Today: As Instagram and Twitter offer competing photo filters, Yahoo (YHOO) gets into the game by reinvigorating Flickr app, which will allow posting to all social networks. Also: The Federal Reserve increases its bond-buying program to keep rates low, but Wall Street stays flat.
Yahoo jumps into mobile-photo fight with new Flickr app
Yahoo's mobile efforts showed exquisite timing Wednesday, as the Sunnyvale Internet company unleashed a new version of its Flickr mobile app that offers photo filters and editing capabilities, just as the king of such apps -- San Francisco-based Instagram -- cut off functionality with popular microblogging service Twitter.
Flickr updated its app for Apple's (AAPL) iPhone with extra functionality just two days after Twitter did the same, but offers the ability to post photos to Facebook, Twitter or any other social network, a move that could make one of Yahoo's dwindling properties relevant again as CEO Marissa Mayer seeks to push Yahoo into mobile computing.
"When you're in the mood to share, you can do so simultaneously via Facebook, Twitter, Tumblr or email. We've worked with our partners to ensure that your photos look gorgeous no matter where they are viewed, on or off Flickr," Markus Spiering, head of product for Flickr, wrote in a blog post announcing the changes.
Yahoo acquired Flickr for $35 million in 2005, offering it as an online photo album of sorts, similar to Shutterfly. However, Facebook jumped in to that territory, as uploading photos became one of the most popular uses of the world's largest social network -- which also offers other services that Flickr does not -- and Flickr's mobile app has never caught up to Instagram which Facebook purchased earlier this year.
However, the Guardian reported Wednesday that Flickr has been a major emphasis for Mayer since she came on board; the former Google (GOOG) executive is a big fan of Instagram, even using the service (way back when it worked with Twitter) to announce a major acquisition for her mobile team.
"With the launch of this app we hope to optimize the rich functionality of Flickr on desktop on the mobile. It's been a core focus since Marissa's been here," Jennifer Davies, Flickr's head of product marketing in Europe, told The Guardian.
The timing of Wednesday's launch is fortuitous, coming just two days after Twitter launched its own service for filtering and editing photos within its app. That followed Instagram's decision to cease functionality with Twitter as it ramps up the desktop version of its network, which is expected to lead to advertising revenue for Facebook. Facebook admitted Wednesday that it intends to monetize the photo-sharing service.
Flickr's mobile launch offers iPhone users -- the company said it is still working on an Android version of the app -- an alternative to the interfaces that launch to only one social network at a time, a change that has led to intensive workarounds already.
In addition, the move continues Yahoo's charge into mobile relevance, which got off the ground just the day before, when Mayer announced a redesign of Yahoo's webmail service that included its first stand-alone iPhone app. Mayer, who took over the Internet company that had been falling in relevance to Google and Facebook, has said that mobile is her top priority.
Early reviews of the Flickr service were strong: Business Insider's Nicholas Carlson called it "beautiful and deep with functionality far surpassing Instagram," while Ironfire Capital founder Eric Jackson -- admittedly a Yahoo investor and bull -- called it "the best mobile photo app on the market."
Then again, we are just talking about photos -- as Elevation Partners founding partner Roger McNamee told Bloomberg television on the Twitter-Instagram beef Wednesday, "Personally, I think the whole thing is a sideshow and will not matter in the long run."
Wall Street didn't seem to be impressed with a second consecutive day of Yahoo mobile news, as the company's stock fell 0.7 percent to $19.38. That price is still above where Yahoo had traded for more than four years, however: Shares closed at their highest price since September 2008 on Tuesday, and the stock has increased 23.9 percent since Mayer took over in June.
Federal Reserve increases its spending, still doesn't trust economy
The Federal Reserve will spend an additional $45 billion a month to ensure interest rates stay low while the U.S. economy -- most notable the job market -- struggles to right itself, maintaining its level of purchases until the unemployment rate drops below 6.5 percent.
The Fed was already spending $85 billion a month to buy bonds, but was using sales of short-term Treasury bonds to buy longer-term bonds; with its short-term Treasurys sold, the central bank will now begin to add to its already gigantic portfolio, which has more than tripled since the Great Recession and now stands at $2.9 trillion.
The move shows that the group does not believe the U.S. economy can stand on its own, and Chairman Ben Bernanke backed that up in a news conference after the announcement. Bernanke told reporters that the unemployment rate is likely to remain high until at least late 2015, and that the economy is already suffering from the inability of politicians to settle on a new tax-and-spend plan for the federal government.
"Clearly the 'fiscal cliff' is having effects on the economy," Bernanke said, referring to the name he coined for tax hikes and spending cuts that will take effect at the end of the year unless Congress and the president act. He later added that the Fed "cannot offset the full impact of the fiscal cliff. It's just too big."
The unemployment rate fell from 7.9 percent to 7.7 percent last month, but Bernanke says it will not fall below 7.4 percent in 2013 and will remain at 6.8 percent through late 2014. The Fed plans to keep its short-term interest rate near zero until it falls below 6.5 percent, part of a drastic and unprecedented measure by the Fed to tie interest rates to the job market.
Wall Street stays flat, but technology stocks move down
Wall Street likes the Fed's bond-buying program, but stocks failed to bounce Wednesday after Bernanke's dour news conference, as fears of further economic turmoil at the hands of politicians kept indexes mostly flat.
While neither the Dow Jones nor Standard & Poor's 500 moved as much as 0.1 percent, tech stocks took a bit of a tumble, with both the tech-heavy Nasdaq and the SV150 index of Silicon Valley's largest technology companies declining 0.3 percent.
Apple failed to continue its Wall Street resurgence Wednesday, falling 0.4 percent despite more buzz around the expected television set pundits see on the horizon for the Cupertino tech giant. Facebook fell 1.4 percent as it announced new privacy controls, and VMware tumbled 2.7 percent.
On the positive side, Netflix (NFLX) took a large 5.4 percent leap and closed higher than $90 after Morgan Stanley increased its price target for the stock to $105, offsetting a possible new competing streaming offering from Redbox. Zynga grew by 7.1 percent as it announced a new casino-style game for the Facebook platform, and Hewlett-Packard (HPQ) continued its recent positive run on Wall Street with a 1.9 percent gain.
SolarCity expected to give its initial public offering another chance
After a false start Tuesday, Silicon Valley expects to see its latest initial public offering executed Wednesday afternoon, when San Mateo-based SolarCity is expected to sell its first draft of shares before beginning to trade Thursday.
The solar installer postponed its planned IPO Tuesday after investors balked at the initial price range of $13-$15. The company refiled its paperwork with the SEC on Wednesday, dropping the price to $8 a share and increasing the number of shares offered; the new offering would bring in $92 million, less than half the $201 million SolarCity originally expected to get in the IPO.
Tesla CEO Elon Musk, the chairman of SolarCity, had promised to buy $15 million worth of the IPO shares in an effort to convince investors, and at the new price, two other board members also agreed to buy IPO shares. A final filing detailing the sale is expected Wednesday evening, with the stock hitting the Nasdaq Thursday morning under the ticker SCTY. Check back at www.siliconvalley.com or www.mercurynews.com for further developments.
Silicon Valley tech stocks
The tech-heavy Nasdaq composite index: Down 8.49, or 0.28 percent, to 3,013.81
The blue chip Dow Jones industrial average: Down 2.99, or 0.02 percent, to 13,245.45
And the widely watched Standard & Poor's 500 index: Up 0.64, or 0.04 percent, to 1,428.48
Check in weekday afternoons for the 60-Second Business Break, a summary of news from Mercury News staff writers, The Associated Press, Bloomberg News and other wire services. Contact Jeremy C. Owens at 408-920-5876; follow him at Twitter.com/mercbizbreak.