Monday, October 25, 2010

The Latest from TechCrunch

The Latest from TechCrunch

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A Week In The Technology-Packed 2011 Ford Edge Sport

Posted: 25 Oct 2010 09:23 AM PDT

Hello, gorgeous. A 2011 Ford Edge Sport just hit my driveway and I’m in love. This vehicle is a looker inside and out. It’s funny how much more modern this model feels over last year’s model — I guess a bit of sheet metal plastic surgery can go a long way. There’s now a large grill and sweeping headlights up front that define the rest of the crossover’s lines. Even the wheels got hit with the redesign hammer, going from wannabe-luxury to urban.

The biggest update is inside, particularly at the infotainment suite. The 2011 Edge is one of the first vehicle’s in Ford’s line-up with a totally-redesigned center stack and gauge cluster dubbed MyFord Touch. Gone are the days of push buttons and analog gauges. This vehicle instead employs two totally customizable LCD screens on either side of a traditional speedometer along with a robust entertainment screen in the center of the dash. Think of it as the smartphone of in-vehicle controls. I would drive a Ford Pinto if it had this system.



PaperBecause: A Paper Industry Astroturf Defending Paper

Posted: 25 Oct 2010 08:59 AM PDT


How prescient! I just wrote that the dead-tree book is dying and a tipster sent us in this charming little site dedicated to the joy of paper – funded by a paper manufacturer, one of the biggest in the world.

Domtar is the “largest integrated producer of uncoated freesheet paper in North America and the second largest in the world based on production capacity” and business, thus far, has been good. Like buggy whip manufacturers, however, the writing is on the wall – a great deal of the paper they spew out will soon be replaced by bits.

While most of that information, including the lip-service to sustainability, is false, I don’t envy Dotmar’s position. They are a massive paper conglomerate and their bottom line is being attacked by a free newspaper app you can download for iPad. Their best customers for centuries are now, slowly, turning away from them. That said, the website is a ham-handed attempt (one example bit of advice “Senior Executives prefer print…A resume is a summary of your professional career, not a blog about what you had for breakfast.” That’s why they’re called Senior. Duh!) by an entrenched industry to keep making money.

Read more…



Is Cloud OS Maker Jolicloud Preparing To Sell A Netbook Of Its Own?

Posted: 25 Oct 2010 08:57 AM PDT

Jolicloud, which set out to build a cloud-based operating system for netbooks, appears to be preparing to build and sell its own line of actual netbooks, too. Tariq Krim, founder and CEO of the French startup, earlier today tweeted links to two interesting pictures:

As others are speculating, these pictures suggest Jolicloud is working on a proper netbook rather than sticking with just building software to run them.

For background, Jolicloud’s upcoming 1.1 release will no longer be all about netbooks, but also for people to replace older desktop and laptop computers still running Windows with a faster ‘Internet OS’. Krim loves to call it the company’s “HTML5 iOS”.

Krim stopped short of confirming to me that they are preparing to sell custom Jolicloud computers directly, and declined to go into detail about the pictures and the computer that can be seen in them. He did, however, promise me to share more information about what’s cooking in the Jolicloud kitchen soon enough (I have a meeting planned with him during an upcoming event in Dublin, Ireland, later this week), so hold tight.

I’ve spoken to other sources, however, who confirmed to me that Jolicloud is in fact partnering with a hardware manufacturer to build a ‘social netbook’ (activation would be as simply as clicking a Facebook Connect button and importing your social graph), targeting the 12-25 year old demographic.

None of them would confirm pricing of the ‘jolibook’ to me, however, although clearly for that demographic the price needs be low enough to remain interesting, say $250-$350.

The elephant in the room is of course the imminent launch of Google’s Chrome OS, which will steal much of Jolicloud’s thunder no matter how both operating systems stack up on a product quality level. On a sidenote: we’ve heard rumors about Google prepping the launch of a proper Chrome OS-based netbook, too.

A lot will of course depend on positioning. If it turns out Jolicloud will focus primarily on selling to youngsters, its strategy could differ from Google’s enough to carve out a niche of their own.

Founded back in 2008, Jolicloud has raised $4.2 million from London-based Atomico Ventures and Mangrove Capital Partners in July 2009.



Amazon Touts Kindle Sales Numbers Without Sharing Kindle Sales Numbers

Posted: 25 Oct 2010 08:27 AM PDT

Unsurprisingly, the fourth quarter is usually the best sales period for the Kindle (and most retail products), but it looks like this year will be especially strong as more consumers flock to e-books. After announcing a new e-book loan feature last week, Amazon is revealing a number of new Kindle stats today in time for the holiday shopping rush. According to the company, sales of the new generation Kindle devices have already surpassed total Kindle device sales from the holiday season of last year (October through December 2009).

Sales of individual Kindle titles are flying off the digital bookshelves. Amazon sold more than three times as many Kindle books in the first nine months of 2010 as in the first nine months of 2009. Amazon also said that Kindle book sales continue to overtake print on Amazon.com. This data is consistent with Q2 and Q1 Kindle numbers Amazon revealed during its earnings call in July. And in the past 30 days, Amazon.com customers purchased more Kindle books than print books, which includes both hardcover and paperback combined, for the top 10, 25, 100, and 1,000 bestselling books on Amazon.com.

In the three months since Amazon debuted the new Kindle, Kindle devices or Kindle-related items such as Kindle books and covers represented 15 of the top 15 bestselling items on Amazon.com and Amazon.co.uk combined. Of course, this dramatic growth is buoyed by the fact that e-book sales are rapidly growing (Amazon says sales are up 193 percent between January and August 2010). Kindle book sales growth during the same period exceeded this rate.

All of this growth sounds pretty great, but it’s really hard to accept these stats and data without the actual numbers of Kindles sold or e-books sold. Clearly, Kindles are big-sellers for the e-commerce giant (perhaps because the company slashed prices of the device to $139 for WiFi-only and $189 for the full-featured model). Amazon is notorious for sending out releases or news touting Kindle sales while never releasing the actual numbers (data which Apple reveals all the time).

For now, Kindle sales will continue to be one of the best-kept secrets in device land.

Also related: B&N will be releasing a color version of its Kindle competitor, the Nook, this week.



Ray Ozzie Has Seen The Future, And It Looks A Lot Like Google

Posted: 25 Oct 2010 08:16 AM PDT

Just as Microsoft chief software architect Ray Ozzie is preparing to step down, he’s leaving the software giant with a farewell memo outlining where the “Post-PC” world is headed. Titled “Dawn of a New Day,” it comes across as a dire warning for Microsoft to move faster away from its dependence on the PC towards “continuous services” in the cloud available across a wide array of “connected devices.”

Ozzie has hit upon some of these themes before, starting with a big-think memo five years ago called “The Internet Services Disruption.” Certainly his original concept of Microsoft Mesh was very much in this vein of syncing data across devices and the cloud. But Mesh has been years in the making, and is only now beginning to see the light of day in limited ways.

It is almost as if Ozzie is saying Microsoft didn’t completely get the message. After starting off this latest memo with some dutiful praise, he gets to the meat of his concerns:

Yet, for all our great progress, some of the opportunities I laid out in my memo five years ago remain elusive and are yet to be realized.

Certain of our competitors' products and their rapid advancement & refinement of new usage scenarios have been quite noteworthy. Our early and clear vision notwithstanding, their execution has surpassed our own in mobile experiences, in the seamless fusion of hardware & software & services, and in social networking & myriad new forms of internet-centric social interaction.

What he describes sounds a lot like Google, which is pushing to remove the distinction between native apps and Web apps with the Chrome OS and Google Apps.

Google is also probably the furthest ahead in terms of syncing connected devices such as Android phones and Google TVs to the cloud. A general design principle Google follows is if your data is in the cloud, it should be available on all your devices. This is already true for Gmail, Google Docs, Google Calendar, and Picasa. It’s also increasingly true for other apps.

The Send-To-Android feature, for instance, makes it easy to send links to phones which will then launch apps on those phones. Google extended that functionality to its Chrome browser. Android also updates apps over the air seamlessly.

Obviously, Google isn’t the only threat here. It certainly isn’t at the forefront of social networking (that would be Facebook). And perhaps that is where Microsoft can still find its footing, by creating a computing architecture that brings together devices, the cloud and social networks. Ozzie hints at this:

Tomorrow's experiences will be inherently transmedia & trans-device. They'll be centered on your own social & organizational networks. For both individuals and businesses, new consumption & interaction models will change the game. It's inevitable.

Of course, Google also realizes how important social is going to become. But when you think about who is winning in social, neither company comes to mind.

Photo credit: Flickr/Dan Farber



The Color Nook Could Be The Tablet Tipping Point

Posted: 25 Oct 2010 08:05 AM PDT

Both Amazon and Barnes & Noble have downplayed actual e-reader device sales numbers, instead crowing about the number of e-books sold in the past year. This is an important distinction because it shows us a few things about the Nook/Kindle audience. First, e-readers (dedicated e-readers, mind you, not tablets) are popular with heavy readers and, as a corollary, most e-reader owners buy a lot of books. However, the real value has been in the e-book format itself, as the popularity of the Kindle and Nook e-book stores can attest. Since the first e-readers trickled out of Sony in about 2006, the general audience has complained about the lack of a color option and their interest has been consistently drawn to tablets like the iPad, the Playbook, and the HP Slate. What’s an e-reader manufacturer to do?

In short, they need to create a slate with a focus on e-reading which, like the Nook, will run a kiosk-style, locked-down version of Android. A thin LCD screen (OLED is right out) should satisfy all but the most picky reader and a $250 price tag, $50 more than the best E Ink e-reader, would create a fairly compelling offering for that self-same reader.

And that’s just what we can expect to see from Barnes & Noble this week when they announce a new Nook.

Read more…



Cashie Rings Up PayPal API To Offer Checkout Platform For Publishers

Posted: 25 Oct 2010 08:00 AM PDT

There are plenty of checkout and shopping cart solutions on the web; including Payvment, BigCommerce and others. Cashie is launching today as a cloud-based e-commerce platform that can be easily installed on a website or blog.

Cashie is designed for publishers using content management platforms such as WordPress, and can be integrated into a site by copying and pasting a few lines of code. The technology leverages PayPal’s X Developer Platform to allow users (who need to have a PayPal Website Payments Pro merchant account) to offer a PayPal and standard credit card checkout experience.

On the front end, buyers will see be able to see a shopping cart with all of their items that will allow them to change quantities, remove items from their cart, or checkout. The basic idea behind Cashie (which was developed by Web Assist) is that it is a dead simple way for any publisher to integrate a basic checkout an shopping cart system.

So do we need another checkout service? Cashie’s president Hieu Bui says yes. A former developer for PayPal, Bui says that the web needs a simple way for any user to start monetizing content or other products on their websites. A number of sites are already using Cashie, including a real estate site, a UK-based vacuum dealer, and a site selling fragrances.

Cashie also confirmed that it would soon be offering a micropayments option, leveraging PayPal’s soon-to-be launched Digital Goods platform, so that content creators can monetize their content.



Facebook, Groupon And Zynga Investor Mail.ru (aka, DST) Shoots For $5.7B Valuation In IPO

Posted: 25 Oct 2010 07:05 AM PDT

Mail.ru Group, formerly known as Digital Sky Technologies and notable investor in Internet sensations Facebook, Groupon and Zynga, among others, has filed for a $876 million IPO on the London Stock Exchange that would value the investment firm at up to $5.7 billion.

That valuation is higher than expected (earlier reports predicted a $5 billion valuation).

Mail.ru, which includes largely Russian e-mail, social-networking and gaming sites, will float just over 3 million new shares and 28.59 million existing shares in the form of global depositary receipts at between $23.70 and $27.70 per GDR, it said in a regulatory disclosure.

Shares will be admitted to a Standard Listing on the LSE under the ticker ‘MAIL’.

To be clear, Mail.ru Group is the new name for DST’s Russian holding – its international investments are handled by DST Global, which has retained its name and will not float.

Part of the proceeds of up to $876 million (which, for your reference, would be slightly more than the total of capital raised by Facebook since its founding) from Mail.ru Group’s IPO will be used to increase the company’s stake in Russia’s biggest social network, vKontakte.ru, reports Russian business paper Vedomosti.

Mail.ru Group, which already owns social network Odnoklassniki.ru and ICQ, plans to buy a 7.5% stake in vKontakte for $112.5 million, increasing its equity stake from 24.99 percent to 32.49 percent. The investment values the site at $1.5 billion.

Mail.ru is also purchasing an option to acquire an additional 7.5% stake in vKontakte over the next year, which if exercised would bring its stake to 39.99%.

Mail.ru Group shareholders include Russian billionaire Alisher Usmanov, South African media company Naspers, China’s Tencent, Goldman Sachs, Tiger Global Management and DST founder Yuri Milner.

Goldman Sachs and J.P. Morgan Chase are acting as joint coordinators for the IPO, and the banks are working with Morgan Stanley and VTB Capital as joint book-runners in connection with the offering.



Innovalight Chief Awarded For Making Solar Cells (And Industry) More Efficient

Posted: 25 Oct 2010 07:04 AM PDT


The chief executive and president of Innovalight, Conrad Burke, won the 2010 Ernst & Young Emerging Entrepreneur of the Year award, the companies announced today, following the ceremony in Dublin, Ireland earlier this week. The award recognizes “entrepreneurs who are building and leading successful, growing and dynamic businesses” according to an E&Y press statement.

According to Innovalight’s website its silicon ink technology improves the photon to electron conversion efficiency of solar cells by one percent, which can drive the cost of solar energy down by six percent. Solar cells are semiconductor devices that convert photons from the sun into electrical current.

The U.S. Department of Energy backed Innovalight in 2008 with a $3 million grant for:

“…Developing very high-efficiency, low-cost solar cells and modules by ink-jet printing their proprietary ‘silicon ink’ onto thin-crystalline silicon wafers. The company’s contact-less printing process has been demonstrated to significantly reduce both the manufacturing costs and the complexity required to make today’s highly efficient [solar] cells and modules.”

Under Burke’s leadership, Innovalight has developed sales through licensing and collaboration deals with solar manufacturers, rather than through the manufacture and sales of its own solar photovoltaics. The company’s customers are major manufacturers seeking to increase the megawatts-per-year that they produce per line without increasing expenditures on new equipment. These include several of China's top solar concerns, among them Suntech Power, JA Power and as of last week SolarFun Power.

In January this year, the company raised $18 million in a series D round led by EDB Investments (EDBI) of Singapore, and joined by Vertex Venture Holdings (the venture subsidiary of Temasek Holdings in Singapore) and its pervious investors: Apax Partners, ARCH Venture Partners, Convexa Capital, Harris & Harris Group, Sevin Rosen Funds and Triton Ventures. That brought Innovalight’s total raised capital, mostly from venture, to about $60 million.



Old Meets New As Groupon Partners With eBay

Posted: 25 Oct 2010 06:23 AM PDT

Groupon may not turn out to be the next eBay according to our own Mike Arrington, but the social buying site is on a veritable tear. Coincidentally, the latest Internet giant to partner with the ecommerce startup is … eBay.

While arguably symbolic, the deal – which we predicted was going to happen when we covered the Yahoo-Groupon acquisition rumors – doesn’t go as deep as one might suspect.

For now, the agreement spans a co-marketing incentive whereby US-based eBay customers can sign up for Groupon deals on groupon.ebay.com and earn 5% back in eBay Bucks, the ecommerce juggernaut’s free rewards program.

Groupon closed a similar affiliate deal with Ning last week.

We’ll have to wait and see if these disitrbution partnerships grow into something more meaningful over time.

Groupon is currently live in more than 100 North American markets and running nearly 200 deals per day; eBay for one says it will use geolocation to determine the closest deal for each user.



Interlude, S-Curve, And VEVO Team To Launch Ridiculously Engaging Interactive Music Video

Posted: 25 Oct 2010 05:00 AM PDT

Head to leading music video portal VEVO this morning and you’re going to see something that’s quite out of the ordinary: a new music video starring Andy Grammer that puts you in the director’s chair. Hit ‘play’ and things will start simply enough, with Grammer walking down an alley as he croons toward the camera. But after a few moments you’ll see a popup asking if you want him to “Bump into Movers” or get “Dumped by Bikers”. Better make up your mind — you only have ten seconds to make your choice, and it actually impacts which version of the video you’ll be seeing. It’s part video game, part choose-your-own adventure story, and it’s what you might call “engaging as hell”.

The video may well be a taste of what’s to come over the next few years as musicians, entrepreneurs, the labels, and web publishers work together to figure out the future of music content online. And it’s surprisingly fun — there are dozens of possible versions based on the choices you make, with variations that include everything from dancing housekeepers to multiple cameos from actor Rainn Wilson (Dwight from The Office). But the story behind the video is also compelling. Over the last week I’ve spoken with some of the key players involved with the production to learn how it was put together, and where they see things going from here.

Interlude

If the interactive portion of the video seems vaguely familiar, it’s because we previously wrote about the startup that’s building the technology behind it: Interlude. This Israeli company was founded by Yoni Bloch — who is actually a well-known musician himself — and has developed a platform that can add this engaging, interactive layer to video content. Interlude put together a demo video of Yoni early this year, and it was a huge success in Israel — he tells me that 25% of the country’s Internet-using population watched it. And perhaps even more impressive: the engagement stats showed that nearly everyone watched the video more than once, so they could discover the multiple routes.

Of course, interactive videos aren’t exactly a novel idea — we’ve seen plenty of startups looking to add an interactive layer on top of video footage, and it’s even possible to use YouTube’s annotations feature to build some basic interactivity. The key distinction that Interlude brings to the table is an interactive experience that’s seamless: the content doesn’t pause as it waits for you to make your decision. Instead, you see an overlay for a period of time determined by the artist (for the Grammer video it’s 5-10 seconds), and the audio and video never cuts out.

S-Curve

It’s one thing for a startup to build a snazzy custom video player — but how do you actually get artists to use it? That’s where S-Curve, a record label founded by former Columbia Records President Steve Greenberg, came in.

Greenberg (who is also known for discovering The Jonas Brothers and is a Grammy-winning producer) says that S-Curve is still a small company, which gives it the flexibility and a very strong incentive to keep innovating as much as possible. To do that, the label is working to discover and foster new technologies that are related to the music business — and then to actually use these technologies with S-Curve artists (and help connect the companies with the rest of the industry). Along with Interlude’s interactive video project, S-Curve has also been involved with Hashtag art, which was used by Katy Perry.

In return for helping these companies get off the ground in the hard-to-crack music industry, S-Curve will sometimes take an equity stake in the company, which is the case with Interlude. Greenberg expects that Interlude’s technology will extend well beyond music— he says there’s been interest from the advertising world, producers of online webisodes, and a content creators from a variety of other categories. In short, he says “the only limitation is the creativity of the people making the video — lightbulbs are going to go off when everyone sees it”.

VEVO

The third piece of the puzzle is distribution — you need people to actually see what Interlude, S-Curve, and Andy Grammer have put together. Cue VEVO, the music video portal that’s a joint venture between Universal Music Group, Sony Music Entertainment, and Abu Dhabi Media (EMI participates as well, and all VEVO content is syndicated to YouTube in a setup that still confuses me).

VEVO would be featuring Grammer’s music content anyway (S-Curve is distributed by UMG) but this video in particular is going to be given very prominent placement. The reason? It’s the first video to be part of VEVO’s new Video Evolved showcase.

VEVO CEO Rio Caraeff says that the site wants to do everything it can to feature innovative music content — he says that “music videos are ripe for reinvention” and he wants VEVO to be a place to help these experiments come to life. So the site is setting up a separate section that will highlight these new technologies as they launch. In some cases, VEVO will simply be embedding content from other services onto the Video Evolved site. But in the case of Interlude, VEVO has actually integrated the startup’s video player into its platform, so it will be hosting the content itself.

VEVO is also doing something special to mark the launch of its first truly interactive music video: the site will be tracking which ‘routes’ made through the video are most popular and after two weeks this version will be considered the ‘official’ release — it will be the version that’s given to other content channels like television and YouTube.

There’s a clear theme running through all of this: the desire to discover the future of music videos and their interplay with the web, whatever that may be. And while it’s far too early to say whether this interactive music video technology will be as ubiquitous as the “static” music videos that came before it, I can say one thing with certainty: it’s pretty damn fun. Sure, it’s quite possible that the novelty will wear off after a few of these, but I found myself watching the video repeatedly just so I could find Dwight — the last time I was this engaged in a music video was Britney Spears’ Sometimes. I finally found Dwight, and it seems like the labels won too: I now have this Andy Grammer song stuck in my head.



How To Protect Your Login Information From Firesheep

Posted: 25 Oct 2010 04:00 AM PDT

TechCrunch reader Steve Manuel claims to have found a workaround to Firesheep, the controversial Firefox extension that allows anyone on an insecure open Wifi network to access user login info for almost every single social network in existence.

Firesheep banks on the fact that most social sites default to the HTTP protocol because it’s quicker. The already existing Firefox extension Force-TLS attempts to circumvent this by forcing those sites to use the HTTPS protocol, therefore making user cookies invisible to Firesheep.

Like the alternative option HTTP Everywhere, the Force-TLS  Firefox extension allows your browser to change HTTP to HTTPS on sites that you indicate in the Firefox Add On “Preferences” menu, protecting your login information and ensuring a secure connection when you access social sites.

HTTPS encrypts user data, so if a script like Firesheep’s like tries to pull it, it can’t be read. Force-TLS forces a number of sites to make all of their requests over an SSL secured channel and while some sites, like Amazon, don’t currently have the secure option, the majors like Facebook, Twitter, Google, etc all allow a HTTPS connection.

How to configure:

1. Download the plugin here and install into Firefox.

2. Open “Preferences” and add the domains you want to force the HTTPS connection with.

3. Restart Firefox.

Note: Unlike HTTPS Everywhere, Force-TLS relies on the user defining the sites they want to access through a secure HTTPS connection.

And while everyone should have learned by now that there’s always some privacy risk when interacting online, hopefully the installation of Force-TLS will at least put less of a damper on today’s stint at your local “free Wifi!” boasting cafe. I’m also looking into the possibility of equivalents for this extension on other browsers and will update this post as soon as I have alternative options.

Thanks: Steve Manuel


Teaser Image: Kevin Steele



Venture Capital Sputters in the Third Quarter; Consumer Down, Business Services and Software Up

Posted: 25 Oct 2010 03:59 AM PDT

Dow Jones is releasing its third quarter venture capital numbers today, and the amount of money raised was down sharply from last quarter’s heady $7.7 billion distributed across 740 deals.

In the third quarter of this year, 662 companies raised just $5.4 billion. It’s not uncommon to see a muted third quarter in the venture business due to summer vacations, but this was the smallest amount raised in a summer quarter since at least 2005. Unless the fourth quarter outperforms, the industry will likely wind up in the same range as 2009′s total of $23 billion raised by US companies, which is down by about 30% from recent years. That’s not surprising given the dearth of IPOs and the fact that venture firm fundraising is down too.

Still, there were few interesting surprises in the numbers.

Researchers saw a shift in investor attention away from consumer products and services and towards business and financial services. Almost as many business and financial services companies have raised money in first nine months of 2010 as did in all of 2009. Consumer goods and services, on the other hand, saw one of its weakest quarters since the recovery. Although year-over-year the numbers for consumer products and services held up, there was a sharp drop in dollars on a quarter-over-quarter basis, down from $985 million in investments in the second quarter to $621 million this quarter. The reason could be as simple as timing. Several big deals may have just closed in the second quarter and not the third. But it could indicate a frustration with rising valuations and the general frothy consumer Web mood.

The number of cleantech and healthcare deals was pretty steady but, in terms of dollars, it’s a different story. Healthcare has been weak this year, but energy and utilities have surged. Year-to-date dollars going into energy companies are up a huge 47% to nearly $2 billion.

There was also a 26% uptick in the amount of money going to software companies– a cool $1 billion this quarter. “Software” is an inherently broad category, but it has historically been the venture industry’s largest and most consistently profitable one.

It’s a ho-hum quarter overall, but there are seeds of cleantech delivering on its promise, a new generation of enterprise companies and a meaningful disruption of the finance-industry. At a minimum, these numbers show that more entrepreneurs and VCs want there to be.

On a can’t-we-all-just-get-along note, the survey found that there was an increase in venture capital firms and angels doing deals together so far, year-to-date, although to be fair it’s a small $282 million in co-investment out of some $18 billion raised so far in 2010. Returns may be a different matter for this generation of funds, but in terms of money flowing out, this is still a VC’s business.



Five Years Later, Ray Ozzie Pens Another Great Memo: “Dawn Of A New Day”

Posted: 25 Oct 2010 03:08 AM PDT

Ray Ozzie, who famously took over the reins as Chief Software Architect at Microsoft when Bill Gates formally retired from the company (his last full-time day being June 27, 2008), stepped down from that position last week and will leave the company behind within months.

Ozzie, of course, you should know for having been the driving force behind Lotus Notes, a popular e-mail and collaborative workspace software package. He also co-founded Groove Networks, which was acquired by Microsoft in 2005.

Five years ago this week, Ozzie penned a memorable memo, 5,000 words long, entitled “The Internet Services Disruption”, outlining the challenge for Microsoft to catch up to its rivals in the Internet and cloud computing space.

He’s celebrating that birthday with a fresh memo: “Dawn of a New Day”.

Below is a short excerpt from the end of the memo, as I wouldn’t dream of stealing the man’s thunder (read the whole, 3,477-word thing here):

Let there be no doubt that the big shifts occurring over the next five years ensure that this will absolutely be a time of great opportunity for those who put past technologies & successes into perspective, and envision all the transformational value that can be offered moving forward to individuals, businesses, governments and society.

It's the dawn of a new day – the sun having now arisen on a world of continuous services and connected devices.

(Hat tip to @ScepticGeek)



LDK Solar Inks $300 Million Deal With BYD

Posted: 25 Oct 2010 02:01 AM PDT

Several big names in solar have settled from recent highs on Wall Street, but there’s still a lot of money running into the sector.

On Monday morning, LDK Solar announced that it has locked up a new two-year sales deal with Chinese juggernaut BYD worth roughly $300 million. Under the deal, LDK will provide monthly shipments of polysilicon starting on January 2011.

It’s another win for the solar wafer manufacturer, which earlier this month raised its third quarter guidance about 7% to a range of $610 to $640 million. In addition to raising its outlook, LDK noted that shipments of solar wafers and modules were outpacing demand.

For its part, the diversified BYD— which makes everything from automobiles to mobile phone batteries— has made no secret of its ambitions in green tech.

Earlier this year BYD announced that it will spend more than $3 billion over five years to construct one of China’s biggest solar power battery plant in Shangluo. Meanwhile, the company has also been working on large-scale energy storage solutions and their all-electric vehicle, the e6, is being prepped for a US debut. Although BYD (which Warren Buffett’s Berkshire Hathaway has a 10% stake in) has struggled this year amid soft demand in China’s auto market, the company has seemingly maintained its aggressive stride in the green sector.

“We are very excited to add BYD, a leading high-tech enterprise that has a strong commitment to the green energy sector, as a key customer,” LDK’s CEO, Xiaofeng Peng said in a statement.



Google Goes After YouTubeSocial For Trademark Infringement

Posted: 25 Oct 2010 01:09 AM PDT

YouTubeSocial founder David Sanghera has informed us that Google has sent the group viewing startup multiple email requests to hand over the YouTubeSocial.com domain. We also hear that the i/o Ventures-backed YouTubeSocial, which has amassed 50,000 unique visitors in the 30 days since we wrote about them last, is currently in advanced acquisition talks with a major media company so Google’s entreaties are a definite sign they are doing something right.

For those of you that are old, these kinds of “knock it off” threats, if not complied with, turn into ubiquitous “Cease and Desist” letters which come with the territory; Large companies send this kind of stuff to startups all the time, even we were not immune back in 2006.

According to Sanghera, Google and YouTube are asking YouTubeSocial for the following concessions:

1. YouTubeSocial cannot use YouTubeSocial URL.  Must change it to something else.

2. Must also change the branding and logo.

3. Must not use any monetization features. (Which it doesn’t)

4. YouTubeSocial must transfer their domain over to Google/YouTube.

While Sanghera says that he, like we did, will eventually succumb to Google’s requests, YouTubeSocial’s current strategy is to appeal to its users and start pushing out new features, like a public rooms feature and the Flingo.org assisted “Fling to a Web enabled TV” feature; “We’re doing this for our users, how are they going to hang out and talk with their friends if Google and YouTube takes us away?”

YouTubeSocial is still serving up YouTube ads up against all its content, so Sanghera refers the Socialvision’s product as really a “win win” situation for YouTube; “The average user spends 12 minutes on YouTubeSocial and recurring users spend about 35 minutes. So people are discovering a lot of content.”

On what happens if this David and Goliath tale does not have a happy ending? Sanghera says that the startup will have to change its URL and branding and start looking to other video services like Vimeo for content, “We’re the little guy, so obviously we have to comply.”




Skype Demands Mobile App Nimbuzz Remove Support, Effective October 31st

Posted: 24 Oct 2010 10:30 PM PDT

Exclusive: Nimbuzz, a popular mobile communication service provider, has been asked by Skype to remove support for all Skype services, effective October 31st.

The startup will be announcing the news to its 30 million or so registered users later today.

Nimbuzz sees the decision to ask for the removal of support for Skype services in line with the communication software giant’s “mandate to disconnect with all third-party VoIP services ahead of its impending IPO“.

Skype, in turn, calls bullshit and claims Nimbuzz simply stopped communicating with them quite recently, following several months of discussions about Nimbuzz’ compliance with its API Terms of Use and End User Licence Agreement.

Update: Nimbuzz has posted about the situation on its blog.

You may remember that the exact same thing happened between Skype and Nimbuzz rival fring back in July. Skype at the time also stated that it tried to resolve a dispute with fring amicably for a considerable amount of time, only to arrive at a point where they saw themselves forced to threaten legal action over “misuse of Skype software”.

From October 31st onwards, Skype users will also find themselves unable to chat, send messages or call their contacts on Nimbuzz, and vice versa. Nimbuzz points out users will remain free to communicate with their contacts using other VoIP/SIP, instant messaging services and social networks, including Facebook, Yahoo, Windows Live Messenger, AIM, Google Talk, Twitter, MySpace, ICQ and others.

In both the Nimbuzz and fring case, of course, it’s their millions of users who also use Skype that are the ones getting screwed over here. It’s also telling that Skype has started requesting the bigger third-party service providers to remove support for Skype services very recently, while both fring and Nimbuzz have offered Skype support for many years …

Said Evert Jaap Lugt, CEO of Nimbuzz:

Skype's decision is unfair to its own and our users. People want to choose how they communicate and to be able to make calls and send messages, regardless of service, social network, device or operator network. Nimbuzz gives them the freedom to do so, Skype does not.

For what it’s worth, Skype responded with this canned statement:

"Skype has been in discussions with Nimbuzz regarding our concern and belief they were using Skype's software in ways which it was not designed for, in a breach of our API Terms of Use and End User Licence Agreement.

Skype offered to meet Nimbuzz and discuss the issue however we have not heard back from them since our last correspondence to them in early August. As we have said before, Skype encourages openness and supports developers to build products that work with the Skype platform."

Coincidentally, both Nimbuzz and fring recently started offering their own paid VoIP services to users (NimbuzzOut and fringOut, respectively), so my educated guess is that that’s the real reason why Skype is singling out these companies in particular (for now).

For all its popularity, competitor eBuddy does not offer support for Skype services and, as far as I know, never has.

Nimbuzz is not a small player in the mobile messenger / VoIP space either, any way you look at it. The startup recently announced that it has surpassed 150 million downloads and has 30 million registered users across all major mobile operating systems. Moreover, Nimbuzz claims 3.65 billion mobile voice minutes have been logged over the past year.

The company has raised $25 million to date, and one of its shareholders is Naspers / MIH Group, the multinational media group which boasts investments in Tencent, Mail.ru, Facebook investor DST and other notable industry players.

Time will tell if both fring and Nimbuzz have strong enough offerings, and loyal enough users, to stand their ground against the many alternatives, no longer bearing in-app Skype support. It will also be interesting to see if Skype will move to demand more third-party clients to remove support for its services in the future.

We’ll keep you posted.



Firesheep In Wolves’ Clothing: Extension Lets You Hack Into Twitter, Facebook Accounts Easily

Posted: 24 Oct 2010 09:24 PM PDT

It seems like every time Facebook amends its privacy policy, the web is up in arms. The truth is, Facebook’s well publicized privacy fight is nothing compared to the vulnerability of all unsecured HTTP sites — that includes Facebook, Twitter and many of the web’s most popular destinations.

Developer Eric Butler has exposed the soft underbelly of the web with his new Firefox extension, Firesheep, which will let you essentially eavesdrop on any open Wi-Fi network and capture users’ cookies.

As Butler explains in his post, “As soon as anyone on the network visits an insecure website known to Firesheep, their name and photo will be displayed” in the window. All you have to do is double click on their name and open sesame, you will be able to log into that user’s site with their credentials.

One word: wow.

It’s not hard to comprehend the far-reaching ramifications of this tool. Anytime you’re using an open Wi-Fi connection, anyone can swiftly access some of your most private, personal information and correspondence (i.e. direct messages, Facebook mail/chat)— at the click of a button. And you will have no idea.

This is how it works. If a site is not secure, it keeps track of you through a cookie (more formally referenced as a session) which contains identifying information for that website. The tool effectively grabs these cookies and lets you masquerade as the user.

Apparently many social network sites are not secured, beyond the big two, Foursquare, Gowalla are also vulnerable. Moreover, to give you a sense of Firesheep’s scope, the extension is built to identify cookies from Amazon.com, Basecamp, bit.ly, Cisco, CNET, Dropbox, Enom, Evernote, Facebook, Flickr, Github, Google, HackerNews, Harvest, Windows Live, NY Times, Pivotal Tracker, Slicehost, tumblr, Twitter, WordPress, Yahoo, Yelp. And that’s just the default setting— anyone can write their own plugins, according to the post.

Within an hour of Butler’s post appearing on Hacker News, Firesheep was downloaded more than 1,000 times and evidence of usage has already popped up on Twitter in fantastic fashion. (Disclaimer: At the time of this post, I was not in a public setting and could not fully exploit the extension, however several users have reported success.)


(I had to pull one Tweet down at the request of the user, who had hacked into someone’s Twitter account).


Thanks to Bensign, aka Ben Schaechter (former TechCrunch developer) for the tip.

According to Butler’s post, he created this seemingly diabolical tool to expose the severe lack of security on the web. We spend so much time quibbling over the minutia in privacy policies, we lose sight of the forest, or in this case, gaping security holes.

“Websites have a responsibility to protect the people who depend on their services. They’ve been ignoring this responsibility for too long, and it’s time for everyone to demand a more secure web. My hope is that Firesheep will help the users win,” Butler says.

Update: A TechCrunch reader has discovered a Firefox extension that can prevent Firesheep from accessing your login information.
(Teaser Image: Flickr/David Makes)



Shunned By Apple, Adobe Embraces Android With AIR 2.5

Posted: 24 Oct 2010 08:59 PM PDT

Apple keeps giving Adobe the brush-off—what with the new MacBook Airs shipping without Flash and Apple’s prohibition (recently rescinded) on porting Flash apps to the iPhone. Without Apple, industry observers are asking “Where does Adobe go from here?” Apparently, right into the arms of Android.

On Monday, Adobe will be releasing AIR 2.5 at its Adobe MAX developer conference. The latest version of AIR, which up until now has been a platform for creating desktop apps, will extend the runtime to smartphones, tablets, and TVs running the Android operating system (as well as the Blackberry Tablet OS). For the most part, that means Android phones, Android tablets, and Android-powered Google TVs. Just last week, Adobe Connect Mobile became available for Android, and Adobe Reader X extended the ability to read PDFs to Android mobile phones, Windows Phone 7, and Blackberry tablets. SInce becoming available earlier this year, Flash 10.1 for Android has been downloaded 2 million times, and will be pre-installed in future Android phones.

When Apple shunned Adobe last April, it literally turned to Android. Its development efforts with Android took priority and are now bearing fruit. It will still work with Apple when Apple allows it, obviously, but it is making a much bigger bet on Android.

The plan all along was to make Adobe, and AIR in particular, a one-stop development shop. Write once, and your apps can appear on any device—desktops, mobile phones, tablets, TVs. That is still the plan, but the emphasis now seems to be on non-Apple devices (more because of Apple than Adobe). Android is a big opportunity, and not just mobile. TV apps are going to be popular. The selling point behind AIR is that it will figure out how to display the same app on various devices and platforms.

Adobe is also launching InMarket, which is supposed to be a single place from which to distribute apps built with Adobe’s tools to multiple app marketplaces. Developers will get 70 percent of any revenues. At launch, however, InMarket only supports app stores from Intel and Acer. I’d expect the Android Marketplace to be added soon, but not iTunes. Now with AIR 2.5, Adobe will have a runtime for apps on desktops (Windows, Mac, and Linux), mobile (Android phones and tablets, Blackberrry tablets), and smart TVs. Meanwhile, Apple just launched an app store for Macs, which is targeted at exactly those kinds of desktop apps that are now AIR apps.

Photo credit: Flickr/ Mark Sebastian



Captchas + Ads = NuCaptcha Engage

Posted: 24 Oct 2010 08:58 PM PDT

NuCaptcha, the recently launched video captcha technology, is rolling out a new offering tonight: NuCaptcha Engage. Like the startup’s previous product, the platform uses video to determine if people are really human but adds a twist in the form of brand advertising.

Captchas are security questions you find on Web sites that require you to decipher and type words or numbers and detects whether the user is a human or a spambot. Most Captchas you see are transcription, text-based Captchas. NuCaptcha is trying to disrupt the space by adding video to the mix.

NuCaptcha Engage allows brands to place advertisements behind the actual Captcha text. NuCaptcha's video animation technology aims to be easier to read and more secure, with animation that makes the captcha far easier for humans to solve. You can find examples of the technology here.

NuCaptcha’s formats are available in a variety of sizes and will soon be incorporated on the advertiser side by brands such as Electronic Arts, Activision, and Disney. Pricing is either on a video CPM basis ($10 to $25), or a cost-per-engagement basis ($0.10 to $1.00), for larger, longer videos.

In tests, NuCaptcha’s adds have experienced 100 percent higher user engagement than traditional online advertisements. NuCaptcha’s pitch is that Captchas are used massively across the web (over 100 billion
captchas were used last year alone) and it makes sense to eek out some revenue from this traffic in the form of advertising. On the publisher side, captchas are promised to be more engaging compared to the average text formats.

It should be interesting to see if NuCaptcha’s advertisement formats will take off. Since NuCaptcha’s launch in June, the startup is now used by over 3,500 websites. In September, five millon captchas were served using the platform, and the startup is on schedule to serve ten million in October.



NSFW: Changing the world via Twitter? Yeah, you should get out more

Posted: 24 Oct 2010 06:44 PM PDT

When you start to think about it, Malcolm Gladwell – author of The Tipping Point and frequent contributor to high-brow magazines – and Chris Dixon – co-founder of Hunch and investor in Skype, Foursquare, Stack Overflow and others – have a fair amount in common.

Like Gladwell, Dixon – as evidenced in his recent appearance on Ask A VC – is a master of giving long, thoughtful answers to straightforward questions. Like Gladwell, Dixon has turned his passions into a successful career and no small amount of wealth. And like Gladwell, Dixon has the bold-strokes look of someone who might play himself in a Judd Apatow movie.

But there's one area at least where, if their writing is to be believed, Gladwell and Dixon find themselves at polar odds: the value of Twitter in building relationships and changing the world.

The discord began with an essay, written by Gladwell for the New Yorker, in which he argued that social media is only good for triggering small-scale, fundamentally meaningless change. For significant change – revolution even – Gladwell insists that participants must be bound together by real-world social ties – friendship, loyalty, fear – which simply can't be synthesized electronically.

Through concrete examples, the essay goes on to demolish the popular myths surrounding various high profile instances of "social media activism" – including the Iranian protests (characterised as grass-roots even though much of the social media chatter was written, in English, from outside Iran), the Moldovan ‘Twitter revolution’ ("a bit of stagecraft cooked up by the government" in a country where "few Twitter accounts exist) and even the case of Sameer Bhatia, whose struggle with acute myelogenous leukemia inspired an online campaign which lead to 25,000 people registering on a bone marrow donor database and a match for Bhatia being found.

In that last case, Gladwell acknowledges the success of the campaign, but counters that it came only because "friends" on Facebook, Twitter and the rest were only asked to do something incredibly quick (signing a register, giving) and with very little personal risk.

Chris Dixon disagrees. Writing on his blog, he admits that ‘I don't know if Malcolm Gladwell is right when he claims "the revolution will not be tweeted,"’ but "I can say with certainty that the Twitter [Gladwell] describes is not the Twitter I know". He continues…

"I've made more strong ties through Twitter (and blogging) than I have through any communications medium I've ever used before. The relationships start off weak – a retweet, @ reply, or blog comment – but often strengthen through further discussions and eventually become new friendships and business relationships."

Of course, it's slightly unfair on Dixon to contrast both pieces of writing as if they were equally-matched positions in a debate. Dixon's response was just a short post on his personal blog, while Gladwell's 4,400 word New Yorker piece is, to my mind, one of the best things the author’s ever written. And yet, the fact that Gladwell's piece appeared in print on newsstands across the globe while Dixon's post was one of many such responses to appear online is actually kind of the point. In writing his rebuttal, Dixon neatly encapsulates two pervasive attitudes amongst bloggers and advocates of social media.

The first of these is the knee-jerk impulse to defend social media against any attack, especially when it comes from someone who, as Dixon says of Gladwell "doesn't seem to really use Twitter". In fact, such is his urge to defend Twitter, Dixon doesn't seem to have noticed that he's actually agreeing with Gladwell. Consider again what Dixon says: "I've made more strong ties through Twitter (and blogging) than I have through any communications medium I've ever used before."

And how do those ties manifest themselves?

"The relationships start off weak – a retweet, @ reply, or blog comment – but often strengthen through further discussions and eventually become new friendships and business relationships."

Precisely. The retweets, replies and comments started off as inherently weak connections but some of them have since led to actual discussions and friendships and business relationships. No one – certainly not Malcolm Gladwell – is disputing that Twitter is a great way to connect with new people, some of whom might become more than just 140 character bios and 73 x 73 pixel avatars.

Unlike Gladwell, I was – until recently – a heavy user of Twitter. Before I closed my account I'd written a little over 12,000 tweets (more than twice as many as Dixon and Gladwell put together, if that’s really a metric that matters). Like Dixon, I formed plenty of meaningful relationships as a result of all those tweets. Hell, I even started dating a girl after I tweeted about her during a flight (she's a flight attendant, I was That Creepy Guy On A Plane). But the idea that the resulting relationship was in any sense defined by our use of Twitter is just plain nonsense.

On the contrary, like most of the relationships Dixon is describing, it didn't become meaningful until we took it away from social media; first to text messaging, then phone calls, then an actual real-world date. The further away from Twitter the relationship got, the more meaningful it was. It's the real world element that gave it value – something that, in their rush to flag-wave for technology, too many social media fanatics fail to realise.

Which leads to the second, and more dangerous, attitude those same fanatics share: a confusion between Means and End; the idea that saying something is the same as doing something.

Last week, Mike Arrington responded to a Twitter follower who had asked him to retweet this…

Mike’s response was short, but damning: "@flashsid do you kind of feel like you made a difference by tweeting that ad?". The tragic truth is that @flashsid's answer was probably yes.

Just consider some of the most popular examples of cyber-action: joining the save Darfur Facebook group, turning your avatar orange for Burma, changing your location to Tehran in support of Iranian protesters, changing your MySpace background music to La Marseillaise in support of French students (I may have made that last one up) or whatever today's cyber cause du jour is. Yes, they make us feel good about ourselves, but as for actually making a ha'penny shit of difference; well, let's turn back to Gladwell…

"The Facebook page of the Save Darfur Coalition has 1,282,339 members, who have donated an average of nine cents apiece. The next biggest Darfur charity on Facebook has 22,073 members, who have donated an average of thirty-five cents. Help Save Darfur has 2,797 members, who have given, on average, fifteen cents."

And therein lies the problem with the myth of social media as a way of spurring people into action, and the automatic urge for many of us who enjoy social media to defend it against all attacks.

Sometimes the attacks are justified.

And sometimes… as in the way that Twitter and Facebook and the rest have deluded even smart people into thinking they're creating meaningful relationships in 140 characters. And in the way that delusion has tricked millions of well-meaning people into squandering their goodwill on an endless succession of meaningless digital gestures when they could do so much more simply by taking to the streets or writing a check…

…well, sometimes “attacks” like Gladwell's essay are not only justified, but a vital public service.

Please retweet.



Make Chuck Masturbate In This iPhone App For 9 Year Olds

Posted: 24 Oct 2010 06:35 PM PDT

Talking Chuck was approved by Apple and released into the appstore on October 22. It’s described as “a fun and interactive character for your iPhone and iPod” and “Fun for everyone! Kids, adults, friends, co-workers, and more. Everyone loves Talking Chuck!”

One of the buttons that makes Chuck do things is labeled “WC” (for water closet, or bathroom). When you press the button it’s supposed to “let him go to the toilet.” Which may or may not be true. But what he’s doing in that toilet is maturbating, complete with a happy ending.

Apple rated the app as 9+, which it defines as “Applications in this category may contain mild or infrequent occurrences of cartoon, fantasy or realistic violence, and infrequent or mild mature, suggestive, or horror-themed content which may not be suitable for children under the age of 9.”

Get it while it’s still available, just don’t let your kids play with it.



Qwiki Has No Qwiki For Qwiki

Posted: 24 Oct 2010 06:06 PM PDT

The world is starting to get a first hand glimpse of TechCrunch Disrupt winner Qwiki. And one of the things they’re noticing is this – Qwiki has no qwiki for Qwiki.

In other words, the site turns up no results for the query “qwiki,” and apparently a lot of first time users are using that as a test query. Just like lots of people type “google” into Google, or “wikipedia” into Wikipedia. And, yes, a surprising number of you also type “techcrunch” into our own search box.

Qwiki knows millions of things, the site says. It gathers data from resources like Wikipedia, Flickr and Yelp and then present that data in audio, video and image formats. Even obscure restaurants bring up cool results. It’s probably a good idea for them to add their own company into their database. Because people really want to see the Qwicki qwiki.



Might The Mac App Store Lead To A New Class Of Micro-Apps?

Posted: 24 Oct 2010 04:35 PM PDT

This weekend, Ryan Block put up an interesting post on gdgt entitled: Will the Mac App Store have enough to sell? He raises a number of good points for why Apple may not be able to replicate their current App Store success with this new desktop store. But I’m left wondering if the store won’t lead to a new class of app: a sort of micro-app for the desktop.

Block makes the following points: a) high-end software like Photoshop won’t be placed in this store because Adobe won’t want to give Apple a 30 percent cut of all sales. b) most paid desktop software is dead or dying due to free replacements on the web. c) Apple’s strict rules will prevent developers from using this new store for test or demo software. I agree with all of those points. And that’s why I’m wondering if this store won’t instead lead to this new type of app environment.

While Apple’s brief demo at their event last week and their website teaser page indicate they intend this Mac App Store to be used to distribute full Mac apps, such as the ones they make like Pages, iPhoto, iMovie, etc, I think it’s possible that popular apps in this new store may be more akin to Mac Dashboard widgets.

Here’s what I’m thinking: one of the most popular apps since the inception of the iPhone App Store has been Pandora. Pandora obviously works through the web browser, but plenty of people would be into a small app that sits somewhere on your desktop running in the background. How do I know? Because Pandora actually already makes such an app — but it runs on AIR and you need a Pandora One premium account to use it. What if Pandora made a free ad-supported Pandora Mac app? Or a paid version (maybe $5 or $10) that gives you premium features? A lot of people would want such an app.

What about a Mac desktop Twitter client? Many of the most popular ones right now also run on AIR (TweetDeck) or Silverlight (Seesmic). Hugely popular native Mac apps exist, such as Tweetie for Mac, but since Twitter bought that client, they haven’t committed to continuing development on it (though it is supposedly being worked on on the side). People would pay a small amount for a great one of these as well.

But a real opportunity may exist in small apps that don’t just fully mimic popular web apps, but instead extend upon them. Imagine a Facebook app, for example, that offered a great photo upload and viewing experience? Again, this is sort of the idea Apple seemed to originally have with their Desktop Widgets, but those never really took off. One reason, undoubtedly, is that distribution was lacking, and developers had no way to make money from them. The Mac App Store solves both of those issues.

And this store may give rise to a whole new crop of small apps that otherwise might get lost in the sea of web apps — or not exist at all. You could certainly make the case that great new services like Instagram would have never existed without the iPhone App Store. Perhaps the Mac App Store will lead to developers creating new experiences and a new crop of apps as well.

And then of course there are games. While traditional game makers may hold off on Mac App Store games since they’d obviously prefer to make 100 percent of their revenue instead of the 70/30 split with Apple, plenty of micro-game makers will pop-up to take advantage of the Mac App Store’s distribution. Angry Birds, Cut The Rope, etc. We’re going to see them all. And they’re going to be huge.

I’d also argue that part of the impetus behind the Mac App Store is also to kill off optical drives, so that Apple can make machines more like their slick new MacBook Air. Every app you buy through the Mac App Store is downloaded and installed directly over the web. And you can install them again on a new machine when you upgrade. No CDs/DVDs needed.

Another point, of course, is to simplify the application buying experience for users. While plenty of software is available to buy and download over the Internet right now, the process is scattered and generally poor. The Mac App Store will change that. A lot of users and developers will welcome this.

Of course, such a unification attempt will have people scared to death that this means Apple will eventually kill off app installation on the Mac outside of this store. But that won’t happen — even Apple isn’t that bold. The shitstorm and backlash they would face from Mac users if they were to do this would be massive. Apple is a lot of things, but they’re not stupid. You’ll still have the option to install your own apps the old way.

Yes, you can’t install apps on the iPhone outside of the App Store, but you never could. Since the dawn of the Mac that hasn’t be the rule. Even if they wanted to, it’s too late for Apple to change that — at least directly.

Instead, computers like the iPhone and iPad that have this new distribution model will eventually far outnumber Macs — based on recent sales, they already might.

Apple has said that they’d like to get the first version of this Mac App Store out there in 90-days. They’ll undoubtedly have a range of third-party developers on board for the launch. But it will be shortly after that when we’ll begin to see exactly how this new distribution model will be used. And I suspect a lot of $5 micro-apps and small games may end up being the apps that drive the store.



Calm Down, Hippies: What San Francisco needs to Learn from the Valley

Posted: 24 Oct 2010 03:31 PM PDT

Something culturally strange is happening in San Francisco. I’m not talking about the “let your freak flag fly,” live-and-let-live vibe for which the city is famous. I’m talking about the growing cultural rift between the city and Silicon Valley, despite the obvious geographic overlap.

If you drew a Venn Diagram between San Francisco hipsters and people who work in and around the Web industry it’d look like a more shoved-together version of the MasterCard logo. While many of the largest technology companies of the last few decades’–like Apple, Cisco, Oracle, eBay, Yahoo, Google–were based on the peninsula, Web 2.0 has unabashedly been centered in San Francisco. Facebook, LinkedIn and YouTube were founded on the peninsula, but that’s about it. TechCrunch recently moved from Palo Alto to the city and Twitter, Zynga, Yelp, Digg and dozens more are within an easy walk from our offices. Just upstairs from us are Yammer, ShopItToMe and OpenDNS.

Implicit in almost every single Web 2.0 startup is the idea of scaling quickly– whether it is raising angel money to focus on getting a product out – revenues-be-damned – or pulling any viral trick in the book to make sure that millions adopt your application or go to your site. The obsession with heady user numbers is only escalating with the reliance on advertising-based business models, since most large ad businesses need 15 million uniques or so to make sense.

Getting big, fast is even more the name of the game now than it was in the late 1990s, with many startups not even building much of a business — just developing the product and hoping a larger company will buy that coveted traffic and user engagement. And the faster all that can all happen, the better.

Go to any hipster, grungy bar in San Francisco. Ask the first five hoodie-wearing people you see what they do, and you can be sure at least two say they work for a startup. And if your next question was “How big are you guys?” no one would flinch… and each of them would try to pad the answer. Big is good in startup land. Getting big, fast is what separates startups from small businesses. Doing that over-and-over again, decade-after-decade is what separates the Valley from nearly anywhere else.

And yet, when it comes to the non-Web, brick-and-mortar retail business in San Francisco an ugly, self-righteous, vitriolic hate is emerging against anything successful enough to have more than one or two locations. Last week there was an ugly blow up around a local, high-brow coffee vendor, Blue Bottle Coffee, who wanted to open a coffee truck in Dolores Park– the center of San Francisco hipsterdom in the Mission district. The kerfuffle is something many of our readers wouldn’t care about, but it strikes at the heart of what has made Silicon Valley great– despite being geographically in the heart of modern Silicon Valley. In short, locals were so incensed that they didn’t get adequate opportunity to approve or disapprove of this “chain” coffee store opening a non-permanent location in their neighborhood that an army of people threatened to boycott, protest, and — believe it or not– actually spit on employees as they went to work their first day.

A reaction against national chains or big box retailers that hurt local mom-and-pop businesses is one thing. But this is so sad and crazy that it makes tea partiers look rational. For obvious reasons, a local business that has been successful enough to open seven stores isn’t the same as a national chain.

When Starbucks locations were popping up throughout America, you saw similar reactions to a big corporate coffee chain running out small mom-and-pops. But Blue Bottle is a Bay Area company with just seven locations. Somehow the same city– the same cultural mix– that supports a Web startup going from an idea to a global powerhouse in a matter of months rushes to tear down a retailer that’s been successful enough to open a few stores in just a few of the modestly-sized city’s cloistered neighborhoods. It’s as if Silicon Valley’s much-trumpeted meritocracy only holds true for the Web. When it comes to coffee? We don’t want the best-run, most popular local brands that have won in the local market; the same brand that mom-and-pop restaurants in the Mission serve and the same brand that you have to wait in line for 20 minutes to get just a few miles away. No, that should be hobbled and literally spit-upon.

It’s such a staggering juxtaposition of rewarding success on one hand and punishing it on the other. One of the most open, competitive systems of working capitalism, juxtaposed against a system that is downright anti-capitalist and protectionist to a rabid extreme– all in the same tiny geographic area. It’s so staggering that I wonder if the two are connected in a yin-yang relationship, like the sibling who is a clean-cut, straight A’s student and the sibling who is a rebel in reaction.

This isn’t the only example. Also last week, Trader Joe’s pulled out of a development in San Francisco’s Castro neighborhood in part because the city was forcing them to make patrons pay to park. This wasn’t a matter of economic necessity, this was a stated desire to control the type of shopping that could happen at Trader Joes. Because the traffic in the neighborhood is already so bad, the city wanted to discourage anyone who wanted to drive to Trader Joe’s for a quick, pick-up-a-few-things trip. The retailer rightly balked and pulled out. If Trader Joe’s is bringing a popular, low-cost, organic grocery store to the neighborhood, shouldn’t it get to dictate what kind of customer it would like? Now nothing is going in. But you made your point, San Francisco. Well done. Just this weekend, we see San Francisco colliding with Silicon Valley again with the city’s cease-and-desist for the popular UberCab.

A more striking collision of typical-Valley and San Francisco cultures was Supervisor Chris Daly’s uproar over a proposal to upgrade San Francisco’s port so that the city could host the America’s Cup. The price tag was $270 million–that’s nothing for this city– and was estimated to generate potentially $1.4 billion in economic activity, create 9,000 local jobs and help repair the aging Port of San Francisco.

Daly, one of only two dissenters, vowed to bring the entire thing down, personally in a long rant, followed by a press conference where he dropped f-bombs and said ”San Francisco should not be going so out of its way, using the people’s money so that a billionaire can have his yacht race.” Or, I guess, using the people’s money to give several thousand people jobs. Daly even found himself on the extreme of the very progressive San Francisco Bay Guardian on the issue. Ellison has a lot of enemies, but most would probably admit that building the second largest software company in the world in San Francisco’s backyard and angel investing in other large locally-based companies like Salesforce and Netsuite has done more good for the area than harm. And calling the global sailing event “his” yacht race is extreme– even given the colossal ego of Ellison.

Similarly, I know self-made Internet millionaires who’ve bought old properties in transitional neighborhoods in San Francisco, only to give up on restoring them because they met so much neighborhood opposition to anyone “wealthy” coming in and rehabbing a historic property. Never mind, these aren’t trust fund kids. These are people who moved to San Francisco because it was a land of opportunity, started from nothing and took huge risks to build companies that employ hundreds of city residents. That’s called spitting on the hand that’s feeding the city– a city, which has steadily lost its relevance in industries like traditional media, finance and manufacturing.

The startup guys used to be the outcasts; the nerds in high school getting their revenge in the real world. Yet, somehow, in the city that benefits the most from their hard work, those nerds have become viewed as the jocks. Those who can’t or don’t start companies are tearing that meritocratic ethos down in the name of “looking out for the little guy.” But who is better for the little guy: An entrepreneur investing in building a profitable, growing company — whether its Zynga or Blue Bottle– or a self-important politician or neighborhood rabble-rouser? It comes down to whether you believe in a capitalist system. And despite the libertarian leanings of a lot of the Valley establishment, a big part of San Francisco is getting less capitalist in the name of being “progressive” every day.

When I first moved to Silicon Valley back in the 1990s, not only did most of the large tech companies operate outside the city, but most of the richest figures in Silicon Valley tended to live outside the city, either north in Marin, east in Walnut Creek or south in Woodside, Palo Alto or Menlo Park. If the city isn’t careful a similar flight is going to occur with the younger generation of entrepreneurs– just like Blue Bottle left Dolores Park, Trader Joe’s left the Castro, and Larry Ellison could very well pick Spain over San Francisco. Left in the city will be a bunch of bitter grandstanders who are too busy spitting on people–again, I mean that literally–who are trying to earn a decent wage at a coffee kiosk to actually start a company, create jobs or invest in making San Francisco a better place themselves.

Valley types spend a lot of time lecturing other parts of the United States and the world on what it takes to create a culture that celebrates risk and reward. Maybe we should take a look at the culture in our own stomping ground.



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