Google on Monday announced that the company would combine individual privacy policies from a variety of its products into one main policy. Critics of the change were worried that Google was now collecting more data than before, and the U.S. House Energy and Commerce Committee demanded answers. The Mountain View-based company has now responded to Congress and defended its decision to change the policy. Read on for more.

In a 13-page letter to several members of Congress, Google answered the lawmakers’ questions and addressed concerns. ”Last week we heard from members of Congress about Google’s plans to update our privacy policies by consolidating them into a single document on March 1,” Google’s director of public policy Pablo Chavez wrote on the company’s blog. “Protecting people’s privacy is something we think about all day across the company, and we welcome discussions about our approach. We hope this letter, in which we respond to the members’ questions, clears up the confusion about these changes.”

Google maintains that while the policy will be changed, users will continue to have custom controls over what Google can and can’t do. According to the company, Google collects three types of data from users: log data, account data, and service data. Log data is anonymous and consists of a computer’s interaction with Google’s services. Account data is all the user information stored for each individual, and service data is information that relates to a particular product, such as Google Maps, however it is “not necessarily associated with any users.”

UPDATE: Google reached out to us with a statement and informed us that the company is not collecting any new or additional data.

“We’re not collecting any new or additional data about users. Our updated privacy policy simply makes it clear that we use data to refine and improve our users’ experiences on Google – whichever services they use. This is something we have already done for a long time for many of our products.”

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By now, you’ve no doubt seen the news: Google intends to acquire Motorola Mobility for $12.5 billion. What this will do is not only give Google access to Motorola’s vast patent library consisting of nearly 25,000 patents, but it will also give Google an end-to-end hardware and software strategy with smartphones, tablets and even with Google TV. The thing is, Google didn’t need to buy Motorola. Google could have just licensed the patents from Motorola. Google bought Motorola because it felt like control of the Android experience was slipping away. It’s apparent that one Nexus-like device from Google a year won’t be enough — MOTOBLUR has probably given Andy Rubin ulcers — and it’s apparent that a company that’s leading in many areas of the smartphone arena wants to control that entire experience. Open or not, it is Google’s, after all. Smartphones and tablets are also going to be the biggest categories in technology for the foreseeable future, and if you think Google is just going to play around with that, well, you obviously haven’t seen the company’s recent moves. Read on for more.

HTC, Samsung, LG, and other manufacturers are probably pissed. Regardless of any protection they might receive from Google owning Motorola’s patent library, and regardless of recent official comments, they are now not only competing with one of the best Android device vendors, but also with Google itself. The end result? You’re going to see HTC, Samsung and LG continue to buy up as many Beats-like companies as possible to further differentiate their Android experiences, because they’re not going to have anything else to offer pretty soon. There are only so many ways to physically differentiate a touchscreen device, and with Google in control of its own hardware, software and services, differentiation could become the key to other partners’ survival  the Android ecosystem.

Nearly two and a half months after its networks were breached by the hacker group LulzSec, Sony will finish restoring its PlayStation Network later this week when it reactivates the service in Japan. According to Bloomberg, Sony has been working with the FBI to identify the LulzSec hackers who were responsible for the attack on its San Diego data centers, during which the hackers obtained account information for more than 100 million PlayStation Network users. Reportedly, LulzSec rented and used servers from Amazon.com’s cloud service to facilitate the attack. Sony CEO Howard Stringer apologized after the attacks and offered a year of identity theft protection to those affected by the breach, as well as a free month of access to PSN.

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According to a new research report from Gartner, consumers are on track to spend a record $2.1 trillion on digital information and entertainment products this year. That figure is expected to hit $2.8 trillion by 2015. $1.2 trillion — 62% — is spent on subscription-based communication services such as mobile, voice, and data services, broadband packages, video services, online gaming, and cable TV subscriptions. $600 billion, 28% of the total $2.1 trillion, is spent on devices themselves, and 10% is spent on content such as computer software, video on-demand, and pay-per-view services. “The three key technology areas that will offer the best opportunity for vendors during the next three years are: wireless broadband, which will enable constant connectivity; location-based services (LBS), which will personalize and take advantage of the constant connected state; and operating systems, which are the foundation for integration applications that can bring it all together,” Mikako Kitagawa, principal research analyst at Gartner, said. Read on for the full release.

Gartner Says Consumers On Track to Spend $2.1 Trillion Globally on Digital Information and Entertainment Products and Services in 2011

STAMFORD, Conn., June 27, 2011— 

In 2010, consumers globally spent $2 trillion on digital information and entertainment products and services, and this will increase to $2.8 trillion by 2015, according to Gartner, Inc. Worldwide consumer spending on digital information and entertainment products and services is projected to reach $2.1 trillion in 2011.

The trend among vendors to offer a diversified portfolio of products and/or services puts them in a better position to seize a larger share of the consumer wallet. Gartner defines consumer wallet spending as the money spent by consumers for digital technology devices and services that are for accessing, consuming and creating content. This wallet is divided into three basic spending types — content, devices and services.

“While a vendor can be a leader in specializing within just one segment of the consumer wallet, there are a mounting number of examples that suggest diversification may be the optimal path forward in the consumer electronics industry,” said Amanda Sabia, principal research analyst at Gartner. “Vendors that diversify their offerings across multiple consumer spending segments earn revenue across the full ecosystem and take legacy services to transform to newer products and services.”

Of the $2 trillion consumers spent globally in 2010 on digital information and entertainment products and services, the largest spending segment (62 percent) was for communications subscription-based access and usage services. The $1.2 trillion included mobile and wired voice services; mobile data services, such as SMS/TXT and broadband; fixed broadband services; video services, such as subscriptions to pay TV; and online gaming.

The second-largest spending segment (28 percent) was for devices. The $600 billion is made up of consumer electronic devices, such as mobile/handheld devices, PCs and related devices, and stationary entertainment equipment, such as television sets and game consoles.

The smallest spending segment (10 percent) was for content and software for a total of $200 billion. Video content that has been purchased/rented/streamed/downloaded, as well as premium channel/pay per view (PPV)/video on demand (VOD), and that portion of pay TV subscriptions allocated to licensing fees made up half of this segment, while the other half was for PC and gaming software, digital music and books, and purchases from mobile apps stores.

“There are two basic strategies that vendors have used to capture consumer spending that will enable their interconnected consumer experience,” said Mikako Kitagawa, principal research analyst at Gartner. “The first is to concentrate in one consumer spending segment, and the second is to diversify into other consumer spending segments.”

“The challenge to vendors choosing to be hyperfocused on one wallet spending segment is the relentless pursuit of innovation required to maintain segment sales leadership in this one specific segment,” Ms. Kitagawa said. “There are two ways to achieve leadership in this instance: by diversifying the portfolio suite of offerings and by expanding the target audience or usage model of the products and services.”

Vendors choosing to diversify into other consumer spending segments can benefit from the fact that consumers are increasingly using alternative services that will move their spending from one segment to the other, such as fixed voice to mobile voice; fixed broadband to mobile broadband; physical content, such as CDs, DVDs and books to online/digital versions; and linear broadcast TV to over the top (OTT) video. All of these alternative services provide business opportunities that would replace or would be in addition to legacy products and services, thus enabling a vendor to pursue the consumers’ spending in more than one segment.

“Technology innovation opens windows of opportunity for vendors to consider diversification,” said Ms. Kitagawa. “However, technology innovation also opens a window for change among consumers to switch vendors in the pursuit of cost savings or lifestyle-changing technology.”

“The three key technology areas that will offer the best opportunity for vendors during the next three years are: wireless broadband, which will enable constant connectivity; location-based services (LBS), which will personalize and take advantage of the constant connected state; and operating systems, which are the foundation for integration applications that can bring it all together.”

Additional information is available in the Gartner report “Market Trends: Diversification Trends Capture More of Consumer Technology Spending.” The report presents what products and services make up the consumer wallet, and a high-level analysis of the varying strategies to capture that spending within and among the various segments. The report is available on Gartner’s website at http://www.gartner.com/resId=1717114.

On Thursday, Groupon — the popular location-based coupon service — filed for an initial public offering with the Securities and Exchange Commission. The start-up, which alerts 83 million email subscribers in 43 different countries of local deals that range from restaurant discounts to sailing lessons, hopes to raise $750 million in its IPO. “Expect us to make ambitious bets on our future that distract us from our current business,” Andrew Mason, Groupon’s chief executive officer, said in a statement. “Some bets we’ll get right, and others we’ll get wrong, but we think it’s the only way to continuously build disruptive products,” Mason added. Groupon launched in November, 2007, has more than 7,000 employees, and reported $645 million in revenues during Q1 2011. Hit the break for a letter from Mason that was included with the company’s filing.

Dear Potential Stockholders,

On the day of this writing, Groupon’s over 7,000 employees offered more than 1,000 daily deals to 83 million subscribers across 43 countries and have sold to date over 70 million Groupons. Reaching this scale in about 30 months required a great deal of operating flexibility, dating back to Groupon’s founding.

Before Groupon, there was The Point—a website launched in November 2007 after my former employer and one of my co-founders, Eric Lefkofsky, asked me to leave graduate school so we could start a business. The Point is a social action platform that lets anyone organize a campaign asking others to give money or take action as a group, but only once a “tipping point” of people agree to participate.

I started The Point to empower the little guy and solve the world’s unsolvable problems. A year later, I started Groupon to get Eric to stop bugging me to find a business model. Groupon, which started as a side project in November 2008, applied The Point’s technology to group buying. By January 2009, its popularity soaring, we had fully shifted our attention to Groupon.

I’m writing this letter to provide some insight into how we run Groupon. While we’re looking forward to being a public company, we intend to continue operating according to the long-term focused principles that have gotten us to this point. These include:

We aggressively invest in growth.

We spend a lot of money acquiring new subscribers because we can measure the return and believe in the long-term value of the marketplace we’re creating. In the past, we’ve made investments in growth that turned a healthy forecasted quarterly profit into a sizable loss. When we see opportunities to invest in long-term growth, expect that we will pursue them regardless of certain short-term consequences.

We are always reinventing ourselves.

In our early days, each Groupon market featured only one deal per day. The model was built around our limitations: We had a tiny community of customers and merchants.

As we grew, we ran into the opposite problem. Overwhelming demand from merchants, with nine-month waiting lists in some markets, left merchant demand unfilled and contributed to hundreds of Groupon clones springing up around the world. And our customer base grew so large that many of our merchants had an entirely new problem: Struggling with too many customers instead of too few.

To adapt, we increased our investment in technology and released deal targeting, enabling us to feature different deals for different subscribers in the same market based on their personal preferences. In addition to providing a more relevant customer experience, this helped us to manage the flow of customers and opened the Groupon marketplace to more merchants, in turn diminishing a reason for clones to exist.

Today, we are pursuing models of reinvention that would not be possible without the critical mass of customers and merchants we have achieved. Groupon NOW, for example, allows customers to pull deals on demand for immediate redemption, and helps keep merchants bustling throughout the day.

Expect us to make ambitious bets on our future that distract us from our current business. Some bets we’ll get right, and others we’ll get wrong, but we think it’s the only way to continuously build disruptive products.

We are unusual and we like it that way.

We want the time people spend with Groupon to be memorable. Life is too short to be a boring company. Whether it’s with a deal for something unusual, such as fire dancing classes, or a marketing

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Apple, a company many said had repeatedly delayed the development and launch of the iPhone for fear that it might cannibalize its iPod business, is now a “mobile devices company” with a smartphone that is undoubtedly its flagship device. Chief Executive Steve Jobs and Chief Operating Officer Tim Cook have both publicly acknowledged this major transition on several occasions, including on stage while unveiling the iPad and on earnings calls while speaking with analysts. Apple is growing at an unheard of pace and stockpiling mountains of cash, all thanks to its mobile business. Personal Computers, Apple’s core business for nearly 30 years, now play second fiddle to the company’s mobile devices in terms of both revenue and mind share. On the other side of the table, old rival Microsoft is doing all it can to regain its footing in the mobile space after letting its Windows Mobile platform grow stale and moldy. Windows Mobile’s replacement, Windows Phone, is still in its infancy but early reports have suggested adoption has been slow at best. So where does Microsoft go from here?

The Internet erupted following our report covering industry insider Eldar Murtazin’s claim that Microsoft has struck a deal to purchase Nokia’s cell phone business for $19 billion. Murtazin has a long track record of solid Nokia scoops, and he was the first person to report that the Finnish phone maker would adopt Microsoft’s Windows Phone platform for its smartphones starting later this year. While his new claim is anything but confirmed, it’s not as far fetched as some might think. In fact, a deal to dump Nokia’s phone business could actually be considered a continuation of former Nokia CEO Olli-Pekka Kallasvuo vision.

The ex-Nokia chief lead a major reorganization that began several years ago in an effort to transition the company away from being a devices company. Instead, Kallasvuo believed Nokia’s future was in software and services. Subsequent acquisitions of companies like Navteq and the eventual launch of Nokia’s Ovi suite would set the phone maker on this new course, but the transition came at a time when the company’s smartphones were leapfrogged by Android and iOS devices, and revenue began to sink along with the firm’s market share.

But perhaps Nokia was on the right track. Perhaps Kallasvuo’s vision of Nokia as a software company is shared by new CEO Stephen Elop, who some pundits believe was brought on board solely to preside over a union with Microsoft, his former employer. Those pundits were painted as conspiracy theorists until Nokia announced this past February that it would adopt Windows Phone as its smartphone platform of the future. Was that deal just the beginning? It’s not so crazy to imagine a role reversal of sorts, where Microsoft could orchestrate the bigger picture while Nokia supplies the software and services that power the Windows Phone platform. Plenty of companies have built monstrous businesses by supplying software to hardware makers — one such company, of course, is Microsoft.

But Microsoft is a different story right now. It is a PC OS company at its core, and therein lies the problem: the PC OS business isn’t what it used to be. As such, Microsoft has spent a considerable amount of time and resources fanning out its software and service portfolio in order to spread out its net. It’s doing a good job, all things considered, but one company found a better path to take not long ago. That company is Apple, and that path is mobile.

It would certainly be quite an interesting piece of irony. For years, Apple nipped at Microsoft’s heels while chasing the Redmond-based giant’s computer business. Then in 2007, Apple planted seeds that would sprout into one of the most successful technology ventures of recent history: iOS. The iPhone, the iPad, the iPod touch… a trio of mobile devices that have made Apple one of the biggest technology companies in the world.

Apple spent decades trying to become the next Microsoft. Now, from atop a mountain of mobile devices, Apple may finally be able to sit and watch while Microsoft tries to become the next Apple.

Sony on Tuesday stated that services associated with its PlayStation Network will be fully restored by the end of this week in all regions outside Japan, Hong Kong, and South Korea. Sony also said it would fully restore the Music Unlimited services tied to its Qriocity streaming music offering for the PlayStation 3, PSP and PCs. “We have been conducting additional testing and further security verification of our commerce functions in order to bring the PlayStation Network completely back online so that our fans can again enjoy the first class entertainment experience they have come to love,” said Kazuo Hirai, Sony’s Executive Deputy President, in a statement. “We appreciate the patience and support shown during this time.” Sony recently suffered a series of cyberattacks across various networks that exposed personal data belonging to over 100 million of the company’s customers. Sony is currently working with the FBI to identify the parties responsible for breaching its various digital networks. Hit the break for Sony’s full press release.

SONY AND SONY COMPUTER ENTERTAINMENT ANNOUNCE FULL RESTORATION OF PLAYSTATION®NETWORK SERVICES

Tokyo, May 31, 2011 – Sony Corporation and Sony Computer Entertainment (SCE) announced today that Sony Network Entertainment International (SNEI, the company) will fully restore all PlayStation®Network services in the Americas, Europe/PAL territories and Asia, excluding Japan, Hong Kong, and South Korea by the end of this week. The company will also resume Music Unlimited powered by Qriocity™ for PlayStation®3 (PS3®), PSP® (PlayStation®Portable), VAIO and other PCs. Details for Japan, Hong Kong, and South Korea as well as the remaining services on Qriocity will be announced as they become available.

The company implemented considerable security enhancements to the network infrastructure, as well as conducted testing of the payment process and commerce functions. The first phase of PlayStation Network and Qriocity restoration began on May 15 in the Americas and Europe/PAL territories, followed by Japan and Asian countries and regions on May 28, when the company brought partial services back online. With this partial restoration users were able to access to some of the services such as online game play, account management, friend lists and chat functionality were restored. The full restoration of PlayStation Network as well as part of services to become available on Qriocity will include:

• Full functionality on PlayStation®Store
• In-game commerce
• Ability to redeem vouchers and codes
• Full functionality on Music Unlimited powered by Qriocity for PS3, PSP, VAIO and other PCs
• Full functionality on Media Go

Customers will be able to purchase and download games and video content from the PlayStation®Store on PS3 or PSP. In addition, consumers will have full access to Music Unlimited powered by Qriocity through PS3, PSP, VAIO and other PC’s. Service restoration of Video on Demand powered by Qriocity™ and Music Unlimited powered by Qriocity for a variety of network-enabled Sony devices will be announced later.

“We have been conducting additional testing and further security verification of our commerce functions in order to bring the PlayStation Network completely back online so that our fans can again enjoy the first class entertainment experience they have come to love,” said Kazuo Hirai, Executive Deputy President, Sony Corporation. “We appreciate the patience and support shown during this time.”

The company will be offering customers a “Welcome Back” package of services and premium content to all registered PlayStation Network* and Qriocity account services. The details of this program will continue to be detailed regionally.

* Only available for those countries with access to PlayStation®Store.

Sony has announced that it’s starting to bring its services back online after a major security breach leaked the credit card data and personal information of over a hundred million users. The first step for Sony’s PlayStation Network members is a firmware update that’s been issued for the PlayStation 3. After applying the patch, PS3 users will be prompted to change their PSN passwords. “Please note that these services will take a bit of time to be turned on and rolled out to the whole country,” the company said in a blog post Saturday. “The process has begun and some states are being turned on now, so please be patient as we reach your city and state.”

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French blog Consomac has discovered an interesting bit of intel inside Apple’s latest developer build of Mac OS X Lion. The information insinuates that users of the company’s MobileMe cloud service will be prompted to upgrade to an offering dubbed “Castle” at some point in the future. It is unclear if Castle will be the new name of an expanded cloud-service offering — iCloud? — or rather the name of an update to the current service. The company’s World Wide Developer Conference is set to take place next month, and we’re sure most of the details will be ironed out by then.

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Earlier today, Apple announced that it will be holding its annual Worldwide Developers Conference from June 6th to June 10th in San Francisco where it said that it will “unveil the future of iOS and Mac OS.” That suggests that Apple may stray from its usual schedule of announcing an updated iPhone during the show each year. “You get caught up in patterns, and it holds true, until it doesn’t,” Michael Gartenberg, an analyst with Gartner, told The Loop. “There is no reason for Apple to follow a predictable yearly pattern, and it keeps their competition off guard a little bit.” We’ll be honest, it would be pretty disappointing to many Apple fans if this deviation was true, but we’re skeptical. It makes perfect sense for Apple to announce the new hardware alongside an updated iOS platform with developers in the room. Why stray from what works?

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In a statement released at 12:00AM ET this morning, T-Mobile announced that Microsoft’s Danger Services — the service that powers T-Mobile’s Sidekick — will be shutdown on May 31, 2011. The announcement was brief, and noted that T-Mo will be providing offers to Sidekick customers, incentivizing them to transition to a new device before the end of May. A web tool has been created that will allow users to export their personal data from the Danger service — including contacts, photos, calendar, notes, to-do lists, and bookmarks — for importation onto a new device. The full statement from T-Mobile is waiting for you after the break.

After May 31, 2011, the Danger Service (a subsidiary of Microsoft) used by T-Mobile Sidekick customers for data services will no longer be available on Sidekick devices.

T-Mobile will provide offers for our Sidekick customers before May 31, 2011, to help make an easy transition from their existing Sidekick device to a new device. We will have more information to share about these offers with our customers in the weeks ahead.

To ensure the best possible transition for our loyal Sidekick customers, an enhanced Web tool is available on myT-Mobile.com to easily export their personal data, including contacts, photos, calendar, notes, to-do lists, and bookmarks, from the Danger service to a new device, computer, or a designated e-mail account.  An application is also available in the Sidekick Catalog to make it easy to export personal data to the Sidekick’s memory card.  Many T-Mobile stores can transfer data from that card to a new T-Mobile device if the customer brings in the memory card and Sidekick.

On schedule and as we exclusively reported, Apple announced its Joint Venture service this weekend to Apple Store employees. The new offering aims to bring small business customers into retail stores, providing more business-centric and personalized services. Users can enroll in Joint Venture for an annual fee of $499. What does that steep fee get you? The fee covers up to five users (additional users can be added for $99 per person per year) and provides priority service at Apple’s Genius Bars (skip the line), phone support from business-focused Geniuses, loaner machines for repairs taking over 24-hours, and access to customized workshops. The new service is set to roll out beginning March 2nd.

It looks like AT&T is aiming to recapitalize on revenues generated from handset sales. Several third-party wireless resellers — including Wirefly — have reported that beginning this March, they will no longer offer AT&T devices or services. In a letter to customers, Wirefly CEO, Andy Zeinfeld, noted that his company is committed to providing great selection and savings along with straightforward pricing; something Mr. Zeinfeld said is no longer possible with AT&T.

“It is with regret that I must inform you that effective March, 2011, we will no longer offer AT&T products and services on Wirefly.com,” writes Mr. Zeinfeld.

Wirefly is not, however, the only one being put on AT&T probation. Online retailer LetsTalk sent out the following note to its affiliates:

Effective March 8th, 2011, LetsTalk as well as other web indirect agents [...], will no longer be able to offer AT&T Wireless as a carrier option to our customers.  The primary reasons given for this change in AT&T’s business strategy were centered around AT&T cost savings and retrenchment.

It is still unclear how other independent, third-party retailers — like Amazon Wireless — will be affected; the “business strategy” that AT&T modified causing this third-party exodus is also unknown.

Wirefly declined to further comment on the situation and AT&T did not respond to BGR‘s request for a statement.

Read [Wirefly] Read [Wireless and Mobile News]

In a short press release yesterday, Microsoft announced a deal with the State University of New York (SUNY) to bring the company’s Live@edu cloud-based collaboration services to all 64 SUNY campuses. “SUNY sought to decrease costs while providing its 465,000 students with up-to-date technology necessary for success in college and in today’s workforce,” reads the press release. “As a result, SUNY students will have access to advanced online software, including hosted e-mail, calendars, online storage, Office Web Apps, instant messaging, document sharing and videoconferencing, among other services.” SUNY estimates that the move to Microsoft’s cloud system will save the state roughly $600,000 over the next five years.

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Research In Motion has been getting a lot of stick recently for not providing government agencies controlled access to their encrypted servers. In August, the United Arab Emirates threatened to pull the plug on BlackBerry services before the two parties reached an agreement. In October, India chimed in on the situation giving the Waterloo based firm an ultimatum: meet compliance standards by January 31, 2011 or get shut down. BlackBerry users in India will be happy/unhappy to know that RIM and the Government of India have reached an interim arrangement wherein RIM will allow for the “lawful interception of BBM services.” RIM still has until January 31, 2011 to come up with a final solution to put this whole thing to bed. In the mean time, it’s business as usual.

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