The company that produced the cover, E Ink, has a track record of innovation — its technology is used in Amazon.com’s e-book device, the Kindle. E Ink, a private company based in Cambridge, Mass., counts Hearst, Esquire’s parent, as a major shareholder. “In 2000 or so, we went to Cambridge to see if they could demonstrate the technology,” Mr. Granger said. “They were doing store displays, so it was premature for a magazine.” Two years ago, at a Hearst management retreat, Mr. Granger again raised the idea. This time it would be possible, he was told, if Hearst invested seed money to create a battery small enough to fit in a magazine.

“This is really the 1.0 version,” said Kevin O’Malley, Esquire’s publisher. “Imagine when the consumer walks by a newsstand and sees that it is alive.”

Digital technology holds the promise of making the dissemination of information much easier and cheaper — no paper, no trucks — but this experiment by Esquire was the opposite. “The whole chain had to be reinvented,” said Peter Griffin, the deputy editor. “The interesting thing is it has almost nothing to do with the normal way of putting out a magazine.”

Esquire has exclusive use of E Ink’s technology for use in print through 2009, and Mr. Granger said he hopes to come up with new ideas for it. “This is probably just a limited view of its use,” he said. The electronic cover will be used in only 100,000 copies that go to newsstands — its overall circulation is about 720,000. - So, save a copy for me please!

Source: NY Times

The Roku media player for Netflix is the coolest, easiest to install, cheapest streaming media package I’ve ever used. And as the former publisher of Connected Home Magazine, let me tell you, I’ve seen ‘em all - and they all sucked - until now. Here’s how easy it was to get going:

1. Open box
2. Discard Instructions
3. Plug into TV via optional HDMI cable
4. Turn On
5. Register with Wireless Network
6. Type in registration/access code
7. Grab popcorn and start watching
8. Head to Netflix and add more movies to my “watch instantly” queue.

Repeat Steps 7 & 8 over and over.

It’s that easy. The video quality, whilst not HD was great on my 42″ LCD and the sound was super duper. This is THE box to turn your home from a VHS playing 1980s relic, to the latest and greatest media serving home - you’ll be the toast of your family - all for $99!!!

Balmer said Microsoft had raised its original offer from $44.6bn to $47.5bn (£24.1bn) - $33 per share. But he added that Yahoo had insisted on at least $53bn, or $37 a share - more than Microsoft was prepared to pay. “Despite our best efforts, including raising our bid by roughly $5bn, Yahoo has not moved toward accepting our offer. “

“After careful consideration, we believe the economics demanded by Yahoo do not make sense for us, and it is in the best interests of Microsoft stockholders, employees and other stakeholders to withdraw our proposal.” In a statement issued after Microsoft’s withdrawal, Yahoo chairman Roy Bostock dismissed the unsolicited bid as a “distraction”.

Wow, watch Yahoo shares fall like a lead balloon on Monday.

BTW, here’s the letter from Balmer to Yang in full:

May 3, 2008

Mr. Jerry Yang
CEO and Chief Yahoo
Yahoo! Inc.
701 First Avenue
Sunnyvale, CA 94089

Dear Jerry:

After over three months, we have reached the conclusion of the process regarding a possible combination of Microsoft and Yahoo!.

I first want to convey my personal thanks to you, your management team, and Yahoo!’s Board of Directors for your consideration of our proposal. I appreciate the time and attention all of you have given to this matter, and I especially appreciate the time that you have invested personally. I feel that our discussions this week have been particularly useful, providing me for the first time with real clarity on what is and is not possible.

I am disappointed that Yahoo! has not moved towards accepting our offer. I first called you with our offer on January 31 because I believed that a combination of our two companies would have created real value for our respective shareholders and would have provided consumers, publishers, and advertisers with greater innovation and choice in the marketplace. Our decision to offer a 62 percent premium at that time reflected the strength of these convictions.

In our conversations this week, we conveyed our willingness to raise our offer to $33.00 per share, reflecting again our belief in this collective opportunity. This increase would have added approximately another $5 billion of value to your shareholders, compared to the current value of our initial offer. It also would have reflected a premium of over 70 percent compared to the price at which your stock closed on January 31. Yet it has proven insufficient, as your final position insisted on Microsoft paying yet another $5 billion or more, or at least another $4 per share above our $33.00 offer.

Also, after giving this week’s conversations further thought, it is clear to me that it is not sensible for Microsoft to take our offer directly to your shareholders. This approach would necessarily involve a protracted proxy contest and eventually an exchange offer. Our discussions with you have led us to conclude that, in the interim, you would take steps that would make Yahoo! undesirable as an acquisition for Microsoft.

We regard with particular concern your apparent planning to respond to a “hostile” bid by pursuing a new arrangement that would involve or lead to the outsourcing to Google of key paid Internet search terms offered by Yahoo! today. In our view, such an arrangement with the dominant search provider would make an acquisition of Yahoo! undesirable to us for a number of reasons:

• First, it would fundamentally undermine Yahoo!’s own strategy and long-term viability by encouraging advertisers to use Google as opposed to your Panama paid search system. This would also fragment your search advertising and display advertising strategies and the ecosystem surrounding them. This would undermine the reliance on your display advertising business to fuel future growth.

• Given this, it would impair Yahoo’s ability to retain the talented engineers working on advertising systems that are important to our interest in a combination of our companies.

• In addition, it would raise a host of regulatory and legal problems that no acquirer, including Microsoft, would want to inherit. Among other things, this would consolidate market share with the already-dominant paid search provider in a manner that would reduce competition and choice in the marketplace.

• This would also effectively enable Google to set the prices for key search terms on both their and your search platforms and, in the process, raise prices charged to advertisers on Yahoo. In addition to whatever resulting legal problems, this seems unwise from a business perspective unless in fact one simply wishes to use this as a vehicle to exit the paid search business in favor of Google.

• It could foreclose any chance of a combination with any other search provider that is not already relying on Google’s search services.

Accordingly, your apparent plan to pursue such an arrangement in the event of a proxy contest or exchange offer leads me to the firm decision not to pursue such a path. Instead, I hereby formally withdraw Microsoft’s proposal to acquire Yahoo!.

We will move forward and will continue to innovate and grow our business at Microsoft with the talented team we have in place and potentially through strategic transactions with other business partners.

I still believe even today that our offer remains the only alternative put forward that provides your stockholders full and fair value for their shares. By failing to reach an agreement with us, you and your stockholders have left significant value on the table.

But clearly a deal is not to be.

Thank you again for the time we have spent together discussing this.

Sincerely yours,

Steven A. Ballmer
Chief Executive Officer
Microsoft Corporation

The companies have partnered with New York-based 24/7 Real Media, a digital technology firm, to handle the delivery of the ads, so that keeps out DoubleClick, meaning Penton Media, one of the notable companies not in the partnership.

Yahoo confirmed that it has received an unsolicited offer and said that its board would evaluate the proposal, “carefully and promptly in the context of Yahoo’s strategic plans and pursue the best course of action to maximize long-term value for shareholders.”

If Yahoo accepted the offer, competition authorities both in the US and the European Union would be likely to investigate the tie-up. Yahoo chief executive, Jerry Yang, announced on Tuesday that he intended to lay off 1,000 staff as part of a restructuring plan. Terry Semel, who stepped down as chief executive last June, also quit as non-executive chairman on Thursday. I sure hope he kept his shares and didn’t do a Jobsy - when Steve Jobs bailed on Apple and sold all his shares (but one) and took a bath!