The Insider: Critics weigh in on new Zune

ZUNING OUT ON CNN: Microsoft is being pragmatic about its new Zune portable music player's short-term chances against Apple's iPod, but even so, an exchange on CNN last week had to sting a little for the company.

It happened at the end of a segment on the new Microsoft device, when one CNN host couldn't help but show off her iPod Shuffle music player. Here's a partial transcript:

CNN host Soledad O'Brien: "May I show you my new Shuffle? ... Hello! Look at this. It weighs nothing. It literally is the size of a matchbook and weighs that. Seventy-something bucks! (Shifts attention to Zune.) So why would I buy that heavy -- although I get a lot more songs, obviously, and the Wi-Fi."

New York Times reporter Andrew Ross Sorkin: "And you get the video. You know, Microsoft in the end, I'm sure, will come out with something, I don't know if it will be that pretty, but something ... (Stops himself as O'Brien clips the Shuffle to her lapel) ... Isn't that neat? Oh my God."

CNN host Miles O'Brien, gesturing to Zune: "Why don't they get some decent design people to make things look better? I mean, it's clunky."

Sorkin, groaning: "No comment."

AND ANOTHER "NO COMMENT": There's been a lot written in the past few days about Web 2.0 deal maker Ross Levinsohn resigning from Fox Interactive Media, owner of MySpace, Newroo, Scout.com and other Internet properties.

Some news reports indicated that Levinsohn left to start a new media operation that will buy up high-traffic Web sites.

That got us wondering about Scout.com founder Jim Heckman, a Fox Interactive executive and close confidant to Levinsohn. We profiled Heckman in August, noting that some of his friends joked that he would never last at a big company such as Fox.

At the time, Levinsohn called Heckman "tenacious" and "hard-charging." He also said that Heckman -- who before Scout.com created the online sports network Rivals.com -- was one of the first people he wanted to bring onboard when he joined Fox Interactive.

So has Heckman -- a Bainbridge Island resident who still keeps an office in Seattle -- left the Fox empire to work with Levinsohn?

Heckman declined to comment on that topic.

MORE ZUNE: Doing firsthand investment research can be a challenge for stock analysts following certain companies. If you're tracking Boeing, for example, and the company comes out with a new plane, they don't let you take one out for a weekend and see how it compares with an Airbus.

But analysts have an easier time of it when Microsoft comes out with a new consumer electronics gizmo. The Seattle-based investment firm McAdams Wright Ragen bought a couple of Zunes and gave them a trial run, one tested by stock analyst Sid Parakh, the other by company President Scott McAdams, himself a former Microsoft analyst.

The results: Parakh ran into more difficulties with the Zune than McAdams did. One explanation is that McAdams has used an iPod in the past, while Parakh hasn't. Experience with such devices might make up for the fact that the Zune comes with no user guide.

"It's kind of hard to imagine this current model will do much to (Microsoft's) earnings or give Apple much of a scare," McAdams says.

At the same time, he warns that it may be dangerous to allow people of his age to assess a product aimed at a distinctly younger demographic. McAdams says he owned one of the original iPods and a Nano, but adds, "I probably haven't used it in months. ...

"What do I know about what the kids are going to like?"

ZILLOW AND DUNKIN' DONUTS: What does Zillow.com have in common with Dunkin' Donuts, Trader Joe's, Gatorade and Visa?

They are among the 50 brands chosen for AdvertisingAge's "Marketer of the Year" award. That is quite an accomplishment, given that not many people knew what Zillow meant a year ago.

Spencer Rascoff, chief financial officer and vice president of marketing at Zillow, notes that the company was the only online brand chosen for the award.

But it wasn't the only Seattle-area company on the list. Others making the top 50 were Nintendo of America for its DS Lite device, Microsoft for its Xbox 360 and WaMu for its free checks promotion.

CHRISTMAS IN OCTOBER: The upcoming holiday season accounts for roughly one-fourth of Blue Nile's income, but the Seattle-based online jewelry company had a nice boon last month.

That's when a customer from Florida bought a $324,000 diamond ring -- the largest single ring purchase in Blue Nile's seven-year history.

"It definitely was a very nice gift," said John Baird, company spokesman. "It was an engagement-style ring. We're not sure if it was for a proposal or a gift."

Baird said the ring, which was delivered by a Brink's truck with an armed guard, had just less than seven carats and D-Color, IF (internally flawless) clarity.

Baird said on any given week, Blue Nile will have up to three purchases of more than $50,000. Every few weeks, a single purchase will exceed $100,000.

"We really want to be the Tiffany's for the next generation," Baird said. "When we see that level of purchase coming through, we are being successful."

P-I reporters Todd Bishop, John Cook, Craig Harris and Bill Virgin contributed to this edition of The Insider, the P-I business staff's weekly compendium of quips, quotes, observations, asides, tidbits, weird facts and gossip.

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