Danny Puff

NEW YORK (AP) Fox News Channel is parting ways with former Republican vice presidential candidate Sarah Palin, ending her three-year tenure as a contributor on the network.

While Palin's time at Fox was occasionally rocky, the network's news executive, Bill Shine, said Friday that "we have thoroughly enjoyed our association" with her.

"We wish her the best in her future endeavors," said Shine, Fox's executive vice president for programming.

A person familiar with discussions between Fox and Palin described the parting as amicable, saying that Fox and Palin had discussed renewing her contract but she decided to do other things. The person spoke on condition of anonymity because they were not authorized to speak on the record.

Palin's lawyer in Alaska, John Tiemessen, had no immediate comment on her exit. Palin's last appearance on Fox News was Dec. 19 on Greta Van Susteren's show.

Palin signed to deliver commentary on Fox in January 2010, reportedly for $1 million a year. It was a coup for both sides at the time; the former Alaska governor was a little more than a year removed from her attention-getting run for the vice presidency and was considered one of the leading contenders for the 2012 presidential nomination. At Fox, she had a platform on the most popular network for conservative viewers. Fox installed equipment in Palin's Wasilla, Alaska, home to make her regular appearances easier.

But there were some indications of tension between her and Fox News Chairman Roger Ailes, who was quoted in a 2011 story by The Associated Press saying, "I hired Sarah Palin because she was hot and got ratings."

When Palin announced she would not be a candidate in 2012, she said it on a conservative radio show, which didn't sit well with the company paying her to be a contributor. Palin took to her Facebook page late last summer to complain that Fox had cancelled her appearances one night at the GOP national convention; Fox said it was simply because the GOP had to condense its speaker schedule due to a hurricane.

Four years removed from her vice presidential candidacy, Palin's influence had waned and she was somewhat overshadowed as a contributor at Fox by Karl Rove, former President George W. Bush's top political aide. Rove recently renewed his contract at Fox through the 2016 election.

With four more years of a Barack Obama administration in power, Fox recently hired former Democratic presidential candidate Dennis Kucinich as a contributor.

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DES MOINES (Reuters) - Senator Tom Harkin, a veteran Iowa Democrat and one of the most liberal senators, said on Saturday he will not seek re-election in 2014, putting at risk what was considered a safe Democratic seat.

Harkin, 73, who has focused much of his nearly 40-year congressional career on farm policy, education and expanding rights for people with disabilities, is the third senator facing re-election next year who has announced his retirement, following Democrat Jay Rockefeller of West Virginia and Republican Saxby Chambliss of Georgia.

"It's somebody else's turn. It's time for me to step aside ... . I think that's not only good for our party, it's good for our state and for our nation," Harkin said in an interview with Reuters.

He said he had no health problems but had promised his wife that he would quit before it was too late to enjoy other things in life.

Iowa, site of the country's first presidential nominating contest, is considered a political swing state. Republican Charles Grassley is Iowa's other U.S. senator.

In remarks to the Iowa Democratic Party central committee after his announcement, Harkin said he would stay politically active.

"I'm not quitting today. This is not a time for legacy talks or anything like this," said Harkin, who has served in Congress since 1974.

Several committee members had tears running down their cheeks as he spoke.

President Barack Obama, a fellow Democrat, praised Harkin for his decades of public service.

"During his tenure, he has fought passionately to improve quality of life for Americans with disabilities and their families, to reform our education system and ensure that every American has access to affordable health care," Obama said in a statement.

Senate Majority Leader Harry Reid, a Nevada Democrat, in a statement described Harkin as "a passionate progressive, whose deeply held principles have provided a guiding light to Democrats for decades."

SEARCH IS ON

Party officials said Harkin's announcement, coming early in the current two-year election cycle, provides ample time to recruit a strong Democratic candidate.

Among Democrats, U.S. Representative Bruce Braley is widely seen as a front-runner. U.S. Agriculture Secretary Tom Vilsack, a former Iowa governor, and his wife, Christine Vilsack, who ran unsuccessfully for Congress last year, are also viewed as potential candidates.

Among Republicans, U.S. Representatives Tom Latham, a moderate, and Steve King, a conservative, are mentioned as possible candidates, which could produce a divisive Republican primary.

Obama won Iowa in the November election. But the state has a Republican governor, and a divided legislature and congressional delegation.

Harkin's retirement "just reinforces our belief that a grassroots Republican comeback can take place in 2014. Let's have it start in Iowa," Iowa Republican Party Chairman A.J. Spiker said in an email appeal to state Republicans.

The party needs to pick up six seats in the mid-term elections next year to get a majority in the 100-member Senate.

One of the last of the Senate's old-guard liberals, Harkin angrily opposed the White House over the recent fiscal cliff compromise that Vice President Joe Biden negotiated with Senate Republican leader Mitch McConnell of Kentucky.

Harkin said the deal that raised taxes only on the very rich helps the wealthy at the expense of the middle class.

First elected to the House of Representatives in 1974 and to the Senate in 1984, Harkin said someone younger needs to take his place.

"I've been there 40 years. I'm 73. By the time I run (for re-election), I'd be 75," he said.

(Additional reporting by Richard Cowan, David Morgan, Charles Abbott and Vicki Allen in Washington; Editing by Greg McCune and Xavier Briand)

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VALLETTA (Reuters) - Parties running for election in Malta launched a 'tablet war' on Thursday, issuing rival promises to hand out iPad-style computers to school children if elected next month.

Putting education and technology at the center of the two-party race to lead the tiny island state, the opposition Labour Party promised a tablet computer for every eight-year-old school child.

Two hours later, Prime Minister Lawrence Gonzi unveiled his Nationalist Party's electoral program which included plans to give tablets to all school children aged between 5 and 16.

Bloggers in the euro zone's smallest country lampooned the politicians' largesse, likening the parties to both Father Christmas and Moses, the biblical figure who brought the word of God inscribed on tablets of stone.

Gonzi said his government had already given laptops to all teachers and put computerized white boards into all classrooms. Giving tablets to all children was the next logical step, he said, adding that pupils would in future use digital text books.

Labour Party leader Joseph Muscat told a news conference: "Tablets are key to fighting IT illiteracy."

Both parties said they planned to use private sector partners to deliver the computers. Muscat said his proposal would cost 1.5 million euros ($2 million) while Gonzi said costings for all of his party's proposals would be announced in the coming days.

The general election will be held on March 9, with Labour, which has promised to cut electricity bills, currently leading the Nationalists by 10 points in opinion polls.

The Nationalists, which have been in government since 1987 except for a 22-month Labour government between 1996 and 1998, is appealing to voters on its economic record, saying it has managed to avert the economic turmoil buffeting all other euro zone countries in the Mediterranean. ($1 = 0.7530 euros)

(Editing by Robin Pomeroy)

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TORONTO (Reuters) - A senior Lenovo executive said on Thursday that the Chinese computer maker may consider Research in Motion as a takeover target, sending the Blackberry maker's shares up 2 percent just a week before it launches a make-or-break line of redesigned smartphones.

But Lenovo, which vaulted into the personal computer market with its 2005 purchase of IBM's PC division, would face formidable hurdles if it tried to buy a company that Canadian Prime Minister Stephen Harper once described as a national "crown jewel." The Chinese company would also encounter tough regulatory scrutiny in Washington, cybersecurity experts say.

Lenovo, on track to become the world's largest PC maker, has held talks with RIM and its bankers about various combinations or strategic ventures, its chief financial officer, Wong Wai Ming, said on Thursday.

"We are looking at all opportunities - RIM and many others," Wong told Bloomberg in an interview at the World Economic Forum's annual meeting in Davos, Switzerland. "We'll have no hesitation if the right opportunity comes along."

A spokesman for Lenovo said Wong was asked about RIM by the Bloomberg journalist and that Wong was speaking broadly about Lenovo's M&A strategy.

CRUCIAL JUNCTURE

RIM, once a pioneer in the smartphone industry, has struggled in recent years as its aging line-up of devices have ceded market share to Apple Inc's iPhone and devices based on Google Inc's Android operating system.

RIM hopes its new touch-screen and keyboard devices, powered by its new BlackBerry 10 operating system, will help it claw back some of the lost ground. Optimism surrounding the launch has powered the stock higher in recent weeks.

Last May the Waterloo, Ontario-based company announced a far-reaching strategic review under which it was expected to examine all options, from software licensing deals to an outright sale of the company.

Earlier this week, RIM shares surged to a 13-month high after Chief Executive Thorsten Heins said RIM might consider strategic alliances with other companies after next week's BlackBerry 10 launch.

In an interview with a German newspaper on Monday, Heins said RIM's ongoing strategic review could lead to the sale of its handset business or the licensing of its software to rival smartphone companies.

Even so, analysts expressed skepticism about a Lenovo bid.

"Anybody who's serious about buying a company doesn't go talking it up... It sounds to me like a comment made more for publicity's sake than a serious approach for RIM," said Charter Equity analyst Ed Snyder. "It is a very long shot at the best.'

NET BENEFIT TEST

Any bid for RIM would face a rigorous review by the Ottawa to determine whether the deal would bring a "net benefit" to Canada. The Investment Canada Act gives the government the authority to kill deals that could harm Canadian interests or threaten the country's national security.

In response to the comments by Heins, Canada's Industry Minister Christian Paradis told Reuters earlier this week that Canada may even go to the extent of reviewing a sale of RIM's handset business if such a deal was proposed.

"Research in Motion has made an important contribution to information and communications technology in Canada, a sector that is so important to the Canadian economy. We hope they continue to do so well into the future," Paradis said in an emailed response to the Lenovo comments on Thursday.

Lenovo's acquisition trail over the past few years, such as the purchase of Germany's Medion in 2011 and IBM's PC business in 2005, has sparked market talk that it could be interested in handset makers such as RIM and Nokia Oyj.

Lenovo executives have denied on separate occasions last year that there were such plans.

Cybersecurity experts said Lenovo would likely go up against tough U.S. government scrutiny as well since the Defense Department and other agencies rely on the Blackberry, which is considered more secure than other smartphones.

Should Lenovo acquire RIM, it could lose a major client - the U.S. government - as U.S. officials would be reluctant to use products owned by a Chinese company due to national security concerns, analysts say.

"A potential acquisition of RIM by Lenovo would raise a number of important security issues," said Michael Wessel, a Commissioner on the U.S.-China Economic and Security Review Commission, appointed by Congress.

"Government employees are one of the largest users of RIM's BlackBerry products and the security of their communications has to be of paramount concern," said Wessel, adding that he was speaking on behalf of himself and not the Commission.

After the comments from Lenovo, a RIM spokesman said the company had nothing new to report on its strategic review.

RIM shares closed 2.2 percent higher at $17.74 on Thursday the Nasdaq. The Toronto-listed shares closed 2.9 percent higher at C$17.80. RIM is a volatile stock, and moves of 3 percent and more are not uncommon.

Its shares are down almost 90 percent from an all-time high of over $148 in 2008, but the stock has rallied in the last four months as the launch of the BlackBerry 10 devices nears. The company's shares have nearly tripled in value since dipping as low as $6.22 in late September.

Lenovo's shares fell 2.73 percent in Hong Kong during Friday trade, after closing 6.6 percent higher in the previous session.

(Reporting by Euan Rocha in Toronto, Diane Bartz in Washington, Randall Palmer in Ottawa, Sinead Carew in New York and Kelvin Soh in Davos; Editing by Frank McGurty, Leslie Gevirtz and Ryan Woo)

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WASHINGTON (AP) Michelle Obama has a new look, both in person and online, and with the president's re-election, she has four more years as first lady, too.

That's got many people wondering: What will she do with them?

Take on a new cause? Travel more? Trace the path of another first lady and keep the Obama political brand alive by running for office?

The answers are to be determined.

The first lady is trying to figure out what comes next for this self-described "mom in chief" who also is a champion of healthier eating, an advocate for military families, a fitness buff and the best-selling author of a book about her White House garden.

For certain, she'll press ahead with her well-publicized efforts to reduce childhood obesity and rally the country around its service members.

"But beyond that, the first lady is exploring ways that she can make a real difference for Americans, not just for these next four years, but for years to come," said Kristina Schake, Mrs. Obama's communications director.

Here are five areas to watch.

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NEW ISSUES

Will she take on a new cause? It's possible.

When Parade magazine asked last year whether she'd take up any new issues, Mrs. Obama identified women's health issues. "How do we strengthen families and make them healthier, an issue not just in America but around the world," she said.

Her marquee causes the "Let's Move" campaign against childhood obesity and the "Joining Forces" effort to help military families took a back seat last fall as she campaigned doggedly for President Barack Obama's re-election.

Look for her to begin publicizing those efforts anew.

Do not expect to see Mrs. Obama push more contentious issues such as gun control or immigration, both second-term priorities for the president. Her public approval rating was 73 percent in a December poll by CNN and she'd like to keep it there.

Some feminists remain unhappy that the Ivy League-educated lawyer hasn't used her position to champion what they view as more substantive issues.

Robert Watson, an American studies professor at Lynn University, said he hopes Mrs. Obama will use her popularity to pivot away from the "velvet-glove" issues first ladies typically embrace and say, "I'm swinging for the fence."

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MALIA AND SASHA

Obama's daughters are older and will be in full teenage mode by the summer of 2014. Malia is already there at 14; sister Sasha is 11.

Both the president and first lady sometimes talk about the girls' busy lives and how they don't want to spend much time with their parents anymore.

Could having older, more independent children free Mrs. Obama to pursue other interests? Some first lady watchers say that's unlikely. After all, the teenage years are often full of angst about dating, proms, learning how to drive, going to college and so on.

"Michelle has made such a public statement about being the 'mom in chief' that it's hard to see her saying, 'Go ahead girls, here's the limo,'" Watson said.

Malia will graduate from high school during Obama's final year in office, in 2016, and probably trade the White House for a college dorm. She and her parents will have to navigate the college application process and campus tours. Sasha will be in high school.

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TRAVEL

Presidents and first ladies often step up the pace of international travel in the second term. But it seems unlikely that Obama could make such a pivot just yet, with the U.S. public still so concerned about the economy, unemployment and government spending.

One option would be to send Mrs. Obama abroad in his place.

The first lady is popular overseas and has been well-received outside the U.S., including in India, where she accompanied the president in 2010, and in Mexico, also in 2010, and in South Africa and Botswana in 2011, the only countries she has visited alone as first lady.

She and Vice President Joe Biden's wife, Jill, traveled together to Haiti after the massive earthquake there in January 2010.

Mrs. Obama also went to Spain in the summer of 2010 on a personal trip with friends and daughter Sasha, but her stay at a luxury resort on the Costa del Sol wasn't well-received back home, raising questions about the cost and wisdom of taking such a trip during tough economic times.

Laura Bush pursued a grueling foreign travel schedule during George W. Bush's second term. She visited 77 countries in eight years as first lady, including with the president, but 67 of those trips came during the second term, including solo stops in Afghanistan and Saudi Arabia, according to Anita McBride, her then-chief of staff who runs American University's first ladies program.

Hillary Rodham Clinton also traveled abroad extensively during Bill Clinton's second term.

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RUN FOR PUBLIC OFFICE

Will she or won't she? Despite Mrs. Obama's many denials of interest in seeking elected office herself, the question keeps getting asked. A recent survey found her to be more popular than Mark Kirk, the Republican senator from her home state of Illinois, in a hypothetical matchup.

"I have no interest in politics. Never have, never will," the first lady said last year on ABC's "The View."

But even those who at one time say "never" can later change their minds.

Hillary Clinton gave the same answer in 1995 when asked if she'd ever run for public office, says Myra Gutin, who studies first ladies at Rider University. But five years later, as her husband's presidency was ending, there was Clinton campaigning across New York for a Senate seat.

She won, used her time in the Senate as a springboard for her 2008 presidential campaign but lost the Democratic nomination to Barack Obama. She became his secretary of state but is departing soon amid feverish speculation that she will run for president in 2016.

Mrs. Obama will be young 53 years old when her husband leaves office in January 2017, and will have a range of options ahead of her. Friends say she has always believed there are ways to serve the country without running for office.

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PERSONAL STYLE

Look for the first lady to continue to be a fashion trendsetter. Everything from her hair to her clothes is scrutinized, with some clothing pieces selling out quickly after she's seen wearing them.

Her new bangs became the talk of this town immediately after she went public with them on her 49th birthday, a few days before the president began his second term. Even the president said his wife's haircut was "the most significant event" of inaugural weekend and gave his approval.

Mrs. Obama also won largely positive reviews for her inaugural wardrobe: Reed Krakoff and Thom Browne by day, and Michael Kors and Jason Wu by night. Wu designed her red chiffon and velvet ball gown. He also designed the white ball gown she wore four years ago.

She also has a new presence on Twitter (at)FLOTUS.

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Follow Darlene Superville on Twitter: http://www.twitter.com/dsupervilleap

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NEW YORK (AP) Matt Damon had his revenge.

The butt of a long-running joke on ABC's "Jimmy Kimmel Live," the actor opened Thursday night's show as a kidnapper who tied Kimmel to a chair with duct tape and gagged him with his own tie.

"There's a new host in town and his initials are M.D.," Damon said. "That's right, the doctor is in."

For years, Kimmel has joked at the end of his show that he ran out of time and was unable to bring Damon on as a guest. Kimmel was the silent one Thursday, watching from the back of the stage as Damon did his job.

Damon tormented Kimmel by bringing on a succession of big-name guests. Robin Williams stopped by to finish the monologue. Ben Affleck had a walk-on role. Sheryl Crow was the bandleader and performed her new single. Nicole Kidman, Gary Oldman, Amy Adams, Reese Witherspoon and Demi Moore all crowded the talk show's couch.

"I've been waiting for this moment for a long, long time," Damon said. "This is like when I lost my virginity, except this is going to last way longer than one second."

Damon's guest hosting turn came at a key time for Kimmel. ABC earlier this month moved the show to 11:35 p.m. ET and PT after a decade of airing it a half hour later, putting him in direct competition with Jay Leno and David Letterman.

Thursday's special program aimed for the same water-cooler status as a memorably lewd short film Damon made for the show a few years ago with Kimmel's then-girlfriend, Sarah Silverman. It went viral and remains probably the best-known skit in the show's history.

To twist the knife even further, Damon brought Silverman on as his final guest Thursday night, with Kimmel looking on forlornly as she likened their five-year relationship to an unfortunate trip to a hot dog vendor.

"Is there anything you'd like to say to Jimmy?" Damon asked.

"No, I'm good," Silverman replied.

Then came the sweetest revenge of all, with Damon promising to ungag Kimmel in the show's final minutes.

"Wait," he said. "I'm sorry. We're out of time."

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RIO DE JANEIRO (AP) Rio de Janeiro is mixing technology with tradition to provide tourists information about the city by embedding bar codes into the black and white mosaic sidewalks that are a symbol of the city.

The first two-dimensional bar codes, or QR codes, as they're known, were installed Friday at Arpoador, a massive boulder that rises at the end of Ipanema beach. The image was built into the sidewalk with the same black and white stones that decorate sidewalks around town with mosaics of waves, fish and abstract images.

The launch attracted onlookers, who downloaded an application to their smartphones or tablets and photographed the icon. The app read the code and they were then taken to a web site that gave them information in Portuguese, Spanish or English, and a map of the area.

They learned, for example, that Arpoador gets big waves, making it a hot spot for surfing and giving the 500-meter beach nearby the name of "Praia do Diabo," or Devil's Beach. They could also find out that the rock is called Arpoador because fishermen once harpooned whales off the shore.

The city plans to install 30 of these QR codes at beaches, vistas, and historic sites, so Rio's approximately 2 million foreign visitors can learn about the city as they walk around.

"If you add the number of Brazilian tourists, this tool has a great potential to be useful," said Marcos Correa Bento, head of the city's conservation and public works.

Raul Oliveira Neto, a 24-year-old visitor from the Southern Brazilian city of Porto Alegre, was one of the first to use the icon and thought the service fit well with the way people live now.

"We use so much technology to pass information, this makes sense," he said, noting he'd seen QR codes on tourist sites in Portugal, where they were first used for this purpose. "It's the way we do things nowadays."

Locals used to giving visitors directions also approved the novelty.

"Look, there's a little map; it even shows you where we are," said Diego Fortunato, 25, as he pulled up information.

"Rio doesn't always have information for those who don't know the city," he said. "It's something the city needs, that it's been lacking."

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VIENNA (AP) Thousands of children were murdered by the Nazis because they fell short of the Aryan ideal. On Friday, a hushed audience gathered in Austria's Parliament to watch the world premiere of an opera depicting how the Nazis methodically killed mentally or physically deficient children at a Vienna hospital during World War II.

The killings were part of a greater campaign that led to the deaths of about 75,000 people homosexuals, the handicapped, or others the Nazis called "unworthy lives" and served as a prelude to the Holocaust.

Austrians played a huge role in these and other atrocities of the era nearly 800 children were killed at Vienna's Spiegelgrund psychiatric ward and Friday's premiere of the opera "Spiegelgrund" was the latest installment of a national effort to atone for such acts in word and deed.

The timing was picked to commemorate Holocaust Memorial Day, which will be observed worldwide Sunday, and the performance was streamed live on the Internet for international audiences. But the parliamentary venue was chosen for a particularly Austrian reason: as a reminder of how the country's politicians fomented the atmosphere of intolerance and authoritarianism that allowed Hitler's troops to walk in in 1938, and a determination to not let history repeat itself.

Composer Peter Androsch said his focus on the era was in part born of his own family's history. His great grandfather died in a Nazi concentration camp. Androsch said the fact that that was hidden for generations "says a lot about conditions in totalitarian regimes and should serve as a reminder for me and many others."

At the premiere a hauntingly effective hour-long performance legislators were joined in the audience by diplomats, Holocaust survivors, former Spiegelgrund patients and other invited guests in an ornate chamber lined with Ionic columns and used for special legislative sessions.

Spiegelgrund survivor Friedrich Zavel was in the audience. He was brought to the clinic in 1940 after being accused of homosexuality. Now 83, he still shudders when he speaks of his ordeals: humiliation, solitary confinement and torture.

The "Wrap Treatment" consisted of orderlies binding a child first in two sheets soaked in ice water, then two dry sheets, followed by waiting for days without food and drink until the body warmth dried the sheets. There also were beatings and injections that either made the child vomit or left him unable to walk for days.

Asked Friday how he felt about the wrongs done to him, Zavel said: "I know neither revenge nor hate."

The opera itself was more of an oratory. Backlit in gloomy purple and red, and accompanied by strings, flute, percussion and a harpsichord, a trio slipped into each other's roles in an allegorical depiction of how all are victims and perpetrators.

Thus a white-coated doctor embodying "The Law" switched from vocalizing about Sparta's doctrine of letting weak newborns die to singing a child's ditty before moving to the role of "Memory" singing broken phrases that harken back to the horrific experiences of the victimized children. The two other singers shifted roles accordingly as a narrator dryly recited facts reflecting the atrocities committed.

"On some days, so many children were killed that the orderlies had to pile the little bodies on a wheelbarrow," narrator Karl Sibelius intones in one sequence before reading a letter from a mother addressed to an institute doctor and pleading for the return of her son.

Bass Robert Holzer was "The Law," and sopranos Katerina Beranova and Alexandra Diesterhoeft sang "Memory" and "Children's Song" respectively. All were very solid.

Parliament President Barbara Prammer said the nation could no longer focus only on glorifying its past.

"We can't choose our history," she told The Associated Press.

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AP video journalist Philipp Jenne contributed.

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Online: www.sonostream.tv

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SAN FRANCISCO (Reuters) - Internet video ads, long a sideshow in the online advertising market, are gaining in importance to marketers and Web publishers as they look to capitalize on consumers' changing viewing habits and tap a $70 billion television market.

The ever-expanding array of gadgets that display online video, from tablets to Internet-connected TVs and DVD players, along with technology such as social media that facilitates distribution, has spurred new interest.

The growing trend means websites like Google Inc's YouTube, Yahoo , AOL and Hulu have a better shot at tapping the mother lode of television advertising budgets, though video ads have a long way to go before they become as dominant a part of the marketing landscape as TV ads.

Research firm eMarketer says video is the fastest growing form of online advertising, with spending increasing 46 percent last year, and outpacing popular formats such as search ads and display ads.

Google does not break out financial results for its YouTube business, but CEO Larry Page said on Tuesday that spending among YouTube's top 100 advertisers increased by more than 50 percent in 2012 compared with the year before.

There have been media reports that Facebook is developing a video ad service, and analysts will likely be looking for answers on that avenue when the social networking giant delivers its quarterly results on Wednesday.

At Yahoo, "one of our highest priorities was to create more online video experiences, because that's where the demand is for advertising," said Tim Morse, the former Yahoo finance chief who became CFO of video advertising technology company Adap.TV this month.

Advertisers are increasingly fond of video ads, Morse said, because of the similarities to TV.

"It's the closest to what they've had offline. They're looking for the same kind of medium where they can connect with consumers," he told Reuters.

TURNING POINT

Chevrolet has been running online video ads for several years, but significantly ramped up its activities and investment in 2012, said Carolin Probst-Iyer, the manager of digital consumer engagement for the General Motors division.

"Last year was a bit of a turning point," she said, as Chevrolet put greater emphasis on creating original video ads and looking for new ways to distribute spots, rather than simply running existing TV ads on YouTube and TV network websites.

One recent ad for the buzz-worthy new Corvette Stingray was viewed more times on mobile devices than it was on PCs, she said.

For Web publishers, video ads are good business. While typical banner ad rates can generate a few dollars per thousand views, video ad rates can reach $20 per thousand views, said eMarketer's David Hallerman.

"All of the Internet advertising to date has come from print sources," such as newspapers, magazines and yellow pages, said RBC Capital Markets analyst Mark Mahaney.

"We're are at a point where television ad budgets are likely to come online."

The explosion of new screens such as smartphones and tablets greatly increases the venues where consumers can watch video, whether they're at their desks or on a bus. And social networking, which makes it easy for users to share favorite videos, has given marketers added incentive to produce video ads that can gain additional exposure by tapping into the social slipstream.

YouTube's head of industry development, Suzie Reider, said marketers are increasingly developing ads that are tailored for specific audiences, making it more likely that Web surfers will actually watch them.

"We're living in a day and age where nobody has to watch an ad that they don't want to watch," said Reider. "You can skip them on the Web, you can skip them on TV."

To make its website more appealing to advertisers, YouTube has helped create hundreds of "premium channels" featuring professionally produced video as opposed to the amateur clips YouTube is famous for. And it's developed a type of video ad that users can skip after five seconds - advertisers only pay if the ad is watched all the way through.

PRICE DEFLATION?

Despite the growth in Web video ad spending, which eMarketer estimates reached $2.93 billion in the United States last year, the firm said the spending still represents only about 10 percent of the broader online advertising market.

And that is a mere drop in the bucket compared with the $68 billion that Kantar Media estimates was spent on television advertising in 2011.

One potential constraint is the way big brands and agencies organize their marketing budgets, says Pivotal Research Group analyst Brian Wieser. Online video ads are typically funded from Web ad budgets rather than a much larger pool set aside for TV.

Analysts also note that the rich rates websites collect for video ads will decrease as more Internet sites open to ads - something that's already happening thanks to technology that automatically pairs ads with videos on websites.

Still, many analysts and industry executives are optimistic about what they see as the bigger picture.

"The number of people watching TV seems to be stagnating or declining, and the number of people turning to the Internet for entertainment is surging," said RBC's Mahaney. "It almost inevitably drives these TV budgets online"

(Reporting By Alexei Oreskovic; additional reporting by Gerry Shih; Editing by Leslie Adler)

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NEW YORK (AP) Exxon has once again surpassed Apple as the world's most valuable company after the iPhone and iPad maker saw its stock price falter.

Apple Inc.'s stock has been on the decline since the company's quarterly earnings report Wednesday suggested that its fast growth phase, rare for a company of its size, may be coming to an end.

Apple's stock fell 2.4 percent to close Friday at $439.88 for a market capitalization of $413 billion. That followed a 12 percent drop on Thursday, the biggest one-day percentage drop for the company since 2008.

Exxon Mobil Corp. gained 38 cents Friday to $91.73 for a market capitalization of $418 billion.

Apple first surpassed Exxon in the summer of 2011, displacing the oil company from a perch it had held since 2005. The two companies traded places through that fall, until Apple surpassed Exxon for good in early 2012 at least until Friday.

China's largest oil company, PetroChina, could lay claim to having hit a market capitalization even higher than either Exxon's or Apple's, but only based on prices on the Shanghai stock exchange, which is isolated from the rest of the financial world because of Chinese laws on foreign investment. PetroChina's shares also trade in Hong Kong and on the New York Stock Exchange. Based on prices there, its market capitalization never went as high as $500 billion.

Apple and Exxon are among only a half dozen U.S. companies to have ever reached $500 billion in market value. Apple and Microsoft Corp. are the only ones to have ever hit $600 billion.

Apple's stock price peaked in September at $705.07 on the day the iPhone 5 was released. Exxon, in the meantime, has been trading steady. Its business oil seems less prone to stock market ups and downs than the Cupertino, Calif.-based tech darling.

Exxon, which is based in Irving, Texas, set a record in 2008 for the highest quarterly earnings by any company. In the first nine months of 2012, Exxon earned nearly $35 billion, or 10 percent more than the same period in 2011, on revenue of $367 billion. Results for the fourth quarter are due Feb. 1.

Exxon, the biggest investor-owned energy company in the world, predicted in December that oil will continue to be the most important source of energy. That's because cars, trucks, airplanes, trains and ships will still depend heavily on oil-derived fuels such as gasoline and diesel.

This year, investors seem unforgiving with Apple, looking for perfection and punishing the stock for anything less. The company's stock price slipped below $500 for the first time last week, as investors saw signs that the iPhone 5 was falling behind competition from phones running Google's Android software, especially those from Samsung Electronics Co.

The latest quarterly report added to the concerns. Apple warned that its revenue growth, which had been running at a speed more reminiscent of promising startups than multi-national corporations, is slowing down considerably.

A big reason: It has been nearly three years since a new product has come from a company still seen as the embodiment of innovation. That last product, the iPad, came in 2010, when its CEO Steve Jobs was still alive. Some analysts question whether Apple can keep growing by just releasing new versions of its old products. The long-rumored Apple TV, is still just that, a rumor.

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