staying away from Twitter," he said in an interview.

Piskorski said Twitter could still be useful in responding to specific customer concerns. It can also be effective marketing, as companies with Twitter accounts can advertise sales and deals to users who follow them on the site.

JetBlue Airways Corp, Comcast Corp and Dell Inc are among companies with Twitter accounts.

JetBlue provides information on Twitter such as announcements of terminal changes at airports and tips on how to pack and directly answers customers' questions. Dell uses Twitter to point customers to discounts. Comcast's account largely responds to customer gripes.

"Enough of our customers are talking about their interactions with us that we get a decent sample of what's going on a daily basis that we wouldn't necessarily get from other long-term studies," JetBlue spokesman Morgan Johnston said in a telephone interview.

Unlike other social networking sites like Facebook.com, men are almost twice as likely to follow other men on Twitter than they were to follow women, according to the study.

Women were also more likely to follow men than they were to follow other female users.

Piskorski said the study did not indicate whether this was because women were asked less often to be followed or because women are more selective in accepting followers.

Follow up research to these findings will likely be released later this month, he said.

According to recent data compiled by Nielsen Online, which measures Internet traffic, Twitter's website had more than 7 million unique visitors in February, compared to 475,000 in February 2008.

(Editing by Jason Szep and Eric Beech)