The Latest from TechCrunch |  |
- Paypal Is About To Get A Bruising From Facebook And Square
- Facebook Comments: What’s Easy Isn’t Always Right
- Why British Geeks Can’t Bear To Look A Gift Horse In The Mouth
- Silicon South Africa: Google Launches Incubator For African Startups
- House Of Representatives Is Among Top 10 ISPs Visiting Isthegovernmentshutdown.com
- Clearer Shot Of The Alleged Buttonless iPod Touch Looks Nice, Is Fake
- Google Buys Mobile Music And Entertainment Platform PushLife
- House Votes Against FCC Net Neutrality Regulation (But It’s Probably Safe For Now)
- A New Design For InternMatch Humanizes Internship Search
- WITN: Abbasso Las Vegas! [TCTV]
- Frame Wars
- What, Zuck Worry? Mad Magazine “Honors” Mark Zuckerberg With His Own Cover
- The Seven Most Interesting Startups At 500 Startups Demo Day (TCTV)
- Weekend Giveaway: A Blackberry Playbook
- Google Places Swallows The Awkwardly Named “Hotpot”
- Sequoia Invests $8 Million In Messaging App Maker WhatsApp: Sources
- I Won’t Use Flickr Until They Release My Photo Hostages
- Keen On… Steven Levy: Google’s Social Strategy – “A Comedy of Errors” (TCTV)
- TechCrunch Giveaway: Free Ticket To Disrupt NYC #TechCrunch
- DOJ Willing To Approve Google’s $700M ITA Deal, With Conditions
- YouTube Gets Into The Live Streaming Game, Albeit Carefully
| Paypal Is About To Get A Bruising From Facebook And Square Posted: 09 Apr 2011 09:00 AM PDT Editor's note: Guest author Ohad Samet is an expert in managing fraud and other risks in payments systems. He was previously a senior manager at PayPal and blogs at As Risky At It Gets. 2011 is going to be a big year for payments, with more startups and mature companies getting funded in the space than almost ever before. It’s important to make the distinction between the headline chasers, the slow moving giants struggling for a piece of the pie and the companies that have a chance at real disruption. For my money Facebook and Square are both very interesting companies to follow in this space. In my last post on TechCrunch I discussed Google and Apple and their efforts around payments, and explained why I don’t yet think they are serious players for the whole payments pie. The post ended with some ideas around what serious contenders could look like, and who are other potential large companies that could step into user-to-user payments. I’d like to expand on that, looking at how the companies above might take advantage of chinks in Paypal’s armor (disclosure: my consulting company, Analyzd, has done a project with Square in the past). Paypal’s Weaknesses Paypal (eBay’s growth engine) is demonstrating strong growth and evidently still enjoys network effects—in many territories its service sells itself to small and medium merchants. Moreover, much like with banks and other financial services companies, people like to complain (about fees, user experience and customer service) but will not easily migrate to another company just by virtue of marginal improvements. But Paypal is far from untouchable; it has a few flaws that make room for some fierce competition. What are they? First and foremost, Paypal’s service has matured over the last ten years. Product and policy decisions that made a lot of sense in the era of “The Paypal Wars” became structural issues, accompanied by limitations gathered in an attempt to improve profitability and revenue. Concepts such as a full redirection to Paypal’s website to make a payment which is still widely required in its most popular small merchant products and the limitations it places on businesses it deems risky (such as rolling reserves, 10-20% of your volume being held for up to 120 days) create whole segments that are underserved and can be tempted by a new service. Second, the company is heavily reliant on the existing card association and banking infrastructure. Despite having acquired Bill Me Later (offering credit on the spot to approved buyers), its payment volume is still noticeably a mix of card and direct bank payments (here’s an old yet still relevant explanation). This creates a boundary both on the level of fraud and credit losses it can sustain and (more importantly) on its pricing. Paypal is left struggling with getting more people to pay with a bank account (and, given Bill Me Later, more and more using credit products) or it’s forced to skim a few basis points on top of card fees. This is one main reason why small merchants start with Paypal, but then graduate out of the system and move to a full merchant account where they can work directly with card products and other, lower fee payment options. Third, Paypal is very much U.S.-centered in both infrastructure and process. It has definitely gone global, with good presence in Europe and Asia, but its hold of the market is much less obvious in these territories. Other countries have significantly different regulatory challenges and sometimes completely different payment processes and preferences (Germany is a good example); a few ongoing issues (most recently in India) have demonstrated that being based in the U.S. is not always an advantage. Becoming a truly international organization, with a distributed work force adapting or (in some cases) rebuilding the product creatively to match the local market is a daunting challenge for many companies. Finally, with size comes the innovator’s dilemma which hinders Paypal’s ability to bet on small and evolving markets, resulting in the company being late to the game. We need to take this one with a grain of salt, though—Paypal is investing in user experience and technology, and through sheer size can reclaim market share even when it is a late entry. However, a wide consumer base is not as large an advantage as it once was when new consumer (web or mobile) products gain immense amounts of traction within weeks and months and other innovative consumer companies with a shorter history are eyeing the space. And so, competition for Paypal’s lead position can come from two types of players: the first and obvious one is a consumer brand that has a trusted relationship with a massive user base; the second is a company rooted in an underserved segment of the market, preferably out of the U.S., and does not build on the usual card-and-bank infrastructure (or worse, on carrier billing or some other secondary derivative). Facebook’s Social Advantage Facebook is a good example of the first type of player. Why them and not Google or Apple, which I’ve discussed in my previous post? All three have a wide user base, have experience with some sort of payments, and are faced by the same challenges. Why is Facebook different? First, Facebook signaled it wants to play, at least to some extent, with its new Facebook payments subsidiary. Second, of all the large companies it not only has the largest, most diverse and global user base, it also has a rather clear identity strategy that extends beyond their website and is based on real information. This is a critical element in payments today. The ability to control identity isn’t the be-all and end-all of payments (spam, abuse and fake accounts on Facebook prove that) but if enforced properly it will provide a good enough basis for seller and consumer risk management. Third, while Google and Apple have built their ecosystems and added payments to them to facilitate the type of commerce they required, nothing is a more natural extension of social interaction than adding payments to the mix. Payments and commerce are by their very nature social transactions. From the user perspective, Facebook moving into payments is an easy to comprehend progression, and the social graph can easily add relevant reputation to boost the feeling of trust. Where is Facebook aiming to be and where can it fit? While currently it is clear that the company is aiming at social games—a high margin industry it understands and could use as a classroom to learn about payments—it can go way beyond that. As I noted above, Paypal has a merchant graduation issue that is clear from its fee structure; when you grow beyond a certain point, a merchant account is better than a Paypal account if only for the costs, even given the need to manage risk management yourself. While Facebook may not be able to solve the cost problem that’s limiting Paypal, it can provide large merchants with a different incentive—a huge, diverse, captured audience—which translates into conversion heaven. With its growing experience in ad targeting and more users moving to Facebook messages, Facebook can create unique marketing opportunities for merchants that integrate Connect. Payments are the next logical step—all through one simple integration. Getting those merchants on board and using Facebook Credits as a universal form of payment will drive enough users to attach cards and bank accounts to their Facebook account. That could pose a huge threat to Paypal, and strongly limit its opportunity. Square: Going For The Mobile Wallet Square comes to mind as a good example of the second type of player, however its case requires some explaining. Square seems to be a consumer-mobile-focused payment system for offline payments using cards, kind of a well-designed poor man’s POS (point of sale system). But look deeper: what I find super interesting is not the payments small sellers and retailers are receiving through credit cards. This is a necessary evil. What’s interesting to me is what these users then do with this money they have in Square’s system—currently deposited to their bank accounts, but which can potentially stay with Square and be used as a low cost funding source. It’s a little farfetched, but Square may be onto a very creative way to tap into payrolls—effectively becoming the one real mobile wallet—by meeting the money spent by consumers at the point of sale and providing better ways to spend it directly from your Square account. The result will be an ecosystem which you enter with a credit card payment, but then never use that card again. If everyone has a mobile phone with a Square app, wide payment acceptance is just one tap (or bump) away, and with fees more befitting cash than cards. This direction can also explain why removing the fixed portion from their card fees makes sense—a loss leader used to pump huge amounts of cash from small retailers into their Square balances. This is the power of going after payroll. From the financial perspective, if Square keeps its current fee structure, it remains competitive with merchant accounts for anything under $15-20 (see Feefighters’ handy calculator here) and with Paypal on even larger average transaction sizes (anything under $35, even for Paypal’s most competitive fees). While Square needs to drive down costs further to become more interesting for the larger retailers, it’s definitely compelling for exactly the population that might then spend money directly from its Square balance and build its wide user base, namely the small retailers and occasional sellers. To those people, Square is also offering a quick way to accept credit payments that may not have been paid otherwise and a superior user experience, both strong drivers for adoption that can be more important than fees in the short term. Photo credit: Flickr/Aaron Nace        
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| Facebook Comments: What’s Easy Isn’t Always Right Posted: 09 Apr 2011 07:00 AM PDT Editor’s note: Jordan Kretchmer is the founder of Livefyre, a realtime commenting and conversation platform for publishers and online communities. He doesn’t think much of Facebook comments. In this guest post, he explains why. I’m not gonna lie, I hate Facebook Comments. It’s not just because it competes with my company’s product (though I’m sure that has something to do with it). It goes much deeper than that. And I am not alone. Whether you're a casual blogger or the owner of a major tech site like this one, it's likely that you've recently begun to think a lot more about the comments system on your site. Blog comments have been around since 1997 (or earlier, if you count Usenet, or various more primordial forms of online diary-keeping). But, never have comments been as important, or contested, as they are today, especially as Facebook charges into the space with its updated comment widget. If you're like us, you're trying to keep up with the frequent reports from the field about which sites are switching to Facebook Comments (like TechCrunch) and what their respective communities think about it. The bulk of the debate centers on whether or not to replace Disqus with Facebook Comments, or the feature war that in almost all cases misses the point entirely. I'm a bit biased, I admit, but I think we have to look beyond the feature-set of Facebook to grasp the impact that one line of javascript could have on a site’s community, and more importantly the entire web. This post tries to unpack the many places where Facebook fails those who adopt the commenting platform as a cure-all to bring community back to their content. (And kudos to TechCrunch for not shying away from this debate. I hope you weigh in with your own thoughts in the comments below, even though you will have to log into Facebook to do so). Facebook Ignores the Interest Graph Facebook Comments approaches online identity and discussion from a perspective that doesn't (and won't) align with the interests of publishers or commenters. Conversations around the web are built on the interest graph, not the social graph. By making the assumption that I want my 800 Facebook friends in every conversation I participate in online, it forces me to combine all of my interest groups and all of my friend groups into one giant bucket. While that social segmentation worked for my college Facebook network back in the day, it broke down the day my mom could join that network, along with my sister's friends and the guy that beat me up in middle school. I can choose who I include in different discussions in real life. Why shouldn't I have that control on the web too? What happens, and this has been proven out on numerous sites, is that interaction rates drop dramatically when Facebook comments get installed. The issue of conversation context is related to this, and deserves a post on its own. Suffice it to say that personal comments from private Facebook pages don't make sense in the context of a conversation on a publisher site. This random comment intrusion damages the value and quality of conversations by reducing commentary to one-line personal banter between two or three friends. It also goes the other way around; random comments appearing unbeknownst in your Facebook feed will confuse more than it will engage others. While Facebook allows you to opt out of that, it's checked by default, and the option to deselect it isn't even presented to you on replies to comments. Sneaky tactic. Facebook Over-Prioritizes Silencing Trolls Facebook Comments hones in on trolling by forcing real identity, but the end result isn't just the silencing of trolls, it's the silencing of everyone. If you've followed the interminable trolls versus no trolls debate, you know exactly what this means. Anonymous commenters are lumped into the all-encompassing evil troll bucket. But the truth is that there are good trolls, and there are bad ones. The good ones spark engaging dialogue and encourage the development of amazing content. We have to find the balance between utter silence, and allowing for important contribution. One thing is for sure, using Facebook Comments to kill trolls is like trying to kill a fly with a boulder. The result will be way more destructive than just letting the fly buzz around and eventually, go away. Facebook Wants Your Data. Badly. Publishers who have chosen to hand over their entire communities to Facebook are likewise choosing to give up the entire value of their community. What this means is that they no longer have any data on loyal commenters, and no email addresses, which means no ability to communicate with them again. They're no longer your users, they're Facebook's. You're giving a huge strategic and valuable asset to Facebook. They understand the inherent value of comments and community, and are attempting to take it out from underneath publishers before they even realize what's happened. And we're back to where we started—publishers don't quite understand the value of their communities yet. Why not just redirect www.techcrunch.com to www.facebook/techcrunch then? Any publisher would find that absurd, because they know for sure that their content has value—and they'll never hand that over to anyone else. Don't Throw in the Towel As a publisher or blogger of any size, creating an active and engaged community isn't something that you have to do alone. There are plenty of companies building tools that foster better conversations. Just remember that focusing on the people in your community will make your site more valuable, without giving that community away to Facebook.        
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| Why British Geeks Can’t Bear To Look A Gift Horse In The Mouth Posted: 09 Apr 2011 02:26 AM PDT
The questioner, looking nonchalant but determined, was in his thirties, held a small black dog in his lap and wore thin spectacles. “I have a question. What’s in it for the taxpayers? Who’s going to be assessing entries and how are they qualified to do that?” There was a chuckle from the audience, at the obviously antagonistic question. I muttered to the person next to me, “Talk about looking a gift horse in the mouth!”        
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| Silicon South Africa: Google Launches Incubator For African Startups Posted: 08 Apr 2011 09:53 PM PDT
Umbono will focus on web and mobile-based startups building solutions to local problems, which also have regional appeal, in an effort to help them “transform their ideas into companies”, according to Google SA country manager Luke Mckend. Fittingly, “umbono” happens to be the very Zulu word for “vision” or “idea”. The South African incubator will be structured as a 6-month program, in which 5 startups chosen by Umbono’s panel of angel investors and Google representatives will receive a seed investment of $25K to $50K. The teams will also have access to Umbono’s free office space, bandwidth, and a mentorship network of Google experts, ready to advise the startups on issues from “product design and commercialization to legal incorporation and valuation”, Google said of Umbono in its announcement. Local bandwidth is expensive in Cape Town — so this will likely be very attractive to young tech startups in South Africa. Not to mention the added bonus of $25K. Umbono’s home city of Cape Town, located on the southwestern shore of South Africa, has for years been attempting to position itself as a hub of innovation and technology in subsaharan Africa. The Cape IT Initiative, a non-profit organization dedicated to developing information and communications technology in South Africa, has been lobbying Google (and others) to locate their incubators in Cape Town for some time. Along with Cape IT, Cape Town is home to Silicon Cape, a similar initiative aimed at fostering tech entrepreneurship in South Africa, as well as veteran incubators, like the highly-regarded, 10-year-old Bandwidth Barn. South Africa has also produced its fair share of successful (and well-funded) startups, like Yola, a website creator that has raised $25 million, MXit, an instant messaging app with over 27 million subscribers, and Twangoo, Twangoo, a group buying club, which was acquired by Groupon earlier this year — to name a few. And now the country’s startup ecosystem adds another notch to its belt by luring Google’s business development talent to its shores. When I asked Umbono spokeswoman Julie Taylor about why Google chose South Africa and whether or not it has plans for incubators elsewhere in Africa, she told me that, at this point, Umbono is a pilot project. The incubator will test the African waters, and if the model proves to be viable — and beneficial –Google will look to expand into other emerging markets. “South Africa is recognized as one of the innovation leaders on the continent, particularly with tech startups,” she said, “so we are enthusiastic about the possibilities here”.        
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| House Of Representatives Is Among Top 10 ISPs Visiting Isthegovernmentshutdown.com Posted: 08 Apr 2011 07:06 PM PDT
What does come as a surprise is that a good number of the visits came in through the House of Representatives ISP, pushing the congressional body, which also happens to be the battleground that might instigate the shutdown, into the top ten service providers on Google Analytics. Other government agencies like the Senate, the Navy, Homeland Security, the Justice Department and Health and Human Services were also in the top 50 in terms of referral traffic. Seward registered the Isthegovernmentshutdown.com domain on February 25th “when the specter of a shutdown was first raised” but didn’t set it up as a Ismubarakstillpresident.com-type single serving site until this week. The site has received over 33K views since Monday, 473 from House of Representatives IPs. And in case you have a theory that’s it’s all one obsessed government employee hitting refresh, 80% of those HofR visits are new. Discuss.        
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| Clearer Shot Of The Alleged Buttonless iPod Touch Looks Nice, Is Fake Posted: 08 Apr 2011 06:00 PM PDT
Now, we don’t just publish things like this willy-nilly. Our highly-paid team of trained image experts has to vet them first. In this case, there were a couple red flags. See if you can spot them before scrolling down.        
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| Google Buys Mobile Music And Entertainment Platform PushLife Posted: 08 Apr 2011 04:48 PM PDT
Founded in 2008 by former RIM employee Ray Reddy, PushLife let you manage wallpapers, music, videos, ringtones and other media on your cell phone until its acquisition, setting out to “build immersive mobile experiences for people to play, organize, share and purchase digital content across multiple devices.” Instead it got bought by Google. The grab is particularly interesting in light of reports that Google might be launching its own music service soon as one could easily assume that Google would want PushLife to perform a similar function when it gets integrated into the Google engineering team in Canada.        
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| House Votes Against FCC Net Neutrality Regulation (But It’s Probably Safe For Now) Posted: 08 Apr 2011 04:24 PM PDT
As we wrote in December, Republicans had vowed to give the loophole-filled rules hell when the Congress turned more Republican in January, first voting to deny the Commission federal funding in February. Today we see the fruits of their efforts again, namely the voting through of House Joint Resolution 37, a regulation that would prohibit the FCC from having any authority over ISPs and broadband, thus overturning December’s regulations. One-half of the government wanting to revoke your power isn’t cool and I don’t want to necessarily down play the impact of a house vote but, as Wired’s Ryan Singel explains, the vote is indeed largely symbolic. Historically, the votes for or against Net Neutrality rules have been divided down party lines, and the resolution would have to pass through the Senate to go into effect, which is unlikely as Democrats are in the majority. President Obama has also said he would veto any legislation reversing the rules if passed by Congress, according to the New York Times. Sure it could take the votes of two-thirds of the members of both Congressional houses to override a Presidential veto. But as the Senate is currently split 53:47 Democrats to Republicans, and Democrats tend to be pro-Net Neutrality, an Obama veto override seems sort of a stretch. Supporter of the resolution and Oregon Republican representative Greg Walden told the New York Times, "Congress has not authorized the Federal Communications Commission to regulate the Internet.” Yes, but it as of yet hasn’t yet unauthorized it either. Stay tuned.        
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| A New Design For InternMatch Humanizes Internship Search Posted: 08 Apr 2011 03:32 PM PDT There are a number of websites out there that allow you to search for and discover internships. Internships.com, which Charlie Sheen recently used to hire a social media intern, is probably the biggest and most well known of the bunch. But, as anyone who’s used these sites knows, the experience is far from perfect. And the same can be said of job search sites like Indeed. InternMatch is entering the internship search and discovery market by focusing on small-to-medium-sized businesses and by building a tool that's easy to use with an eye-catching design. And I think it’s fair to say that a big part of making user experience enjoyable (and simple) is derived not only from the smooth application of the technology that underlies a particular service, but perhaps more importantly, from how its designed. 500 Startups Founder Dave McClure has spoken on many occasions about the importance of good design and yesterday the audacious VC put his money where his mouth is and announced the d.fund, a seed fund dedicated to helping designers start their own businesses. What’s more, just ask Jack Dorsey what he thinks about design. Yesterday at 500 Startups second demo day, InternMatch launched a site redesign that looks fantastic, and Founder and CEO Andrew Maguire told me that the motivation behind the relaunch has largely been to prioritize ease of use. I’ve had my share of internships and have spent plenty of time on internship sites, and from my experience, search tools and results are generally clunky and ugly, and algorithms are imprecise. Some even take on the feeling of servant farms. But, in surfing InternMatch’s new website, I found the UI to be smooth and natural, and it also seems as if the startup is ideologically committed to helping both sides of the equation — interns and their prospective employers. Which will be good for business. InternMatch is attempting to remove some of the barriers to an enjoyable user experience by providing resume and cover letter preparation and templates for free, and by allowing students to search and apply without having to register or sign up. At this point, InternMatch has limited its offerings to the West Coast, because it wants to jump on the “local” bandwagon. They have seeded college and university campuses up and down the coast with evangelists, who are working to build relationships with departments, professors, student clubs, and the students themselves. These evangelists are InternMatch interns, and the startup provides its interns with marketing training, and helps them build comfort with public speaking, and to plan and launch events. For employers, InternMatch launched a Community Page yesterday, which aims to go beyond the traditional listing model by allowing SMBs to tell the story of what it’s like to work at their company. When choosing an internship, students want to see videos and photos of the people behind companies — they want to engage and ask questions. The startup is attempting to do everything it can to humanize the internship search process for students and to allow employers to recruit students who really fit in with their business culture. And, as incentive to employers, if a company does decide to post a listing, InternMatch guarantees that the business will find an intern within 60 days, or it will receive a full refund. Back in February, InternMatch raised $400K in funding from a bunch of angel investors, including Dave McClure, Mitch Kapor, Kenny Van Zant, and Raj Agarwal. The startup is currently using the funding to expand the team and increase West Coast traction. As to how InternMatch monetize beyond its angel funding? The business model may actually present one drawback and barrier to entry for its target employer base. The startup charges West Coast employers $99 to post a listing on the site. (And its Community Page is an enterprise level subscription offering, with pricing dependent on the size of the company.) The $99 price tag is high compared to similar services. Internship.com offers free listings, and another cool internship site we wrote about last August, Urban Interns, charges $40, for example. However, everything remains free to students on InternMatch, and Maguire told me that the startup is working to create exposure and resources for programs like Work Study, which can help reimburse employers who recruit interns with financial aid packages. He also said, in relation to the great paid/unpaid internship debate over the last five years, that the startup will work with all prospective employers to advocate paid internships, especially those that are likely to turn into full-time jobs. Music to an intern’s ears, to be sure. After all, interns who believe that there is potential for upward mobility within their company are much more inclined to work harder and contribute more. InternMatch has the design. Now it just needs the good internships.        
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| WITN: Abbasso Las Vegas! [TCTV] Posted: 08 Apr 2011 03:30 PM PDT
Still, no matter whether you subscribe to Sarah’s view that 33 days in Vegas is 33 wasted days or Paul’s insistence that there are still stories to be found on and around the strip, you can watch the whole debate unfold below. (You can also read Paul’s daily Vegas diary on the Huffington Post, and follow his (temporary) Twitter account at @paulgoestovegas.) And, for those of you who don’t care about Vegas either way: here’s a video of a dog mowing the lawn.
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| Posted: 08 Apr 2011 03:02 PM PDT
Framerate standards sound like a rather dry topic to begin with, but it’s amazing what difference is created by even a minor shift on such supposedly technical grounds. Understanding why framerates are the way they are, and how they are changing, is fundamental to modern media production, and really is a major part of a number of multi-billion-dollar businesses. It’s powerful information, and more importantly, it’s interesting. Let’s take a look at the psychology and history that have created a worldwide standard for moving images, and examine why this standard is under revision.        
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| What, Zuck Worry? Mad Magazine “Honors” Mark Zuckerberg With His Own Cover Posted: 08 Apr 2011 01:57 PM PDT
The cover [Click to embiggen] will complement what will probably be a horribly unfunny piece on the inside of the magazine entitled “The 50 Worst Things About Facebook” and will grace newsstands in about a week. What’s interesting, I think, is that Mad chose Zuckerberg as a cover-boy at all. While always topical and up-to-date (I remember reading “articles” about Spiro Agnew back when I was a kid and having no idea who he was aside from the fact that his name was an anagram for something dirty), placing a someone who is essentially a business person on the cover is an interesting move, especially for a title that describes itself as “Greasy Kids Stuff.” Obviously Facebook is big with the kids, but how many would know the founder on sight? I asked Mad’s editor John Ficarra to explain his actions. TC: Why Mark? Why now? Ficarra: It was a pure business decision. We got a cool $2 mil from the Winklevoss twins to “poke” him a new one. TC: What is Mad doing in terms of social media? Do you have a MySpace page? Ficarra: We don’t have a MySpace page, but we have a very heavy presence on Friendster. Plus, you can usually find us every night…late into the night…on Chatroulette. That’s us with the Zorro mask and the SuperSoaker. TC: Where is your iPad app? What’s the hold up? Ficarra: We have a GREAT MAD app! It’s for the Zune and it’s available exclusively at Circuit City. Check it out! TC: It is my understanding that Mad writers aren’t particularly intelligent. Who spelled Zuckerberg’s name for you? Ficarra: Any idiot can spell Mark. Duh!        
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| The Seven Most Interesting Startups At 500 Startups Demo Day (TCTV) Posted: 08 Apr 2011 01:24 PM PDT 500 Startups first Demo Day sprint is over and people are trickling out their rankings lists of the 23 startups, or “little monsters” as co-founder Dave McClure calls them. McClure, with a background in marketing, has a unique curator’s eye, and his first batch of companies are an interesting brood, to say the least. Companies that are part of the 500 Startups accelerator program get a 50K investment from the fund at a $1 million valuation and can stay in the 500 Startups offices for 3-6 months. Companies that are part of McClure’s seed program receive up to $250K in seed funding, and McClure has the option of following on in later rounds. All in all the 500 Startups investment stable includes 110 startups, including Twilio, inDinero and Foodspotting. Between McClure’s accelerator program and his seed investments, 20 companies presented yesterday, and each of them had an unique story. YongoPal had pivoted from a video English language learning service to English language learning photo sharing app (you can’t make this stuff up). MindSnacks and 955 Dreams skipped out on presentations, because they had already closed their investments. Because some of these crazy kids just might be on to something, I grabbed the TCTV camera crew and interviewed seven of the most interesting companies yesterday. Bear in mind: “Interesting” here doesn’t necessarily mean “will be successful,” just that these are seven to watch (literally). Founded by Stewart Langille and Lee Sherman, the team behind Mint’s data visualization efforts, Visually is pretty much the all around Demo Day winner. An impressive presentation and pre-launch partnerships with CNN and Huffington Post mean that we shouldn’t be surprised if their seed round closes before their launch in two weeks. Founded by an engineering and MIT heavy team, Baydin tries to turn the painstaking and tortuous task of answering email into a game, with timing capabilities, Google Calendar integration and rewards. Just one turn in their email game simulator and I had to drag them in for an interview. Saygent is a voice sentiment analysis service that already has brought one of its customers, Comcast over $20 million in annual sales. Using crowd-sourcing technology, the SaaS helps clients identify who is really going to bite and aims to disrupt the call center industry. At first you might think, who needs conference and speaker matching service Speakergram, and then you look at the list of people and companies who hustler founder Sam Rosen has gotten to sign up: Foursquare, Hipmunk, Eventbrite and LeWeb’s Geraldine LeMeur. Getting influential people to let you handle their speaking engagements sounds like a plan, or at least a start. Social Stork is a Facebook app for moms and babies zzz … Well until you realize that founder Joel Auge is a high-school dropout millionaire, who was a finalist on Canadian Idol, and already has one successful Facebook-based company HitGrab. So why create another company? Exactly. CrowdRally figured out how to monetize the Facebook newsfeed before Facebook did, got a C&D letter and pivoted into a social video sharing product six weeks ago. I smell acquisition bait. Punchd is the simplest yet most disruptive startup of the bunch, and made this list primarily because none of its co-founders could tell me why the startup was interesting when I asked. Well taking customer loyalty cards mobile (“in your pants”) is indeed interesting, because it adds value to users and solves a problem, namely “What am I going to do with all these dog-eared loyalty cards?” Plus the founders “iced” Dave McClure during their pitch meeting, and he still accepted them into the program. While these seven sparked my interest out of the ones that demo-ed, the other 16 in the cohort are also worth a look — the concept of “interesting,” after all, is in the eye of the beholder. Here they are, in no particular order: InternMatch — Helping students find internships at startups companies beyond the biggies like Google and Facebook. Spoondate – A social network for people who want to meet over a meal, with group dining options. Rewardli — A group buying platform for small business. Wednesdays — A LinkedIn and lunches, a platform that lets you organize your networking over meals. YongoPal — Learn English while sharing photos with international friends. Ninua — A news viewing app with a social bent. Volta — Helps companies test their live phone marketing calls. 955 Dreams — New media publishing with a Music and Education focus. myGengo – Crowd-sourced translation services. GinzaMetrics — An SaaS for SEO and social media optimization. AwayFind — An email notification system for urgent messages. Evoz – A mobile baby monitor. WorkersNow – A hiring platform for blue collar workers. MotionMath — A way to make math learning fun for kids, by making it mobile. ReadyForZero — Online software that helps you track credit card debt.        
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| Weekend Giveaway: A Blackberry Playbook Posted: 08 Apr 2011 01:13 PM PDT I was originally going to write something like “Weekend Giveaway: An iPod Classic Case Plus Something Else” and then make you guys read the whole post to find out that I was going to include a Blackberry Playbook in the prize and then you’d be angry and come to my house and stuff and nobody wanted that. So here goes: we’re going to give you one lucky reader a Blackberry Playbook. It won’t ship until the official release date – April 19 – but it will be one of the first Playbooks to roll off the assembly lines. Entering, as you probably know by now, is simple.        
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| Google Places Swallows The Awkwardly Named “Hotpot” Posted: 08 Apr 2011 11:52 AM PDT
Google is killing off the Hotpot name, as they’re announcing in about five blog posts today. But they’re not killing the product itself — instead, it will now reside as a part of Google Places. They’re calling it a “graduation”. I’m calling it a “gorging”. And it’s definitely the right move. Says Google:
They then take a paragraph to explain the name once again. It’s about “shared eating experiences” or something. The fact that this name has had to be explained a few times now says just about all you need to know as to why it’s now going away. Is it Hot Potato reborn? Is it Hotspot? Hot Pocket? Some sort of marijuana reference? Why is this different from Google Places? Well now, it’s not. All those Hotpot updates will now flow through the Google Places blog — where they probably belonged in the first place.        
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| Sequoia Invests $8 Million In Messaging App Maker WhatsApp: Sources Posted: 08 Apr 2011 11:04 AM PDT Messaging apps that let you use your smartphone to text or chat with your friends or even large groups of people, often free of charge, are red hot. We’ve heard from a reliable source that one of the companies making waves in the space, WhatsApp, has just secured $8 million in financing from Sequoia Capital, and possibly other investors. WhatsApp enables users of iPhone, Android, Blackberry and Nokia Symbian60 devices to exchange text messages, images, audio and even video messages with one another. I have no idea how many users or downloads WhatsApp has attracted to date, as the company prefers to keep a low profile, but I’ve heard the name of the app drop in several conversations I’ve had about the mobile messaging space. I was actually quite surprised to find that they weren’t funded yet, especially with the track record of their co-founders, who established the company back in 2009. WhatsApp was founded by Jan Koum, who formerly managed the Platform Operations team responsible for the critical internal pieces of Yahoo’s infrastructure, and Yahoo’s former VP of Engineering Brian Acton. Another former Yahoo exec, the company’s ex-Senior Engineering Manager Charles Kung describes himself as an investor and advisor to the company on LinkedIn. Some signs that the app has already gotten some traction on the market: its iPhone app has received 28,040 ratings and hundreds of reviews on iTunes, while its Blackberry app has garnered 4,050 reviews. Sequoia recently participated in a $10 million round of funding for Bubble Motion, which offers a popular Twitter-like voice blogging service in India, Japan, and Indonesia, and has also invested in mobile communications company Clickatell. Other developers of similar mobile messaging apps have received funding in the past: Kik Interactive raised $8 million from RRE Ventures, Spark Capital, and Union Square Ventures, while GroupMe secured over $11 million in funding from investors like Khosla Ventures, First Round Capital, Betaworks and SV Angel, and textPlus raised $15 million from GRP Partners, Matrix, and Kleiner Perkins. Other contenders include Fast Society, which has raised $275,000 in seed financing from ENIAC Ventures and Quest Venture Partners, and GroupFlier, which has secured $500,000 in seed funding from Novak Biddle Venture Partners. Last month, another group messaging service named Beluga was acquired by Facebook. And let’s not forget that Google has a group texting app as well, called Disco. In other words, this space is heating up fast, and investors are keen to ride the wave. I haven’t yet confirmed the Sequoia financing deal with WhatsApp, I should note, as I’ve been unable to reach them all day, although our sources say the deal is done and has already been communicated to WhatsApp employees. We’ll update if and when we get confirmation.        
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| I Won’t Use Flickr Until They Release My Photo Hostages Posted: 08 Apr 2011 10:23 AM PDT
Flickr is a freemium service. But they have more of a hostage taking business model. It may make people cough up the money, but they sure aren’t happy about it. I, for one, have been staring them down for years now. It’s not a fight I think I’ll win, but it’s one that I’m willing to whine loudly about. On the surface Flickr’s pro service, currently $25/year, seems fair. The free service lets you upload a certain amount of photos, up to a certain maximum size per photo. The pro version allows unlimited uploading and a bigger maximum size per photo. Reasonable? Absolutely. I originally upgraded to Pro almost immediately after using the service so that I could upload lots of pictures all the time. But I’m guessing the real reason most people upgrade isn’t to get unlimited uploading. Rather, it’s because Flickr holds your old photos hostage until you pay up. My Pro account expired at some point, probably because I missed an email or my credit card number changed. I wasn’t using Flickr as much, having moved more to Facebook because of the structured people tagging feature. But then one day I was searching for an old treasured photo that existed only on Flickr and on the hard drive of some long forgotten and discarded mobile phone. Flickr won’t show me that photo. If your pro account expires only your last 200 photos are shown. The only way I can get access to that photo is by paying the Pro fee. That is absolutely no way to treat a customer. And it doesn’t make sense for Flickr. Even though I uploaded those photos as a Pro customer, I can’t see them any more. It’s not that they aren’t just displayed on my public profile, I can’t access them in account settings, either. And even the ones that are displayed are only downloadable in a smaller resized version. Originals are held hostage as well. Will I pay the Pro fee to get these photos back? No. Although I understand that many people will. But those people will not be happy customers, and they will likely just download their photos at that point and never go back to Flickr again. People certainly shouldn’t get comfortable using Flickr as a repository for their photos over the years, because unless you pay the Pro fee, you’ll lose them forever. That isn’t what Flickr should want to be. They should want people to feel safe uploading their photos, knowing that they have ultimate control to access and download them in the future. Flickr has sat on the sidelines as mobile photo apps have come into their own. They aren’t a useful long term repository of your photos. And their business model involves hostage taking. Not exactly what I’d call a thumbs up. If a photo service wants my business, at the very least they need to promise me the ability to download all my photos in original quality down the road. Because they’re my photos, Yahoo. Not yours. Photo credit: Flickr/Matthias Weinberger        
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| Keen On… Steven Levy: Google’s Social Strategy – “A Comedy of Errors” (TCTV) Posted: 08 Apr 2011 10:20 AM PDT
That said, In The Plex remains generally bullish – sometimes, perhaps, a little too bullish – on Google's prospects. And, like the company itself, this is an audaciously bold narrative that goes where no other book about Google has been before. Levy's new book immediately jumps to the top of the pile in the Google literature. It is essential reading for anyone with any interest in the Mountain View search leviathan. For Bay Area based TechCrunch readers who would like to hear an extended, live conversation between Levy and myself, please note that he and I will be talking about In The Plex and all things Google from 3.00 to 5.00 pm on Sunday, April 17 at Berkeley's Hillside Club (2286 Cedar St). Tickets will be $10 at the door and Levy will also be signing copies of In The Plex. Where are the major tensions within Google? Google’s social media strategy, “a comedy of errors” On Android and artificial intelligence Update: Congrats to Tracey M.W., Jerry C., Ankur A., Taylor O., and Anas B. for winning the 5 free books.        
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| TechCrunch Giveaway: Free Ticket To Disrupt NYC #TechCrunch Posted: 08 Apr 2011 10:01 AM PDT
If you want a chance at winning this week’s ticket to Disrupt NYC, just follow these steps to enter: 1) Become a fan of our TechCrunch Facebook Page: 2) Then do one of the following: - Retweet this post (making sure to include the #TechCrunch hashtag) The contest starts now and ends tomorrow, April 9th at 7:30pm PST. Please only tweet the message once or you will be disqualified. We will choose at random and contact the winner this weekend with more details. Anyone in the world is eligible. Please note this giveaway is for 1 ticket only and does not include airfare or hotel. If you do not win this week be sure to check back next Friday. Good luck!        
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| DOJ Willing To Approve Google’s $700M ITA Deal, With Conditions Posted: 08 Apr 2011 09:30 AM PDT
This settlement requires that Google develop and license travel software, to establish internal firewall procedures and to continue to fund software research and development in the industry. Interestingly, The DOJ also filed an antitrust lawsuit at the same time they filed a proposed settlement, in case Google doesn’t agree to the settlement terms. But according to this Google blog post, the search giant seems to be ready for the acquisition to close. The key takeaway is that if Google doesn’t settle, the DOJ says that the acquisition, as originally proposed, is anti-competitive. According to the settlement, Google will be required to continue to license ITA's airfare search software to airfare websites on commercially “reasonable terms.” Google will also be required to continue to fund for that software at similar levels to what ITA has invested in recent years. Google will also be required to further develop and offer ITA's next generation InstaSearch product, which is currently in development, to travel websites, which will provide near instantaneous results to certain types of flexible airfare search queries. Additionally, Google will be have to implement firewall restrictions within the company that prevent unauthorized use of competitively sensitive information and data gathered from ITA's customers. Basically, they want to create a wall within Google so that one part of the company doesn’t leak information to the other part. Google is also prohibited from entering into agreements with airlines that would inappropriately restrict the airlines' right to share seat and booking class information with Google's competitors. Lastly, the settlement provides for a formal reporting mechanism for complainants if Google breaks any of these terms. As we’ve written in the past, the ITA deal represents a huge shift in strategy for Google and a substantial new revenue channel for the company. I have a feeling Google will agree to the DOJ’s terms. UPDATE: Here is ITA’s statement on the news: Today we are extremely pleased with the DOJ's decision to clear Google's acquisition of ITA. We will begin work immediately to close the acquisition, and are committed to making the integration process as seamless as possible for our employees and customers. We are excited about joining forces with Google, and look forward to getting our teams together after close to start working on innovative new ways to make travel search easier.        
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| YouTube Gets Into The Live Streaming Game, Albeit Carefully Posted: 08 Apr 2011 09:23 AM PDT Google’s online video giant YouTube this morning announced that it is getting into the live streaming business, a move that has long been rumored but hasn’t become a reality up until today. In a blog post, the company says it is currently registering 2 billion views on a daily basis, and that they’re looking to complement their offering with live videos. On YouTube.com/live, you can henceforth find videos that were not recorded in the past (perfect for concerts, sporting events, real-time interviews and whatnot). YouTube has dabbled with live streaming events before, but never at this scale. And thus, all of a sudden, YouTube becomes more of a threat to the likes of Ustream, Livestream, Justin.tv and Stickam. Don’t expect YouTube to turn into Chatroulette just yet, however. YouTube Live will integrate live streaming capabilities and discovery tools, but not for everyone, at least not yet. The company is gradually rolling out the live streaming platform, which is still in beta, allowing only a number of existing YouTube partners with accounts “in good standing” to stream live content on the popular video site. A tip: watch The DigiTour: Live from Google HQ! tonight at 7 PM (PDT) YouTube hopes to expand the program to ‘thousands of partners’ in the next few months. For your further reading pleasure: Tonight, You Too Can Watch U2 On YouTube, Live        
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Last week the UK’s Technology Strategy Board, run by the government as a booster of the tech business world, 
Our anonymous tipster who sent 
As regular readers might already know, Paul is in Las Vegas for a month, 
I can’t recall Google pushing a product as hard as they’ve pushed Hotpot on their blogs in recent months. I swear that on a daily basis there’s some sort of update about “what’s new with Hotpot”. The only problem? I have basically no idea what Hotpot is. I mean, I sort of do, but it’s such a bad name and it’s a product that seems to overlap with other Google products, so I just don’t get it. And now I don’t have to.
Freemium business models are always hard. You have to give users enough for free that they try your service out and get hooked. Then you hit them with fees for upgraded features that make it even better. With a perfect product people don’t mind paying because they feel like it’s good value. 
Wired senior writer 
Google has 
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