Sunday, January 31, 2010

The Latest from TechCrunch

The Latest from TechCrunch

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Will China Eat America’s Lunch in Cleantech?

Posted: 30 Jan 2010 07:01 AM PST

In the State of the Union Address last Wednesday, President Obama said "the nation that leads the clean energy economy will be the nation that leads the global economy and America must be that nation."  At the same time, on the other coast, 75 clean energy investors, entrepreneurs, and researchers were debating whether the U.S. can gain this leadership position.  They agreed that even though Silicon Valley leads the world in technology, it is not clear if it will ever lead in Cleantech. The Valley may develop some breakthrough technologies, but without government help these are unlikely to translate into global leadership. The technology world is rightfully allergic to government assistance and intervention. Cleantech is different, however, and we aren't dealing with a level global playing field.

The Knowledge Economy Institute Leadership Summit, which I attended, was held at the Joint BioEnergy Institute (JBEI), in Emeryville, California. The question posed: what will take for the U.S. to achieve global leadership in the clean-energy economy? The group concluded that the U.S., by far, has the strongest innovation platform in the world. But other countries may well reap the benefits of its research efforts. China, in particular, is making massive investments and has a huge advantage from focused policy and large markets.  Even though China is not likely to produce its own innovation, it will continue to appropriate U.S. technology and gain a major advantage by combining this with its manufacturing prowess.  American firms which are increasingly choosing to build design and manufacturing operations in China will provide it with additional advantage.

What will it take for America to lead? Despite decades of dominance in technology innovation, America has a dilemma in the clean-energy economy. Most entrepreneurs aren’t getting the support needed, and we are unable to translate research discoveries in our universities into profitable businesses that attract high levels of investment, make lots of money through manufacturing, and create jobs.

There are two problems with university research – the system for commercializing discoveries doesn't work well, and there is no clear path-to-market for new technologies which do make it out the door. I've written about these problems and I prescribed some workarounds. JBEI is a bold experiment to fix some of these problems the right way. It brings together researchers from different disciplines with business. And it has a practical focus on solving real-world problems.

Centers like JBEI may produce major breakthroughs in technology. But that is when the next set of problems kick in both for university research and for entrepreneurs – clean energy is different than other technologies.  Startups typically need hundreds of millions of dollars to develop and scale up technologies.  Investors don't see steady, strong and growing markets. So, few are taking the risks and making the big investments.

U.S. policy is not as aggressive as other countries in creating sustainable markets, investing in commercialization, or promoting manufacturing.  Take, for example, Japan's Sunshine Project and related initiatives that have consistently driven that country's clean-energy policy since 1974.  Japan has succeeded in building infrastructure, markets, and technology companies that help meet national energy security goals for the long-term.  The U.S. has not.

Contrast this with how U.S. government responded to challenges to its semiconductor industry by rallying behind it and keeping a significant value piece here.  How do we keep our innovative clean-energy companies and their design and manufacturing operations in America?

We need to learn from other countries.  In industries like Cleantech, success depends upon consistent and reliable government policy that links market supply and demand over the long-term.  U.S. policy has been cyclical, unilaterally focused on petroleum, and unrealistic about the value of short-term subsidies and support.  American startups suffer from inconsistent pricing-signals that make investors wary.  As investment cycles wax and wane, small companies lose top talent and are unable to recruit it back when funding begins to flow with the next cycle upturn.

Policy makers need to look at things that affect pricing. Energy is a commodity and it is all about cost.  The energy sector is undifferentiated.  Startups compete with large incumbent firms.  Moreover, clean-energy technology often has a deceptive fit with current industry and markets.  Take biofuels, for example. The high ratio of bulk-to-fuel, distributed biomass sources, and inherent chemical variation dictate smaller-scale and more regional patterns of development and deployment than for petroleum.

Consumers are key.   Consumer perceptions of energy prices have potent effects on the market.   China figured this out.  In addition to subsidizing manufacturing, it is training thirty thousand salespeople to sell new clean technologies to consumers. In the U.S. energy is just too cheap, so consumers don't see the benefits of Cleantech. Rebates and short-term subsidies just aren't creating long-term demand. As a result, entrepreneurs trying to build companies on energy efficiency are finding it hard to stay afloat.  The demand and growing markets are just not there.

Will America meet President Obama's call for global leadership in the clean energy economy?  Not likely if Congress and state governments don't make it a lot easier for startups to attract investment and a lot more attractive to manufacture here.  Governments need to coordinate comprehensive, long term energy policy – now.

Editor's note: Guest writer Vivek Wadhwa is an entrepreneur turned academic. He is a Visiting Scholar at UC-Berkeley, Senior Research Associate at Harvard Law School and Director of Research at the Center for Entrepreneurship and Research Commercialization at Duke University. Follow him on Twitter at @vwadhwa.

Guest Post: The Yo-Yo Life of a Tech Entrepreneur

Posted: 30 Jan 2010 07:00 AM PST

This is a guest post by Mark Suster, a 2x entrepreneur who has gone to the Dark Side of VC. He started his first company in 1999 and was headquartered in London, leaving in 2005 and selling to a publicly traded French services company. He founded his second company in Palo Alto in 2005 and sold this company to Salesforce.com, becoming VP Product Management. He joined GRP Partners in 2007 as a General Partner focusing on early-stage technology companies.

TechCrunch Europe ran an article in November of last year that European startups need to work as hard as those in Silicon Valley and I echoed the sentiment in my post about the need for entrepreneurs to be maniacal about their businesses if one wants to work in the hyper competitive tech world.

Belgian Band Gets Creative With Video Annotations On YouTube

Posted: 30 Jan 2010 06:15 AM PST

YouTube has long introduced ways for users to annotate their videos and add links to external websites, other videos on the site, and more. But I haven’t seen that many people or companies make use of video annotations in creative ways – I don’t spend that much time on YouTube to be honest, so maybe it’s just me.

Belgian electro band The Subs got in touch with us to let us know how they use video annotations to spice up their The Famous Videocast project, and the result is pretty neat if you ask me.

In the videocast, the band members point to other videos which you can easily watch without having to jump to another tab or webpage (that is, if you’re on YouTube and not watching it here or anywhere else where it gets embedded).

If you don’t click, the videocast just keeps rolling, but if you do you can watch other videos and return to where you left off in the videocast with a single click.

Simple, but nice.

Patent Troll Sues Apple Over Wireless Messaging Technology

Posted: 30 Jan 2010 04:48 AM PST

Intellect Wireless, a tiny company based in Reston, VA has filed suit against Apple over mobile picture/video messaging technology it claims to have successfully patented years ago.

The patent infringement suit was filed on 28 January in Illinois Northern District Court.

The complaint states that Apple infringed on the company’s patents when it provided wireless portable communication devices (you know, like the iPhone) that “receive and display caller ID information, non-facsimile pictures, video messages and/or Multimedia Messaging Services.”

It was easy to retrieve court documents showing Intellect Wireless is seeking about $10 million in damages from Apple for allegedly infringing on its patent, but it sure was a whole lot harder to track down what this company has effectively produced with the technology it claims to have enriched the planet with. In other words: it’s a non-practicing entity, aka patent troll, hard at work in this case.

And judging from this article on the General Patent Corporation blog, Intellect Wireless is a feisty one at that.

To learn more about the technology Wireless Intellect has invented, try making sense of this magnificent slide deck from self-proclaimed inventor Daniel A. Henderson, the man behind the company.

This isn’t exactly the first time Intellect Wireless has turned to courts over alleged patent infringement: the company sued T-Mobile USA, Virgin Mobile USA, Helio and U.S. Cellular Corp back in February 2008, Motorola, LG Electronics and Sanyo Electric in March 2008, Samsung Electronics in October 2008 and HTC in May 2009.

Ugh.

Context is King: How Videos Are Found And Consumed Online

Posted: 30 Jan 2010 04:00 AM PST

Editor's note: This is the third in a series of posts by guest writer Ashkan Karbasfrooshan. Previously, he wrote about the State of Online Video, and 12 Surprising Things Holding Back Online Video Advertising.  In part 3 today, he examines how videos are found and consumed online. Karbasfrooshan is the founder and CEO of WatchMojo , a producer of premium, informative and entertaining video content. The company's catalog of 5,000 videos has generated over 110 million streams since 2006.

To try to understand—let alone guess—the future of video advertising, one needs to start by looking at the biggest trend in media over the past few decades.  In November 2006, Bear Stearns Cable and Satellite analyst Spencer Wang published a study called "Why Aggregation & Context and Not (Necessarily) Content are King in Entertainment".  While Bear Stearns has since been acquired by JP Morgan and is now a mere footnote in business books, the study's findings are more relevant than ever.  Let’s examine 8 key factors behind online video consumption

Factor 1: Media is Fragmenting

According to a recent NY Times article, in the 1952-53 season, more than 30% of American households watched NBC during prime time, according to Nielsen.  In fact, up until twenty years ago, you could buy a 30-second spot on CBS, NBC or ABC and reach "everyone.”  Today, NBC's prime time reach is 5%.  Sure, NBC is lagging CBS and ABC, but neither the Tiffany network nor Disney's counterpart is faring much better.  The secret's out: fewer people watch TV and teenagers spend every waking minute connected to the Internet, increasingly through the mobile web.

Factor 2: Deportalization is Here to Stay

As the media world becomes fragmented and consumers move online, the Web is following a similar path, known as deportalization: the move away from the dominant portals of old, as social networks gain huge followings and vertical niche sites gain smaller, but more loyal, followings.

Ten years ago, you could buy a banner on MSN, AOL or Yahoo and reach "everyone" on the Web.  Five years ago, you could get the same result by buying a text link through AdWords and reach consumers who were either searching directly on Google.com, or surfing on the countless number of websites that were part of Google's publisher network through AdSense.

Suffice to say, times have changed.  In fact, less and less often do consumers even seek out content  by actually going to a given site.  To paraphrase Jeff Jarvis, if something is important, it will find me, be it via newsletter, Facebook, Twitter or a shared link in an email.  In fact, Facebook might very well be the last giant Web property and when it launched Facebook Connect, it too began to extend its tentacles across the Web.  Twitter's growth has maintained thanks to its off-site (API) growth, while YouTube exploded due to its open embeddable nature from the get-go.

However, after YouTube sold to Google for $1.65 billion and the site's aggregate traffic soared, some video producers tried to find a way to generate an audience—and revenues—outside of YouTube in order to build a legitimate business.  In other words, media is becoming fragmented, the Web is becoming deportalized, and the front line of it all is online video.

Factor 3: Content is Not a Zero-Sum Game

If we return for a second to television, it's worth noting that with the advent of cable television, as the number of channels rose, so did overall content consumption.

Analogously, as the number of content producers and distribution points increases online, consumption increases exponentially.  For proof, look no further than the recent comScore figures touting over 31 billion videos were viewed in November 2009.

Factor 4: Content is King?

Indeed, to paraphrase Viacom's Chairman Sumner Redstone: content becomes more important than distribution mechanisms; as new channels of distribution creep up, it is the content that is always going to be necessary, hence the adage "content is king".  If you fast forward to 2010, it's true that with all of these social media aggregation and distribution tools, you are seeing media rise to the surface.  No one, after all, cares about the pipes; it's what flows through the pipes that matters.  The context—Facebook, Twitter, email—in which people are introduced to media and consume it is becoming more important than the content itself.  Content is no longer king, context is.

Factor 5: Demand for Content is Elastic, Supply of Funds is Not

The problem, as you can imagine, is that while it's perfectly plausible for global advertising to grow, it will not grow fast enough to feed all of the mouths at the creative table.  As "consumer touch points" increase, the number of people that each piece of content reaches becomes smaller at the time of publishing/broadcast but can grow over time.  That's the theory, anyway.

This is a double-whammy trend.  It is negative because the audience for something (and corresponding revenue) will be less than what the most popular event on television will be, which partially explains the cachet television still has over its online brethren.

But it is also a positive trend in that as a content owner you will be able to derive more revenue over the course of the content's shelf life.  Don't get me wrong, syndication on television is an enormous revenue stream, but that is not an option for all programming, whereas online, technically, anything has both a shot at building an audience and having some kind of residual revenue stream.  The problem is that there is no vetting process per se online so the lowest common denominator can be zero.

Factor 6: Chasing Hits Has Proven Futile

Ultimately, overall consumption of media will increase but hits become less frequent and each hit will become more niche.  The stats support this hypothesis, despite YouTube's aggregate size and macro-level success, each clip's average viewership shows that regardless of whether the video is user-generated, premium or super-premium (for a definition of the differences click here), on average:

  • It will garner 500 views over time
  • 25% of those views will come in the first four days and
  • by and large, only the first 30 to 60 seconds will be watched.

How can you build a business on that?

Factor 7: Discovery vs. Recovery

Exasperating matters is how content is actually unearthed.  To borrow from John Battelle's breakdown of search: videos are found via recovery and discovery.

Statistics show that:

  • 45% of views come from direct navigation where a user goes to YouTube and searches to "recover" something they have already seen or are actively looking for.  Of course, YouTube is the world's second largest search engine and most of those searches are now conducted on YouTube.com, which reinforces the argument that YouTube is now the best Internet M&A of all time.
  • The other 55% of the time, users stumble upon a video and "discover" it.  That is right, over half of the time, users land on something randomly.

In other words, while traditional media views the web as a place where pirates turn to to rip off their copyright, the truth is, only half of all of the content consumed is actually searched for, the other half is stumbled upon, meaning you actually have to distribute it widely enough to increase the likelihood that people even notice it, let alone give a damn!

This is why you need both lots of content and a diversity of it.  Indeed, Time.com former Managing Editor Josh Tyrangiel admitted that "long form journalism, a staple of magazines like Time, is not working" online.  The same applies to long form video online, and by extension, on mobile.

Factor 8: Size Matters

So what works?  To gain more insight into that (and to avoid an overly biased outlook), I reached out to Dina Kaplan, who is the COO of blip.tv.  (We use blip.tv's video player on our web property).  According to Kaplan, a Pyramid of Content is emerging on the Web.

I tend to agree.  Back in February 2007, I wrote an article called "The Commoditization of Distribution and the Scalability of Content".  In it, I alluded to a rudimentary pyramid with super premium on top, premium in the middle and UGC at the bottom:

It's certainly not rocket science, and Kaplan and I are not alone in having that view.  She continues: "Hulu is the best-known platform sitting at the top of the pyramid, in terms of hosting and distributing network content.  YouTube, which has long been known for hosting great viral and one-off videos, has owned the bottom of the pyramid."

The question remains: who will own the middle.  A couple of years ago, YouTube made a move towards "torso content".  Kaplan's blip.tv is obviously making a play for the middle, "blip.tv [wants to own] the middle of the content pyramid: the best original shows produced for the Web.  These shows are produced by talented individuals and production companies who are building up loyal audiences for their shows, just as the producers of a traditional TV show would."

With things like Apple launching the iPad and IPTV gathering steam, Kaplan is confident that "shows will move around from screen to screen and you'll choose to watch content on whatever screen is most convenient for you at that moment."

Of course, with Boxee's struggles to get traditional media on-board, one wonders if new media producers have a golden opportunity to win traditional ad dollars, which dwarf new media dollars by a wide margin.  For all the talk and excitement about online advertising and online video advertising, TV advertising in the US remains a $75 billion industry.

When you realize the dichotomy between the existing business that is Television and the potential that might be Online Video, you realize why the stakes are so high.  Come back next week when we update our Pyramid of Content to reflect the reality of 2010 and look at how videos will be monetized online.  Also read:

Part 1: State of Online Video

Part 2: 12 Surprising Things Holding Back Online Video Advertising

Next Week – Part 4: How Will Videos Be Monetized

Owen Van Natta Talks About His First 8 Months Running MySpace (video)

Posted: 30 Jan 2010 02:24 AM PST

I sat down with MySpace CEO Owen Van Natta at the World Economic Forum in Davos, Switzerland earlier this week to talk about his first eight months on the job. This is one of Owen’s first video interviews since taking the job last April.

We talk about Van Natta’s vision for the once-mighty MySpace. The site was at one time the worlds largest social network and had more page views than any other U.S. website. But in the last couple of years it has been eclipsed by Facebook’s stunning growth.

Still, Van Natta and team have a plan. The MySpace of the future will be all about the social experience around content, and the company’s strong offerings in music and music videos through MySpace Music will be the cornerstone of that effort. From the interview:

I think we have a unique value proposition for consumers that is about being the place where people socialize around content, and by socialize, I mean the tag line of, you know, discover and share and showcase content. It’s where you learn about content both through your friends and, you know, sometimes it’s more important that the people that you don’t have any connections to in the real world. And one of the big differentiators for MySpace is the fact that we have an open social graph. People expect to connect to people they don’t have connection to in the real world but has similar interests with. And so, it’s a great way to do discovery. It’s a lot of the way discovery happens in the real world. And now the social web is just simply enabling that to happen more increasingly online.

Van Natta has made two acquisitions since joining, iLike and iMeem, both in the music space. And that iLike deal got MySpace Music onto Google search, driving a lot of traffic and attention to the service.

We discuss both acquisitions in the interview.

Van Natta also talks about MySpace revenue, particularly the soon to terminate Google search deal.

The full transcript is below (thanks to PhoneTag for the transcription). You can also watch Van Natta’s presentation at the event here.

Michael Arrington: I’m here with Owen Van Natta, the CEO of MySpace. Owen, you’ve been CEO for eight months now?.

Mr. OWEN VAN NATTA (CEO, MySpace): Eight months. About eight months now.

Michael Arrington: We’re sitting down at the luxurious Club Hotel in Davos, Switzerland. You’re at the World Economic Forum. This has become a bit of a tradition for me to interview CEOs here. This is the internet ghetto. This is where they put all the internet CEOs. It's not like the best hotel in the world. As you found out, there’s no shampoo.

Mr. VAN NATTA: (laughs) No shampoo. And they’ve got beds in the closets.

Michael Arrington: Murphy beds. Yes.

Mr. VAN NATTA: But they also have a great sound track here, so you could hear it matches the decor. It’s very ’70s, very (unintelligible).

Michael Arrington: So, I have a few minutes with you. What I want to start with is, tell me what MySpace is today.

Mr. VAN NATTA: MySpace is a place to share and it’s a place to discover, share and showcase content. That’s what people are doing on MySpace today and that’s what we’re focused on, continuing to provide to people.

Michael Arrington: So, over the last eight months, what have you fixed, what have you pushed forward on, what have you cut? What is your job there?

Mr. VAN NATTA: Well, we’ve – I’m very focused on being a user center’s company. And that means starting with the product, making sure that we have a product plan that matches the mission statement of discover, share and showcase content. We’re focused on the music category. We’re focused on film and television. We’re focused on games. That’s what people are engaged with today on the site. Once we – you start a product strategy, you need to make sure you have the right team. We’ve built a entirely new management team of MySpace. I’m really excited about some of the talent that we’ve brought on board. Now, it’s all starting to be built throughout the entire company, and obviously, you have to have a great technical platform in order to be able to compete in the internet space. And we’ve been doing a lot of work to position ourselves to deliver on the promise of our type of platform. You know, we’re doing a lot of things to improve the experience like decrease page download times and we’re starting to realize some of those games already. I’m excited about our progress so far.

Michael Arrington: Your engineers are mostly in L.A. and San Francisco, right? Or entirely in L.A. and San Francisco?

Mr. VAN NATTA: We actually have a large engineering group in – well, reasonably large engineering group in Seattle.

Michael Arrington: OK. And have you hired a lot of engineers since you’ve come on board? Or has it been mostly keeping the ones that you like or how – what has that been like?

Mr. VAN NATTA: No, we’re constantly bringing new engineering talent at all levels of the organization. We have a new CTO, got an Alex Maghen who has a great background dealing with large scale systems. And I think we have a lot of great news to come in terms of tech (unintelligible) coming in. It’s a big area of focus for us.

Michael Arrington: Before you came on board – in fact, I talked to DeWolfe, your predecessor, here a year ago, and there was a lot of focus on the past before you and your team joined about competition, and particularly Facebook, and how you stacked up against Facebook at different times. I haven’t heard a lot of that from the team, not a lot of focus on the competition, more about what you are and what you’re doing to push forward. In fact, you’ve integrated with, I think, Twitter in some ways, right?

Mr. VAN NATTA: Yes.

Michael Arrington: You’ve done a small integration with Facebook Connect. Are we going to see more of that? How can you use some of the companies out there to make your product better?

Mr. VAN NATTA: Well, a big part of our strategy is to be – is to really embrace openness and let people engage with content where it is that they want to engage with it. So, you know, one of the things that we did early on was we acquired a company called I Like That. I know you’re aware of. It has a…

Michael Arrington: Yeah, just a month before they were integrated with Google Search.

Mr. VAN NATTA: That’s right.

Michael Arrington: Did you know about that when you bought them? Did you know that that deal is going to happen?

Mr. VAN NATTA: You know, those things are always in the works but it wasn’t a done deal. But you know…

Michael Arrington: The timing sort of worked out well, looked like you got a really good deal on that company as well.

Mr. VAN NATTA: Well, I think, you know, the timing of the Google partnership is one that we’re excited about. You know, we’ve even extended, so since then, we announced that we’re going to be part of their real time search initiative and, you know, we’re excited to see what type of collaboration that brings as well.

Michael Arrington: Well, since we’re on the topic of Google, I’ll jump ahead. You have a search deal with them that signed a couple of years ago before you joined, and in, I think, June of next year – middle of next year, the end of your fiscal year next year, it ends, at least the last for a public statement on that. Are you renegotiating that or you think you’re working with another partner? It’s nearly $900 million deal over three years. It’s a substantial amount of revenue. Where do you stand with that?
Mr. VAN NATTA: All those types of partnerships always need to evolve. You know, we’ve continued to evolve the business and building that in a way where we just – we don’t have any dependency on – we don’t have dependency on any one revenue stream. We’re always open to new partnership. We’ll continue to extend our partnership with Google in the areas of music search as well as real time search(ph). So, you know, that continues to be a great relationship that we’re excited about. And we’re going to be looking at lots of different options as we go forward. We’re really pushing on innovation. You know, we’re really in the midst of remaking MySpace into the place where you discover, share and showcase content and partnerships are going to be a big part of that.

Michael Arrington: If you talk about content, and this has been something you and your team is – have talked about almost since day one. Obviously, you have the music property with is great. It’s been around since over a year now. You guys do a lot with trailers. I see trailers all the time. You have lots of video content on the site. Is that what we should be thinking of? Or you’re thinking of more of like a Hulu type of thing or are you actually pulling an actual TV content, like what do you mean by content? And there are games as well. Are these games that you’ll publish? Will you acquire companies? Will you pull in more third party Flash games? Is there a way we should – as a press, should be thinking about what you mean by content?

Mr. VAN NATTA: On the Music Space, having the relationships that we do and the joint venture we do with the major record labels, the publisher, all the independent record labels, give us the ability to have a music experience that really is unparalleled.

Michael Arrington: Music videos, music streaming…

Mr. VAN NATTA: All of it in one location and very, very social which we think is really the foundation for discovering (unintelligible).

Michael Arrington: What about mobile? We see a mobile music initiative at some point?

Mr. VAN NATTA: We continue to look at mobile. It’s a big part of the way that people are interacting with the site today. We got a tonic(ph) growth in mobile, and it’s a big area of focus for us, and I’m really hopeful that we’re going to continue to evolve and innovate and that’s (unintelligible)…

Michael Arrington: And maybe see streaming music and that kind of thing in the future.

Mr. VAN NATTA: I think all those things are the things that users are increasingly wanting and we want to serve those user needs, especially as it relates to discovery around music because that’s one of the underserved areas in the market that we’re uniquely positioned to deliver for consumers.

Michael Arrington: What about TV and films? I mean, actual films and things like that. Is that something that you think YouTube and Hulu will dominate or is that a place that you’ll play or do you know yet?

Mr. VAN NATTA: We consider YouTube and Hulu to be partners today and we have their content integrated all throughout the site. We have over 400 partnerships with different content producers and content creators. That’s going to continue to be an area of focus for us. We host our own music videos, that was something we launched, as you know, last year. So, those models will continue to evolve but it’s really going to be about partnership. We’re building a platform where we want users to come and engage with that content in a highly social environment and that’s going to continue to be our focus in terms of providing great user experience.

Michael Arrington: OK. Do you think – and I know this is a question you’ve been asked many times. But, do you think we’ll see a for Facebook Connect integration? Is it something you’re still considering, something you’re deciding on?

Mr. VAN NATTA: We did a very small Facebook Connect…

Michael Arrington: The European site.

Mr. VAN NATTA: Out of our UK office. Again, I think embracing openness means looking at it everywhere. And, you know, we’re certainly looking at different ways that users want to be able to engage with the content and we’re pretty much open to figuring out the right way to make that available for users, where it is that they want it. 7.45

Michael Arrington: OK. MySpace has always been a bit behind maybe on design and technology. And not your team’s fault, but what are your plans to remedy that? Or do you disagree with this statement?

Mr. VAN NATTA: You know, I think usability and user experience and design are critical areas if you’re going to be a player in the consumer web. One of the first hires that we made was someone that had a user experience for (unintelligible) extensive experience, building great user experiences from some of the top sites out there. It’s something that…

Michael Arrington: Who was that?

Mr. VAN NATTA: That really focused on – she’s a woman named Katie Geminder.

Michael Arrington: OK.

Mr. VAN NATTA: She’s got experience at Amazon and Apple and Facebook.

Michael Arrington: Does she report to Jason?

Mr. VAN NATTA: She does.

Michael Arrington: OK.

Mr. VAN NATTA: She – and so, it’s an area – it’s a big area focused for us. It’s something that we’ve actually been staffing up quite a bit. We’re starting to build a really solid team there. We need to have a technical platform that really enables us to have a great user experience and we’re focused on building that out too.

Michael Arrington: How far away are you from that do you think?

Mr. VAN NATTA: You know, it’s an interactive(ph) process. It’s not something that you can do a big atomic launch around. We have a very large site with a large number of users and we really want to bring them along and have them show us through exactly how it is that they’re responding, give us a feedback exactly what the best user experience is. So, you’re going to see that continue to evolve. We’ve done a number of things in that space already where we (unintelligible) set a number of categories and number of areas on the site that we just didn’t think we’re adding value for users, that usually we’re showing through their actions weren’t the things that they were coming to MySpace to do, things like weather and jobs and classifieds, horoscopes. I know you found out that horoscopes are gone.

Michael Arrington: I was – that was a sad day.

Mr. VAN NATTA: But, you know, that’s something that we’re continuing to focus on and we want to be excellent in usability and design. We were building a really strong competence(ph) there.

Michael Arrington: You know, Facebook talks a lot about how they’re the pipes around social. You guys talk a lot about you’re the content. It seems to be that the one word you use a lot is content and social experience around content. Is that the right way to think about MySpace?

Mr. VAN NATTA: I think we have a unique value proposition for consumers that is about being the place where people socialize around content, and by socialize, I mean the tag line of, you know, discover and share and showcase content. It’s where you learn about content both through your friends and, you know, sometimes it’s more important that the people that you don’t have any connections to in the real world. And one of the big differentiators for MySpace is the fact that we have an open social graph. People expect to connect to people they don’t have connection to in the real world but has similar interests with. And so, it’s a great way to do discovery. It’s a lot of the way discovery happens in the real world. And now the social web is just simply enabling that to happen more increasingly online.

Michael Arrington: So, you were always a startup guy. I mean, even in Amazon, you broke out and started a line for them. You were with Facebook when they were a very small playlist. You’re now at a big company within a big company. Looking back over the last eight months, is the job what you thought it would be when you took it? Was it different than you thought it would be?

Mr. VAN NATTA: I think this is a unique situation. I certainly came in expecting that this is going to be a lot of work but what I am excited about everyday and what gets me fired up and my team fired up everyday is that we have an incredible asset base and we have a really strong user value proposition. It’s something that users are telling us every single day with their time that they really value highly. And as we continue to make improvements, we’re seeing increased engagement around the areas that we are focused on, the content areas that we just talked about. So, you know, look, building these companies is a huge challenge, but I love building teams, I love being part of a team, and I’m really excited about what we have in front of us and really also pleased with the progress we’ve made so far.

Michael Arrington: All right. Thanks very much. Oh, one other thing. You just hired a new chief revenue officer.

Mr. VAN NATTA: We did. Nada Stirratt.

Michael Arrington: Any shifts on your revenue strategy now based on that?

Mr. VAN NATTA: Well, one of the things that we’re seeing in terms of the market is, you know, the economic downturn, as I’ve talked with a lot of CEOs and marketers, you know, brand managers, I think the economic downturn caused a lot of these companies to really reevaluate their advertising strategy and what you increasingly see is more people’s time spent online but fewer brand always being able to be spent online. And one of the areas where I think we’ve been super innovative and where I think we have a strong competency is in the integrated marketing area, some of the things that we do with movie studios or on movie launches or record releases. You know, we released over 200 records in the last 12 months for bands, and really to promote those heavily to millions and millions of people in a very integrated way is super unique. When we talk to users about it, we look at users’ behavior, what we’re finding is they really view that content as valuable as they would view professionally produced content or content that isn’t necessarily advertising content. And, you know, that is what we think is the big opportunity that could bring a lot more brand always on to the web and that’s what we’re working on with our advertising partners on today. So, I’m excited about that. I think it is new in that as more brand always go online, people are going to want those types of experiences and I think we’re really continuing to lead the market in terms of that type of integrated marketing.

Michael Arrington: OK. Thanks very much for your time.

Mr. VAN NATTA: Yeah. Thanks a lot.

iPad v. A Rock

Posted: 30 Jan 2010 01:49 AM PST

This speaks for itself. Thanks to Phil Santoro for creating it and sending it us (a play on the iphone v. rock joke).

The iPad And Chrome OS Netbooks Are On A Collision Course

Posted: 29 Jan 2010 06:07 PM PST

“We don’t know how to build a $500 computer that’s not a piece of junk.”

“Netbooks aren’t better at anything.”

Those two quotes are both from Apple CEO Steve Jobs. The first was during an earnings call in late 2008 when Jobs fielded a question about why Apple wasn’t cutting prices amid the rising success of netbooks. The second came on Wednesday as Jobs was unveiling the iPad.

Apple has made it clear all along that they had no plans to build a netbook. And true to their word, they haven’t. But that doesn’t mean that Apple didn’t feel there was a need for a device that resided in between a full laptop and a mobile phone — in fact, that’s squarely where Apple is positioning the iPad. With it, they feel that they’ve created a $500 (for the baseline version) device that is superior to every netbook out there.

Meanwhile, Google has decided to target the market in between the laptop and the mobile phone as well. But whereas Apple is anti-netbook, Google is very pro-netbook — they just want to make them better. That’s the reason behind Google’s Chrome OS, as Google clearly laid out during its unveiling event late last year.

And so yes, we once again have Google and Apple on a collision course.

Now, it remains to be seen if people who buy an iPad will do so instead of buying a netbook. At first, I’m not so sure that will be the case. But it stands to reason that eventually, this will happen. And as Jobs’ comments on stage on Wednesday made abundantly clear, that’s Apple’s idea too. In their eyes, you shouldn’t buy a cheap, underpowered PC, you should buy an iPad, their anti-netbook.

Google, which plans to release its first Chrome OS-based netbooks in time for the holiday season next year, can’t like that plan too much. They have promised that netbooks that run Chrome OS will be better than current netbooks because they’re dictating certain minimum requirements (such as big keyboards) to manufacturing partners. But Chrome OS netbooks won’t be able to match the sex appeal of the iPad’s multi-touch screen. However, what they can offer is a familiar experience (much more like a traditional laptop then an iPad), and that will be appealing to a lot of people.

And what’s interesting is that for either of the two to be massive hits, they both will need consumers to continue to feel comfortable moving away from traditional software applications such as Microsoft Office. But their plans to get consumers to do that are very different. Google wants everyone to move towards doing everything on their apps in the cloud. Apple, as they made clear with their overly-long iWork for iPad demo on Wednesday, wants everyone to move towards using iPhone OS-based apps.

And that’s why this battle coming at the end of this year will be interesting to watch. Both Apple and Google are very popular with consumers, but their offerings are very different — while aiming for the same market. And as two companies that were once as close as could be, it’s also fascinating to watch the tension and awkwardness as they now compete in an ever-growing number of areas.

If this market between laptops and smartphones proves big enough, perhaps the two frenemies can once again find a common ground and band together to defeat their common enemy: Microsoft. But the obvious strategy for this used to be that Google would attack Microsoft from the bottom with its Chrome OS netbooks, while Apple attacked from the top with their premium computers, leaving Microsoft squeezed in the middle. With the iPad now clearly aimed at netbooks thanks to its pricing and Apple’s positioning, everything is different.

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iPad
Google Chrome OS
Apple
Google
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Topicfire Creates Solid Breaking News Twitter Feeds For All Topics

Posted: 29 Jan 2010 05:13 PM PST

A lot of people use Twitter as a primary way of getting information quickly these days. Accounts such as BreakingNews are hugely popular because they offer up stories to their 1.6 million followers (and even more through retweets) instantaneously. Topicfire, a realtime news aggregator we covered in December is now trying to extend that concept to all different topics.

While there are no shortage of services attempting to leverage Twitter to distill information for different topics, Topicfire’s streams seem pretty solid thanks to the use of their HeatRank technology, which is the same thing that powers Topicfire itself. While there are a few factors that go into HeatRank, the main driving force behind it are comments on stories. If they’re coming in fast enough, the HeatRank will get pushed to 10.

If a story hits 10, it will then get tweeted out automatically to its specific Twitter account with a link to the original story as well as the story’s page on Topicfire. This method of curation ensures that followers won’t get overwhelmed by stories that perhaps aren’t that important.

You can see the full list of the 24 Topicfire accounts here. As you can see, they range from Apple news, to design news, to skiing news, to surfing news (though ski and surf don’t have a ton of news items).

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Topicfire
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Tesla’s $100M IPO: Losses Expected Until At Least 2012. Musk Taking $1 A Year.

Posted: 29 Jan 2010 03:09 PM PST

Electric car company Tesla Motors has filed for a $100 million IPO. There were rumors recently floating around that the company, which is led by PayPal co-founder Elon Musk, would go public “soon.” One interesting tidbit from the filing: Musk only takes $1 in yearly salary.

Another interesting factoid: In the filing, Tesla states that it has seen net losses in each quarter since inception. The company expects to continue on the same path until it starts to deliver larger quantities of its Model S sedan, which is not expected until 2010 or later. Tesla took a loss in the first three quarters of 2009 of $31.5 million which is less than its loss for the same period in 2008, which was $57.3 million. Gross profit for the first three quarters of 2009 was $7.8 million compared to $561K for the same period in 2008. Sales for the first three quarters of 2009 topped out at $93.4 million. As of last December Tesla had sold 937 Tesla Roadsters in 18 countries. The company also saw a total of $108.2 million in revenue since its inception in 2003 until September of last year.

Tesla claimed profitability in August of last year, reporting at the time that it made "approximately $1 million of earnings" on revenues of $20 million, and that it shipped 109 Roadsters, its $109,000 all-electric sports car. Although the company took a loss for the first three quarters of 2009, we are assuming that Tesla may have posted a profit in the fourth quarter, which is why the company claimed profitability last year. In June, Tesla was also awarded a $465 million loan from the Department of Energy, which will help it manufacture its more reasonably priced Modern S sedan.

The company went through a bit of a scandal with a scathing law suit filed against Tesla Motors and Elon Musk by co-founder and former CEO Martin Eberhard, which was eventually dropped. Last year, Daimler also took a 10% (or $50 million) stake in Tesla, putting the company's then valuation at $500 million.

First Round Capital Gives Entrepreneurs A Way To Get In On The Portfolio Action

Posted: 29 Jan 2010 02:19 PM PST

In case it wasn’t obvious, being an entrepreneur is risky business. Even those that get investments have a relatively small likelihood of a successful exit. So early-stage investment firm First Round Capital has a plan to alleviate some of the risk: an entrepreneur’s exchange fund.

For those not aware, an exchange fund in this regard is exactly what it sounds like: company founders are given the option to give up a small piece of the stock they own in their venture in exchange for a piece of the action of the larger pool of all the First Round portfolio companies that choose to participate. Basically, this allows these entrepreneurs to diversify their own holdings without having to sell any stock. More importantly, it lowers their risk of walking away with nothing while adding an incentive to see other companies in the portfolio succeed.

As First Round managing director Josh Kopelman writes, “One of the benefits of having a fairly large portfolio is that our portfolio companies can offer a lot of value to each other. Whether it is sharing interview techniques, technical management strategies, sales leads, perspectives on the advertising market, or doing deals – it is always great to see portfolio companies helping each other succeed.” And with this exchange fund, all of these companies have more reason than ever to help each other out.

Kopelman notes that First Round itself doesn’t receive any financial benefit from the establishment of this fund.

First Round’s portfolio includes companies like Get Satisfaction, Gnip, Mashery, RockYou, StumbleUpon, Wikia, Xmarks, Xobni, and many others. Notably, their portfolio also contains two hot location properties right now: SimpleGeo and Hot Potato. And they participated in mobile payment company Square’s big first round.

[photo: flickr/michael spencer]


 

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First Round Capital
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Google Twists Knife In IE6, Pulls Support From Docs And Sites

Posted: 29 Jan 2010 02:00 PM PST

This has not been the greatest start to the year for Microsoft’s Internet Explorer browser. Days after news of the latest security flaw in Internet Explorer, Google is adding fuel to the fire by phasing out support for IE6 for two of its Google Apps products, Docs and Sites (which recently got an aesthetic upgrade).

For both the consumer and enterprise versions of Google Docs and Sites, the only browsers that will be fully compatible are Microsoft Internet Explorer 7.0+, Mozilla Firefox 3.0+, Google Chrome 4.0+ and Safari 3.0+. The phase out will take place beginning March 1. While you’ll still be able to access Docs and Sites from IE6, you will have restricted functionality and many features won’t work, making the applications for the most part useless. We hear that Google will be phasing out IE6 support for the remainder of Google’s major products, including Gmail and Calendar, over the coming year. This isn’t Google’s first move to phases out IE6 functionality for its products. Last July, the search giant began phasing out YouTube support for the Microsoft browser. For users of IE6, the online video site began pointing to 'modern' browsers like Google Chrome, Internet Explorer 8 and Firefox 3.5 as alternatives. A similar prompt will now take place on Docs and Sites for users who are browsing from IE6.

For the most part, the tech community, including web developers and designers, tend to have a profound dislike of Internet Explorer 6. Obviously, the browse has many issues, including low performance and major security flaws. Even Microsoft itself, is recommending that all its customers upgrade to Internet Explorer 8, the latest version of the browser which has better security in place. The main reason why IE6 is still being used at all is because of corporate IT departments across the globe needing to make upgrade decisions. Unfortunately, a number of these companies still have to use the browser because they have systems in place built specifically to run with it. To add insult to injury, IE6 continues to lose market share in the browser world.

And Google isn’t the only technology company that is looking to close off support for IE6. Digg has hinted at wanting to cut support for the browser too. I have a feeling that as Google joins the web in gathering pitchforks around IE6, more companies will flock to join the movement.


VC Leaderboard: Top 25 Most Active Dealmakers Of 2009

Posted: 29 Jan 2010 01:35 PM PST

Which venture capitalists funded the most companies last year? We went through our funding data in CrunchBase to come up with the Dealmaker Rankings below. The most active VC was Draper Fisher Jurvetson, which invested in 57 deals throughout the year by our count, followed by Kleiner Perkins (49), New Enterprise Associates (47) Intel Capital (46), Sequoia Capital (42), First Round Capital (34), and Accel (33). You can see all top 25 in the interactive table below, which is followed by another table for just the fourth quarter of 2009. Mohr Davidow and DAG Ventures broke into the top ten for the quarter. You can compare those to the tables we published for the third quarter. The rankings are based on the number of deals each firm participated in during each time period. But you can also you can also re-rank the table by clicking on the different column headings to find the VC firms which participated rounds with the largest total or average values. By doing that you can see that the bigger VC firms with the most capital to deploy, such as New Enterprise, Kleiner, Accel, Venrock, and Sequoia, were the most active in the bigger rounds. The fbFund, True VEntures, First Round, and Charles River Ventures dominated the smaller, earlier stage rounds. And then interestingly, firms like Benchmark, Greylock, and Highland Capital were active at both ends of the spectrum.


Developers, Not Apple, Will Make Or Break The iPad

Posted: 29 Jan 2010 01:32 PM PST

The iPad's fate isn't in the hands of Apple. Jobs & Co. has done their part and made the device. The iPad's success lies solely in the hands of developers. Because unlike the iPhone or iPod touch, the iPad doesn't really have a core function. The iPhone is nothing more than a glorified telephone and the iPod touch is just another PMP. But what's the iPad? A big iPod touch? None of the iPad's functions seem to define it. Ebook reading? That may turn out to be just a novelty feature for many buyers. Web browsing? Maybe, but the Internet is formatted for a mouse and keyboard, a tablet simply doesn't offer much, if any, advantage over a netbook or computer running a full OS. Early reports are even suggesting that the iPad isn't even a solid media player because of its 4:3 aspect ratio. Then there are the millions upon millions of apps Apple has accumulated over the last two years. They, and new iPad-specific ones, are the key to success for the iPad. Without them, the iPad would just be another concept-of-function device, targeted at a small crowd with its limited capabilities of web browsing, task management, ebook reading, and media playback. The apps will likely prove to be the justification many people will need to purchase the iPad.


Windows Mobile Finally Checks Out Foursquare

Posted: 29 Jan 2010 11:56 AM PST

For much of the past year, the major criticism of Foursquare was that it only worked in a few select cities in the U.S. and was basically iPhone-only. In the past few months, both Foursquare itself and a growing core of third-party developers have changed that. Today brings yet another expansion in the Foursquare universe with the beta launch of a Windows Mobile app.

To be clear, this app is only meant for touch screen Windows phones, and you need to be running either Windows Mobile 6.1 or 6.5. But if you have those, you can submit your email address here to be let into the beta. Once they kick the tires in beta for a bit, the plan is to submit the app to the Windows Marketplace for Mobile, Windows Mobile Sr. Product Manager Anand Iyer writes today on his personal blog. Iyer has been working on this project on the side for a few months now, and made the app along with the help of development house Touchality.

This isn’t (yet) an officially sanctioned Foursquare app, but Iyer and crew have been working with the Foursquare team since before the public APIs were made available to get it done. Foursquare itself made its iPhone app and the just-launched BlackBerry app, but the Android app and the WebOS app (that works on the Palm Pre) were also done by a team outside the company. This addition of a Windows Mobile app leaves Symbian as the only major mobile OS with a native client, but work is also being done on that front. Foursquare also offers a limited mobile web version.

Foursquare itself is hard at work on a complete revamping of their main website. While it currently serves as a way to view some of your location data, you can’t do things such as check-in from the site. For that, I’d recommend using the excellent FoursquareX application. Unfortunately, that is Mac-only for now.

Brightkite Expands Product Line-up With Mobile Apps For Nokia, Palm Phones

Posted: 29 Jan 2010 11:09 AM PST

Popular location-based social network Brightkite has simultaneously released mobile apps for some Nokia as well as Palm smartphones.

The release of the apps follows earlier launches of Android, BlackBerry and iPhone applications.

The Nokia app can be downloaded from the Ovi Store already and should run fine on all Symbian S60 5th Edition phones, including the Nokia N97 and the Nokia 5800 XpressMusic.

Brightkite curiously doesn’t use its own brand name for the Palm app, which was baptized Parafoil instead. The application was custom-developed for Palm’s WebOS platform and is compatible with the Palm Pre and Palm Pixi devices.

I’m told the reason that it isn’t named Brightkite, is because the program was actually developed by two Brightkite users, John Barker and Kyle Johnson, based on the startup’s open API.

As you can tell from the third screenshot embedded below, Brighkite has adopted the ‘check-in’ moniker to let people update their friends on their current locations and what they’re up to.

Brightkite says the United States remains its biggest market, but that international markets are growing in importance, which prompts the company to expand its range of handset support. The company adds that it currently sees about 2 million people using Brightkite on a monthly basis, across all platforms (though the vast majority uses it on a phone).

Alternatives to Brightkite include Foursquare, Loopt, Gowalla, aka-aki networks and Rummble.

Smackdaddy Lets You Heckle Your Buddies and Bet on Sports on your iPhone

Posted: 29 Jan 2010 09:39 AM PST

Like bad beer, cracker jacks, and drunken fans getting hammered in the parking lot, smack-talking and sports-betting are staples of American sports. And that’s why Bema Studios created Smackdaddy, a free iPhone app [iTunes link] that allows you to both bet on games (currently just NFL, NHL and NBA) and tell your friends they smell.

I got a chance to play with Smackdaddy this Sunday and loved it – it is easy to use, intuitive, and addictive

Read the rest at MobileCrunch >>
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