Silicon Valley Watcher--reporting on the business and culture of innovation

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July 2005 Archives

July 29, 2005

The Friday Wrapper . . .and introducing Atom Atomic

Atom Atomic: a pseudonym for some of my writing, when I want to be a different persona, and also for all of us.

Atom Atomic is a character and name that others will use; and you, dear reader, are also welcome to use it as a pseudonym. And you can use variations on the name, as well.

I think there is value in using different names as labels for different personas. Using pseudonyms is not necessarily to hide identities; but more to allow for different kinds of expression.

Pseudonyms help label the tone of an online voice; and labels are very important in this changing media.

Plus, many writers can take on the identity of a pseudonym, and develop a character, a personality, maybe. And it shares identity among a group of writers.

So, introducing Atom Atomic: sometimes it's written by the Atom-in-me persona; and sometimes it's written by the Atom-in-you. I'm not yet sure what Atom's voice is; but that will develop as others take part.

So, are you an Atom? Atoms are everywhere--send us an atom-item or leave it as a comment. Or use your real name :-)

Friday Watcher: Must-have servers/gadgets for CEOs
By Atom Atomic

The new must-have for top executives: your own personal mail server

Microsoft often invites customers to its Redmond HQ, AKA the Fortress of Solitude, and wows them with a tour of its soggy campus, and also its state-of-the-art IT center.

A recent visitor to the world's largest center of innovation, in the greater Seattle area, brought back some interesting tidbits.

Inside the Microsoft data center, visitors are led to a particular, special server: it's a mail server, and they are told it is Bill Gates' personal mail server. They are told that a personal mail server is by far the best way to manage and secure Bill Gate's secret email address.

Mr. Gates, like many of us to a lesser extent, had to abandon his main email address, and head for a personal mail server, because he gets 4m e-mail messages per day. And that's after it has gone through the spam filter.

I'm told that there are two luckless drones going through the email messages daily to check for anything worth saving.

Imagine hitting the delete key all day long... then doing it again the next day. I wonder how long someone would last in that job?

If I was in that job I'd stay up all night working on my projects; then I'd just dump the entire inbox first thing every morning. Then I would say I was beta testing a neat technology from Microsoft Labs that lets users control computer screens through REM under closed eyelids.

It's an advanced form of computer user interface that lets me delete, save and forward BG's email all day long --all through eye movements. Silence and low light are optimal, occasional drooling and snorting noises are a side effect; we're still trying to get the bugs out.

Actually, it wouldn't surprise me if Redmond's brightest weren't already at work on such a technology; and that would be a killer user interface. That way, we could do our computer work and catch up on our sleep!

Can you imagine how much value that would contribute to the human race?! No more grumpy people; everyone gets their beauty sleep. Bill Gates would be made god.

July 28, 2005

[thoughtleader thursday] More from Geoffrey Moore and John Gallant on IT strategy. . .

By Tom Foremski for SiliconValleyWatcher

On Tuesday I met with Geoffrey Moore, Silicon Valley's leading IT strategy consultant. He was running around with John Gallant, head of Network World, who had just flown in from Boston.

I wrote about their attempts to kick some life into enterprise information technology, make it interesting again, and be recognized as an important and strategic field(here).

Here is part II, some further notes from our conversation:

Geoffrey Moore: Companies have to figure out what is their strategic IT, the core of the enterprise; and which part is context, the commodity part of their IT. Then you innovate around the core, and outsource the rest.

But can you extract the jewels that make your company different? A lot of companies do things backwards: they do the commodity IT in-house, and then outsource the core IT work to outside consultants, who then go off and do it for their other clients.

[Chastising companies that use IT consultants for strategic IT work seems a bit strange. Could Mr Moore be signaling a new role? I didn't spot this at the time; but I'll ask him about it next time. -Tom Foremski]

Geoffrey Moore: India and China are a big challenge to US companies because they have come online much faster than anyone expected. That means companies here have to innovate faster than ever before.

The Gorilla IT companies can be seen as the coral reef: they provide the ecosystem on which the market flourishes. It encourages innovation.

- - -

John Gallant: The CIOs we talk with are so mired in what they have to do to maintain their legacy systems that they are leery of computer vendors offering new solutions, and leery if they have chosen the right path. This has produced a stasis in the industry.

Enterprises are cautious on proprietary IT systems because they don't want to be stuck paying a proprietary margin and then getting little in proprietary value for it. IT companies need to add value constantly to stay ahead of the open source snowball.

IT is not boring: there are a lot of interesting things going on in security, mobile applications, virtualisation, etc. . .

- - - -

Foremski's Take: It was an interesting conversation about a mostly dull sector that I covered as a reporter for many years. John Gallant was certainly very energized about the subject, and eager for the battle ahead. He hopes his Vortex conference in San Francisco in October will convince others that IT is indeed strategic, and that IT does indeed matter.

As for Mr Moore, I somehow felt that he would rather change places with me (not salaries of course), and be free of the "is IT strategic?" argument. And also be free to be disruptive and provocative, which is lots of fun :-)

The way I see things is that IT is not very strategic; but business process innovation is strategic. IT is now all about how well you can glue the computers and software to the business process.

Therefore, how you combine these business processes is where the real innovation occurs. This then leads to what are effectively proprietary business process architectures, which are very strategic and very profitable. (See Apple/iPod/iTunes for a text book example.)

The future that I see is an "Atomic Ventures" world consisting of technology-enabled business units, where each unit is a "best in show," and simple technologies such as the web browser, RSS, and the URL bind them all together.

(Except that it will be molecular aggregations of business units rather than "atomic," so that license/IP issues are simplified. One bill, one license will be the mainstream mantra.)

July 27, 2005

Deadly dull enterprise IT markets--Geoffrey Moore and John Gallant hope Vortex conference will spice things up

By Tom Foremski for SiliconValleyWatcher

I'm in Hotel Monaco, chatting with uber Silicon Valley consultant Geoffrey Moore, (Crossing the Chasm, etc), John Gallant editorial director of Network World, and Bob Angus, president of A&R Partners.

They are preparing for the Vortex conference in San Francisco in October, and a Churchill Club event this Wednesday evening: Creating Competitive Advantage Through Information Technology.

We're talking about the IT enterprise market, a topic that is very dull because nothing much is going on. But Mr Gallant and Mr Moore are determined to get the market moving and make enterprise IT interesting again.

"The IT market is mired in a morass and that needs to change. At the Vortex conference we will be bringing the main constituents together, the vendors and the customers. It will be a frank exchange of ideas," Mr Gallant promised, and no PowerPoints allowed. Tough questions and one-on-one interviews, and large amounts of audience participation are also promised.

Mr Moore will keynote Vortex and talk about core versus context, a concept he expands in his forthcoming book out in January, "Dealing with Darwin."

I'm a huge fan of Mr Moore's work and his thinking and ideas have made an enormous impact on how businesses understand themselves.

"My clients often don't have the time to reflect on their business, they are distracted by making the quarter's numbers, and daily operations. I get to reflect on their business and think about their IT strategy and what is core IT to their business." Mr Moore said.

Stuck in a Sargasso sea of morass

The trouble is that enterprises often aren't able to think about how to use IT strategically, because they are stuck dealing with a huge amount of complexity. Mergers and older IT architectures such as client/server, have created layers and islands of IT systems within corporations. Most of it can't be junked but must be made to work together, a long, tedious process.

"The last things CIOs want is somebody trying to sell them more IT because the integration challenge outweighs the ROI," says Mr Moore.

Yet the IT vendors such as HP, IBM, EMC, etc talk about adaptive computing, utility computing, virtualisation, etc. "Companies are telling the vendors, 'we don't understand how adding another layer of complexity will help us,'" says Mr Gallant.

Flogging a flagging horse

So, how do you jump start the enterprise market when dealing with legacy IT is such a massive burden?

I wish them the best of luck in their goal it is not a job I would like to do, but, then again, I don't have an attachment to the subject matter. Mr Gallant's Network World publication is aimed at enterprise IT users. And Mr Moore has his book publishing empire and his Chasm Group consulting firm, firmly focused on advising on IT strategy.

I think they have a long, hard slog ahead because:

-Maintenance spending is rising, there is less money for new technologies.
(See SVW "There's lots of gold in maintenance deals...Accenture study")

-The IT enterprise market sectors are controlled by one or two large players which discourages innovation and new products. (see SVW "Giant sucking sounds.")

-There is too much FUD in IT markets such as security, which lengthens buy cycles. (See SVW, "FUD in IT markets..."
)
-And the enterprise market will dwindle further because many of the enterprises themselves, will become extinct. They will suffocate under the load of legacy IT systems and other legacy factors. What I call the New Rules Enterprise will emerge. (See SVW,"These are the new dotcoms...and they will eat lunch this time around."
)

I think that the conversation has moved on, what will distinguish companies is their strategy around business process innovation. A corporation's IT strategy is not core, it is context, it is determined by the meta level strategy, imho.

Also, IT strategy can be duplicated, business process innovation is harder to duplicate. Look at iPod, for example.

[More on this topic in Thoughtleader Thursday...]

July 26, 2005

A visit to Yahoo and the human touch

. . . bloggers are big in Japan

By Tom Foremski for SiliconValleyWatcher

I popped down to Yahoo on Monday and Linda Kozlowski (great name btw :-) from Text 100 introduced me to Christine Castro, chief comms officer and snr VP at Yahoo, and some of her comms team, Mary Osako, senior director, and Linda Du, who manages international PR.

Yahoo is a lot different now from my first experience with the company. That was when Yahoo was located in a small building in Palo Alto that had clearly seen better days. I interviewed co-founder Jerry Yang as we sat on old plastic chairs and the Yahoo server sat in an adjoining room.

Now Yahoo has a thoroughly modern campus that is overflowing with hordes of attractive twenty to thirtysomethings. There are cute cafes and eating places throughout the campus, and the distinctive purple and yellow Yahoo colors are seen in the flower beds, and in the Memphis style furniture inside the building.

The visit to Yahoo was an opportunity for me to continue an exploration of the different approaches taken by Yahoo and Google. The two companies have similar roots and similar products, but there is a big difference in their approach to business.

Google is a media company yet it is run by engineers from head to toe, there is not a single media professional in its top echelons.

Contrast that with Yahoo, which has seasoned media professionals in nearly all of its senior ranks. Terry Semel, ex-Warner Bros, John Marcom, ex-Financial Times US, and Christine Castro, ex-Disney, to name just three.

My question about Google has been: can engineers build a media company?

Well, so far, they have proved that they can, because they have focused on engineering a rock solid computing platform.

And Yahoo has proved over the past few years that it can build a big business with smart engineers and media professionals. The winner is not yet evident.

But the difference between Google and Yahoo is one of humanity. Or as Mary Osako says, we "value the human touch. For example, when we put together Yahoo news, there are people helping to make the choices."

At Google News, however, Google proudly states that no human was involved in the collection and display of the news stories, it's all done by machines.

Well, servers and software are easier to scale than people and cubicles. That can be seen at the Yahoo campus which is bursting at the seams with people (how about a northern campus near San Francisco?).

So is the human touch going to be the key differentiator between the two companies? That's what I'm going to be watching for over the next couple of years.

- - -

BTW, Yahoo's top blogger Jeremy Zawodny is big in Japan. A group of visiting Japanese journalists taking a tour of the Yahoo campus were very eager to meet Jeremy, saying he is famous in Japan. Jeremy cheerfully posed for photos dressed in California casual: shorts and T-shirt, and eating a big cheeseburger.

It's another reason why you should not wait to become a blogger ;-)

http://jeremy.zawodny.com/blog/

July 25, 2005

Disruptive media technologies: SiliconValleyWatcher versus BusinessWeek

This one is a little tongue in cheek, or barbed wire caught in cheek :-)

In my research on today's post on acquisitions by large tech companies, I Googled this term: cisco +m&a.

Imagine my surprise and delight when SiliconValleyWatcher was the highest ranked online news publication at number three on the page.

The only other news source listed was BusinessWeek.com, at number 10, and it was below the fold and thus required an extra click(!)

Ouch, that must hurt. Cisco and its mergers and acquisitions strategy are such inseparable terms, yet BusinessWeek.com can't beat out SiliconValleyWatcher.com? (That's why our sponsors and advertisers are smart, very smart.)

BTW, we do not resort to any search engine optimization techniques. Therefore Google computes a pure page rank based on what the Internet community says is important.

[innovation watch] That giant sucking sound...will massive tech companies vacuum up all the cool/hot tech companies?

By Tom Foremski for SiliconValleyWatcher

Will just a few big tech companies end up owning all the cool/hot tech companies? That's the way it's looking right now, and it's going to be a big problem.

That's because the big boys are controlling the valuations of startup companies. With fewer buyers around, it becomes a buyers market. Which means fewer reasons to build more startups.

Within each tech sector there are now just one or two companies of a size that can compete against each other, and the other companies in their markets are generally much smaller.

That means it's less likely a bidding war will develop over a hot company, and since there is not much of an IPO market, it's a take it or leave it type of deal.

When I met recently with Joe Kraus, co-founder of search giant Excite (pre-Google) he said he was worried that there was a giant sucking sound coming from Google as it acquires more and more companies.

Yahoo has done its fair share of sucking too, Flickr, one of the coolest/hottest startups of 2004 became part of Yahoo earlier this year.

In other sectors, tech giants such as Oracle, Intel, Cisco, IBM, Microsoft, and Broadcom behave in much the same way. They buy the most promising private companies and they do it nearly every month.

The upside to fewer companies chasing hot companies is that there is less mania and less pressure to buy. When I visited with Dan Scheinman, Cisco's head of M&A, earlier this year, he said he had more time to identify and evaluate a potential acquisition. Valuations were now more reasonable than during the dotcom boom years, he said.

Ten baggers quicken the heart

Reasonable valuations however, don't stir the blood of venture capital investors. There is no opportunity for a ten-fold return on a VC investment when valuations are "reasonable." Yet a potential ten-bagger is the minimum requirement for a VC firm to be interested, generally.

So is innovation in trouble? Will we have less of it in the future?

It is difficult to argue with the economics of scale. I'm not talking about scale in terms of being able to negotiate lower costs on resistors or disk drives. Companies such as Google, IBM, Oracle, SAP can monetize a product or service far better than the startup venture can because they have scale in infrastructure: the global distribution channels, customer base, and support.

Is there a way around this? Let me know. Later this week I'll share what I think might be a scenario for future innovation.

[Sign up for the daily SVW newsletter—subscribers will always get more :-)

July 22, 2005

Coming Events: Roger McNamee talk with George Zachary about the $100bn new media market

. . . will content finally be king?

Manish Chandra over at TiE, has put together an interesting event Tuesday, July 26 in Santa Clara featuring Roger McNamee. Mr McNamee has had a midas touch over the past five years with investments at SilverLake Partners. And those years have been the toughest ever for Silicon Valley.

Also, Mr McNamee is very interested in new media which, happens to be an interest of mine also.

From the TiE pitch about the event:

The confluence of technology, new delivery mechanisms from podcasting to TV on the cell-phones is creating a revolution that remains only partially understood. It is changing how we create, consume and distribute entertainment. The emphasis on distribution technologies has overlooked the role of creation of content for the new media.

This touches on one of my favorite predictions: that we are reaching the point when finally, content will be king. Because creating content is difficult at a time when servers and algorithms are easy and plentiful. There are too many "tech" companies using servers and algorithms to make money from people produced content.

Indexing the content of blogs such as at BlogPulse, and aggregating news stories, such as at Google News, holds little value because anybody can do much the same thing reasonably well with some servers and software. Yet not anybody can create the content, such as news stories, gadget reviews, etc.

A page of links or headlines harvested by machines is cheaper to produce but those links have to point to something of value, otherwise there is nothing.

There must be considerably more value in content than in the index. Content can be controlled, it can be locked up or selectively syndicated. It all seems pretty obvious, or is my math wrong?

SIG- Internet "Legends in Internet & New Media: George Zachary Talks to Roger McNamee"

Selling of the Blogosphere heats up as a revamped BlogPulse challenges Technorati mano a mano on blog search

One of my recent posts kicked off a debate about monetizing the content of blogs and revealing it for corporate eavesdropping. There is a large industry forming that is making money off of the Blogosphere.

The money is in selling services that answer which blogs are the most influential, and what is being written about companies and their products.

This is measured by page links and algorithms that assign levels of authority to blog sites, and to specific posts. There are now many tools and corporate services that monitor and listen to the conversations of tens of millions in the Blogosphere.

But some, such as Robert Scoble, the uber-blogger at Microsoft, have pointed out large differences in metrics from leading blog tracker companies such as Technorati, indicating possibly that the data is faulty. Earlier this week BlogPulse released a revamped blog tracking service that claims more reliable results.

Jason Dowdell, over at his blog MarketingShift.com has been following these things and he is an excellent source on such matters. Take a look at Jason's posts (in chron. order) on the subject:

BlogPulse new & improved blog search engine

BlogPulse profile tool has the Blogosphere buzzing

BlogPulse addresses profile performance issue

July 21, 2005

Silicon Valley outlaws...could future legislation ban innovation?

Thursday evening I met with a bunch of RFID chip experts from Sun Microsystems, Texas Instruments and VeriSign. I know that my sponsor Infineon Technologies is watching this space and is concerned about legislation that could ban radio chip tags in government facilities in California, and similar legislative moves around the country.

The RFID chips are currently attached to pallets of products, and wireless readers can pick up their bundle of identifying information as they speed through the supply chain. Eventually they are expected to be used to tag most products.

Some US politicians have sponsored legislation that seeks to restrict or ban the use of the chips, because of citizen data privacy concerns. RFID chips being used to track people is the main worry.

The RFID experts I spoke with that evening seemed relaxed and unconcerned about the political side of things, which seemed both strange yet typical. US tech companies generally have faith that laws will be rational and will not limit innovation.

But Infineon knows better. Christoph Liedtke, the comms director at Infineon, used to be a speech writer for a prominent German politician for many years. And he has also seen first hand how Infineon and the German government sparred over crucial issues, and that the political process is one that cannot be ignored.

Silicon Valley's lacklustre interest in the legislative process is a big issue, says Joe Kraus, co-founder of Excite, the pre-Google search giant, and now founder of JotSpot. Last week in SiliconValleyWatcher, he warned that Silicon Valley needs to get serious about having its voice heard in Washington D.C, and in state governements. Otherwise there will be more restrictions on what types of innovation can be done here.

Already, the Digital Millennium Act places a huge amount of technology in a gray zone because it could be used to circumvent content protection technologies. This has chilled investment in some companies because of the risk of legal challenges - and Silicon Valley did little to challenge the passage of that law.

Future US laws will be passed because of strong lobbying by sectors that are threatened by progress in digital technologies. The music industry and Hollywood have already done that with their strong support for the Digital Millennium Act. Others will try to do the same.

The biggest danger to Silicon Valley is that it could become illegal to innovate here.

[thoughtleaders] Most startups should avoid venture funding, not pursue it

A Silicon Valley thoughtleaders column by Greg Gianforte, CEO of RightNow Technologies, for SiliconValleyWatcher

Raising venture capital for early stage start-ups seems to be the prevailing path for most entrepreneurs; however, most would-be founders should reconsider.

Here are some reasons why:

-If you start by selling your concept to potential prospects (rather than stock to VCs), you will either end up with initial customers or a conviction that your idea won't work. Why raise money and then find out which one it will be?

-Raising money takes time away from understanding your market and potential customers. Often more time than it would take to just go sell something to a customer. Let your customers fund your business through product orders.

-Adding VCs to the mix early gives you an additional set of masters you must serve in addition to your customers. It is always hard to serve two masters, especially in a startup.

-With no money you can't make a fatal mistake. This is a blessing. Without VC money, you are forced to figure out how to extract funds from your customers for value you deliver. Ultimately that is the only thing that really matters.

-Money removes spending discipline. If you have the money you will spend it - whether you have figured out your business model and
market or not.

-Raising VC money determines your exit strategy. You will either sell the business or take it public. What if you end up with a very profitable, modest sized business that you want to just run? That is no longer an option once you raise VC money.

-You sell your precious equity very dearly before you have a proven business model. This is the worst time to raise money from a valuation perspective.

I know this is a contrarian view. And some of you are saying that might be fine for a small company. Don't forget Dell, HP, Microsoft all originally started without VC funding; you can build a big business with bootstrapping and without VC money. At RightNow, we doubled our revenue and employees every 90 days for two years before we took any outside money, and even then the employees retained more than 75% ownership after raising $32m.

- - -

Greg Gianforte has a soon-to-be-published book called: "Bootstrapping Your Business: Start and Grow a Successful Company With Almost No Money."

SVW affiliate link:
<br />

And he welcomes questions from SiliconValleyWatcher readers.

Thoughtleader Thursdays...introducing the first column from Greg Gianforte, CEO of RightNow Technologies, one of the hottest IPOs of 2004

I've been wanting to have a "thought leaders Thursday" section for a long time on SiliconValleyWatcher and to feature guest columns, interviews, and profiles of our new generation thought leaders.

Greg Gianforte is one of my favorite high tech execs because he knows how to build companies, time and again. As CEO of RightNow Technologies he is leading one of the largest companies in the fastest growing sector of the IT market, the software as a service sector, Salesforce.com, Netsuite, etc. (BTW, this is not ASP by another name.)

Greg loves sharing his hard-won expertise in person. I've seen entrepeneurs following Greg around at conferences, asking him questions about running a startup business. And small crowds develop when he dispenses his advice.

Greg has a book coming out soon, for those that don't get a chance to buttonhole him in person. "Bootstrapping Your Business: Start and Grow a Successful Company With Almost No Money."

Also, be sure to read and clip his article in today's SiliconValleyWatcher on why VC money is bad for business.

It's a very compelling argument, and I'd love to hear reader response. Also, please send in questions for Greg for future columns, to me: tom @ foremski.com (w/o spaces).

SVW affiliate link:

July 20, 2005

A permalink for youthful indiscretions....

Tuesday evening the Electronic Frontier Foundation hosted a panel discussion on the legal issues surrounding blogs and also produced a "Legal Guide for Bloggers."

I caught the tail end of it, but Blake Barbera over at the Wetfeet PR blog, caught most of it, and he discusses an interesting issue. Are blog posts really forever? Suppose someone posted in their youth on a topic that is embarrassing in later life? The search engines will keep churning up that older post.

Take a look at Blake's post here:
A blog post’s shelf life; when will search engines let it go?

Coincidentally, this an issue I've been thinking about lately and the answer is increased use of pseudonyms. In fact, we older people should take our clues from the younger generation where made up nicknames are used all the time online.

It is similar to Burningman, where the participants generally have a "playa" name. The goal is not to hide identity, but to portray persona. By which I mean personas come and go :-).

My 16 year old persona was not the same as the one I had when I was 26, or 36. Personas represented by nicknames are one way to avoid the problems of your past coming back to bite you.

And, increasingly, there will be a less public world of the internet visible/searchable.

In the company of BlogHers . . .

SiliconValleyWatcher is a proud media sponsor of the BlogHer conference, the first conference highlighting the emerging elite of women bloggers.

As far as I know, tickets for this conference are already sold out; unfortunate, as I would like to take my 11-year-old daughter, Sarah. I've no idea if Sarah wants to be a BlogHer, but I'd love to expose her to a new environment and dynamic role models.

BTW, wouldn't you almost think that a blogging conference focused on women, or anything gentrified as such, is more of an artefact of the 70's, 80's and 90's? Along those lines, I'm interested in the vibe they'll try to extend, if it'll be a NOW-type one.

I often say that blogging is about meritocracy of content. I never check for gender bylines. And blogging is about authentic voices and a viral distribution system. Women bloggers will surely find their way into the limelight. I meet more of them every day.

The BlogHer conference organizers want to publicize the best women bloggers and encourage more women to climb into the top echelons of the blogosphere.

I'm glad somebody is encouraging more women to become bloggers, because we need some fresh voices. It is always the same A-list bloggers, you know who I mean. At every conference I go to, and every panel I moderate or take part in, it's the same group. It's people like Robert Scoble, Doc Searls, John Udell, Ross Mayfield, Marc Cantor, Jeremy Zawodny, Dan Gillmor, Mike Manuel, Om Malik, etc.

It is a group I like because the company is never dull. But it is all men, except for Charlene Li, Forrester's superstar analyst, who seems to be on every panel on blogging in the western hemisphere :-).

I've no doubt that the male dominated geek blogger community would do everything in its power to encourage women to blog, and to attend their geek conferences in large numbers.

And I'm happy to accelerate the building of women blogger media brands - if you'd like to send me a guestblog.

July 19, 2005

Is confusion over RSS audience metrics holding back online media?

I'm a big fan of Rok Hrastnik, who runs MarketingStudies.net.

I first met Rok earlier this year in New York, where I was moderating a couple of panels at the Syndicate conference, and was very impressed by his intuitive understanding of online marketing.

And there is an interesting discussion going on at MarketingStudies.net on the subject of RSS audience metrics. How do you measure audience and collect behavioral information using RSS to syndicate web site content? The answers are crucial because they will determine the business models around RSS and determine its future.

Finding a way to recover the value created by the work of myself and my team, is obviously very important to me, but it is also fundamental to the entire online media world.

It is the holy grail of the online world: how to create what Google calls a "virtuous" cycle, in which content creators are sufficiently well rewarded for great content that they can reinvest in further content creation.

Google AdSense was an important step in that direction, and now RSS might provide additional opportunities. We shall see.

Here is Rok on RSS Average Daily Readership Explained.
http://www.marketingstudies.net/

A tough crowd as Cadence played Boulevard

By Tom Foremski for SiliconValleyWatcher

Cadence Design Systems is probably one of the largest software companies you've never heard about. Only because they do the work of creating software that is used to design chips of all kinds, and the motherboards they sit upon.

Cadence has never been able to gain much limelight but Mike Fister, the former senior Intel exec now running the company, hopes to change that. And judging by the performance of Mr Fister and his team Monday evening, he might be able to do it. Cadence started looking pretty good as the evening wore on. [And it was more than just the slightly disorienting effect of ingesting the delights of Boulevard's kitchens and cellars.]

Mike Fister and two of his top executives hosted a media round table Monday evening on three tables and they switched places after each dinner course. (BTW, Mercora should take note :-)

Tough questions

Cadence invited a mainstream establishment media crowd to the event, which normally means they would face simple questions about chips and the design cycles. But on Monday they walked into a lion's den of sorts, and barely were able to take a bite of their dinner as they took on some tough questions from a tough crowd.

On my table, there was Cliff Edwards from BusinessWeek, well versed in this space, and Chris Kraeuter, senior reporter from TheStreet.com, who has covered this space on a daily basis. I've had the fortune of covering the chip industry for more than 20 years, and I love the drama of its rags-to-riches cycles. I can discuss about dielectric materials and the economics of the industry all night long — but I couldn't keep a friend if I did.

At the other table is Don Clark, deputy bureau chief from the Wall Street Journal, and Dean Takahashi, former WSJ, Red Herring and now San Jose Mercury News. Don and Dean are both hardcore chip reporters, they have been studying and reporting on the industry longer than they've known their children. So I think you get my point. It was a tough crowd that night.

Sucker punch deflected

But I have to hand it to Cadence. Mr Fister has gotten everybody on message that Cadence wants to be the number one supplier of chip and motherboard design software services, for every industry and vertical.

And it offers tool sets for each vertical that combine many chip design tools into one integrated system. It saves customers from having to figure out the tools integration themselves, thus faster time to market. [BTW, if Cadence could also integrate the IP licensing into one license package it will own the market.]

Mr Fister also had some interesting answers to some thorny questions. For example, at one point Mr Fister said Cadence was the largest, or second largest, in every one of its markets, and that there were only one or two other small, insignificant competitors.

But surely this lack of competition is bad for the industry as a whole, I asked? "The lack of competition in this case, creates an enormous amount of innovation. Because now, you don't need to integrate dozens of design tools to create an advanced chip. Whatever your sector, whether automotive or wireless, we've done it for you." Cadence thus becomes a design platform on which many thousands of chip designers can use to innovate new chips.

Fair enough, provided Cadence doesn't exploit such a dominant position. And I do think there is a new paradigm evolving, an understanding that companies want their suppliers to do well and prosper - just not to get filthy rich and arrogant and deliver little ongoing value.

[BTW, that is part of the paradigm of the future, your customers will decide just how much they will allow you to profit — so you'd better be nice.]

The culture of Silicon Valley

We grilled Mr Fister's colleagues, James Miller, senior VP of Development, and Aki Fujimura, CTO. Mr Miller worked for many years with Mr Fister at Intel, and it is typical that you bring your foxhole-buddies with you.

Mr Fujimura is a intersting person, Japanese, he was thirteen when he arrived in the US. His father is a famous researcher in speech recognition technologies. Mr Fujimura founded and sold two companies to Cadence, and he is an entrepreneur in the classic Silicon Valley style—he keeps coming back to do it again.

Mr Fujimura and many others here, no matter from which culture they emerged, share a characteristic that is rarely found elsewhere. These people like to build small companies into large ones, they want to work on big ideas. And when they hit the jackpot, they don't disappear onto a yacht and villas on the Mediterranean, as Euro entrepeneurs do. They pump their capital and their expertise back into the ecology of this place.

Two issues

So, getting back to Cadence, the two issues need a bit of work:

1) Diminishing numbers of customers. Consolidation at the top, and the high volumes required to make leading-edge chips viable, mean there are a small number of large companies. That leads to smaller license revenue—unless you can switch business models fast enough to a services-based model.

Also, can small, fabless chip companies survive/prosper against large integrators such as Broadcom that can offer one-stop chipset solutions? If they can't survive, that means fewer Cadence customers.

2) Acquisition target. Mr Fister said he did not worry or think about becoming an acquisition target by a large chip foundry, such as maybe TSMC, the world's largest and also a Cadence business partner.

Yet the economics within the chip industry favor such a scenario, as low margins force the foundries to absorb more and more of the value chain.

The way chips are manufactured these days, and the way they are designed, are woven more tightly together than ever before. Cadence design tools have to be intimately aware of the machine settings, and nuances of the chip fabrication materials used by TSMC.

How long before that tight connection between manufacturing process and the design tool, is mirrored in the business of the industry, and sparks a new direction for a large M&A trend?

July 18, 2005

There's lots of gold in IT maintenance deals as they consume corporate IT budget increases-- Accenture CIO study

. . . Larry was right

By Tom Foremski for SiliconValleyWatcher

Fortune 1000 companies report they are having to increase spending on IT maintenance and repairs at the expense of productivity-boosting IT systems.

This is despite a 9 percent average increase in IT budgets in 2004.

Accenture surveyed CIOs at 300 Fortune 1000 companies.

Larry Ellison must be smiling.

More from the Accenture study:

The quest to contain spending on information technology (IT) frequently backfires, forcing companies and governments to instead increase expenditures on IT maintenance, repairs and other unproductive practices. . . . Survey respondents cited an inability to close the gap between goals and results, despite average IT spending increases of 9 percent last year. . . . More than half of CIOs (55 percent) report that their organizations prefer to follow, not lead when it comes to pioneering IT developments, letting others absorb the costs and risks of initial development or category creation. Yet the majority of high-performing IT organizations (77 percent) said they want to be early adopters. . . . Technology adoption appears strongest in compliance areas, while weakest in business improvement technologies. . . . High-performing IT organizations spend 40 percent more of their budget on building and integrating new systems than low performing IT organizations. . . . The average IT organization spends about 12 percent of its time fixing preventable problems; high performers in contrast spend only 5 percent of their time fixing, where low performers spend 16 percent.

A HP/Sun combination makes sense...and so does Zander at the helm

. . .fantasy corporate mergers

By Tom Foremski for SiliconValleyWatcher

In February I argued that a Hewlett-Packard/Sun Microsystems combination makes sense, [BTW way more than Symantec-Veritas] - and with extensive HP cutbacks/layoffs looming, it makes even more sense now.

By themselves, those two companies don't have enough to compete against IBM. Together, they have plenty of synergies, let me recap:

+HP would get Sun’s range of SPARC systems and an impressive future technology road map for SPARC microprocessors. This is a great challenger to IBM and its proprietary 64-bit Power microprocessor architecture. Margins on proprietary hardware are four to five times better than on industry-standard systems.

+HP would gain from Sun’s large accounts in financial services and telecoms. These sectors are huge IT spenders.

+Sun needs a much stronger services arm, and HP has a strong IT services group.

+HP would gain Sun’s middleware, v.important against IBM’s WebSphere middleware.

+Both companies could consolidate their computer labs.

+It would be easier for HP and Sun to spin out business groups, such as HP's PC group.

+Sun’s Java technologies have consumer electronics and mobile phone applications and momentum.

There's more but you get the picture.

The culture of the two companies is different, but it could be made to work by making it into a West Coast versus East Coast (IBM) type of thing.

The leadership issue could be resolved if Ed Zander, now at Motorola, but former president of Sun, came in to run the combined company, with Scott McNealy as chairman and Mark Hurd as president. [Mr Zander was approached to run HP, just before Carly Fiorina was appointed.}

That would make for a powerhouse company, imho.

July 15, 2005

From hack to flack: Matt Hicks from eWeek is leaving to join

. . . Zeno Group (formerly PR21) in their San Francisco office.

Silicon Valley should fight laws controlling innovation, says veteran valley entrepeneur

By Tom Foremski for SiliconValleyWatcher

Silicon Valley could face additional laws limiting technology innovation unless it gets active in politics and lobbies hard to protect its digital freedoms. That was the view of Joe Kraus, a Silicon Valley veteran and an avid angel investor.

Lunch with Joe is always a treat, not just because he picks up the tab but because I get to pick his brains about all sorts of issues and trends. As a veteran of the first search engine wars, when he co-founded Excite, and now heading a corporate wiki company JotSpot, Joe sees a lot more than many, and he has a lot invested in Silicon Valley innovation through his angel investments.

One of the things on Joe's mind is how cleverly Hollywood managed to control innovation. What do you mean by "control," I asked?

"Hollywood is very good at the political process and it managed to get the digital millennium copyright act passed." This essentially gives Hollywood control over innovation, because it gets to approve appropriate technologies and therefor development.

Silicon Valley companies have traditionally paid scant attention to Washington, and have not learned how to play the lobbying games. While older tech companies like Texas Instruments, Intel, and a few others have large staffs in Washington.D.C, they are still less than equal to a force to be felt.

Joe recently joined the Electronic Frontier Foundation, an organization that works to protect digital civil liberties. And he founded the 50,000 member strong lobbying group DigitalConsumer.org.

Last month I met with 463 Communications, a PR firm that is helping tech companies become involved in the public political process. It's a small move in the right direction.

What else is Joe wondering about? "There seems to be a giant sucking sound from Google as it pulls in top engineering talent and technologies," he said.

Earlier this year I saw Eric Schmidt on Charlie Rose and he said graduates are told that if they want to change the world they should choose Google because it has the largest scale and is best placed to achieve their goals. "That's a killer pitch," he said. I know, what can you say to that?

I've been wondering if Google and Yahoo will buy up all the cool emerging companies. And isn't this bad for innovation because there are a small number of bidders for young companies?

They essentially control valuations of startups and that means a lower return for investors.

The same is true in enterprise software markets BTW. Lower returns, equals less investment in future ventures.

We chatted about so many things that we forgot to chat about JotSpot, Joe's current tech focus. Fortunately, the always excellent Dan Farber, at ZDNet met with Joe that day too, and wrote about what is new about JotSpot:

JotSpot reorients itself by ZDNet's Dan Farber -- Joe Kraus of Jotspot came by my office today and we chatted for about 30 minutes about how his wiki-based platform and applications are evolving. Joe has ample Web 1.0 experience in building a Web-centric products and company. He was one the co-founders of the pre-Google search engine Excite (which then became part of the highly touted but now extinct [...]

Here is our interview with Joe from earlier this year.

Joe's blog is here: http://bnoopy.typepad.com/bnoopy/

http://www.jotspot.com/

July 14, 2005

Today in filesharing: Linking is infringement in AU; legal music downloads nearly triple

By Richard Koman for SiliconValleyWatcher

An Australian judge has convicted a man of copyright infringement for hyperlinking from his site to sites containing copyright MP3s, ZDNet Australia reports.

While on the surface, the act of linking to a file would hardly seem an infringing offense, in all liklihood the scale of the linking, the name of his site - mp3s4free, and the fact that he was profiting from the arrangement, all add up to the conclusion that there's not a lot of difference between linking and hosting.

The record companies' success down under may lead to similar suits in the States.

Meanwhile, the Register reports that US legal music downloads are up 187% from a year ago, probably an effect of Apple's success in marketing the iTunes Music Store to its gobs of iPod customers, not a reflection of falling illegal downloads. The Register notes CD sales have fallen precipitously, but there is not way that can be laid squarely at the feet of illegal downloading.

The tepid economy and generally uninteresting offerings from the music business are at least as much to blame, IMO. One indirect way downloads may have impacted the drop though: people are starting to get the idea that $20 for a CD from a mass market artist is not exactly a good deal.

600% growth in iPods leads to Apple's best quarter

by Richard Koman for SiliconValleyWatcher

Apple announced its best quarter ever at its conference call yesterday, reporting a net quarterly profit of $320 million, or $.37 per diluted share, and revenue of $3.52 billion. A year ago, Apple reported net profit of $61 million, or $.08 per diluted share, and revenue of $2.01 billion. It all comes out to revenue growth of 75 percent and net profit growth of 425 percent. International sales accounted for 39 percent of the quarter’s revenue.

Mac sales rose 35 percent to almost 1.2 million units, while Apple shipped more than 6 million iPods, which is more than six times the iPods sold a year ago.

Steve Jobs cited Tiger as a "tremendous success," and promised as he always does, "more amazing products in the pipeline."

Apple expects revenues to be slightly down from these numbers in the fourth quarter.

Intel's Dirty Tricks

by Richard Koman for SiliconValleyWatcher

Why is Intel inside better? According to AMD's suit against the Santa Clara chipmaker, it's because Intel intentionally compiles programs to run slower on AMD chips. The complaint charges, according to TechWorld.

"Intel has designed its compiler purposely to degrade performance when a program is run on an AMD platform. To achieve this, Intel designed the compiler to compile code along several alternate code paths. Some paths are executed when the program runs on an Intel platform and others are executed when the program is operated on a computer with an AMD microprocessor. (The choice of code path is determined when the program is started, using a feature known as “CPUID” which identifies the computer’s microprocessor.) By design, the code paths were not created equally. If the program detects a “Genuine Intel” microprocessor, it executes a fully optimized code path and operates with the maximum efficiency. However, if the program detects an “Authentic AMD” microprocessor, it executes a different code path that will degrade the program’s performance or cause it to crash."

Also, as widely reported: Intel's offices across Europe were searched by EU investigators. Offices in England, Milan, Madrid and Munich were caught up in the investigations of abusive marketing practices.

Complaint is on AMD's site (PDF).

Another day another panel another conversation about my two favorite subjects: Silicon Valley and disruptive media

By Tom Foremski for SiliconValleyWatcher

As media and communications and marketing professionals, we are all taking part in something very interesting: the birth of a new media landscape.

We will never again, in our lifetimes, experience/witness/participate in anything of such scale and importance as what is now developing in our industry sectors. imho.

That's one of the things I said Wednesday lunchtime to a very interesting group attending the monthly meeting of the San Francisco Publicity Club.

Was I being too dramatic? I don't think so, I'm certain it will be seen that way by historians :-)

It's another day and I'm on another panel, and I like taking part in things like this. But what's not to like about being in the Waterfront Restaurant at Pier 7 on a gorgeous day, talking with a smart and ambitious group about my favorite subjects: Silicon Valley and disruptive media technologies?!

My fellow panelists were interesting picks. Event organizer Ellisa Feinstein and colleagues picked Don Clark, deputy bureau chief of the Wall Street Journal; Mark Robinson, a senior editor at Wired magazine, and Lindsey Turrentine, an editor at Cnet's gadgets review section. The panel was a nice spectrum representing old to new media organizations.

The Q&A part of such events is the best part, because that's when talk turns to conversation. And I get to hear stories, concerns and issues.

A large subject for this audience of communications professionals, is trying to figure out how to deal with online media, which is fast becoming the dominant form of media expression.

Yet online media can appear as a confusing mish-mash of different forms: Podcasting, blogs, wikis, RSS feeds, news readers, news aggregators, and many different online communities. There are different rules, and different processes. And you still have the traditional media to deal with while trying to implement and use these unfamiliar publishing and communications technologies.

And you are often expected to do it all with the same budget, headcount and management. But you can't.

I told the group we were all lucky to be here, at this time, at this important point in the transformation of the media and communications industry. There are many questions, and we only have some of the answers.

That's why we are lucky, because this time, we get a chance to discover/create/develop the future. The software engineer was important for enabling Internet 1.0. In this second major phase in the evolution of the Internet, it is the "media engineer" that will be important.

I define this as a media/communications professional that understands how to create compelling online content/services, and how to use the latest media technologies. In that order, btw.

Letters to the Editor: Throwing a cat amongst the pigeons. . . the blogosphere reaction to "The Selling of the Blogosphere...." the first in a series

. . .it's like Doc Searls snowball effect

By Tom Foremski for SiliconValleyWatcher

Walled Garden.jpg My recent piece about companies such as Technorati collecting data on bloggers and their conversations and selling that to marketing and PR organisations created quite a stir.

I am not against such practices, BTW, I report on the business of Silicon Valley, and much of that business is media technology business these days, Google, Yahoo, etc. And I'm interested in the business models of the second generation media companies and their ecology--which includes companies such as Technorati. The development of successful business models by Technorati and others, will define the look and feel of our future society.

And the selling of the blogosphere, without significant kickbacks in terms of services or value, will lead to the Internet becoming much more private.

We will have an era of the walled garden, the fort, the trusted private networks, the gated communities. There will always be a public face, but the rest of the 90 per cent of people's time online and in real interactions will not be public. imho.

Fractured and separated communities coexisting on servers but not physically, or on culture/ideas/opinion--is something I think about as a possible future scenario. Our current technologies can easily support the creation of millions of private and impenetrable online communities.

It would be good to have a Technorati type service to help a fractured society learn things about itself as a whole.

Here are some reader reactions,(thanks to all, especially Sam Whitmore of the excellent Media Survey.)

From Doc Searls weblog [Doc is on the board of Technorati--he is a master of the art of blogging. I had the fortune to share a panel with Doc earlier this year--and felt like I had robbed the guy, because I walked away far richer from the experience. I learnt a tremendous amount from Doc that day and am still learning.)

The Doc Searls Weblog:

It's interesting to see the ripple effect of The selling of the Blogosphere—Technorati's big push into monetizing its treasure trove of data collected about millions of blogs, by Tom Foremski at SiliconValleyWatcher.

Also, hear from the moderator of the panel and Ron from Cisco writes...so click on through...it's all good!

Hey Tom, Liked the post this morning on your recent blogging seminar. I think Technorati's offer is a little overkill. Yes, there are many blogs, but only a few worth reading. Very few have any significant influence on either the blogging or non-blogging communities. Know what is going on among the few key blogs, and you pretty much know what is going on in the outer reaches of the blogosphere.
Ron Piovesa, Cisco Systems

I agree Ron, things will shake out in good time, and it will be plain to see which blogs/online sites are the ones that matter within an industry/community. That won't require algorithms... :-)

This is from Shannon, a partner at the Horn Group, who did a wonderful job as moderator for the panel (I took some notes.)

Shannon Latta

http://horngroup.blogs.com/

Tom. I’ve been meaning to write you for a few days now to thank you for participating in the panel last week. The panel was one of many great sessions (both on the clock and after hours) at our annual company offsite – it’s taken me a few days to recover. Nonetheless – thank you!

Your post is packed with good observations and musings. Peter’s Technorati pitch did come on strong, especially for an audience of agency people. But I sought him out as a panelist to include the perspective of a search and measurement company so it was fitting to a degree. He was also the dominant presenter in terms of speaking style and delivery, so it came on even stronger.

In your SVW pitch you nailed the issue that I thought most powerful in our panel – giving up control of the corporate message. You’ll recall that Peter’s response to that question was “control is so 20th century.” As agencies continue to establish our role in these new mediums where everyone is publisher and publication, the notion of message control has huge implications. It’s changing the way we communicate, pitch or engage (call it what you want) with media, clients, companies and bloggers. Finally, we’re talking together to uncover the real stories underneath the prescribed stories. It makes me think of rule number one in the good years of Burning Man – participate! You said it: “Participate in, rather than seek control of, the blogosphere.”

I wasn’t able to formulate my entire opinion about the panel until I got feedback from our employees in the room – and apparently it was a hit. The right mix of panelists, we answered a few big questions and sparked some bigger ones, and everyone took something away – so I’m pleased. Most of all we’re participating, rather than gawking from the sidelines. Good stuff!

Shannon Latta
Horn Group, Inc.

July 13, 2005

Powell joins Kleiner, Perkins in mentor role

'Yes, General, we respect your technical knowledge ... by the way, are you still on good terms with Wen Jiabao?'

By Richard Koman for SiliconValleyWatcherBut don't worry, he won't be talking about you at the UN ...

Former Sec. of State Colin Powell will join venture capitalist firm Kleiner, Perkins, Caufield and Byers as "strategic limited partner," a title that reveals both his investor status and his real job as entrepreneur mentor.

"I wanted to be on the leading edge of technology developments in America and in the world, which will not only benefit America, but all of human kind," Powell said in an interview with the San Jose Mercury News.

Kleiner partner Brook Byers said in a conference call, according to the Mercury: ``The real role he's going to play for us is mentorship.'' The Times quotes Ray Lane, Kleiner partern and ex president of Oracle, on Powell's international expertise: "General Powell has a global perspective. So we think he will be very helpful in helping us figure out what we should do overseas, and how we do it, and what we should eventually invest in."

Really. While Powell has sat on the boards of tech companies like AOL and Steve Case's Revolution - he is, he said, "not a total rookie" - what does he really bring to the party? The Times quotes Paul Kedrosky, a professor at the University of California San Diego and a specialist in venture capital, who thinks that Kleiner wanted him for the usual reasons former government bigshots are wooed by the private sector - access.

"There are any number of coaches who would happily sign up with Kleiner in a limited role given the payoff," Mr. Kedrosky said. "But it sure helps if you've got a coach who can pick up a phone and get Donald Rumsfield on the line." Security is currently a hot area for venture investing, Mr. Kedrosky noted - and one in which Kleiner Perkins "has been underinvested in relative to other large venture firms."

Makes sense. But imagine just how strained the call-opening small talk will be as Colin and Don reminisce on their chummy White House relationship.

Browster—a nifty search utility or a new way to "frame" third party web sites?

. . . is the business model sound?
By Tom Foremski for SiliconValleyWatcher

Framed Content.jpg
Browster was a hit at the Demo conference earlier this year. It's a nifty utility that lets you search through pages of search links very quickly. You just mouse over a link and a pop-up page of the source web site appears instantaneously.

That means fewer clicks. Compare it with the current alternatives: Clicking on a link, waiting for it to load, then clicking back to the search results, or opening new windows and then trying to find your way back to the search results.

On Wednesday, Browster launched its 1.0 version. I spoke with Scott Milener, CEO and co-founder of Browster.

"Our goal is to enhance the search experience because that has become such a big part of our lives. Search is where a lot of us spend a large part of our day, and Browster makes it possible to speed through many pages of search results," said Mr Milener

When a Browster-enabled web browser displays a page, Browster looks for links and downloads the home page of that web site into a cache on the client.

Mousing over a link causes a pop-up of that web site page in a separate window. The window also displays five text ads in a horizontal row in the tool bar area.

"By using Browster, people can search deeper within Google, rather than stopping after the first page or two. That means users have a better chance of finding what they want," Mr Milener said.

Foremski's Take:

It's a nifty utility - but is it a "feature?" Browster has filed four patents, but how defensible is its IP?

Downloading web pages in the background is not novel and is done by Internet accelerator products. And pop-ups are generic.

Prefetching and caching web content is going to be a standard feature of many more products, I would think.

Business model: Browster wants to make money by selling advertising that is part of a "frame" of a third party's web site. [Browster, BTW, does not identify itself to web sites that it visits.]

The framing of third party content was something that was tried and failed during Internet 1.0. This is a different twist, but not different enough to avoid the attention of web site owners. Those web sites will undoubtedly see Browster trying to profit from their work — with no kickback.

Another issue: Users are unlikely to click on Browster's text ads, which pop up and pop away, as quickly as they speed through searches.

Another issue: The web sites prefetched by Browster register the hits, but that doesn't mean that the user actually viewed the web page, because a Browster user might not preview all the links on a page of search results. This skews usage data.

However, this somewhat makes up for the fact that ISPs, telcos, and large corporations cache web site content all over the place and those page views are not recorded/reported to the original web site.

Another issue: Corporations will not like Browster because it dramatically increases the bandwidth load on networks. Suddenly, thousands of users are downloading 10 to 20 times as much web content each time they load a web page. Browster will very likely be banned from corporate work environments, which is where a large proportion of web searching is done.

Another issue: Browster can generate clicks on pay-per-click advertising, raising costs for advertisers. That's another reason Browster should identify itself to any web sites it visits.

I like the utility but, I don't like the business model. My advice would be to try charging $10 for the software instead of selling ad clicks around someone else's content.

Content producers are going to fight back against the aggregators, scrapers and all the others that want something for nothing, much.

Producing good content is not easy or cheap.

July 12, 2005

Our comments section is now working

Blog-happy PR firms

By Richard Koman for SiliconValleyWatcher

Steve Broback, who's bringing the Blog Business Summit to San Francisco in August, did a brief survey of how often PR firms use the word "blog" on their websites. And the winner is ... Edelman, by a long shot. Here's the list:

Edelman PR Worldwide	77
Manning, Selvage & Lee	53
Horn Group	18
Hill & Knowlton	9
Burson-Marsteller	5
Haas MS&L	5

Top blog-happy PR firms

Edelman PR Worldwide	77
Manning, Selvage & Lee	53
Horn Group	18
Hill & Knowlton	9
Burson-Marsteller	5
Haas MS&L	5

July 11, 2005

Let me introduce a master graphics artist...Chris Dichtel

By Tom Foremski for SiliconValleyWatcher

This has been a long time in coming, but there will be more.

More well-deserved credit for the work of Chris Dichtel, our SiliconValleyWatcher illustrator.

We rarely grab a logo or any other graphic from another web site. Most of the time our graphics guru Chris draws on a mishmash of public domain images to create unique art found only on SiliconValleyWatcher.

This is a way that we can distinguish ourselves from other sites and enhance the experience for our readers. We know that you have no time to even kiss your kids goodbye before leaving for work -- that we will be lucky if you spend even two minutes on this site.

Any face time is priceless and we want you to have a great experience on our site. The content is unique and so are the graphic creations of Chris Dichtel.

Here is one of my favorites, our post calling for a bat signal summoning Dan Gillmor to come and chastise USA Today's Kevin Maney for banning the media from a Churchill Club event he was moderating. A gracious Dan did indeed reply to our bat (Dan) signal! ("LOL at the illustration...but I drive a Prius...")

Poor Kevin Maney had to write a groveling apology on Dan's web site, explaining that if USA Today allowed other journalists into its event it would be scooped by them. [Try typing a bit faster guys :-)]

My advice on keeping the press away: USA Today should have emphasized "no lunch."

I was checking the spelling of his name when Google popped up with this speech promo (BTW, I should sign up for this) for $20K he'll come out all the way from Virginia. He describes himself as:

...one of the only people in the media who cover the technology scene as it happens, every day.

also...

...a witty presenter with a sharp mind and a full storehouse of knowledge, stories and insights.

Obviously, few of us in the press can vouch for that latter claim, because Mr Maney shies away from the media.

And as for his former claim as the Lone Ranger of Tech reporting? Absolute and Total BS. And 200 other journalists will back me up. imho.

The selling of the Blogosphere—Technorati's big push into monetizing its treasure trove of data collected about millions of blogs

. . .helping corporations control their message
By Tom Foremski for SiliconValleyWatcher

Last Friday I was on a panel with Sam Whitmore, of the popular Media Survey, and Peter Hirshberg, a very high powered marketing guy (see his bio) representing Technorati, a well known web site that is very highly regarded by the blogging community because of its early focus on the blogging phenomena.

Technorati has done an enormous amount of work in supporting the early blogging communities, and it has been a strong evangelist for bloggers everywhere through its promotion of blogs and bloggers. And through its close watch on blogs, it has helped the blogging community understand itself, and how it is evolving.

The subject of the panel was "How the Blogosphere is changing the game in PR and marketing" organized by the PR company Horn Group and nicely moderated by Shannon Latta, a partner of the Horn Group, and the panel included Horn Group's in-house blogger Blake Barbera, who writes an increasingly popular blog: Wet Feet PR.

What surprised me was how aggressively Mr Hirshberg was pitching Technorati's expensive blog tracking services to this audience of agency and corporate communications professionals. Mr Whitmore barely mentioned his company, and I didn't pitch anything, maybe I should have :-)

But I did get an interesting peak into the world of "selling the blogosphere" and how there is a large and growing number of companies, such as Technorati, that would like to make a lot of money from the work of millions of bloggers.

Technorati is listening

Mr Hirshberg talked about the current tracking services that Technorati offers, and new products coming that will offer a deeper analysis of web blogs and will assign a value of authority, and other tags. All the better to more accurately distinguish how important a blog post is, the sphere of influence of a particular blogger, and the many number of ways to slice and dice the wealth of blog data Technorati is collecting and selling.

"It's all about getting the right algorithm" he said at one point, arguing that Technorati's sophisticated automated services would enable corporations to find out what is being said about them, their people, products, and to respond to bad news very quickly, by engaging bloggers in conversations.

Corporate fear of lost control

Mr Hirshberg's pitch very much played into the fear that most corporations and their media relations teams currently wrestle with: how do you deal with millions of bloggers acting as journalists? How do you control your corporate message?

Well, Technorati is offering services that will help companies control their corporate message by identifying those blogs and their social network, that have posted around the "wrong" message. Then, I would imagine, some sort of corporate "SWAT" team could parachute in and engage those off-message bloggers.

"You need to become involved in the conversation," Mr Hirshberg strongly advised his audience.

I was surprised by how aggressive Technorati was in its pitch because it has a very good standing within the blogging community, a community that bristles at the thought of others commercializing its work.

Exposing the relaxed intimacy of conversations

Are Technorati and others, spying on the blogosphere? I don't think so, it is a public space after all. . . but it is a bit creepy.

A lot of blogs are semi-private, their authors are mostly talking with their friends and family, and the discussions are not intended for broad publication.

Mark Jen, for example, a software engineer at Google, lost his job because he made some comments about his colleagues (he is now at Plaxo.) "Only my friends and family used to read my posts," he told me. He was shocked when tens of thousands discovered his account of life at Google a compelling read and his employer did not.

Mr Jen's experience is unusual, the typical experience of most bloggers continues to be writing for a small group of family, friends and peers.

This produces a relaxed intimacy of conversation that marketeers prize very highly. And now they can track and eavesdrop on millions of such relaxed conversations, thanks to Technorati's services, (not cheap either.)

The SVW pitch

I did not make a commercial pitch on the Horn Group panel, but I'll make it here, a more appropriate place IMHO.

The pitch is much different from that of Technorati's: when we aren't tracking down news and exclusive stories, we do some consulting work teaching companies how to become good citizens within the blogosphere, how to become a valued part of the community, and to give up the notion of control over the corporate message.

Participate in, rather than seek control of the blogosphere.

Because:

Every company, every organization, is both publisher and publication.

Every company is a collection of stories, stories about itself, stories told within the organization to itself, and stories told to customers.

Telling/publishing compelling stories is key for any company, and difficult. Those stories have to be truthful, they have to be accurate, and they have to have real passion/energy—otherwise nobody listens/buys.

Spin, marketing, selling, become strange anachronistic words within this new communications world that is emerging. And the rules of this new communications medium stress ethics, transparency and honesty, among many other features.

I would rather teach the corporate world how to publish content that is real, and of value to its communities rather than help the corporate world monitor and control the content published by others.

Am I a bit harsh on Technorati? I hope not, it has every right to make a living from its work, it shares a considerable amount of data it collects with the entire blogging community for free, and it is just one of many companies selling the blogosphere.

July 7, 2005

Fix found for Movable Type-CPanel bug...Six Apart hits the ground running in wake of J4

There wasn't much in the way of burgers and beer for Jay Allen and his colleagues this past barbecue weekend. As product manager for Six Apart, the publisher of Movable Type, Jay faced a big problem: an upgrade to a popular third party software application was causing tens of thousands of Movable Type blogs to behave erratically.

Movable Type engineers (Brad Choate gets a special mention) worked with the third party software engineers to fix the problem and so everything should be fine once the software gets updated at web server hosting facilities.

On top of that, it was Jay's birthday too, and the poor guy says he won't see sunlight until he gets version 3.2 of Movable Type out the door--that's the Geek Life and it's not for the faint of heart. But we wouldn't want it any other way...

From Jay:

An update to the DBD::MySQL driver has been posted by the developer.
Movable Type users affected by the problem because of the automatic CPanel updates will also be automatically fixed within 24 hours.

Update also posted to the Six Apart ProNet and MT News blogs.

July 6, 2005

Thousands of Movable Type weblogs affected by bug...

My apologies for the comments section still being down, but it is a much wider problem and tens of thousands of installations are affected. Six Apart, the creators of Movable Type are working on a patch which is to do with strange interactions with an updated version of CPanel, a utility for managing server installations at many web service providers. But, it has been several days now and no patch has appeared...

Six Apart risks losing more users to competitor WordPress, an open-source weblog platform.

In the meantime, you can send a "letter to the editor" to: tom @ siliconvalleywatcher.com (ommitting the spaces) and I will compile and post your comments manually as a seperate entry. Thank you.

Here is info from Anil Dash at Six Apart about the problem.

I want a portable wiki -- a WalkAbout Wiki (with TagAbout GPS technology...)

By Tom Foremski for SiliconValleyWatcher

There has been a lot of talk about mobile applications and geo-location projects lately, and that reminds me of a product I have longed for: a portable wiki, or WalkAbout Wiki.

Wikis are very simple but very effective software applications that can organize information out of chaos, and also build themselves into simple applications.

I get most of my ideas when I'm walking around San Francisco and I want one place where I can jot everything down, throw it all into one big repository, business and personal, and then retrieve it through tags, search, and simple organization of projects via a wiki interface. It would hold my notes, my midnight musings, my personal and public stuff, photos, videos, audio. Some of it would live in the cloud, some on the client.

The WalkAbout Wiki would be cheap—under $200 for the basic model. It would be notebook sized, with a near full sized keyboard, a decent size screen and very robust.

It is so robust you can play frisbee with it, let your dog bring it back and send it spinning back out again, and it still keeps working, dog slobber and all.

WalkAbout companion...

It would also let me record messages, or events photo, video or audio. The Walkabout Wiki would naturally, have a built in Skype-like phone service, broadband, and bluetooth. It would have open source Office-like applications, which would be a mixture of client side and server side - but I shouldn't really know or care. All I need to know is that I have access to my applications, to a degree, even if an Internet connection is not available.

When a Walkabout Wiki walks into a hotspot, or hops a bluetooth connection, things sync up and I don't need to know. Everything is always backed up and I can roll things back to any point in time on my device.

The largest application of such a device would be as a knowledge store of a person's life. For example, HP Labs has played around with the concept of recording every moment of a person's life. Search technology could be used to bring back names, photos, anything from anytime in the past, that is contextually relevant to now, my now.

That would be a cool device, I'd buy one. And Walt would probably like one too :-)

Tagging GPS locations

But wait, I also want a global positioning sensor in my WalkAbout Wiki so that I can attach notes to a specific location, a restaurant review, a note about a person, where a photo was taken, a conversation I had in that spot. I could get a $10 coupon from walking into a store as part of a promotion, I could play a treasure hunt with friends.

The WalkAbout Wiki, with the TagAbout application, would share some of my tags with the public, some with friends, and I could read other people's tags at a GPS location. Billboards too, would have associated tags with promotional messages and video. This would overlay the Internet onto the real world, a concept that HP Labs and IBM have played with. HP proposed wired "beacons" attached to billboards, but with wireless connections and a GPS location, you don't need an infrastructure of wiring "beacons" to billboards.

There would be a ton of other applications that would arise from a WalkAbout Wiki platform, but probably not much money in making the device itself - unless it's a proprietary approach that links the hardware to the services, the cell phone model.

Could IBM do it again?

An open-platform open-sourced WalkAbout Wiki would create a larger community and a more vital ecosystem than one modeled on the proprietary cell phone business model.

But, how would we get an open WalkAbout Wiki platform? The only reason that we got an open platform PC model was that IBM was in a rush and had to use open-sourced components and software.

The PC platform is too expensive for a WalkAbout Wiki type of device. Maybe IBM can do it again? And this time on purpose, using its muscle to set an open platform. After all, IBM is the leading evangelist for open source software, and it has the chip technology, a lot of it already in the consumer space.

An IBM POWER microprocessor chip integrated with graphics and communications could easily power a WalkAbout Wiki. Or maybe a chip like Broadcoms Alphamosaic chip plus an ARM RISC processor (both are British designs BTW) would fit the BOM (bill of materials) quite nicely. And Intel's StrongArm based XScale chips could also provide a decent hardware platform for a WalkAbout Wiki.

We'll get there one way or another, the hardware layer is less important these days anyway. And there is a ton of open source software, from operating systems to full-fledged applications, and it's only going to get better.

Fencing the commons

The choke point however, in this open digital utopia, is in the gateways to the Internet. Municipalities have been challenged by the commercial sector from providing public wireless Internet. That is an attempt to attach a commercial gateway to every Internet access point, wired or wireless. That's not good. We need public access to a public infrastructure.

I've nothing against "toll roads" on the Internet, a faster service for more money, but I'm against having to take a "toll road" to get onto the Internet from anywhere-- that's an alarming trend.

Here is more on public Internet access at the SFLan project, which is run by Internet Archive. Join in and grow the network, find out if you have roof top line of sight with another SFLan node.

Also, here is something that could very nearly be a WalkAbout Wiki, the Pepper Pad.

RSS VC Fund draws criticism...

By Tom Foremski for SiliconValleyWatcher

Last week I wrote about RSS Investors, a $100m VC fund focused on RSS focused ventures. I like the fund because it draws attention to RSS--a simple but very intriguing technology.

Many in the VC community told me that it is a bad idea to launch such a fund. It is too narrow and restricted and will fail.

My interest is not in the success or failure of the RSS fund, (though I think it could do very well) but in the ecosystem of startups that will grow around it. There will be a thousand entrepreneurs rewriting business plans and writing new business plans for innovative startups. Plus, RSS will be transparent and part of the fabric of our lives, as it already is for some.

It is all fodder for our sites SiliconValleyWatcher and ionRSS. Also, writing as someone that has an RSS based startup business, it can't hurt. It's a win-win from where I'm sitting.

I know that we will be all surprised at the many uses for RSS and the successful businesses built around it. And if no one wants to join in launching rival RSS funds, so much the better. Too many investors spoil the market n'est pas?

So, you other VCs, stay away from RSS :-) But I know you won't...

July 2005 Archives

July 29, 2005

The Friday Wrapper . . .and introducing Atom Atomic

July 28, 2005

[thoughtleader thursday] More from Geoffrey Moore and John Gallant on IT strategy. . .

July 27, 2005

Deadly dull enterprise IT markets--Geoffrey Moore and John Gallant hope Vortex conference will spice things up

July 26, 2005

A visit to Yahoo and the human touch

July 25, 2005

Disruptive media technologies: SiliconValleyWatcher versus BusinessWeek

[innovation watch] That giant sucking sound...will massive tech companies vacuum up all the cool/hot tech companies?

July 22, 2005

Coming Events: Roger McNamee talk with George Zachary about the $100bn new media market

Selling of the Blogosphere heats up as a revamped BlogPulse challenges Technorati mano a mano on blog search

July 21, 2005

Silicon Valley outlaws...could future legislation ban innovation?

[thoughtleaders] Most startups should avoid venture funding, not pursue it

Thoughtleader Thursdays...introducing the first column from Greg Gianforte, CEO of RightNow Technologies, one of the hottest IPOs of 2004

July 20, 2005

A permalink for youthful indiscretions....

In the company of BlogHers . . .

July 19, 2005

Is confusion over RSS audience metrics holding back online media?

A tough crowd as Cadence played Boulevard

July 18, 2005

There's lots of gold in IT maintenance deals as they consume corporate IT budget increases-- Accenture CIO study

A HP/Sun combination makes sense...and so does Zander at the helm

July 15, 2005

From hack to flack: Matt Hicks from eWeek is leaving to join

Silicon Valley should fight laws controlling innovation, says veteran valley entrepeneur

July 14, 2005

Today in filesharing: Linking is infringement in AU; legal music downloads nearly triple

600% growth in iPods leads to Apple's best quarter

Intel's Dirty Tricks

Another day another panel another conversation about my two favorite subjects: Silicon Valley and disruptive media

Letters to the Editor: Throwing a cat amongst the pigeons. . . the blogosphere reaction to "The Selling of the Blogosphere...." the first in a series

July 13, 2005

Powell joins Kleiner, Perkins in mentor role

Browster—a nifty search utility or a new way to "frame" third party web sites?

July 12, 2005

Our comments section is now working

Blog-happy PR firms

Top blog-happy PR firms

July 11, 2005

Let me introduce a master graphics artist...Chris Dichtel

The selling of the Blogosphere—Technorati's big push into monetizing its treasure trove of data collected about millions of blogs

July 7, 2005

Fix found for Movable Type-CPanel bug...Six Apart hits the ground running in wake of J4

July 6, 2005

Thousands of Movable Type weblogs affected by bug...

I want a portable wiki -- a WalkAbout Wiki (with TagAbout GPS technology...)

RSS VC Fund draws criticism...

- The Less talked about feature in New Xeons.

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