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June 30, 2005

We're off to the races...the first RSS focused VC fund is announced--$100m

...let freedom reign

By Tom Foremski for SiliconValleyWatcher

At the Races.jpg Jim Moore and John Palfrey have launched RSS Investors with $100m of capital. It is the first VC fund with a focus on Really Simple Syndication, (RSS), the syndication technology at the heart of media technologies such as blogging and corporate news communication.

Jim Moore, RSS Investors partner says:

RSS is emerging as the next great tool in the spread of information and ultimately freedom: freedom of expression, freedom of communication and freedom of information.

This reminds me of years ago when Kleiner Perkins launched a $100m Java fund in 1996. It is milestone for RSS and its use.

RSS is very much a core technology for this next phase of the internet. It is a unique animal: neither email or web page, but with characteristics of both. It is opt-in, in that users or applications subscribe to RSS feeds which are pushed out — it is, in fact, a pushme-pullme technology (a nod to Dr Dolittle ;-)

More on RSS Investors:
The fund creators include: Richard Fishman, Steve Smith and Tom Crowley (representing Ritchie Capital Management)

It will focus on:

Supporting and nurturing the technologies and leaders who are championing RSS-related technologies, including news aggregation, blogs and new classes of search engines. In addition to examining technologies that utilize RSS for news aggregation, RSS Investors will strongly pursue RSS applications that aggregate data, particularly in the financial and medical industries.

Jim Moore, RSS Investors partner adds:

The Internet is the driving force behind the invention of new forms of communication enabling instantaneous personal dialogue across the globe. Like a mind constituted of millions of inter-networked neurons, the participants in this exchange of information are capable of astonishingly rapid and sometimes subtle community consciousness and action. The evolution of these communities has already had a profound effect on the media, professions and enterprises.

The mission:

For the first time in history, people who share points of view can communicate around the world in real-time to exchange and build ideas. Recognizing the economic opportunities growing from the next generation of Internet tools, the mission of RSS Investors is to support the growth of these borderless communities built on collective thoughts and goals.

The creators of the fund (in their own words):

Jim Moore is a noted technology expert who was the first to identify the significance of business ecosystems in the development of new markets, summarized in a variety of writings including “Predator and Prey: A new ecology of competition” (Harvard Business Review).

John Palfrey is an authority on the use of the Internet to champion global freedom of expression. He directs the leading Internet and society think-tank and teaches Internet law.

Steve Smith is currently responsible for the global venture and private equity business at Ritchie Capital Management, L.L.C., the lead investor in the fund. Both Smith and Tom Crowley, also at Ritchie Capital, have extensive experience in GE’s process disciplines from running GE Equity’s Internet and Telecommunications portfolio.

Richard Fishman is a successful venture capitalist most recently heading technology investing for MacAndrews & Forbes Group, Inc.

June 29, 2005

Forbes Radio wants to interview me and probably you too...bring your checkbook

I was thrilled to see an email from a producer of the "Forbes Radio" channel on American Airlines inviting me to be interviewed for the program. There was a description about the program spotlighting the world's most innovative organizations and forward-thinking leaders, and a long list of top companies that had been "distinguished guests" on the show.

The Forbes Radio channel claims a captive audience of as many as 4.2 million travelers. And the three-minute interview would be put together by a crack team of professionals capturing the exact message I want to convey. Excellent. But, I can't afford the half-price offer of $4,995.

[Er, shouldn't it be the other way around if money is to be exchanged?! Does editorial integrity take flight when you are 8 miles high?]

A reader writes... The problems of forced blogs; Anonymous comment on OutCast; The bandwidth issue

Dear Readers, the comments section of this blog is temporarily out of service . In the meantime, I'm manually posting some of the comments that readers have sent. Please feel free to do the same. Tom @ SiliconValleyWatcher.com, (omitting spaces) will reach me. Thank you. Comments might be edited for length and interest ;-)

[I met Wade recently, we were both on a panel at a The News Market event for Tuck School of Business at Dartmouth. Wayne was responding to this recent post.]

Tom, nice post. I enjoyed being on the panel with you. You're absolutely right that a "forced" blog is painful to read. One way organizations can avoid this is to give trusted writers the freedom to blog about whatever they want, whenever they want, without a lot of over-the-shoulder monitoring. At Technology Review, I've had the good fortune, under editor in chief Jason Pontin, of being able to blog as inspiration strikes. In fact I have two work blogs -- one on the TR site(http://wade.trblogs.com), and a "satellite" blog off the site that relates specifically to my August cover story about social computing (http://www.continuousblog.net). I try to emphasize quality over quantity, adding a substantive post perhaps once a week on each blog.

Thanks for your comment Wade. I agree with your point about emphasizing quality over quantity. There is way too much quantity in the world! Less quantity is a good thing.

It's a wonderful paradox, that in the online world where there is tons of space—brevity is encouraged by the medium. Yet in the print world, where there is limited space, journalists are often asked to stretch stories to beyond their useful value just to fill the space between ads.

A disgruntled reader comments on the acquisition of OutCast Communications by Next Fifteen, name withheld...

Many people have been talking about how small the deal was and what bad judgement that Caryn and Margit used in the deal. OutCast is notorious for hiring senior level management, who walk out after several months when learning that the two women can't relinquish control of any piece of their business. There is a growing number of old disgruntled workers from OutCast who would like to see the company go down.

Lynne Jolitz writes:

Hi Tom,
Posting the following regarding your bandwidth issues and rackspace:
http://www.siliconvalleywatcher.com/mt/archives/2005/06/running_out_of.php

"This is why you negotiate with a managed service provider for overage bandwidth. A good ISP should be calling you about your burst, not you calling them after you've been knocked offline as punishment for the sin of being successful.

I wrote about this in one of my essays on datacenter management and monitoring, but alas, I've been told that no one needs to know this stuff anymore, because everything works perfectly, right? :-)"

Lynne, you make a good point. We do tend to take a lot of the infrastructure stuff for granted these days, which I think is a testament to how bullet-proof the infrastructure services tend to be--mostly :-)

I don't mind being my own admin for a while, I like the work, it's just that I have trouble finding the time to do that and all the other things that I need to do. Writing is a top priority for me, and I will stay away from my inbox until I get some posts done, because that is often a two to three hour process wading through the emails.

AMD lawsuit against Intel shows how marketing in the PC world works

By Tom Foremski for SiliconValleyWatcher

The lawsuit filed this week by Advanced Micro Devices against Intel, claiming illegal anti-competitive business practices, is interesting because it reveals the millions of dollars paid to PC makers and retailers by chip suppliers. The money is for shelf space in stores, co-marketing campaigns, and rebates on chips.

AMD claims that Intel uses such payments to disuade PC makers and retailers from buying and using AMD microprocessors.

The complaint alleges many specific cases in which leading PC makers and PC retailers received millions of dollars from Intel in rebates as long as they did not make or sell PCs with AMD chips.

In some cases, companies that announced plans to introduce AMD-based PCs are alleged to have been enticed by Intel's gold to drop, or not promote, the AMD-based computers.

From the complaint paragraph 49:

Intel also purchased HP's exclusivity for its most popular notebook line. HP captured 15% of the US retail market last Christmas with an Intel-powered 14 1" display notebook (the "DV 1000") with a popular power saving feature called Quick Play. When AMD sought to convince HP to carry a similar AMD-powered notebook, HP declined. It explained that Intel has paid between $3 and $4m to lock up this product line for at least one year.

The other way to look at this is that PC makers and retailers could be using the "threat" of AMD as a way to get higher rebates and more marketing dollars out of Intel...

I'm planning to announce a business line of AMD Opteron based PCs--if Intel is listening :-)

Here is the complaint.

http://www.amd.com/us-en/assets/content_type/DownloadableAssets/AMD-Intel_Full_Complaint.pdf

Here is: An Open Letter from Hector Ruiz, AMD Chairman, President and Chief Executive Officer.

June 28, 2005

Comments is broken...

My apologies but our comments section is not working and I'm trying to fix things. I speak a little bit of Geek so I might be able to put things right very soon.

Our media architect Nick Aster is out in Alaska, up in the Arctic circle, bringing blogging to the most extreme boundaries of human civilization. Not even the Mormons have made it to the remote Eskimo village where Nick is staying.

Actually, Nick is in this remote region of Alaska with a small group of business eco activists hoping to argue for the economics of not drilling for oil. And a documentary film crew, of course, is gawking their travails.

In the meantime, I have to pull long days at the server farm, on top of my many other daily duties. Such is the unglamorous life of a (sometimes) standalone journalist.

Zoto photo project aims to record more than 4.54m US sites

. . . Route 66 at hyper speed

By Tom Foremski for SiliconValleyWatcher

If you have ever wanted an excuse to travel the US and visit places you never knew existed, Zoto has the mission for you: upload a photograph of each spot where a whole-numbered minute of latitude intersects with a whole-numbered minute of longitude.

That's 4.554 million "minute confluence points." So make sure your digital camera has plenty of batteries.

Zoto is an online sharing site similar to Flickr with some interesting twists on Flickr-like features such as tagging.

Flickr developed into a community platform almost by accident, and continues to produce "accidental" communities of users that are drawn together for unpredictable reasons.

Zoto, in contrast, has been designed from the start to be a community platform. It will be interesting to see if aberrant behavior by groups, the "madness of crowds," will show itself in abundance on Zoto.

Encouraging the unpredictable

That is the best test of a community platform such as Flickr, Del.iscio.us or MySpace.com — that there are thriving communities of users doing different and unexpected things. I like to tag this as a "flickriscious" quality and it is the holy grail of community platforms.

To encourage online communities, Zoto has chosen to sponsor the minute confluence photography project, also known as GeoProject USA and inspired by the successful Degree Confluence Project.

"Google is using trucks equipped with lasers and photo gear to create 3D maps of cities such as San Francisco, [see SVW scoop] so we wanted to do something different," said Dakota Sullivan, Chief Operating Officer at Zoto.

He estimates it will take volunteers two to three years to collect photos of nearly all the 4.554m points — each with four views — which are just one mile apart.

"Then you'll be able to zoom across a virtual USA consisting of a montage of photos in any direction, at hyperspeed. It'll be stunning. And people will come up with applications and uses for something like that," Mr Sullivan said.

Zoto lets digital photographers store tens of thousands of photos on its servers, and publish them to blogs, for family members or the public. It was founded in 2004 with several executives from LookSmart, the Australian search company.

The GeoSmart project should help it attract an interesting crowd of users. All you need to take part is a standard global positioning device, a compass and a digital camera.

M&A deals in hot photo sector

Photo sites and photo sharing are active business sectors because of acquisitions such as Picasa by Google. This year Yahoo bought Flickr, Hewlett-Packard grabbed Snapfish and, in June, Shutterfly acquired Memory Matrix.

Google seems to have the most integrated and ambitious plan for photos, photo sharing, and photographing near every inch of the planet. In October it acquired Keyhole, which has huge numbers of satellite photos that can be integrated into a ground-level view for creating 3D photo montages of cities.

Google also wants communities of users to come up with interesting uses for this type of geo-location photography. And with 3D cities as a focus, this will create opportunities for Google and its partners to overlay commercial services.

Will big always win?

These are early days and Zoto can still carve out a decent sized market. But these are essentially infrastructure battles, which generally play out in terms of scale; whoever gets bigger faster, using open, standard platforms, will eventually win.

Google has scale and it has open standard platforms. I'm sure I don't need to step my readers through the opportunities, from the application of the Google advertising network to the Google Earth project. Contextual advertising has a new meaning.

. . .
From Cnet:
Shutterfly buys out Memory Matrix

HP to acquire Snapfish photo service

Yahoo buys photo-sharing site Flickr

Here is some background from the announcement Zoto will make on Wednesday:

Geo Project USA is inspired by the successful “Degree Confluence Project” (www.Confluence.org). More than 7,000 participants have visited, photographed and written about 5,000 degree confluence points in 166 countries, including 872 of the 1265 degree confluence points in the U.S. “People have been asking me for something like this for a long time,” said Alex Jarrett who founded the Degree Confluence Project in 1996. “Geo Project USA takes our original vision to an extreme level.”

Zoto is a natural home for Geo Project USA. Kord Campbell owned the Oklahoma internet service provider (ISP) where the Degree Confluence Project was originally housed and has been involved in the project ever since, personally contributing several degree confluence visits in Oklahoma and Texas.

Zoto is a Web-based photo hosting, organizing, sharing and publishing site. Zoto was founded in 2004 by Kord Campbell, Rick Dunning and Trey Stout and is privately funded. Zoto is based in Oklahoma City, OK, with a business development office in Berkeley, CA.

June 27, 2005

The seemingly boundless interest in blogging. . .the Horse's Ass blog. . .and why forced blogging doesn't work

By Tom Foremski for SiliconValleyWatcher
I continue to spend a lot of time speaking on the subject of blogging, and I've heard many of the same questions from different audiences. There is a lot of confusion about how best to respond to blogging, and in general how to adapt to a changing and very fragmented media landscape.

I don't pretend to have all the answers — but it's fascinating being in the middle of this, and being part of the still relatively small group of people trying to find answers to these questions.

In recent weeks I've spoken with representatives of the Semiconductor Industry Association, with the Seattle chapter of the International Association of Business Communicators (IABC), and most recently at an event presented by the Tuck School of Business at Dartmouth and TheNewsMarket. These events usually attract mostly corporate communications and agency people, they are in the front lines in trying to get to grips with the blogging phenomenon.

At each one of these events I try to freely share as much as I can about this blogging phenomenon and the medium's unique aspects. And it is always worth it, because I come back with a ton of stories about how other people do things within their organizations, and the cultural and other obstacles that they deal with in their work. Also, I meet other bloggers from other sectors and compare notes.

Differences in political blogging

Suzanne Hartman, from Hill & Knowlton, invited me up to Seattle to speak with the local IABC chapter after reading one of my essays on the future of journalism at New Communications Blogzine, and here on SVW.

It was an interesting trip and a memorable group. One of the people I met was David Goldstein, a political blogger (Horsesass.org—the straight poop on WA politics and the press). I remember saying to David that one good thing is if you make a mistake, a dozen people are looking over your shoulder and will point out factual errors by leaving messages at the site. Thus, there is a self-correcting process at work and an opportunity to grow a communal type of journalism such as that espoused by Dan Gilmor.

David says he gets hundreds of comments on his blog - but he says there is no community correction of facts. In the political sector, it seems people won't readily accept that certain facts they use are false. Instead, there is a partisan battle based around ideology

That seems a bit disheartening to me, because it means that when it comes to political issues, facts and reason can do little to change people's minds. Is there any such thing as meaningful debate, or are political arguments just lines drawn in the sand by opposing blowhards?

Blogging as a work duty rarely works

At the recent Dartmouth Business school event I was on a panel along with Charlene Li, Forrester's superstar internet analyst, Joel Dreyfuss, editor-in-chief of Red Herring, Wade Roush, senior editor at MIT's Technology review (now edited by former Red Herring editor Jason Pontin), and Jason Smith, ENPS project manager at Associated Press.

I was the only full time "blogger" even though the other journalists work for publications and write blogs. This is fine but I think that as established media continue to add blogs, problems are going to mount.

I can already see stress fractures at some large publications.

[This is not to say that my colleagues on the panel suffer from the following problems ... it just reminded me of some issues on the topic of journalists and blogging that I've come across over the past few months.]

The reason there is stress in established media organizations is that it is difficult to create a difference between the online publication and its blogs. Journalists are confused about what stories should go into the blog, what style should they be written in, and why the blog gets edited by the same editors as the publication.

In addition, writing a blog at work is yet one more extra task piled onto an already full plate. Many journalists that survived the dotbomb are working two to three times as hard as five years ago. It's a workload brought on by constant staff cuts and difficulty in recruiting experienced journalists to fill the job vacancies.

Adding blogging duties is a lot of extra work and it is forced work - forced blogging comes across as such and cannot be disguised. You know it when you see it.

Also, blogging journalists need time to develop a "blog voice" - or maybe several blog voices, depending on the time of day or mood. These are different personalities, and the style is different from the rigid house style of their employer. That's why journalist blogs are better done from home, and not hosted on their employer's server, and driven by passion and interest - not by the need to fulfil employee duties. IMHO.

Running out of bandwidth...the good, the bad and the ugly (support)

By Tom Foremski for SiliconValleyWatcher

Running out of bandwidth is something I have to watch out for, since our traffic continues to jump higher - especially when we have scoops and exclusive stories.

But running out of bandwidth can be a frustrating experience, as we found recently with our web hosting service TotalChoice Hosting. There was no phone number to call, just a "live" chat channel and the opportunity to email support "tickets."

SiliconValleyWatcher was off line for about 6 hours as traffic surged above our monthly quota. And I couldn't open up the pipes because there was no way to buy more bandwidth online. I found that I would have to wait until the next morning and email the sales department!!!

Nobody to call in times of trouble, plus hours spent sorting out problems. That's why I will be changing hosting providers. When your business is offline, you had better get somebody on the line pronto.

Fanatical support sounds fine to me

I'm thinking of changing to RackSpace. I interviewed one of their top executives a few months ago, but never got to write the company's interesting story.

This San Antonio, Texas web hosting provider says it has fanatical support. It is so fanatical about support that it has even trademarked the term "Fanatical Support." This company awards its top-performing support people with a straitjacket — plus other perks, such as limo rides to top restaurants. This and other activities constantly motivate their support staff.

Next time I get kicked offline by my service provider, I'm sure RackSpace will answer my call PDQ. And that's what you need in a crisis situation: Support staff competing for the straitjacket award! I'll take it.

My good buddy Om Malik, of Business 2.0 and the very popular GigaOm.com broadband blog, reported excellent support from RackSpace when they called him up a few months ago and told him his server had died. The RackSpace people worked through the night recovering his data and set him up on a new server by the morning.

[PS: I'm a few days behind on my emails--my apologies to all. I've been off-line with my kids.]

http://www.rackspace.com/aboutus/leadership.php

June 23, 2005

Pillar Data Systems: Larry Ellison's $150m data storage company emerges from stealth mode

By Tom Foremski for SiliconValleyWatcher

Stealth Storage.jpg It took four years and $150m of Larry Ellison's money for Pillar Data Systems to emerge from stealth mode with a data storage solution that could be disruptive to EMC, IBM, Network Appliance and others.

I spoke with Michael Workman, CEO of San Jose-based Pillar, about the long trudge ahead, the company's technology and its strategy. It is a market dominated by giants, and by an industry trend that favors providing broad solutions rather than focused IT systems.

The Pillar approach attacks IT costs through using one platform to manage and store all three tiers of data, from high availability Tier 1 data, to archived Tier 3 data that normally would end up on tape.

In the Pillar approach, everything is stored on inexpensive high performance commodity serial ATA hard drives, but on different sectors of the disk. Slower sectors hold Tier 3 data while the fastest sectors towards the outside edges of the disk are reserved for Tier 1 data.

The goal is to provide storage systems with Tier 1 to 3 capabilities for about the total cost of ownership of Tier 3 systems. This is accomplished by using inexpensive hardware within a single fail-safe platform.

The secret sauce

The heart of Pillar is a sophisticated software application of 2.5m lines of code providing essential data admin functions through a very simple user interface.

What takes sixty clicks to set up in an EMC system can take just 6 clicks on a Pillar system. And with headcount being the largest item in IT budgets, needing fewer admins is a key selling point.

Mr Workman has 20 years in the data storage industry, with 15 years at IBM and a dozen patents. He leads a veteran management team of former executives at Network Appliance, Conner, IBM, and Quantum.

Pillar Systems are in place at companies such as LeapFrog Enterprises, I/Pro and Thacher Proffit.

But building a market in the enterprise sector is tough work and expensive.

"Corporations typically take four to six months to qualify IT systems. And we must also make sure that we have a large customer support organization in place to support them," Mr Workman said.

In addition, Pillar has built a huge testing facility, costing more than $25m and comtaining 150 systems. Then there is the considerable expense of marketing Pillar within an IT market dominated by just a few large players, each able to offer more than just data storage systems.

$150m doesn't go too far in such a market, but Mr Workman said the company has Mr Ellison's wealth behind it and a long term multi-year road map. Funding is all from Mr Ellison's Tako Ventures, with no current plans for other investors.

Foremski's Take: The enterprise IT market today is all about scale and large vendors providing complete data solutions. Pillar needs partnerships with larger vendors and systems integrators to make its voice heard.

The company's software application, which sets up and manages a wide range of data storage requirements, is where the value of Pillar systems is clear. It is also a considerable barrier to competitors.

Requiring fewer IT admins is a message that attracts CIOs, and the lower hardware/maintenance costs are a nice bonus. But CIOs are also very conservative, and evaluation and implementation cycles can be lengthy. Maintaining a large sales/suport team during such times accelerates expenses.

Now that Pillar is out of stealth mode and into marketing mode, the burn rate is accelerating. Mr Ellison has deep pockets and understands the dynamics of the enterprise world, which should help Pillar.

Mr Ellison also brings attention to Pillar, which will save on some marketing costs. However, he is also a sometimes controversial figure, which may reflect on the way his companies are perceived by potential customers. A broader investment base would help mitigate any "Larry effect" and also bring in other cheer leaders.

June 22, 2005

Mercora—a good evening spoiled by endless presentations...[updated]

By Tom Foremski for SiliconValleyWatcher

I went along to a dinner hosted by Mercora Wednesday. The event sounded interesting - it promised to discuss the impending MGM versus Grokster court case on file sharing.

Mercora, which offers music search and sharing services, lined up a good collection of music industry lawyers and others to discuss and promote the issue of legal file sharing.

Unfortunately, Mercora did not know when to stop. An attentive group of key journalists dutifully listened and scribbled notes. Then the salad arrived, and we listened and scribbled notes. Then the entree arrived and was dispatched, then it was time for desert and coffee, but the CEO stood up and said, now, let me show you the demo...

At which point I decided the time was better spent with my son and I left. And I hope others did so too. Giving up an evening to meet with company executives is asking a lot, but for Mercora to monopolize all of the evening is too much.

I don't mind giving up, say, half of the evening to listen to your pitches. But give me the second half to chat with my peers, and to get to know you and others there. Maybe I'll pick up an exclusive story/angle from chatting with others.

Please don't invite me to give up time with my family, or just myself, to hear your pitches all evening long. Your PR team probably told you it was a bad idea to do that - but who listens to them?

And you know what? Your pitch, that file sharing will boost music markets, is fake. Because you make your money anyway from enabling music sharing (living high on the bountiful riches from ad clicks...). Yet you are essentially saying to content creators/providers "give it away and you will end up selling more music and making more money."

You are not taking the risk of giving away content, but you are telling content owners they should. There is no leadership high ground to be had here.

Much has been said, rightly, about the stupidity of the music/movie industry in slapping down digital technologies that could aid them. But Mercora has only its self interest at stake in encouraging/enabling support for widespread song sharing.

Why don't you buy up a record label or two and give the content away as a demonstration of where your wallet meets your pitch?

- - - - - -
Interestingly, Perk, a musician Mercora shipped in from Los Angeles to perform two songs during the evening, said he admonished his friends for burning copies of his CDs for others. "How am I supposed to make money if you do that?" Despite long days performing, promoting and booking his own shows, (standalone musician) Perk said he makes most of his money selling tank tops for young women. And he has a generous patron, his wife, with a job.

Without music content, Mercora has a nice interface to nothing. Where is Mercora's value-add? Mercora's software enables Perk's music to be heard widely for free, while promising him pie-in-the-sky when he gets thousands of listeners...

I think I'd rather be a content creator/owner, like Perk, during this next phase of the internet, because content will be king this time around, while servers and software become commoditized.

(BTW, I bought the domain ContentWillBeKing.com a year ago. Why not? It was $8 on GoDaddy...own a piece of the English language online and a piece of the future for $8—priceless.)

- - - -

An excellent write up of the MGM-Grokster case and its implications at Eweek:
Preparing for the Grokster Watershed

Updated:
Mercora apologised for keeping me away from my son, and pointed out that it does pay for music, it is the same rate as a radio station pays to play music.

June 21, 2005

Eric Schmidt speaks up on GooPay, denies Google wants to compete with PayPal

By Richard Koman for SiliconValleyWatcher

AP reports that Google CEO Eric Schmidt has denied that Google is launching a competitor to PayPal, even as he confirmed that Google is in fact readying some manner of payment system.

"The payment services we are working on are a natural evolution of Google's existing online products and advertising programs which today connect millions of consumers and advertisers," he said. That's not much to go on but I would guess that Google's payment system would allow them to manage a cost-per-sale advertising model, in which they can integrate advertising placements, clickthroughs, sellthroughs, and user behavior.

In any case, Schmidt went to pains to disabuse the notion that GooPay would be a PayPal killer. "We do not intend to offer a person-to-person, stored-value payments system," he told AP. It's pretty unusual for Google to break its silence on unannounced initiatives. Perhaps they were concerned about the rumormill unnecessarily punishing eBay's stock?

WSJ: Google Readying PayPal Competitor

The British Invasion continues as OutCast is gobbled up by Next Fifteen

...will everyone in San Francisco PR eventually work for Tim Dyson?

By Tom Foremski for SiliconValleyWatcher

TDyson Hi Res bw.jpg San Francisco based OutCast Communications has been acquired by Next Fifteen, Europe's largest publicly traded PR company for an initial payment of about $6m and additional performance based payments that could reach $13m over the next five years.

From Next Fifteen:

Under the terms of the acquisition, Next Fifteen will pay initial consideration of £3.3 million ($6 million) for OutCast, which is to be funded out of existing cash and debt facilities and a vendor placing which raised £2.5 million. Further consideration will be paid over the next five years based on the performance of the company, with total consideration capped at £7.2 million ($13 million).

Earlier this year, at least one other company considered buying OutCast. Financial Dynamics, the large New York firm specializing in investor relations and now branching out into other sectors, explored a possible purchase.

Next Fifteen is now by far the largest employer in the San Francisco/Silicon Valley PR sector. It owns Bite PR and Text 100, two of the largest San Francisco PR companies. It also has a significant stake in 463 Communications, a PR firm targeting tech policy issues. The 463 Communications offices are shared with Bite.

Consolidation in PR mirrors the valley

The OutCast acquisition is a product of changing markets. The consolidation in the IT sectors has created a smaller number of vendors. And the remaining IT vendors are large and multinational. OutCast can make use of Next Fifteen's European and global reach.

In turn, OutCast founder's founders Margit Wennmachers and Caryn Marooney know how to build a fast growing PR organization, which will help Mr Dyson report a steady increase in revenues.

His challenge has been to grow business during a time when PR budgets remain very tight, there are fewer media outlets to target, and smaller numbers of large enterprise companies to pursue as clients.

New communications threats on the horizon?

In addition, media technologies such as blogging, represent a potential threat to traditional methods of corporate communication. While such "new communications" channels are still in their infancy, they represent an additional cost that will likely pressure PR budgets further, at least over the short term.

Large tech companies are beginning to specify that PR firms must have experience in using blogging technologies to augment traditional methods. And while there is much well justified skepticism towards blogging among Next Fifteen's PR companies, including OutCast, the fact that their clients recognize the power of blogging to reach potential customers, is something the PR firms cannot dismiss.

Smaller companies such as Voce Communications, in Silicon Valley, which recognized blogging early on and quickly integrated it into its products and services, represents a potential threat to larger, slower moving PR firms. The threat is that specialist PR firms could siphon away the more profitable and interesting communications contracts.

Next Fifteen gains aggressive duo

The gain for Next Fifteen is that it now has one of the most effective management teams in the PR industry. Ms Wennmachers and Ms Marooney set a blistering pace and their partnership has survived some of the most difficult times in the industry. Their expansion of OutCast is all the more impressive because it came during difficult personal times for both, that drew them away at various times to be with their families.

Yet OutCast continued to grow and surprised many west coast PR firms when it won the EMC account late last year.

"I was shocked when I heard that," said one senior PR executive at a rival firm. OutCast has worked for several years with VMware, now an EMC subsidiary, which may have provided some help.

The EMC win was not only a feather in OutCast's cap but also marked its transition from a boutique firm to a national company able to work with large global enterprise IT companies.

Next Fifteen also gets Marc Benioff

OutCast's most famous client is SalesForce.com, headed by the sometimes-flamboyant Marc Benioff, a master self-promoter. Mr Benioff led the company in a very successful IPO last year, which was part of a decent sized surge in stock market tech activity and Silicon Valley business.

IPOs such as Salesforce.com and RightNow Technologies, under the leadership of Greg Gianforte, also signaled a new software market emerging. This model is one that is based on software as a web based service rather than as a massive ERP or other enterprise software installation.

Now, Mr Benioff will be working with a company whose Next Fifteen sister company, Bite PR, is representing Siebel Systems, Salesforce.com's prime target.

A Marine boot camp

OutCast has earned a reputation as a tough place to work, a "Marine boot camp" as one former employee said. This is not a bad label to have in the tough PR market that the Bay area suffered from since the dotbomb detonated in late 2000.

The local PR and media sectors were devastated by the fallout from the tech stock market bust and markets groaning under a glut of IT equipment. Marketing and PR budgets were the first to be slashed at thousands of Silicon Valley companies.

This caused some firms to go bust or leave San Francisco completely. Next Fifteen snapped up Applied Communications, a large San Francisco PR company that was an early victim of the dotbomb.

Many US PR (and media) companies continue to struggle but there has been a resurgence in the Bay Area where there are many job vacancies among agencies.

The largest shortage is in finding people that have 5 to 8 or more years experience and like working at PR agencies. Most of those, prefer working within corporate communications teams where work levels are more consistent and less volatile. Or they can find work as freelance consultants, sometimes known as "mommy consultants" because some are able to combine work with child rearing duties.

From the Next Fifteen press release:

Under the deal, OutCast will continue to operate as a separate business under its own brand name, with its founders Caryn Marooney and Margit Wennmachers becoming co-Presidents of the business. As Presidents they will report directly to Next Fifteen's Chief Executive Officer, Tim Dyson.

Tim Dyson said: "Next Fifteen is keen to build a Group that comprises best-in-class consultancies. We have long been impressed with the way OutCast has approached this sector and have enjoyed competing with them over the years. OutCast has built a great team of consultants that have together built a great business. We look forward to working with them during the next stage in their development."

OutCast Communications was founded in San Francisco in 1997. In recent years it has experienced strong growth, with sales in 2004 increasing 28% over the previous year to $6.2 million. Operating profits in the same year were $1.6 million. The firm has also won a string of awards including PR Week's Boutique Agency of the Year award in 2001 and PR Week's award for Technology Campaign of the Year in both 2003 and 2005.

In conjunction with the acquisition, Next Fifteen has completed a vendor placing of 4,807,693 ordinary shares of 2.5 pence each at 52 pence per share, to raise £2.5 million.

About Outcast Communications
OutCast's mission is to provide unparalleled public relations services to the best and brightest technology companies within an environment where its group of talented, aggressive and connected employees can deliver the highest level of customer service and unprecedented results. OutCast has offices in San Francisco, California, and New York City, and can be found online at www.outcastpr.com.

About Next Fifteen
Next Fifteen Communications Group is a holding company for a number of world leading PR and marketing services firms. The majority of clients are in the technology industry with twelve of the world's top twenty technology businesses being clients of the Group; these include IBM, Apple, Microsoft, Sun Microsystems and Cisco. The Group strategy has also evolved to pursue non-technology clients and the Group already works with such brands as Royal Mail, More Th>n (Royal and Sun Alliance Group), Olympus, Total and the Department for Education and Skills.

The Group is made up of four independently branded subsidiaries that operate as autonomous businesses thus enabling them to service competing client businesses. The Group has three broad technology PR subsidiaries: Text 100, Bite Communications and Inferno. The fourth brand, AUGUST.ONE, provides both B2B and Consumer services across a number of vertical market sectors. More information can be found at: www.nextfifteen.com.

BitTorrent's Cohen: Avalanche is 'Vaporware' and 'complete garbage'

By Richard Koman for SiliconValleyWatcher

Ask BitTorrent creator Bram Cohen, as it seems many people have, what he thinks of Microsoft Research's Avalanche, their better-than-BitTorrent P2P program and you'll get an earful (or at least a blogful).

On his blog, Cohen writes:

"First of all, I'd like to clarify that Avalanche is vaporware. It isn't a product which you can use or test with, it's a bunch of proposed algorithms. There isn't even a fleshed out network protocol. The 'experiments' they've done are simulations."

I won't pretend to understand the technical niceties except to note that Cohen's critique is that the Microsoft simulation is rigged against BitTorrent. He concludes:

The really big unfixable problem with error correction is that peers can't verify data with a secure hash before they pass it on to other peers. As a result, it's quite straightforward for a malicious peer to poison an entire swarm just by uploading a little bit of data. The Avalanche paper conveniently doesn't mention that problem.
As you've probably figured out by now, I think that paper is complete garbage. Unfortunately it's actually one of the better academic papers on BitTorrent, because it makes some attempt, however feeble, to do an apples to apples comparison.

GooPay makes sense for Google's shopping, video, premium content businesses

AP's latest report on the unconfirmed story that Google is starting a PayPal killer quotes a number of informed sources who think it's a real thing and some good thinking on where this takes Google next. Google used to be thought of as a search engine; now you just have to look at their balance sheet to change your conception to "advertising company." Google's advertising is a "beautiful thing," as Larry Page once said, but Google's vision is far bigger.

It is, I think, really to make every online experience as good as possible, and to make a LOT of money doing it. Pick up the paper any day. There's almost always a story about identity theft, stolen credit cards, online fraud, etc. If Google can get control of the online transaction, and in the process track who's a scammer, how money is being spent, what the trends are, that could be as interesting as getting a piece of every transaction, which of course would also be a "beautiful thing."

As the AP article notes: "A payment service also might give Google more insights into accountholder buying habits - an advantage that theoretically could be used to do a better job of delivering relevant ad links that would be more likely to be clicked upon to generate more profits."

American Technology Research analyst David Edwards believes what I'll call GooPay would be tied to Froogle initially but the AP writer also notes:

... The service might process the money that's exchanged between the millions of merchants and Web sites participating in its online advertising network. A payment service also could make it easier for Google to sell content through its search engine.
Google already has indicated it will charge visitors to view certain videos that will be indexed in its search engine. Some analysts also think a payment service would enable Google to charge a fee on behalf of publishers looking to cash in on copyrighted or subscription-only news articles.

GOOG closed Tuesday at 287.84, well above Monday's open of 276.09. eBay, owner of PayPal, which would be hurt by GooPay, closed at 36.90, down from Friday's close of 38.05.

Ready for the Avalanche?

By Richard Koman for SiliconValleyWatcher

Microsoft will shortly unleash Avalanche, an attempt to improve on the popular filesharing app, BitTorrent. While BitTorrent is anathema to Hollywood studios and other copyright holders, Avalanche, which is being built in Microsoft Research, would include a DRM to block the unlicensed sharing of copyright material.

UPDATE: BitTorrent's Bram Cohen calls Avalanche "complete garbage." [Read[

Presumably what interests the folks in research, though, are some technical enhancements. Microsoft would add network coding to BitTorrent's swarming approach to large file downloads. In simplest terms, BitTorrent breaks content into blocks of data and does parallel requests for blocks from multiple servers. This greatly speeds downloads of large files.

Microsoft's improvements order the blocks that each machine has and creates a way for machines to communicate which blocks they have. According to Microsoft Research's paper:

Such encoding ensures that any piece uploaded by a given peer can be of use to any other peer. Peers do not need to find specific pieces in the system to complete, any encoded piece will suffice. This makes the system very robust as peers disconnect. Also, no peer becomes a bottleneck, since no block is more important than another. Finally, network bandwidth is considerably reduced since the same information does not travel multiple times over bottleneck links. And all this is achieved with zero-information of who has what, no knowledge of the network topology or available bandwidth, and negligible-overhead!

Very cool but its DRM not speed enhancements that will excite Hollywood as well as the digital frontier. Avalanche might actually legitimize P2P applications. Users uncomfortable with the shady side of the Net might be interested in using it if they didn't have to worry about love letters from the MPAA showing up in the mail.

And Hollywood would be happy to play ball with copyright-friendly companies like Microsoft, as they've proven with Apple. "Having a legitimate way to exchange intellectual property and respect copyright would be very welcome in the entertainment industry, and other industries too," movie industry lawyer Charlie Sims said.

But Microsoft needs to do DRM right. It would need to respect fair and free uses of copyright material, such as the ability to use purchased materials on more than one machine and to move materials to portable players.

Sounds like a release is imminent. I'll be happy to check it out.

I went to a garden party....and Carly Florina was there. So was Scott McNealy, Larry Sonsini, Ray Ozzie. and a digital Bill Gates, seeking valley love

. . . is BFG seeking love in all the wrong places?

By Tom Foremski for SiliconValleyWatcher

I went to a garden party in the backyard of Heidi Roizen's house in Woodside. The event was the annual SDForum Visionary Awards.

This is a great event, because much of the Silicon Valley aristocracy turns out for it. It is small and comfortable; and people let their hair down and tell funny stories about each other.

The winners this year were:

Carol Bartz, CEO of Autodesk, introduced by Scott McNealy, still CEO of Sun
Bill Draper, of the Draper VC family dynasty (Tim is J.R, BTW), introduced by VC Ann Winblad of Hummer Winblad
Carly Fiorina introduced by Larry Sonsini, master of the universe
Ray Ozzie, formerly of Groove and now operating under the pay of Microsoft, introduced by a Max Headroom-like Bill Gates and then handed over to Esther Dyson

It was a great evening and here is the rest of it. . .

Garden party part two: McNealy's tips for creating room at the top

Garden party part three: Bill Draper, the godfather of Silicon Valley's oldest VC dynasty

Garden party part 4: Larry Sonsini leads valley lovefest for Carly Fiorina . . .

Garden party part 5: SVW uncovers backyard plot by Microsoft loyalists

Tech companies concerned about possible US laws on radio tag chips

. . . should RFID technology be restricted?
By Tom Foremski for SiliconValleyWatcher

I try to check in with our sponsors at regular intervals but lately we've been swamped with exclusive stories and scoops to write, and we've been neglecting our stalwart supporters. However, it is all thanks to our sponsors, Infineon Technologies, Tibco Software, and Nooked, that we can bring you this unique coverage of Silicon Valley, the world's capital of innovation.

A few weeks ago I visited with Infineon, one of our first sponsors, to chat about what they are watching. I met with Christoph Liedtke, who heads media relations and his assistant, Mansi Agarwal, at the HQ of Infineon's US operations in San Jose.

Top of Infineon's watch list is possible legislation that could limit the use of RFID chips, tiny semiconductors used to tag shipments and eventually most commercial products. Concerns about user privacy has led to some US and Californian lawmakers to support calls for greater controls and limits on the use of the technology.

Can tech firms stop RFID backlash?

Infineon is one of many large global technology companies keen to see faster adoption of RFID chips. Other supporters include IBM, Microsoft, and leading Silicon Valley companies such as Oracle, Sun, HP, Cisco and others. And why not? The use of RFID is forecast to boost IT spending overall, as retailers and others install and build out the significant infrastructure needed.

RFID supporters argue that the technology itself should not be restricted or regulated by government. How RFID-generated information is used is a societal issue not a technology issue.

Technology companies however, are generally lousy about figuring out how to lobby governments and how to fight what they see as bad legislation. Large companies such as Intel and Texas Instruments have over the years developed their Washington offices and have figured out how the Beltway functions. But they are a rarity, and it is an expensive conversation to join — Washington lobbyists sell their services for a high price.

Trade organizations such as the Semiconductor Industry Association are reasonably effective at making their presence felt in Washington but, again, it takes time to establish the right connections and be heard.

Many young tech companies don't have the means — or often the awareness — that they need to be involved in the political debates.

Things become even more complex when US states pass laws, making it tough to become involved in public discourse in many different states.

Community PR trend

radio tower.bmp Most corporate communications is tailored to reach potential customers or investors—the trend in the PR industry is to create specialist firms that target messages to the public and legislators.

463 Communications is one such company, partially funded by Next Fifteen, the publicly traded European PR giant, which owns Text 100 and Bite PR--two of the leading Silicon Valley PR firms. Tim Dyson, CEO of Next Fifteen, is chairman of 463.

Sean Garrett, a partner at 463, says "This sector is still fairly small but is bound to grow as tech companies mature and realize that they could be directly impacted by some legislation, and they need to make sure they can communicate their message to politicians and the public."

At Infineon, the challenge is keeping track of pending RFID legislation and trying to determine where it might lead, and how to gain the ear of sympathetic legislators. Christoph Liedtke used to work as a speech writer within the German political establishment and is aware of the need for companies to be involved in politcal debates. But US politics is a different animal.

I would have offered some advice if I had it, but my understanding of US and Californian politics is tiny, probably matching that of most citizens of Silicon Valley.

- - - -

Some recent articles on RFID issues:

I.B.M. Expands Efforts to Promote Radio Tags to Track Goods
New York Times, 06/14/05

AP: U.S. to Scale Back Passport Standards

News and features on RFID from UsingRFID.com (UK), 06/14/05

The RFID Weblog by Anita Campbell.

Tim Dyson's blog and his recent post on Apple turning to Intel for microprocessors

The 463 blog, an interesting peek into some of the key legislative issues facing its clients.

June 17, 2005

WSJ: Google Readying PayPal Competitor

The Wall Street Journal is reporting that Google is getting ready to launch an electronic payment system to go head to head with eBay's PayPal. "It could be a pretty big negative for eBay if it happens," Piper Jaffray analyst Safa Rashtchy, who follows Google and eBay, said. The AP story notes:

Expanding into online payments might make Google less dependent on advertising, which accounted for nearly all of its first-quarter revenue of $1.26 billion. The merchants who run auctions on eBay are major buyers of Google's ads, which appear alongside search results.

Garden party part 5: SVW uncovers backyard plot by Microsoft loyalists. . .

. . .McNealy silenced by Redmond gold? And who else?

By Tom Foremski for SiliconValleyWatcher

Ray Ozzie, creator of Lotus Notes, head of Groove Networks, and now CTO of Microsoft, won the last of the 2005 SDForum visionary awards. Although he deserves such an award for his body of work, I couldn't quite rid my mind of thoughts of Microsoft, and its hand at work.

It's not unnatural that the world's most innovative software company would seek to ally itself with the world's most innovative region bar none.

After all, being stuck up there in the soggy northwest, in the Fortress of Solitude, the cabin fever must be terrible. Here, in Silicon Valley, companies are challenged moment by moment. You get up and say one thing, and ten others will tell you you are a fool - and they'll prove it. That's what makes it good. That's why the innovation is here.

Looking back on the evening, there was clearly an attempt at some rapprochement between the world's capital of innovation, and the world's largest most-found-guilty-of-crushing-innovation-through-illegal practices computer company.

Bill Gates was present at the event, at least in moving image, as a prerecorded video projected a large talking head onto a screen, to introduce his boy Ray Ozzie.

[I thought I heard Bill Gates say, "Sorry about Netscape and all of that, it was the 90s....you know, youthful exuberance, what can you do? It's all a blur....and believe me, we paid for it, and we're still paying for it! Ouch. We're not going to do that again in a hurry, you can bet on that. We're completely fine now, so give us a chance, take us back, we're your buddies...Look, any of you, seriously, even you VCs.... can come up and crash at my place, a-ny-t-i-m-e. It's on a lake, really nice. Scott?....Scott? Tell them how nice it is....Ray...you tell them.....By the way, what are you guys up to these days...working on anything good? We've got nada up here...)

Instead of saying what was on most people's minds, BFG said something about Ray Ozzie. Then he was gone, and Ray Ozzie made what was for many, the best speech of the evening. Unfortunately, I had to step out to get a fresh battery for my camera and missed it.

The podium part of the evening ended with Heidi Roizen, our gracious and generous hostess, who jibbed and jabbed at her guests in a fun, lighthearted manner. She mentioned the geriatric research opportunities provided by the audience. And she spoke about a visit by Bill Gates, a few months ago. She said her 12 year old daughter said it was very cool that Mr Gates was visiting, and she asked if the Xbox was the only thing that Microsoft made.

[Microsoft, an icon of emerging youth culture? Whatever next...] Mr McNealy, under normal circumstances would have had some ready ammunition for his stand up act. He would have been calling Microsoft "the video games company," just as he has slammed HP for being the "printer ink company" because that's where its profits were made.

However, Mr McNealy was quiet, and has laid off all Microsoft jokes. Is it because Microsoft gave his company a ton of money? Nobody knows...

Ms Roizen said that it was difficult thinking of Mr Ozzie as working for Microsoft, and she said how bizarre it'll be when Scott turns up with a Microsoft badge. Ouch, I thought, that's a bit harsh.

But does she know something? Ms Roizen and Mr Gates have been close friends for many years.

Garden party part two: McNealy's tips for creating room at the top

Garden party part three: Bill Draper, the godfather of Silicon Valley's oldest VC dynasty

Garden party part 4: Larry Sonsini leads valley lovefest for Carly Fiorina . . .

Garden Party part 4: Larry Sonsini leads valley lovefest for Carly Fiorina . . .

. . . too little, a bit late

By Tom Foremski for SiliconValleyWatcher

Larry Sonsini, Silicon Valley's uber-uber lawyer, introduced Carly Fiorina. He said lots and lots of nice things. He noted Ms Fiorina had helped spin-out Lucent Technologies, the largest IPO in history, and she handled an extremely tough job at HP.

Mr Sonsini, looking very debonair, in a well tailored light gray suit, spoke for almost as long as Ms Fiorina. He succeeded in establishing his presence at nearly every critical juncture of HP and Ms Fiorina's story. He was present at nearly every major decision making process. He said Ms Fiorina had to deal with changing company culture, the worst downturn in the tech industry, and executing the largest IT merger.

"Some called it two garbage trucks colliding, but I won't say that," he said, after saying it.

He was referring to a Scott McNealy quote from years back about the HP/Compaq merger. But why bring it up and embarrass two top guests? Because he can I would assume.

Ms Fiorina graciously took the podium and spoke for maybe ten minutes, the shortest speech of the night. She spoke of Silicon Valley in the terms HP people would recognize, that these things that we do here in Silicon Valley are about people, and that profits enable companies to do good thigs, invoking Dave Packard's philosophy.

[This might seem ironic to those ex-HP-ers thrown out by the tough decisions she had to make. But, they weren't the audience that evening, she was speaking to the people that create and profit from the Silicon Valley culture of expendibility.]

It was good to see Ms Fiorina celebrated by SDForum. But, when she was running HP, she had few friends in and among the mansions of Woodside, Silicon Valley's elite neighborhood.

[I have a video of her speech that I'll post as soon as I figure out how to do it!]

Next: SVW uncovers backyard plot by Microsoft loyalists

Previous post: Bill Draper, the godfather of Silicon Valley's oldest VC dynasty

June 16, 2005

Garden Party part three: Bill Draper, the godfather of Silicon Valley's oldest VC dynasty

. . . slams Bush administration over United Nations policy

By Tom Foremski for SiliconValleyWatcher

Bill Draper is a towering figure in the Silicon Valley VC community, and one of the most successful practitioners of this art.

He looked tanned and vital; and was eloquent on what makes Silicon Valley unique, and why the Bush policy towards the UN --where he served as head of the United Nations Development Programme-- is wrong.

He shared one of his secrets to finding succesful startups:

look for enthusiastic, passionate founders that will follow their dream no matter what, they just know it's going to happen. "When we see that, we follow their dream too," he said.

He also spoke about Silicon Valley's tolerance of failure (a subject that I've long regarded as Silicon Valley's secret sauce, and the reason why trying to replicate it by building a business park around a university won't work.)

Mr. Draper said that those who failed in their ventures deserve almost as much credit for establishing the American dream as those who succeeded, because they tried. That's the important thing: to have tried. (Silicon Valley punishes those that don't take risks, IMHO)

He said that his son, Tim (a very successful VC), missed out on a very early investment in Internet media giant Yahoo, ignoring pater's recommendation. "He could have had Yahoo, but lost out; he was too cheap, as usual."

Mr. Draper, a Republican, spoke about his time serving at the UN; and said that the Bush administration had the wrong policy towards the organization.

A gentleman of the old kind, he finished speaking by tipping his hat towards the ladies in noting that it was good to see SDForum celebrating their achievements.

Next: Larry Sonsini leads valley lovefest for Carly Fiorina . . .

Previous post: McNealy's tips for creating room at the top

Garden party part two: How McNealy creates room at the top...

By Tom Foremski for SiliconValleyWatcher

Part 2 of our tales from the annual SDForum Visionary Awards garden party in Woodside, at which the Valley aristocracy let their hair down and tell stories about each other.

Scott McNealy, Sun's CEO, introduced Carol Bartz, CEO of Autodesk and a former Sun VP. Mr McNealy played the familiar role of that irascible character we all know and love from many performances.

Mr McNealy was in classic form Wednesday evening, dressed in his signature jeans, light shirt and navy blue blazer, and sharing a vignette or two about Ms. Bartz, who used to work at Sun.

He recalls that Ms Bartz stomped into his office and resigned because of a generous rival job offer. Mr McNealy acted swiftly: He walked down the corridor and into the office of his VP of Marketing and said "You're fired." He walked back over to Ms Bartz and said "You can't resign, you're VP of Marketing!" What happened to Lloyd, Ms Bartz asked? "Lloyd is no longer with us," deadpanned Mr McNealy. Lots of laughter.

Mr McNealy, encouraged by audience response, forged ahead and started to talk about Ms. Bartz spawning, at which point he was hooked off the podium. A gracious Ms. Bartz gave him a "you naughty boy" look.

Ms. Bartz said that the firing incident was her first introduction to how the valley works; but since then (1983) she has come to thrive on being here, relishing the incredible ecosystem, creativity, and describing the region as "nirvana."

She jabbed good-heartedly at SOX, investors, and over-zealous boards of directors, to much amusement; but she tore into "flat worlders" Thomas Friedman and his ilk (critics of globalization), saying that she didn't care much for that point of view.

Does anybody remember when we used to outsource to Huntsville and Kentucky, she asked?

Garden party part three: Bill Draper, the godfather of Silicon Valley's oldest VC dynasty

Garden party part 4: Larry Sonsini leads valley lovefest for Carly Fiorina . . .

Part 5: SVW uncovers backyard plot by Microsoft loyalists
(And read Part 1).

June 15, 2005

More hidden secrets of the Google 3D mapping truck

Our scoop on the Google 3D mapping truck last week generated a large number of trackbacks and they continue to come in, nearly a week later.

They show the viral nature of some stories. Some spread very quickly yet are soon gone, while others have a steady momentum that continues to generate trackbacks.

Here's the original story: Scoop! Smile for the Google 3d mapping truck.

We actually have a little bit more information on the 3D mapping truck: here is a low res Treo 600 photo of the hut where the Google truck is hidden. The location is Palo Alto.

Blogs of freedom: Reporters Without Borders picks top free speech blogs around the world

By Richard Koman for SiliconValleyWatcher

Freedom Blog Awards.bmp In countries where the press in under the direct control of the government, blogs provide the equivalent of a free press. That's why Reporters Without Borders asked Internet users around the world to pick the best blogs defending independence and freedom. Now the results are in. The winners hail from Maylasia, the US, Afghanistan, Europe and Iran.

Most notable of these bloggers is Mojtaba Saminejad, an Iranian blogger who was sentenced this month to a two-year sentence in Iranian prison because of his writings. Other winners were:

Screenshots (Malaysia) written by Jeff Ooi, who was threatened with imprisonment in 2004 for comments "insulting Islam."
Shared Pain (Afghanistan), commentary on Afghanistan's social and political turmoil.
Al Jinane (Morocco), Tarik Essaadi tries to "understand the complexity of the world."
ICT lex (Italy), a blog on Internet law and new technology.
Press Think, Jay Rosen's thoughtful blog on media old and new.
Netzpolitik (Germany), blog dealing with open source, Internet rights and free expression.

What if Buckminster Fuller were still alive and looking for funding? I'm still in shock at Silicon Valley's blindness regarding Doug Engelbart

By Tom Foremski for SiliconValleyWatcher

Over the past few days readers may have noticed that I've been writing (ranting too) a lot about Doug Engelbart, popularly known as the inventor of the computer mouse, but also the source of many computational models and applications that we take for granted today.

Some have likened him to a Buckminster Fuller. Tony Christopher from Digital Places tells me that one of the people on the board of Bootstrap.org, the Mr Engelbart-focused organization, once said "this is like having the chance to videotape/capture Leonardo DaVinci."

At a fantastic event organized by the SDForum last Wednesday, John Markoff, the New York Times journalist and book author, paid tribute to Mr Engelbart. And many others joined in, revealing a person and a body of work that I had not realized belonged to Mr Engelbart.

I was very impressed at the stories people shared about how their lives were changed by their interactions with Mr Engelbart. Imagine my surprise when it turns out he is sitting right behind me!

He is 80 and looks great. He is sharp and eloquent. Imagine my surprise when I meet him later in the evening, and he tells me he has not been able to get any funding for the last 20 plus years, and cannot even engage people in a dialogue!

Shock and awe. What is going on here? Silicon Valley lauds this person and his work and his influence, and ignores him for more than 20 years? I cannot understand this attitude. Why isn't Doug sitting at Stanford university, guest lecturing from time to time? He changed people's lives, don't you think he still has that gift? Why isn't he at HP Labs running a project or two?

We have a national treasure in our own back yard and we ignore this intellectual giant? I'm still shocked at Silicon Valley's callous disregard, and stupidity. For such a place filled with geniuses it is a place that is ignorant of the simplest of social graces in respecting such iconic figures. If Doug were dead, no problem, tribute after tribute, all empty air. IMHO.

Not everyone is like this, Logitech is one company that has risen very highly in my regard. Logitech has provided Mr Engelbart with an office and a secretary for the past ten years, out of respect, and without any fanfare.

Kudos to Logitech, for respecting our elders and being aware of our history. You can advertise for free here anytime. And I will always buy your mice.

[More to come on Doug Engelbart... hear what happened when the Google boys, Sergey and Larry invited him to speak to 200 of their researchers at the end of last year.]

UPDATE: Ross Mayfield just published an excellent post on Doug Engelbart. This is how to use blogging to capture an enormous amount of information, and cover a subject as complex as that of its subject.

http://ross.typepad.com/blog/2005/06/doug_englebart_.html

Here are some of the earlier articles on Doug Engelbart. And thanks for all the messages of support. Researchers pay tribute at SDForum event and an interview with Mr. Engelbart.

June 14, 2005

Retrobox.com: green riches in the muck and junk of the digital age

. . .and a call for an environmental tax credit

By Tom Foremski and Nick Aster for SiliconValleyWatcher

Bloggers have to eat, and if it is possible to combine good food with good conversation, so much the better. Which is why my colleague Nick Aster and I headed over to the Town Hall on Tuesday for lunch with Stampp Corbin, CEO and co-founder of Retrobox.com, a very ambitious and profitable computer recycling company.

There is money to be made in handlng the muck and junk of the digital age, and Mr Corbin is happy to spread the word because his company has a business model that works incredibly well.

But it is not just about finding a safe way to dump a computer monitor (8lbs of toxic materials in each) it is also about data security, creating an asset trail, and the regulatory compliance demanded in various industries.

"Data security is a big deal and one that some companies forget," says Mr Corbin. "Fortune 1000 companies will spend tens of milions of dollars on firewalls to protect a server - and the next day that server is replaced and sold on Ebay along with its now unprotected data."

Wiping data is one part of the business model; reselling the equipment is another. "We resell, reuse as much equipment as we can, we get 50,000 hits per day on our site without advertising, and we give back 75 percent of the revenues to our clients. Often, we will hand back a check for more than it cost the company to contract our services."

Business has been good, but it could be even better if the government steps in and gives an extra incentive through an environmental tax credit.

"I used to sell IBM mainframes and if you bought a $2m mainframe, you got 10 percent back, that was $200k because of the investment tax credit available. That was a powerful boost to the the tech sector. We need something like that for companies that are responsible in disposing of their computer waste," Mr Corbin says.

Mr Corbin is strongly opposed to the advanced recovery fee system, which would mandate a user paid fee of about $10 per monitor collected by state government. The money would be then doled out to "collectors" - companies authorized to dispose of the equipment.

"This is a very inefficient system, lots of government bureaucracy. It is much better to use a tax credit to encourage proper disposal of equipment."

Mr Corbin says he hopes to persuade lawmakers and others in the tech industry to support an environmental tax credit for digital-age junk rather than waste money administering a new bureaucratic empire.

Rising above the babble through blogging

It makes sense, but getting the message out is a problem. Mr Corbin explains that the cost equipment recycling comes out of the IT budget - but IT decision makers are swamped in marketing babble from tech-sector sales people.

I mentioned that blogs, as long as they are producing something of value, can cut through that noise. It can be the most effective form of self-promotion bar none, if it is done right. And we'd be glad to offer some simple guidelines to get him started.

Also, we want to point to thought leaders such as Stampp Corbin to encourage others to join him. There is green ($), and lots of it, in green business activities.

-----

[Retrobox.com is an example of innovation through a technology-enabled business model. This is something we pay close attention to because it is part of what we call the new rules economy that we believe will dominate this internet 2.0 phase that is emerging. Retrobox.com has many characteristics of a new rules enterprise: It is private; it has a technology-enabled business model; it is a thought leader in its space; it understands the most efficient business processes in its sector; and it has avoided venture capital money to fund its growth. The private investment money it has received was to reward Mr Corbin and his business partners - it was money taken off the table without the need to IPO.]

SiliconValleyWatcher: These are the new dotcoms of the new rules economy...

The slow death of TV advertising

By Damien Stolarz for SiliconValleyWatcher

Death of TV.jpg This link from Brand Noise: TV Continues to Unravel (from a WSJ article) discusses the fact that Procter & Gamble is sharply lowering the amount of committed television advertising this year, and that the company is trying to find "life beyond the 30-second TV spot".

Another interesting quote from the article: "We must embrace the consumer's point of view about TV, and create advertising consumers choose to watch."

Is he talking about infomercials (which people watch for entertainment value), or video-blogish downloadable ad spots such as those done by Seinfeld for Amex? Is he implying a switch from annoying interruptions of your main program (unlikely in ad-supported network TV) or some other form of compelling commercial content?

While this is only one data point in a sea change of media consumption, I tend to agree that advertisers will increasingly switch their ad dollars around, especially to more trackable media.

Thirty-second spots, with their difficult-to-count "impressions," are still potentially useful for well-capitalized, global brands. But there are now thousands of video channels, as well as hundreds of thousands of audio (podcasting) and text channels (portals), each able to provide exact statistics about their listeners, viewers and interactions. Internet advertising is finally getting its revenge, moving into the mainstream and taking a hefty, satisfying bite out of TV's ad revenues.

Sirius radio to be available on Sprint mobile phones this year

By Damien Stolarz for SiliconValleyWatcher

Forbes.com reports, in Sprint And Sirius Sing A Duet, that Sirius will be supplying a subset of its channels on Sprint mobile phones as early as this year.

In a few years, XM and Sirius satellite radio will almost cease to have a technology edge. Wireless broadband, supplied via WiMax or 3G, will eclipse the expensive unidirectional, narrowband satellite channels that Sirius and XM have spent billions to deploy.

Sprint Radio.jpg At that point, however, Sirius and XM could have as many as 10m loyal listeners, accustomed to satellite radio's exclusive content (or at least predictable, commercial-free content). Offering mobile phone users the same channels they've been used to hearing in their cars will be a way to make money by exploiting the data transfer capabilities of mobile phones.

It will also provide a stronger incentive to switch carriers - and pay for wireless data - than any of the generic, weak-brand content (i.e. RealNetworks) available on mobile phones today.

Excellent piece on Doug Engelbart by Ross Mayfield

Ross Mayfield, CEO of SocialText, points me to his post on Doug Engelbart, and it's an excellent piece of work. This is how blogging should be done, this should be used as a textbook example of fine blogging.

http://ross.typepad.com/blog/2005/06/doug_englebart_.html

June 13, 2005

WSJ's Don Clark & Off the Record benefit for Big Brothers Big Sisters...

This is becoming an annual event and one not to be missed (I missed it last year unfortunately...) Come and see hacks and flacks rocking out for a good cause. Just $20 (and you have to RSVP.)

Click here to say "I'll be there"
(Watch for confirmation email from Sibling_Revelry@cpcomm.com in a moment with the party location and details. (Please make sure any email filtering programs that you may be using do not prevent you from receiving that message.)

Details are here:
A benefit for
Big Brothers Big Sisters of
San Francisco and the Peninsula.

Please join us for great food, drink, music and dancing; renew and make new friendships; try your hand at Light Saber dueling with a Jedi; win fantastic door prizes.
Suggested Donation: $20.

Thursday, June 23
5:30-10:30 PM

Cartoon Art Museum
655 Mission Street
San Francisco
@ New Montgomery
Easy access to nearby parking.

Technology and transcendence: a report from the recent Mind States VI conference

By Luke Maroney and Dawn Montefusco for SiliconValleyWatcher

mindstates conference poster medium.jpeg While VCs were sailing their boats and enjoying the sunshine of Memorial Day weekend, 500-plus psychedelic geeks and silicon hippies gathered at the Palace of Fine Arts in San Francisco for the 6th annual Mind States conference. Now that the buzz has worn off, it’s time to give a rundown of what happened at this unique event, subtitled Technology and Transcendence.

The West Coast conscious heard the latest developments in everything from techno-biological enhancement to current psychedelic research, herbiculture and visionary art. The most interesting thing, however, wasn’t the chill room or the mescaline-packed San Pedro Cacti but the substance of the sessions.

Marc Pesce, the writer, educator, and technological guru, gave a presentation called "Hyperpeople," in which he described a world interconnected by social technology where "we no longer need to rely on mass media to get our information."

Pesce commented on the evolutionary pressure that the information explosion is forcing upon us. Audiences are abandoning big broadcasters in favor of direct relationships with independent amateurs. "After all," he said, "the amateur only wants to satisfy himself and his friends, while the big broadcasters have to satisfy advertisers."

The use of knowledge swarms like wikis and blogs to share information is creating a vast network of free media. A new trust is forming between peer-producers and peer-consumers, and this trust is breaking down the dependence upon mainstream media. "We can now be our own TV stations," Pesce said.

As these networks emerge, the jump between the technological collective and the conscious collective becomes easier to make. In effect, the technology is creating a virtual conscious collective. “It sounds hippy dippy, but science is now proving that it’s true." said Piers Bizony, author of Invisible Worlds and another presenter at Mind States.

But Pesce warned that these subterranean worlds of virtual reality have a seductive quality. He said he used psychedelic drugs to expand his thinking, giving him a different world view that he says enhances creativity. Toward the end of his lecture he asked: "Where is the outside world? Where are the voices of others? Do you see the light in their eyes?"

His question seemed to have a double meaning. On one hand, advances in technology are validating previous concepts of collective consciousness. But as skeptics of psychedelic drugs have said, what happens when you don’t come back from the trip? Or, in this case, back from the virtual world?

Monday's News (aka the Asia Report)

By Richard Koman for SiliconValleyWatcher

Broadband wireless provider SOMA Networks has landed $35m in venture funding. The round was led by Singapore-based Temasek and Morgan Stanley Venture Partners, with participation from NeoCarta Ventures and Endeavour Investments. This follows $15m in funding secured late last year.

Lots of other Asia connections today ... Intel celebrated its 20th anniversary of doing business in China by launching the $200m Intel Capital China Technology Fund. It will focus on "cellular communications, broadband applications for consumers, and semiconductor design," according to the Intel press release. Intel also announced earnings this quarter of $9.1 - $9.3 billion, a big jump over last quarter's numbers. ...

According to the FT, Microsoft is censoring key words like "democracy" and "freedom" from its Chinese MSN site in an effort to avoid pissing off the Chinese. (Via Silicon.com). This at the same time US trade representatives are trying to get the Chinese to crack down on piracy...

In other MS Asia news, the government of Indonesia claims MS will offer a $1 a seat amnesty program to get the Indonesians in compliance. Micrsoft denies (WebProNews) ...

Nokia and Intel are joining forces to promote mobile WiMax, according to PCMag. In other Nokia news, the cellphone maker is moving forward with a web browser based on the open source Konqueror browser, according to Macworld ...

And in digital music news, MS is rumored to be readying a subscription-based music service. A product manager threw this up the flagpole: "We are actively investigating the subscription model, but we don't have anything to share today. Once we are ready to talk more, we'll let you know." (via WebProNews ... And David Utter of WebPro notes that a new Nokia phone supports Apple's AAC format, which suggest support for the iTunes store.

Scoop: Novell chooses Horn Group...

By Tom Foremski for SiliconValleyWatcher

Novell, the enterprise Linux company, has chosen the Horn Group, one of Silicon Valley's largest PR companies, to handle its communications. It was a hotly contested contract and two bigger PR companies were on the final shortlist. Novell becomes the Horn Group's largest customer and is added to its stable of enterprise software clients.

June 10, 2005

Exclusive interview with seminal 1960s computer visionary Doug Engelbart -- he's still here and looking for funding

...how the Sixties counterculture smashed the work of leading computer researchers

By Tom Foremski for SiliconValleyWatcher

"How do you deal with society when its paradigm of what is right is so dominant?" Doug Engelbart, the 1960s computer visionary asked me the other evening. It's a question he has pondered many times over the past 20 years or so, ever since his research funding was taken away.

Mr Engelbart and his teams of researchers at the Stanford Research Institute (SRI) shaped the look and feel of the PC, as John Markoff chronicles in his latest book What the Dormouse Said: How the Sixties Counterculture Shaped the Personal Computer Industry.

Mr Markoff's book raises the profile of Mr Engelbart, well known as the inventor of the computer mouse, and less well known for his seminal work in creating many of the concepts later found in the personal computer. Mr Markoff returns credit to where it is due.

What the book does not chronicle is how the rise of the PC killed funding for Mr Engelbart's work.

By 1979, he had lost all funding from SRI because of unfavorable peer review.

"The other research groups said what I was doing could be done better with microcomputers or through machine-based artificial intelligence. That was the dominant culture at the time. What people don't realise is that there are many different cultures and not one is right." Mr Engelbart told SVW.

As a result of his experiences, he questions whether the past 20 or so years of his life have been a failure.

That's how long Mr Engelbart has been trying to raise funding to continue his research into human machine interfaces and solving large, complex problems using networked software.

But the culture of our time has been unfavorable to his ideas of developing human-centric computer applications using one big powerful computer with many users. The paradigm of the PC revolution is that everyone gets to have a computer, no time-sharing needed.

PC emerged from revolt against institutions

Mr Markoff points out that the PC revolution grew out of the turbulent times in the 1960s, from the free speech movement, the anti-war protests, and the drug culture. The implication is that out of this internal societal war between the generations - the old and the young - good things emerged such as the PC.

At a recent promo event for Mr. Markoff's book at Xerox PARC, Mr. Engelbart and the pioneers at SRI and Stanford AI Labs (SAIL) described the events of those times.

Lee Felsenstein, one of the computer researchers mentioned in the book remarked "We were caught up with what was going on around us, we were against the institutions."

Personal computer concepts appealed to this generation because there was no centralized control; power would be brought back to the individual through a personal computer.

In fact, the PC would topple massive institutions, they believed, including the Soviet Union, because the power of the PC and desktop publishing would make it impossible to control the publication of information.

What the Dormouse didn't say

However, it is possible to take a different view, a counterculture view. I could argue that the turbulence of the 1960s, reached deep within the military research labs of SRI and Stanford university, and resulted in killing the development of advanced computer systems.

And it was because time-sharing represented the same model - central institutions mandating/controlling access to resources - that the campus protesters railed against in their political lives.

Within the computer research labs, power to the people was translated into power to the personal computer. And it is only now, 25 years later, that we are able to appreciate what was lost.

I could argue that the move to develop the PC smashed the work of leading thinkers such as Doug Engelbart, and set back the clock to near zero.

Power to the PC meant going back to square one, developing the languages, the operating systems, the applications, the user interfaces from scratch.

And now we are coming back full circle. Now, the paradigm has shifted again, and the big computer shared by many users is back. And it is better than the PC. What is Google?

Don't miss part 3 of the SVW Doug Engelbart story/interview series.

Part one is here:

June 9, 2005

A tribute to one of Silicon Valley's most influential and forgotten researchers at Xerox Parc event

By Tom Foremski for SiliconValleyWatcher

[This is why I love being in Silicon Valley...]

The place to be Wednesday evening was at Xerox PARC, for a reunion of the seminal Homebrew Computer Club and a tribute to a man that history has tried to forget, or at least relegate to a minor role: Doug Engelbart.

1st mouse.gif Mr Engelbart is usually remembered simply as the inventor of the computer mouse. But dozens of computer pioneers stood up Wednesday to acknowledge his much larger role, as one of the most profound and influential thinkers of their time.

The tributes to Mr Engelbart went on and on, long after the allotted time for the event, with many stories told publicly for the first time. It was priceless material for future archaeologists exploring this fascinating spot on earth.

The event was not billed as a love-fest for Mr Engelbart, but that's what it became, and you could not sit there and hear these people - many of them A-list names in their own right - and not walk away with a profound admiration for Mr Engelbart and his ability to change the lives of the super-smart elite of the early Silicon Valley.

The event was billed as a promo for a book by Silicon Valley's most respected journalist, John Markoff of the New York Times. Mr Markoff grew up in the Valley and has become its most accomplished interpreter.

researchers deny drug influence--we didn't inhale (much)

His latest book, What the Dormouse Said: How the Sixties Counterculture Shaped the Personal Computer Industry, details his theory that 60s drugs and counter-culture were responsible for fostering significant computer innovations such as the PC revolution.

However, many of the people mentioned in his book turned up at the event and said drugs had nothing to do with their work. They might have tried drugs later in life - but that was beside the point, they said. "It was psychedelic just being involved in the things we were doing in the labs," said Bill Duvall, a PARC veteran who took part in a panel following Mr. Markoff's presentation.

Mr Markoff uncovered some interesting experimentation initiated by a maverick CEO of electronics company Ampex, who in the early 60s wanted his engineers to take LSD to improve their creativity. The board of directors said no, and then had to fire him after they discovered he'd snuck off anyway on a mountain hike with seven or eight engineers and given them LSD.

There was also the story of the Stanford university campus Jesus cult, a group that split off into an LSD experimentation organization that turned on several hundred engineers over several years.

A large part of the presentation was about Doug Engelbart and how he did not get the recognition he deserved for his early ideas on very significant concepts, such as timesharing in which many users can share one computer. Paradoxically, it was due to timesharing that the PC revolution took place, Mr Markoff argues, because everybody then wanted their own computer instead of a slice of a larger one.

Question everything

Those heady days of the sixties and early 70s were marked by a big shift in US society as the shocking events of the Vietnam war shamed American youth into radical opposition. It was also a period that marked a fundamental shift in computer systems thinking, initiated by Doug Engelbart and his team of researchers at Stanford Research Institute, and the rival lab at Stanford University's AI labs known as SAIL.

Both these labs had the same types of uber-geeks, super smart and inspired by the 60s free-speech movement to question everything. This seems strange to us, in these times, where it is evident that you should cast doubt on everything that comes your way, but this was not always the case.

Challenging accepted notions and speaking your mind was not done much. It was difficult. That's why there was a free speech movement. It was revolutionary. The computer lab researchers of the time found they were discovering new methods of communication and computing by challenging accepted notions.

It is impressive to hear what people were doing by applying timeshare principles to computers. And they were creating applications that were way ahead of their time, resembling software that we are only now being able to build.

Rediscovering lost technologies

For example, we talk a lot on SVW about blogging, wikis and RSS, the media technologies defining this phase 2.0 of the internet. In 1965, Engelbart told me, "we had developed a way of sending email, and making any word of a document into a permalink, which could be linked to any other document or word and easily published to others. Essentially we had blogs and wikis."

The rival research centers, SAIL and SRI, were both funded by copious amounts of Pentagon money. Some of the researchers admitted that they were first attracted to the work because they could avoid the draft, as long as they worked on a military research project. Some said that they became staunch opponents of the Vietnam war and pursued social and community projects outside of research.

Bill Gates and Steve Jobs kill the dream

Some of the researchers created the Homebrew computer club in 1975, where Microsoft and Apple Computer, the two most enduring dynasties of our young digital age, were born.

Mr. Markoff says the members of the Homebrew club shared everything freely, including software - until Bill Gates found out his fellow Homebrew club enthusiasts were sharing a copy of the BASIC language he had co-written. Gates hit the roof, accused everyone of piracy and demanded that people pay for the software.

That's where the book ends, and it implies that Bill Gates' focus on monetizing the early days of the PC led to the loss of this community of brilliant geeks, freaks and mad geniuses that interacted in wonderful ways. No filthy lucre in sight, until Gates came around.

The Homebrew club was also the stomping ground of Apple founders Steve Jobs and Steve Wozniak. Like Gates and his partner Paul Allen, this dynamic duo also figured out a way to monetize things, and that's how the Apple I, the first real microcomputer, was born.

Bill Gates' demand for payment has long been seen as the beginning of the end for the Homebrew club and its innovations. However, if the computer enthusiasts of the Homebrew Club had continued to share their software for free, there would not have been a PC industry for many years.

Gates and Jobs found a business model. Business models attract funding, and an industry was born that accelerated PC innovation way beyond the hundred or so members of the Homebrew club, IMHO.

Engelbart and Moore's law

Tales of Doug Engelbart's influence continued to pepper Mr Markoff's presentation, such as that Mr Engelbart figured out much of what became known as Moore's law and made a presentation on the subject at a premiere chip conference. This was some four years before Mr Moore presented a paper at the same conference which led to Moore's Law....

Mr Markoff is riding in a car with Gordon Moore, wondering how to confront him with the fact that Mr Engelbart was the first to describe what became known as Moore's law. Then Mr Moore said he was in the audience during Mr Engelbart's presentation.

This was getting interesting, but then Mr Markoff abruptly changed the subject, leaving hanging the obvious question: Was Mr Moore unfairly given credit for similar ideas espoused by his forgotten hero Doug Engelbart, years earlier? And that Mr Moore had prior direct knowledge of those ideas? (I think I know what Gordon Moore would say - that he was not responsible for Moore's law, it was created by others.)

Mr Moore certainly fared a lot better than Doug Engelbart. The rise of the PC was also the rise of Intel, and the creation of the world's largest and most succesful chipmaker.

The rise of the PC was a disaster for Doug Engelbart

Tomorrow I'll tell you what Mr Engelbart thinks about the PC revolution, and how the counter-culture of the 60s helped kill his research projects. He talks of his frustration at not being able to continue his work.

"I sometimes feel that my work over the past 20 or so years has been a failure," he says. "I have not been able to get funding and I have not been able to engage anybody in a dialogue."

Silicon Valley turned out to praise this man yet none have been willing to fund his work? Or listen to him and debate his ideas?

This is shocking. Mr Engelbart is 80 and motivated and seeking work. I think his struggle for funding is that many people in the valley still don't understand his ideas because they are enamoured by the PC "revolution."

You'll be shocked at what I discovered in talking with Mr Engelbart. And you might conclude, as I did, that we were close to having the keys to a golden digital future in the mid-60s, and that the move to the PC was a backward and destructive move that is only now being remedied.

It's an exclusive interview and you can only read it here on SiliconValleyWatcher...

Extras:
Special thanks to Renee Blodgett. She has an excellent account of the evening and dinner afterwards at her blog site: Down the Avenue.

This historic event capped a three year long series organized by Sandy Rockowitz and Bebo White of the SDForum that consistently featured challenging thinkers. They are taking a break from the work of organizing what has probably become one of the most compelling speaker events in Silicon Valley.

This is the seminal 1968 demo that changed the lives of those that saw it, or just heard about it. Lee Felsenstein said "The demo changed my thinking and I wasn't even there, I had heard about it third-hand."

The people on the panel following the presentation:

Dennis Allison was co-founder of the Peoples Computer company, created Tiny Basic, and a founder of Dr. Dobbs Journal. He is currently a lecturer in the Computer Systems Laboratory at Stanford and works as an independent consultant.

Bill Duvall worked in Doug Englebart's Augment group at the Stanford Research Institute, where he wrote the software that sent the first ARPANet message, and subsequently moved to Xerox PARC.

Lee Felsenstein ran the Homebrew Computer Club, and designed the Sol and Osborne 1, two of the original personal computers. He is currently a partner at the Fonly Institute, a consulting and research organization focused on developing groundbreaking products that place computer power in the hands of ordinary people.

Larry Tesler worked at the Stanford Artificial Intelligence Laboratory (SAIL) and later Xerox PARC and Apple, where he was Vice-President and Chief Scientist. He is currently Vice-President and Research Fellow at Yahoo, where he heads their User Experience and Design Group.

June 8, 2005

The poor man's crackberry...Yahoo and Sprint launch push email from Seven

The hard working John Kuch over at telco apps company Seven pings us to say that Yahoo and Sprint will be branding Seven's push mobile email solution. . . the first blackberry-like service for consumers.

John claims that...

* Yahoo! Mail for Mobile, powered by SEVEN, is the first push (blackberry-like) mobile email service for consumers.
* With Yahoo! and Microsoft getting into push email this week, mobile email is not just for top execs anymore. Blackberry is no longer the only game in town.
* Consumers can now access their email using a variety of smartphones and everyday cell phones.
* Simple start-up. Consumers can sign up from their mobile phones and get up and running by entering their existing Yahoo! username, password into their phone.
* Cost of the service is $2.99 a month, Blackberry costs $30-$50 a month.
* Do Google, AOL or Earthlink have a push mobile email service?

Scoop! Smile for the Google 3D mapping truck

By Tom Foremski for SiliconValleyWatcher

Google plans to use trucks equipped with lasers and digital photographic equipment to create a realistic 3D online version of San Francisco, and eventually other major US cities.

The move would trump Amazon's A9 service, which offers two-dimensional photos of buildings on US city streets.

The trucks would drive along every San Francisco street using the lasers to measure the dimensions of buildings, to create a 3D framework onto which digital photos can be mapped. This would complement the mostly top-down view of San Francisco available through Google's Keyhole satellite photo application.

The goal is to create similar 3D online versions of other cities in the US and overseas.

There have been several test runs of the specially equipped truck along San Francisco streets. One problem is that vehicles and people can block the automated laser and digital photo systems. This could be eliminated with a second pass, but Google wants to achieve results with a single run.

Researchers at Stanford university are working on this and other city related projects. For example,
here is another Google-funded Stanford project.

The Google 3D project would be used to highlight and distinguish the company's push into local business listings—the next big opportunity in online advertising.

June 7, 2005

The corporation as publisher: Is Cisco's online magazine a sign of further challenges to an already beleagured media establishment?

By Tom Foremski for SiliconValleyWatcher

In my travels around Silicon Valley, Cisco stands out as one of the savviest in its use of new media technologies such as as RSS syndication feeds and blogging.

This might seem surprising, because Cisco is one of the oldest Silicon Valley companies and older cultures resist change. But Cisco is also in the business of communications, and its use of new media could be viewed as adding an eighth layer to the seven-layer communications stack. This additional layer consists of media technologies distributing content such as news, features, and ideas.

Cisco has begun to figure out the emerging "new communications" landscape. This landscape becomes visible when a corporation recognizes that it is both publisher and publication.

In fact, any large corporation can be viewed as a media company in that it constantly seeks to publish content. It publishes what could be called "sponsored" content in the form of company literature and advertising, and it constantly seeks to persuade others to publish its story. Corporations spend a lot of money influencing independent media organizations such as New York Times, Financial Times, Business Week etc, to publish their stories.

A general rule of thumb in the PR industry states that the ROI from influencing independent media coverage of a company is three times higher than an advertising campaign in the independent media.

In other words, money spent placing a story in the New York Times generates sales three times higher than the same amount of money spent on advertisements in the same newspaper.

[BTW, this is also why Google's contextual text ads are so effective because they blend in/become content.]

The new rules of corporate communications, however, are changing this picture. Cisco has found itself at the frontier of these changes, and it will be interesting to watch the company's initiatives closely.

Cisco online mag larger than most independent mags

Consider this: Cisco produces an online magazine called news@cisco that is run with the same journalistic standards as any computer trade magazine. It is the brain child of Dan Scheinman, Cisco's head of corporate communications - and head of M&A(!)

(Ron Piovesan, on Cisco's corporate communications team worked on news@cisco and he first told me about it in November 2004. And earlier this year I met Gretchen Ushakova, manager of internet PR, who runs news@cisco.)

Did you know that in just four years news@cisco has built an online readership larger than that of Investors Business Daily? And larger than the top computer trade newspapers and magazines?

Need I step you through what this means? I'll do it anyway because it resurrects a long word rarely seen since Internet 1.0 days: disintermediation. It is very likely that news@cisco is an example a potential trend that will lead to the disintermediation of established media on a massive scale. I would use capital letters except that it looks ugly.

If Cisco can take the next step, it's success will earn a place the history books (I'll explain what those are in part two :-)

EXTRAS:

Here is a very good description of news@cisco from the weblog of Robin Stavinsky at new venture marketing.

Interesting:
In Googling Dan Scheinman to double check spelling, it shows our SiliconValleyWatcher interview with Mr Scheinman in pole position. It seems that Google attributes extra value to independent sources of content, just as people do ...

June 7, 2005 | Permalink | Tag: New Rules
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June 6, 2005

Mr. Unpredictable: Jobs Embraces Intel

Will wonders never cease? To the amazement of just about every analyst covering Apple, Steve Jobs announced this morning at Apple's Worldwide Developer Conference that future Macs will use chips from Intel - just like most other PCs in the world. Apple has been developing all versions of OS X since its inception to run on Intel and PowerPC chips, Jobs announced, according to
cnet. "Mac OS X has been leading a secret double life the past five years," he said.

The shift should be much easier than the one from Motorola to PowerPC. In the future, developers can create a universal binary that will work on both Macs and Windows-based PCs. In the meantime, Apple has developed Rosetta, a tool to allow PPC-based apps to run on Intel chips. "Every application is not going to be universal from day one," Jobs said.

Live from WWDC: Apple switches to Intel. What does it all mean?

By Damien Stolarz for SiliconValleyWatcher

I just attended the shorter-than-ever Apple keynote address (just an hour) at Moscone Center in San Francisco, where Apple computer finally came out and proclaimed its love for the Intel chip. Although the Wall Street Journal tried to out Apple over the weekend, it really hadn't sunk in for anyone until Steve Jobs spelled it out.

He said that OS X has been living a "secret double life" for more than 5 years - every single version of the OS X has run on Intel, "just in case" since OS X was first released. I got to hear Steve Jobs, the CEO of Intel, and the CEO of Adobe get up on stage and get chummy in that forced, unrelaxed way that CEOs do. It was subdued, understated, brief, and all the while a watershed event.

Technically Unsurprising

Although it's easy to pretend to play it cool, as a Macintosh user since the mid 1980s, I'm not one bit surprised. When I was in college in the early 1990s they had NeXT machines for sale in the UCLA computer store. They had nifty features like Display PostScript - fully real time WYSIWYG display, at a time when my friends were excited to get their hands on Windows 3.0. When Jobs brought NeXT into Apple almost 10 years ago, the NeXT OS (on which OS X is built) ran on Intel processors - and it had just been ported from the same Motorolla 68k processors that the Macintosh Quadras had been running on. I even have a NeXTStep install CD and floppy - for Intel processors. So NeXT was already cross-architecture, cross platform code.

Since OS X came out, a lot of the lower-level plumbing of the OS - "Darwin" - has been available as an open source project - and portable to Intel. In fact, the slowness of OS X for the first few painful versions was probably because they were porting it from Intel. It wouldn't make much sense to not keep it running on Intel processors, especially when the code was already cross-platform. So the theoretical possibility of an Intel port was always quite obvious to engineers.

What was not clear was whether Apple was going to be able to: 1) survive; 2) keep up with Intel processors. For years, various explanations of the megahertz gap were put forth. The iMac did a great job of marketing the gadget without proclaiming it's speed at all - just as an appliance. Ask an iMac user, they probably don't know the gigahertz or megahertz of their processor.

In the server-class machines, Apple has done a great job overcompensating for their megahertz gap. The top of the line Intel processors, running at 3.4Ghz, are just plain faster than Apple's 2.7Ghz PowerPC chips. But many of the tasks that Mac professionals do, such as video compression, photo editing, digital effects, audio processing, and a dual processor configuration actually helps a lot. Apple's main line of computers come with two processors, so for some tasks you can actually consider it a 5Ghz or 5.4Ghz computer.

This switch to Intel is by no means an admission that the top-of-the-line Apple machine is slower than a top-of-the-line PC. Far from it. Apple's high-end machines are top of the line - their bus speeds, graphics cards, memory, are all state of the art, and in some cases superior to the high-end Intel chipsets.

But there are many tasks for which the raw gigahertz is necessary, and for general purpose application functionality, nothing beats clock speed when it comes to performance. The dual processor is never going to kick in to help you with word processing.

Apple has always secretly felt that two small ones just isn't as good as one big one, and that's why they've been seeing Intel on the side for five years.

Fast Roadmap

Apple has set an aggressive roadmap to be shipping an Intel-based Mac by one year from now, and to switch over to Intel processors completely by 2007. All the developers are being offered a $1000 3.4 Ghz Pentium 4 machine, in a shiny Apple G5 case, to "borrow" for a year and port their applications.

Switching applications to run on the new processor only takes a couple of hours to weeks, depending on the application. They got some testimonials on stage to prove that point. There's a simple checkbox in the Apple developer tools to create these new "universal applications" that run on both PowerPC and Intel computers. In traditional Apple style, the technical impact of the change is being carefully managed, and notwithstanding from legions of uninformed sales people and consumers giving bungled explanations to each other about what it all means, the transition may be seamless.

Switching hardware architectures isn't rocket science. Linux developers do it every day of the week, so porting from the second most common processor to the most common processor is somewhat of a yawn with the current development tools.

Attack of the Clones

The frustrating thing for consumers at large will be the need to pay Apple a premium for what appears to be the same commodity hardware powering the Windows platform. No longer will there be some exotic, foreign quality that can justify a high-margin machine. Sure, Apple can produce a dual- or quad- processor Pentium machine and, since few PC manufacturers do this themselves, Apple will be able to compete there. And in the low end, Apple's iMacs are appliances, and using Intel or PowerPC or an AMD chip for that matter would be irrelevant to that target market.

But for middle-of-the road PC purchasers looking to spend around $1000-$1500 for a fast PC, the requirement to buy a proprietary Mac version of commodity hardware will be off-putting. Used to cobbling together a high end PC with some of their own parts, their expensive last-generation video card, and a new CPU and motherboard, cross-platform users like myself will suddenly bring with them the expectancy that they can run Mac OS on every PC they own - just like I can do today with Linux or Windows. I have dozens of machines at my disposal, and I run Linux, Win XP or XP Server on them - as needed for the specific task - without thinking about it. I buy all my licenses. I would buy DOZENS of copies of OS X if I could run it on all my hardware. But I'm concerned that Apple will cripple the OS to only run on their Intel machines.

Editor's Note: Cnet reported that Apple Senior Vice President Phil Schiller categorically stated that other Intel-based PCs will not be running MacOS: "We will not allow running Mac OS X on anything other than an Apple Mac." But what if they don't? Apple is on a many-year high. Their stock just split. They've got the strongest chance to take market share from Microsoft ever. If they suddenly ran on all hardware - their OS would be a real contender.

Plus, emulation is now child's play. I have Microsoft's virtual PC on my Powerbook. It emulates a Pentium II at around 300Mhz - pitifully slow, but just fast enough for me to bring up any Windows app I need. But I can't use it for any length of time. Now, with a top-of-the line PC (Mac users have a median salary well above the Windows users, so they tend to have faster machines) I would have full-speed Windows emulation.

Editor's Note: Schiller said Apple wouldn't do anything to preclude people running Windows on Intel-based Macs.

Suddenly Linux projects like Wine (Windows emulation) will be able to flourish on the Mac platform and run Windows apps on Mac at full speed. This is significant - many developers would love to run a stable UNIX, like Mac OS X, and have Windows where it belongs - in a Window - on their desktop.

Mac tried the clone approach a decade ago, and Jobs came in and ended it. Many people consider that it was killing the platform - cheaper, higher-performance Macs were available from third parties. But Apple is in a different position today. Their business isn't entirely dependent on computer sales - the iPod has given them billions to play with. New media-changing industries, like podcasting, are not only named after their products, but are being re-incorporated into their products. Apple has tremendous control over the future of the fast-changing multimedia industry, just as they had with DTP in the 1980s. They're looking stronger than ever.

What does it all mean? Things change. The Cold War ended in a fizzle in 1989. By 2020, Microsoft may not own the desktop any more.

June 6, 2005 | Permalink | Tag: Apple [AAPL]
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Spreading the word: How we will be sharing our knowledge through consulting and community projects

By Tom Foremski for SiliconValleyWatcher

I've been doing a lot of talking about blogging, freely sharing what I have learned so far at conferences and while visiting companies and associations. It's fun and educational for me and, I hope, for the people I meet. It's interesting to see how people view blogging, hear their questions, and learn about the cultural obstacles within all organizations.

With interest in blogging exploding within the business world, we at SiliconValleyWatcher are being asked to consult on various projects. We hope to follow a long line of high-profile bloggers such as Doc Searls, John Battelle and Jeremy Wright, that share their expertise this way.

Because of my commitments to our main product, SiliconValleyWatcher, I will be more selectively engaged in consulting than some other members of our team. A large part of our consulting work will be through our tech team, led by Nick Aster, who is our CTO and a master in creating media technology architectures for organizations.

The blogging platform is a very powerful two-way communications technology. Used in the right way, it can make a bigger difference than probably any other technology investment, IMHO :-)

Sharing our work with our communities and a focus on schools

We hope that our work will also enable nonprofits and community-facing websites to make better use of these technologies. Nick Aster, for example, recently launched Triple Pundit—an eco site that is quickly gaining readers and is very compatible with his Green MBA project. BTW, Nick is looking for editors and writers on that venture.

We also have a project in the works that seeks to bring these technologies to schools, enabling community collaboration around one of the most important issues of our times - our children's education.

Upcoming speaking events

Next week I'll be speaking about blogging with some of the world's largest chipmakers, who are in town for the biannual Semiconductor Industry Association meeting. Many of these companies are showing great interest in media technologies such as blogging. One of our sponsors, Infineon Technologies, is one of the world's largest chipmakers.

The SIA event is a closed-door meeting, but on June 22 I'll be at a public venue in Palo Alto, on a panel discussing "How technology is revolutionizing news distribution and corporate reputation," organized by the Tuck School of Business at Dartmouth and The News Market.

Paul Argenti, professor of corporate communications at Dartmouth, will give the keynote address. My fellow panelists are Joel Dreyfuss, editor in chief of Red Herring, Charlene Li, Forrester's superstar analyst, Wade Roush, senior editor at MIT's Technology Review, and moderator Rafe Needleman, editor for business buying advice at Cnet.

Here is a link to the event (if you can't get in, drop me a note!)

Also, drop me a note if you'd like to find out more about our New Rules Media consulting services. We initially plan to work only with a small number of organizations, teaching best practices, how organizations can tell their stories without the need for spin, and issues around Sarbanes Oxley compliance. And, of course, how to set up a media technology infrastructure that supports the enterprise.

June 5, 2005

Drivers not required: Stanford's stealth AI vehicle project could net $2m Pentagon prize

By Tom Foremski for SiliconValleyWatcher

stanley vw.jpg I recently rode shotgun in a Volkswagen Touareg SUV. It's a great car. But this one was extra-special because it drove itself.

I was over at Stanford university conducting an exclusive interview with the engineering team that built the autonomous car, capable of avoiding obstacles and negotiating tough terrain in challenging weather conditions - without any need for human direction.

The car, dubbed Stanley, will compete with 19 others for a $2m prize on October 8, in DARPA's Second Grand Challenge race. The winner has to complete a 175-mile course in 10 hours across rugged desert terrain filled with unknown obstacles.

Pamela Mahoney, marketing director at veteran VC firm Mohr Davidow Ventures, has been working with the Stanford team. It is led by professor Sebastian Thrun, director of the Stanford Artificial Intelligence Lab. Pamela said MDV maintains close links with Stanford researchers because of its focus on early funding of startups. (Pamela also worked 10 years in the auto industry, including a spell at Chrysler, before coming to Silicon Valley.)

Itanium powered?

Volkswagen provided some engineers and the car, which bristles with gear and antennas on its roof rack. And the trunk has a rack with seven Pentium M PC boards, plus extra car batteries and various black boxes. Most of it is donated by Intel, yet another enthusiastic supporter.

Interestingly, Intel initially offered its high-end 64-bit Itanium microprocessors. These are power-hungry chips and Intel has been trying to boost the visibility of Itanium users within IT. But for cars, it's overkill, so Sebastian had to politely decline the offer and ask for Pentium M chips designed for laptops, which have low power consumption.

Apart from the computer and sensor gear, the car is a stock model that you could buy from a dealer. This is important, said Cedric Dupont and Mike Montemerlo, members of the Stanford racing team engineering group. It means that their approach is adaptable to many types of vehicles.

Another key aspect is the team's software-heavy approach to the challenge. This also makes the project more portable, and possibly adaptable to controlling other vehicles, ships or machinery.

Sebastian and his team said several times that they are not supporters of the war in Iraq, but that their technology could save lives. "You can imaging such vehicles being used by the military to transport supplies and avoid exposing people to roadside bombs," Sebastian said.

The gear on the car includes lasers, radar, GPS, and many types of sensors. So far, the team has taken the vehicle on secret trips to the Mojave desert. Secret because the mostly university teams competing for the prize are notorious for spying on each other. The Stanford team said they managed to keep their project so quiet that they heard on the grapevine that there was not going to be any Stanford entry.

Stanford's project could do very well. I can vouch that we didn't hit anything or anybody, successfully completed about eight or nine 50 meter circles, and that the car stopped exactly next to an orange cone Sebastian had placed at the start of the demo. I was impressed and a little dizzy.

(We hope to cover the race, which likely to be in Nevada this year because that will remove the need for an environmental impact report. It took 20 biologists to check out last years Grand Challenge in California's Mojave desert.)

A link explaining more:
http://media.vw.com/article_display.cfm?article_id=9583

San Jose Merc: http://www.siliconvalley.com/mld/siliconvalley/11685903.htm

UPDATE: The Stanford team has made it into the semifinals--only 20 teams will compete in the finals. DARPA press release.

Apple embraces Intel. The question is why. Steve to explain all Monday morning. Meanwhile, bloggers spin the news.

By Richard Koman for SiliconValleyWatcher

The big news of the weekend: Apple is dumping IBM as its chip supplier and has struck a deal with Intel, the Wall Street Journal reported.

While Apple is famously unhappy with IBM's difficulty in delivering chips, an architecture switch just as the Mac is achieving serious acceptance is certainly a risky move. Here's Nathan Brookwood, of Insight 64, quoted in the CNET article on the story:

If they actually do that, I will be surprised, amazed and concerned. I don't know that Apple's market share can survive another architecture shift. Every time they do this, they lose more customers" and more software partners.

So what's the point? The blogosphere has some ideas:

At GoldSounds, the theory is that it's all about the enterprise.

If you want to get to the heart of the matter, one need look no further than the XServe. IBM, as a manufacturer of high-end servers as well as the chips that Power them (no pun intended), has a vested interest in protecting its stake in the top-end UNIX market. IBM has readily supplied the desktop-capable FX970 (G5) chips to Apple for some years now, but the high-end POWER4 and POWER5 chips remain strictly IBM only. While recent moves such as Open Power intend to portray the Power architecture as the foundation of the next generation of high-end computing, IBM is still the gatekeeper to factories and patents used to produce these chips, and has the clout to keep other players at bay should they threaten IBM’s core business.

Under this theory, consumer Macs continue to run on G4s and G5s for the forseeable future. Rumblings make it sound bigger than this, though. I would expect to see consumer level Macs running on Intel chips at Macworld 2006. Does the switch in chips really matter? Would you simply be able to install Tiger on your PC instead of Windows? That's hard to believe but when Apple is running the same hardware as everyone else, why buy an Apple-built Mac instead of a Dell? And Microsoft let Dell sell Intel-based PCs running Mac?

Another theory posted on Slashdot holds that because IBM failed (miserably) to meet its contractual obligations on clockspeed (3 gHz) Apple now owns a substantial part of the PPC intellectual property and is free to shop around for a better manufacturer. In other words, Intel will be manufacturing PowerPC (not Pentium) chips for Apple.

This makes a lot of sense to me. I would have to concur with Brookwood - it's unbelievable that Apple would jetison the whole PowerPC architecture. It would set them back years, just as acceptance of the Mac is at historical highs. While they haven't made many inroads into the enterprise, Apple is a consumer/creative company. Dumping PowerPC really isn't an option. But if they're not held hostage to IBM, if they really have the rights to the IP, then Steve has the ability to have his PowerPC chips made by someone who knows how to crank out chips.

In any case, we'll find out in a few hours.

June 4, 2005

Google CEO vows one right answer for every search and universal reach "we'll get them all, even the ones in the trees"

By Tom Foremski for SiliconValleyWatcher

It might be unfair of me to pull that quote from Eric Schmidt's Charlie Rose interview Friday, but it was there so what could I do?

It was an interesting interview even though Mr Rose did not understand much of the answers, or, many of the questions.

The questions were predictable and interesting answers were left unexplored, or even cut off in mid sentence as Mr Rose flailed and ultimately failed, to engage Mr Schmidt in a debate on any decent hot topic issue.

Still, there were some very good nuggets:

Google is the greatest calling--working for world peace through search

Everybody searching Google should only have to get one answer and that answer should always be right. It is very important that Google succeed in only giving one right answer. There is no better calling in life, said Mr Schmidt.

Search is a force for peace and a better world. Google will reveal how everybody lives and thinks and speaks and looks and that is beneficial to world peace. Societies get along better when they know/see/hear more about each other, Mr Schmidt said.

The Google recruitment pitch

Mr Schmidt says Google recruits by appealing to people who want to make big changes in the world and convince them that they should do it with Google. Why? Because Google has the scale in computing and organization.

And because of its size, Google represents the largest opportunity they will ever have in their lifetimes.

(Whew, ...that is one tough pitch to argue against.)

Google the innovation machine?

Mr Schmidt repeatedly spoke about innovation, and in a real way not like Microsoft, which peppers (and salts) the term innovation into near every public sentence uttered.

The competitive game is about who can innovate the fastest, who can build innovative teams the fastest. Money will do you no good. You have to know what is the most efficient sized team and process.

Google focuses 70 per cent on its core business, 20 per cent in adjacent businesses and 10 per cent on new ideas. Sergey's math skills "proved" this split to be most effective business strategy, Mr Schmidt explained.

We already knew its engineers spend about 20 per cent of their time working on new ideas, any ideas. Those that survive a review process are able to work on their new idea project full time, then they can start to recruit friends, (thus building self-organising teams—a key element of what we call the newrules enterprise).

Mobile phone becoming more important than PC

Vast areas of the world have no internet because there is no electricity. That's why mobile phones will be critical in extending Google's reach beyond the electric grid, such as in the Amazon, Mr Schmidt said. And that's the context of the headline quote, "We'll get them all, even the ones in the trees."

If a shipment of lava lamps arrives at your company

You have just been acquired. Welcome to the Googleplex, your mission is to make the world a better place by publishing all of the world's information (or as much as you can beg, borrow or . . . persuade?).

Mr Schmidt said the lava lamps help introduce people to the Google way.

I just saved you an hour.

June 3, 2005

The Valley wrap ... three dot journalism returns (a nod to Herb Caen)

By Tom Foremski for SiliconValleyWatcher

Jim Finn, the former head of comms at Oracle was in town recently, he's now with IBM. We caught up downtown over dim sum and I got to hear about his new gig. BTW, if Jim ever gets to write a book about his experiences in Silicon Valley, go buy it.

Jim started off at IBM and is happy to be back on the East Coast fulltime and not having to make the punishing weekend commute to be with his family.

Interestingly, Jim and Andy Lark, the former head of comms at Sun Microsystems were recently seen breakfasting together. Both started at Sun and Oracle within weeks of each other, and both announced their departures within weeks of each other. (BTW, Andy has promised me the scoop on his new venture.)

. . .

Micro media mogul Nick Denton (Gawker Media) swung into SF Thursday, and our sleepy fishing village roused itself and a decent crew assembled at the smoky Place Pigalle in Hayes Valley to catch up with the great man.

My good buddies David Galbraith (wists.com) and Om Malik (GigaOm.com) were there, as were a bunch of other local geeks and entrepreneurs. Nick asked me who would be a good gossip columnist for Silicon Valley, I said Chris Nolan, (ChrisNolan.com — politics from left to right) but she won't do it because she prefers writing about politics. I told Nick I had SiliconValleyGawker.com all ready to go for him.

Gossip doesn't interest me much because it's easy to do. I do write some "gossipy" entries but there are some larger, more seminal types of media ventures to be done first, IMHO.

. . .

I bumped into Gaurav Dhillon one of my favorite valley CEOs. Gaurav left Informatica about a year ago and I lost track of him so it was wonderful to reconnect. Gaurav is now living in San Francisco and said he spent much of the past year traveling in Africa and other exotic locales. Now, he says he is ready to get back into the game.

He recently moved into offices on Market St. and is looking at ideas in media. Barely 40 years old, Gaurav says, "I figure I've got at least one more great company in me." He built up Informatica from garage startup to public company and led Informatica through the toughest part of the toughest downturn the valley has ever seen. And he's coming back for more.

. . .

My good buddy Alicia (Lish) Nieva-Woodgate is leaving Mediabolic and is the new head of communications at Opsware, the Marc Andreessen-founded company (used to be known as LoudCloud.)

Opsware has been building up quite a bit of momentum over the past year or so. And its message of IT automation services is a lot easier to tell now that we are all comfortable with such concepts. I remember when LoudCloud launched, it was a difficult story to communicate, even its PR company could not explain what it did.

. . .

James Hong, one of the founders of Hot or Not, the simple, highly popular people rating site, tells me that he has left the company and his co-founder, Jim Young is CEO and running things. http://www.hotornot.com/pages/about.html

Even though the founders of Hot or Not are famous for raking in millions in revenues and working just one day per week, he says running the business was stressful. "If there was the slightest dip in traffic, I'd want to know why," he says.

When did you leave, I asked? "About five months ago, but we don't have any place to announce it." Hey, it's news if you didn't know about it!

James is sporting an athletic build, obviously time well spent in the gym. He says otherwise, "I'm just buying clothes now that fit me." A summer in hot hot New York City beckons.

. . .

Hacks are flocking to blogging as the print business model continues to crumble ... the latest is San Jose Mercury tech journalist Dean Takahashi, ex-Wall Street Journal, ex-Red Herring. Dean is writing about video gaming with colleague Mike "Nooch" Antonucci. Check out http://deanandnooch.blogspot.com

(BTW, Dean, Blogspot took forever to load the page, it is always really slow — let us host it for you for free. Ping me...)

Also, I have to mention my buddy Tom Abate and his blog, mini media. Tom is well known to many as the tech columnist at the San Francisco Chronicle, and then biotech columnist. He's still at the Chronicle and very much interested in the emerging media technologies, as are we. Here is his blog: http://minimediaguy.blogspot.com/

(Same thing Tom, I can't get blogspot to load the page, let us host you for free. Ping me...)

. . .

Speaking of hacks, the brain drain at Cnet News.com continues. The latest to leave is Rick Shim, the personal technologies editor. It's his last day today and he heads off to a market research firm.

That's about eight veteran hacks to leave within the past couple or three months. Ouch, that makes life tough for those remaining. It means more work and replacements are tough to get and slow to build their productivity.

Also, Jim Kerstetter from Business Week is now at ZDnet.

. . .

Novell is looking for a new PR agency and the short list seems to be down to Text 100, Horn Group, and at least one other agency. Interestingly, Novell has specified that the agency must have some experience with the use of blogging and blogging technologies.

I think this will become an increasingly common requirement requested by other large tech companies and many agencies will have trouble meeting this requirement.

[warning: blatant pitch ahead!] I smell a potential opportunity for our consulting services group...newrulesmedia consulting—Nick Aster and the team are aggregating a tremendous amount of experience with the use of media technologies.

. . .

Ted Rheingold, the founder of Dogster and Catster, tells me they signed their first sponsor recently and he says working with a sponsor is so much better than working with advertisers. "I am fed up of looking through the server logs and arguing with advertisers over how many hits we served compared with their numbers."

The last time I mentioned Dogster was in the context of searching for aberrant behaviors, or the the madness of crowds. I was trying to determine what is the size of an online population that starts to exhibit spontaneous aberrant social behaviors, which cannot be predicted. Dalton Caldwell, chief technology officer at personal network software company Imeem, said he thought it might be about 10,000 users because that's when he noticed Dogster users started posting in the voice of their dog.

Ted said that my posting was picked up very widely, but, he said that the number is wrong. "That started much earlier, by the time we had 500 users, people started doing that."

Happy Friday!

June 3, 2005 | Permalink | Tag: Friday Watch
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Google's Secret Searchers

Hank van Ess reveals on SearchBistro.com that Google operates a secret worldwide network of search testers - humans not bots - to make sure that sites are properly placed in Google's search results. Does this mean that Google's vaunted algorithm is really a whole bunch o' clickmonkeys?

What is it? It's a lab of humans from all over the world (from China to The Netherlands, from Korea to Brasil) They are paid to check search results of Google every day. Most of the employees, called international agents by Google, were recruited through universities all over the world. The aim is to avoid spam, to get the right sites at the top of the listing and to test new features, not shown to the public yet. I call it Google's Secret Evaluation Lab, but the real title is less adventurous; 'Rater Hub Google'.

June 3, 2005 | Permalink | Tag: Google [GOOG]
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The scandal of our local public schools

By Tom Foremski for SiliconValleyWatcher

School Sidecar.jpg The Silicon Valley/Bay Area has some of the worst public schools in the country. This is a scandal for a region that prides itself as the global engine of innovation.

It's like having several rusting trucks parked on breeze blocks in your front yard.

Silicon Valley needs to take care of its local schools. Global companies cannot ignore the plight of their communities and we intend to play a significant role in changing the situation.

What if Craig Barrett, Intel's CEO, spent one half hour visiting a school each week? What if Steve Jobs popped into a local high school occasionally? Larry Ellison, get off your boat and into the schools. Meg Whitman, come on down. Carly, you've got time, come and inspire a new generation.

Did you know that Bill Gates, through his foundation, is doing more for our local schools than any of our local leaders?

Can you imagine the effect it would have on our communities if our rock star business leaders stepped up to the plate?

I'm fed up with hearing our local captains of industry harping on about the sorry state of education here in the US, yet not even bothering to poke their noses around the corner in their own communities. We will make sure they don't rest easy.

June 2, 2005

Silicon Valley startups told: Come to London ... BT wants your business!

By Tom Foremski for SiliconValleyWatcher

This week the British have been trying to drum up interest from California companies to locate their European offices in London.

I ran into the dapper Dale Smith, vice consul on trade and investment (think Denzel Washington in a well-tailored blue English blazer) and Rob Hull, bus dev manager at BT Group, formerly giant British Telecom. Mr Smith had recently authored an interesting research note on wireless infrastructure in the UK. Mr Smith noted that London is the world's most unwired city, with 1,200 public hotspots out of about 10,000 across the UK.

I also spoke with Michael Charlton, chief executive of Think London a private promo group. His pitch is that the UK, and London in particular, are especially attractive locations to base California's mobile content/services companies because of the extensive cellular and wi-fi infrastructures. Plus a large and savvy urban population of avid tech adopters.

Think London, along with the government organization UK Trade and Investment, can "fast track" the process of establishing an office in London.

They will also help US companies with making the right business connections. I asked if an old school tie was included in the deal. Mr Charlton said, "A personal introduction is always much better."

BT wants your business, really.

The BT guy explained how companies could buy infrastructure services from BT, such as wireless (although that's actually supplied by Vodaphone) and how BT will partner with mobile content/services companies, handle the billing, etc.

However, should your wireless service become hugely popular, BT reserves the right to "port" the service to its machines and reverse a 20 percent / 80 percent revenue split in its favor(!)

Mr Hull says that this provision is rarely implemented. But then why have it? Seems a discouragement to me...

Maybe a company could go to a BT competitor? I asked Mr Hull.

He seemed flustered and had trouble understanding the question. "What do you mean a competitor, to me?" No, BT.

"Is there any other company that is investing $16 bn in a next generation platform?" I said, isn't there?

It had turned into a rhetorical dialogue and it showed that BT does not have to think about competition, which is not a good thing.

Let's recap the value proposition here: Come to London and establish a mobile content/services business using the services of BT, the 8,000 pound guerrilla, which BTW, has the right to grab your service and the lion's share of the revenues (after you have labored to build up your business!)

That is not an attractive scenario IMHO.

And as for London, I grew up there and it's a tough place to live and work...I'd shoot for Paris, Berlin, Amsterdam or Barcelona.

Find out more about locating in London and the UK, from Janet Coyle UK Trade and Investment in San Francisco. janet.coyle at fco.gov.uk or 415 617 1360.

June 2, 2005 | Permalink | Tag: Tech Watch
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June 1, 2005

Startups on parade at IBD Under the Radar event

By Tom Foremski for SiliconValleyWatcher

There was a good turnout at the IBD "Under the Radar" consumer technologies event Tuesday as 32 young startups paraded in front of very skeptical panels of VCs.

The event is partly promoted as one in which startups can potentially raise funds from the exposure to VCs. But at the previous Under the Radar event, VCs told me they would not consider funding any of the startups appearing because they had no exclusivity in the deals.

Nevertheless, the Under the Radar event drew a decent sized group of in-crowd VCs, media and various other Silicon Valley folk.

From speaking with various people that had spent the day at the conference, the crop of startups was interesting but derivative. Steve Eskenazi, general partner at WaldenVC summed it up when he said, "They all seem to be variations on Google and other large companies, none of them have an original business model."

I asked how was the energy of the presentations? The complaint last time was that only one startup exhibited any excitement or passion. I was told it was good, that the startups seemed to be well motivated.

Some notable winners in their categories were PeerFlix, the peer-to-peer DVD trading site, and UpSnap, the SMS mobile search company, was an audience favorite. Here is a full list of the winners.

Michael Yang, CEO at Become.com, one of the more interesting shopping search engines, was in a very good mood, he had just raised a $7.2m round all from his original investors.

And a couple of the other companies also said they were not looking for investors. So why appear at IBD? Well, the networking was pretty good when I arrived at the end of the day...

June 1, 2005 | Permalink | Tag: Tech Watch
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Thursday News Wrap: Top 10 Reasons to Publish Top 10 Lists

By Richard Koman for SiliconValleyWatcher

Just when you thought it was safe to watch Letterman again, those Top n lists keep coming around. Today we have PC World's Top 100 Products of 2005, which picks Firefox as #1, Gmail as #2, Tiger as #3. Sounds a lot like the software lineup on my system ...

And here's another Top list, the Online Publisher Association's top 12 traffic drivers: #1 is "entertains, absorbs me" but #9 is "turned on by ads," ahead of "ease of use" (sorry Jakob ... oops, that's a hidden link) and "helps and improves me." FWIW. ...

Newsweek has a piece on video search engines, especially Blinkx. Basically, the networks are willing to play ball with for-free services that can make their products legitimately available online. The lesson from the music industry: When consumers are creating a new sales medium, maybe you should meet them with a storefront instead of a subpoena.

The strategy of the TV industry is not to fight the pirates so much as beat them at their own game—by making their television programming available, for a fee, on legitimate Internet-based video libraries. The key is to offer a service that's so much better than the rogue peer-to-peer networks that customers don't mind paying. "There's this general assumption that people will always steal content if they can, but I don't think that's true," says Chandratillake. "The success of the new Napster and iTunes demonstrates that people are very interested in downloading broadband content online and paying for it, if it's priced right and available easily."

(More later ...)

June 1, 2005 | Permalink | Tag:
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June 2005 Archives

June 30, 2005

We're off to the races...the first RSS focused VC fund is announced--$100m

June 29, 2005

Forbes Radio wants to interview me and probably you too...bring your checkbook

A reader writes... The problems of forced blogs; Anonymous comment on OutCast; The bandwidth issue

AMD lawsuit against Intel shows how marketing in the PC world works

June 28, 2005

Comments is broken...

Zoto photo project aims to record more than 4.54m US sites

June 27, 2005

The seemingly boundless interest in blogging. . .the Horse's Ass blog. . .and why forced blogging doesn't work

Running out of bandwidth...the good, the bad and the ugly (support)

June 23, 2005

Pillar Data Systems: Larry Ellison's $150m data storage company emerges from stealth mode

June 22, 2005

Mercora—a good evening spoiled by endless presentations...[updated]

June 21, 2005

Eric Schmidt speaks up on GooPay, denies Google wants to compete with PayPal

The British Invasion continues as OutCast is gobbled up by Next Fifteen

BitTorrent's Cohen: Avalanche is 'Vaporware' and 'complete garbage'

GooPay makes sense for Google's shopping, video, premium content businesses

Ready for the Avalanche?

I went to a garden party....and Carly Florina was there. So was Scott McNealy, Larry Sonsini, Ray Ozzie. and a digital Bill Gates, seeking valley love

Tech companies concerned about possible US laws on radio tag chips

June 17, 2005

WSJ: Google Readying PayPal Competitor

Garden party part 5: SVW uncovers backyard plot by Microsoft loyalists. . .

Garden Party part 4: Larry Sonsini leads valley lovefest for Carly Fiorina . . .

June 16, 2005

Garden Party part three: Bill Draper, the godfather of Silicon Valley's oldest VC dynasty

Garden party part two: How McNealy creates room at the top...

June 15, 2005

More hidden secrets of the Google 3D mapping truck

Blogs of freedom: Reporters Without Borders picks top free speech blogs around the world

What if Buckminster Fuller were still alive and looking for funding? I'm still in shock at Silicon Valley's blindness regarding Doug Engelbart

June 14, 2005

Retrobox.com: green riches in the muck and junk of the digital age

The slow death of TV advertising

Sirius radio to be available on Sprint mobile phones this year

Excellent piece on Doug Engelbart by Ross Mayfield

June 13, 2005

WSJ's Don Clark & Off the Record benefit for Big Brothers Big Sisters...

Technology and transcendence: a report from the recent Mind States VI conference

Monday's News (aka the Asia Report)

Scoop: Novell chooses Horn Group...

June 10, 2005

Exclusive interview with seminal 1960s computer visionary Doug Engelbart -- he's still here and looking for funding

June 9, 2005

A tribute to one of Silicon Valley's most influential and forgotten researchers at Xerox Parc event

June 8, 2005

The poor man's crackberry...Yahoo and Sprint launch push email from Seven

Scoop! Smile for the Google 3D mapping truck

June 7, 2005

The corporation as publisher: Is Cisco's online magazine a sign of further challenges to an already beleagured media establishment?

June 6, 2005

Mr. Unpredictable: Jobs Embraces Intel

Live from WWDC: Apple switches to Intel. What does it all mean?

Spreading the word: How we will be sharing our knowledge through consulting and community projects

June 5, 2005

Drivers not required: Stanford's stealth AI vehicle project could net $2m Pentagon prize

Apple embraces Intel. The question is why. Steve to explain all Monday morning. Meanwhile, bloggers spin the news.

June 4, 2005

Google CEO vows one right answer for every search and universal reach "we'll get them all, even the ones in the trees"

June 3, 2005

The Valley wrap ... three dot journalism returns (a nod to Herb Caen)

Google's Secret Searchers

The scandal of our local public schools

June 2, 2005

Silicon Valley startups told: Come to London ... BT wants your business!

June 1, 2005

Startups on parade at IBD Under the Radar event

Thursday News Wrap: Top 10 Reasons to Publish Top 10 Lists

- The Less talked about feature in New Xeons.

Comments

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