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September 2006 Archives

September 29, 2006

Superstar VCs and YouTube; IWantMedia; Free domains? PhishTank is coming; $70 PCs; SCNR in Boston

. . . What do superstar VCs watch on YouTube
From my friends over at Beet.tv:

I thought you might enjoy this one. Andy and I saw Roger McNamee yesterday at MIT. We taped his thoughts on the proliferation of video. He also says he enjoys Keith Olbermann clips, and ones of baby pandas in China:

http://www.beet.tv/2006/09/superstar_vc_ro.html

. . . From the excellent I Want Media Daily e-newsletter, Patrick Phillips and team at NYU . . . :-)

Google, Yahoo 'Don't Have to Pay for Journalism'
A change in media business models has been created by the simple fact that it is more effective to sell products and services next to a search box than next to journalism, writes Tom Foremski, a Financial Times reporter-turned-blogger. "How will we pay for professional journalism?"

http://www.siliconvalleywatcher.com/mt/archives/2006/09/two_years_ago_i_1.php

http://iwantmedia.com/

. . . Also from I Want Media:

U.S. Media 'in Decline Worldwide'
American media are experiencing a decline in world audience market share, according to British media expert Jeremy Tunstall, author of the forthcoming book "The Media Were American." India, China and Japan now have media exports that equal, or exceed, their media imports.

http://www.hindustantimes.com/news/5967_1808511,001600060016.htm

I wonder how soon US online media companies such as Google, Yahoo, etc will face a similar decline in market audience?

http://iwantmedia.com/

. . . Is OpenDomain.org altruistic or business savvy?

OpenDomain offers free use of domain names to open source software communities.

Ric Johnson, president of OpenDomain.Org. "We don't sell domains nor do we transfer them. Instead, we buy domains so organizations that share our view of responsible open sourcing can use them for free in promoting these open technologies.

However, OpenDomain keeps ownership, which could be a big problem in the future. It should give them away not keep them, so that open source communities can keep control over the future of their own online address.

http://www.opendomain.org/

. . . OpenDNS is launching PhishTank on Monday

PhishTank is a collaborative clearing house for data and information about phishing and malware on the Internet.

http://www.phishtank.com/comingsoon/

. . . We don't need no stinkin' $100 MIT laptops

Especially since we can get a $70 PC. That's what South Korean firm nComputing showed at DEMO.

http://www.ncomputing.com/ncomputing/index.php

. . . Coming up the Society of New Communications Research conference

Inaugural Society for New Communications Research Symposium & Awards Gala, November 1 - 2 at the Colonnade Hotel in Boston, Mass. Be the first to hear the results of our 2006 research initiatives and winning case studies from around the globe. Receive a copy of the first Journal of New Communications Research. Help us determine our 2007 research agenda and hear about developing standards for social media initiatives.

View the entire program and session descriptions here.

HP: When lawyers play spies

By Richard Koman for SiliconValleyWatcher

HP's leak investigations look outright ridiculous in an internal report released by the House Committee on Energy and Commerce yesterday. Investigators focused on the language in a CNet story to help finger George Keyworth as the source of the leak, the Times reports today.

The scrutiny included intricately parsing the language of a Jan. 23 CNet article in which Dawn Kawamoto, a reporter for the service, described a board meeting that month. The article quoted an anonymous source as saying, “By the time the lectures were done at 10 p.m., we were pooped and went to bed.”
Like Kremlinologists (or maybe Encyclopedia Brown), the investigators for Hewlett-Packard drilled in on the use of the word “pooped.”
“This is also an unusual term,” the report reads. “A number of key witnesses interviewed indicated that contrary to a number of members of the board, Keyworth often uses casual, colloquial terms in conversation, so this is a term he may use.”
The investigators also focused — in that same CNet quote — on the use of the word “lectures.”
“This is an academic term, rarely used in the business environment. Keyworth is the only board member with an academic background.”

This is the report that Hunsaker delivered to Mark Hurd, Ann Baskins and the board. <

Interestingly, it was Carly Fiorina who initially encouraged Keyworth to strike up a relationship with CNet's Dawn Kawamoto to promote HP's aggressive moves.

Further clues were available in the story. Kawamoto cited only a single "source," in the singular.

One of the first things the investigation team noted is that Kawamoto always cites just one ‘source’ rather than citing ‘sources’ or ‘people familiar with the situation,’ like other reporters who more frequently cover H.P. do,” the report theorized.

And pretexting revealed that Kawamoto called Keyworth at home at 5:25 pm on the day before the story ran. Investigators with Kawamoto's records knew she hadn't called 411 and thus knew Keyworth's number.

The investigators also received reports about Perkins' and Keyworth's arguments during a break in the heated March board meeting.

“The arguments were mainly one-sided, with Keyworth intently speaking and even pointing his finger at Perkins’ chest several times. At the very end of the second argument/heated discussion, Keyworth was overhead saying: ‘They don’t have enough to go there.’ ”

Germany loves LG15; Podshow funding shows a bubble; Women-led startups

. . . LonelyGirl15 wrap up

Uncovering the identity of LonelyGirl15 vidstar "Bree" was a great scoop for SVW, (closely followed by an SVW scoop on EMC acquiring Network Intelligence.) Google found 27,400 pages mentioning the LG15 scoop.Scoops always attract traffic and some of it continues to return, which is why scoops are very important for any news publication.

Looking at my server logs was interesting. Even though SVW made it to the front page of the New York Times, three times more traffic came from another news publication, Germany's prestigious Spiegel.

- http://www.spiegel.de/netzwelt/netzkultur/0,1518,436783,00.html

. . . Jason Calacanis on Podshow raising another $15m.

Lest there be no question, we are now in a full-blown bubble. What on earth Podshow is going to do with almost $25M in funding is anyone's guess, but it's not going to end well I can tell you that. To raise this money they must have had a $35-60M pre-money valuation. That means the VCs are going to look for a $300-500M exit at the very least, and that means they need to get to $30-50M in revenue. Not sure I see that happening.

Link to OK folks... now it's a bubble - The Jason Calacanis Weblog

. . . Women tech entrepreneurs conference Oct 5

The Women's Technology Cluster's Entrepreneur Venture Conference (EVC) is a showcase for women-led startups.

Women's Technology Cluster - San Francisco

Also SVW interview: Telle Whitney, head of the Anita Borg Institute

September 28, 2006

Morning questioning of Dunn and Sonsini

By Richard Koman for SiliconValleyWatcher

A rough transcript of the morning questioning of Dunn and Sonsini.

Rep. Ed Whitfield:

Q: Mr. Sonsini, did you understand that pretexting was occurring?

A: At that particular time, I didn't understand pretexting. I turned to Baskins and Hunsaker and said we should respond to Perkins. Hunsaker sent me a report, Baskins sent confirming email, and I took that and went to Perkins and said, It appears it was done within legal limits.

Q: Ms. Dunn, did you receive opinion about the legality?

A: I didn't get a legal opinion. Hunsaker reported to me that every method was legal.

Q: We've determined the only legal opinion ever given was by John Kiernan, the lawyer for Delia, and the opinion was actually written by a law clerk. It would appear that HP at the highest level relied on opinion by the law clerk of an attorney who worked for a private investigator.

A: There was a memo with a second opinion that said it was legal.

Q: What was that?

A: It was not produced by the company.

Q: Mr. Sonsini: The California penal code prohibits fraudulently obtaining information from a public utility by false pretenses.

A: We concluded methods may have been used that implicated that statute.

Diana DeGette, (D-CO)

Q: Mr. Sonsini, as outside counsel, is this standard business practice in the industry to investigate leaks in this way?

A: I have never dealt with an investigation of this kind from a board.

Q: Pretexting?

A: No

Q: Going through trash?

A: Not to my knowledge

Q: Creating fake employee to sting a reporter?

A: No

Q: As counsel to HP, were you consulted about the scope and methods?

A: No.

Q: You received a memo that discusses the procedures, including "obtained ... 3rd party phone records ... including reporters phone records." And there's a footnote asserting the methodologies were all legal.

A: I focused on that footnote. I was concerned by scope of the investigation

Q: What did you do?

A: Nothing further. I asked Baskins about legality.

Q: Did you research it?

I was assured it was legal.

Q: Ms. Dunn says she didn't supervise the investigation. So Baskins gets opinion saying its OK and you rely on that opinion. It all seems very circular.

A: The investigation was done by HP legal. It wasn't until it was over that I was asked about it.

Q: Ms. Dunn: This fictitious Jacob character ... is it common practice to make up fake characters at HP?

A: I do not know. I would not come to my attention if it were. I really can't answer your question.

Q: You ordered the investigation.

A: I initiated it at the request of board. I was nonexecutive chairman.

Q: Look at Tab 21, Hunsaker says to Gentilucci. We need to get approval of Mark, Ann and Pattie. Tab 60 (2/26//06) Hunsaker email: "Here is the email we sent to Dawn Kawamoto. You knew this operation was going on.

A: Yes

Q: Did you think there was a problem with this?

A: At no time was I responsible for designing its methods ... This did raise a concern. I didnt' want to be the person who authorized it.

Q: What did you do about it

A: I sent the team to management for approval.

Q: Who was that?

A: Mr. Hurd.

Q: What did you say to Hurd?

A: I dont remember a conversation. I told the team to talk to Hurd.

Q: You didnt mention it to anyone?

A: I asked Hurd to look into it. I understand they gained the approval they were seeking.

Q: Mr. Sonsini, you saw a report that talks about Jacob. Were you familiar with it? Did you have concerns?

A: That was not my focus I was retained to do.

Chairman Barton:

Q: Ms. Dunn: You claim your position is unique in that you dont have direct staff. Who reports to you?

A: No one.

Q: You're an administrative adjunct to the board

A: Its a coordinator role.

Q: There were leaks from board meetings

A: Yes.

Q: Was the board divided or unified? Were there schisms?

A: After I became chairman, I became highly cognizant of deep schisms on the board.

Q: What steps did the board take before you resorted to these sordid methods?

A: The first inquiry began under Carly. She asked Sonsini to talk to every director one on one and seek confession of the leaker and to reassert their commitment to confidentiality. The reason the board was so concerned was that no one had come forward to admit leaking.

Q: How were you directed?

A: Next to finding the new ceo, my top priority was to identify the leaks. Seven of the nine directors came to me and asked me to investigate the leaks.

Q: There was never a vote?

A: No.

Q: Kona 1 used pretexting?

A: I believe it did. I'm sorry I've just been corrected. ... I dont know.

Q: When did you learn pretexting was being used?

A: In the sense of the word we're using it today - fraudulently - this was not something I understood until July 2006 as a possible component of either investigation.

Q: Did you clear this with Hurd?

A: He wasn't with HP in the period when i was first named chairman.

Q: Who did you call?

A: Bob Wayman, the longserving CFO of HP.

Q: You had no management responsibility.

A: He was a fellow director.

Q: He was one of the directors who wanted to investigate

A: Yes. He directed me to Huska, who directed me to Delia.

Q: Was this personal? Was this do whatever takes?

A: There was never any question the board expected the investigation to be done legally and ethically.

Q: Well if seven of nine wanted it, I would start with the two who didnt

Q: I provided informatin to investigators about who wanted it and who didnt it. I was

Q: If I called you up and asked for your phone records, would you give me that?

A: If I understand ...

Q: No. I just called you up?

A: In your position, I would.

Q: Well, praise the Lord. I wouldn't give you mine

A: I hope that doesn't mean you have something to hide.

Q: If I want your records as a congressman, I can get them via subpoena. But as an individual I can't just peruse your records without permission. And i shouldn't be able to. This committee is concerned because use of pretexting ignores what most people understand as right and wrong.

Opening statements of Dunn, Sonsini, Adler

By Richard Koman for SiliconValleyWatcher

Opening statements from Dunn, Sonsini and Adler.

Patricia Dunn:

All corporate directors have a solemn duty of confidentiality. Leaks create unfair advantages to some stockholders over others. When HP board asked me to become chairman, I expected challenges but I never imagined these circumstances could ever occur.

I took the mandate to stop leaks seriously. As detailed in written testimony, she sought out Bob Wayman, acting CEO and CFO. He referred her to Kevin Huska, global security, who led her to Delia. In talking to Delia, she learned that checking phone records was SOP and were drawn from public sources.

In Jan. 06, there were leaks about CSC acquisition. Baksins felt strongly that Hunsaker should run the investigation. He brought in the same team for Kona II as Kona I. His draft report was given to Dunn and Hurd. I requested and received assurances that investigation was legal and proper.

In June Sonsini told her Perkins raised concerns. Sonsini concluded "the process well done and within legal limits." He later told the board the methods were not generally unlawful.

I deeply regret that so many people - including me - by were deeply let down this reliance. I hope that Congress enacts legislation to protect themselves from leakers.

Larry Sonsini:

Wilson Sonsini was not involved in the design or conduct of Kona 1 or 2. I was not even aware of them when they were being conducted. HP asked WS to provide legal advice.

In my opinion, pretexting is plainly wrong. They should not be used by businesses or anyone. When we were asked by board, although generally pretexting was not specifically unlawful, we could not confirm the methods used in the investigation were legal.

Although pretexting is clearly wrong, the law is not as clear as it could be. As the chairman said, it is probably illegally. It needs to be clearly illegal.

A board cannot function effectively if its most sensitive deliberations are leaked to outsiders. Boards are greatly weakened without confidentiality. HP remains a company we can all be proud of.

Fred Adler, HP IT security investigations

I became uncomfortable when I learned of the investigatory techniques. One must understand legal issues around obtaining records. HP employees sign agreement to give company records from computers, email, phone records. Information we use to make inquiries must comply with law.

When we grew concerned, a coworker and I brought matter to attention of managers. We raised concerns with counsel. We were advised by counsel that investigation was legal. Those opinions have since been questioned.

Baskins, Hunsaker, contractors all take the Fifth

By Richard Koman

All of the witnesses on the first panel are pleading the Fifth as I write this. The witnesses are Ann Baskins, Kevin Hunsaker, Anthony Gentilucci, Ron DeLia, and owners and subcontractors to Action Research.

The committee is seething that the entire panel pled the Fifth, since only two witnesses previously said they would do so. One representative called the hearing a "waste of the committee's time, a waste of witness's time."

The second panel is Dunn and Sonsini. They're being sworn in now.

Rep. Ed Markey on the HP scandal

Ed Markey addresses the subcommittee:

What has happened to our corporate culture? We used to ask who does your PR? Now will we have to ask, so who does your spying? That is what this whole area has opened up. HP's website says 'the company respects your privacy."
What were they thinking? I am concerned officials are suffering from Sgt. Shulz syndrome. Some are saying I saw nothing, I heard nothing, I know nothing. That is not believable. Where were the lawyers? Some are suggesting that ambiguities in existing law made it difficult for lawyers to determine legality. This is absolutely absurd. What happened is already illegal. Section 5 of FTC Act makes pretexting illegal. The Telecom Act of 1996, section 222 clearly states customers phone records can only be revealed to customer or someone with permission. Wire fraud laws also prohibit pretextiing. Congress must act to ensure this never happens again.
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HP Hearings: Barton focuses on Sonsini, others point to violation of public trust

By Richard Koman for SiliconValleyWatcher

Rep. Joe Barton points out that Larry Sonsini signed off on the pretexting ops back in April, and demands to know how he didn't wave a red flag, rather than saying "such operations are not generally illegal." He and other reps have asked, why are so many principles refusing to testify today if the actions were so legal?
A common thread in the opening statements is that the public will expect HP's actions are common throughout the Valley and the whole corporate world and that public will fear that their own private records may be searched. "Is corporate America the next big brother, Rep. Tammy Baldwin said in her opening statements.
Most members of the subcommittee are pointing to an anti-pretexting bill the committee reported out this summer, which died in a "black hole" on the Hill. lt's pretty obvious that another bill will be passed and that House leadership will be hard-pressed to sit on it after all this.
September 28, 2006 | Permalink | Comment on this post | Tag: HP [HPQ]
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HP Hearings: Barton focuses on Sonsini, others point to violation of public trust

By Richard Komanfor SiliconValleyWatcher

Rep. Joe Barton points out that Larry Sonsini signed off on the pretexting ops back in April, and demands to know how he didn't wave a red flag, rather than saying "such operations are not generally illegal." He and other reps have asked, why are so many principles refusing to testify today if the actions were so legal?
A common thread in the opening statements is that the public will expect HP's actions are common throughout the Valley and the whole corporate world and that public will fear that their own private records may be searched. "Is corporate America the next big brother, Rep. Tammy Baldwin said in her opening statements.
Most members of the subcommittee are pointing to an anti-pretexting bill the committee reported out this summer, which died in a "black hole" on the Hill. lt's pretty obvious that another bill will be passed and that House leadership will be hard-pressed to sit on it after all this.
September 28, 2006 | Permalink | Comment on this post | Tag: HP [HPQ]
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Dunn: I thought it was legal

By Richard Koman for SiliconValleyWatcher

UPDATE: Dunn will take the Fifth. What about Hurd?

How did Pattie Dunn come to work directly with Ron DeLia for HP's anti-spying probe? In her written testimony (PDF) today, she says she was pointed by Bob Wayman, then the acting CEO, to Kevin Huska, HP's global security chief. Huska referred her to DeLia, whom, she says, worked almost exclusively for HP. Thus, "I did not hird the private investigators who were involved in the Kona ... investigations. They were already under contract to HP when the leak investigation was initiated."
She relied on DeLia to understand the legality of the operation:
As a matter of course I asked Mr. Delia at every point of contact for his representation that everything being done was proper, legal and fully in compliance with HP's normal practices. ... At some point during the late spring of 2005, I became aware from Mr. Delia that phone records were accessed as a standard component of such investigations from HP. The clear impression I had from Mr. Delia was that such records could be obtained from publicly available sources in a legal and appropriate manner ... I now believe that not only I, but all of the executives upon whom I relied at HP ... were similarly confident that these records were accessed under fully legal circumstances.

To that point, Rep. Ed Whitfield said in his intro minutes ago: "If there are legitimate ways to get access to someone's personal phone records without their consent, short of a subpoena, I'd like to know about it."
September 28, 2006 | Permalink | Comment on this post | Tag: HP [HPQ]
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HP's Baskins quits, won't testify today

By Richard Koman for SiliconValleyWatcher

HP general counsel Ann O. Baskins has resigned from HP and will not testify at today's congressional hearings, her lawyer said, The Times reports. Hearing start at 10 am EST.
Baskins was intimately involved in the HP's anti-leak probes. She assigned Kevin Hunsaker, HP's senior counsel for ethics, to run the investigation. Hunsaker clearly received warnings from security officials that the pretexting operations were probably illegal, and Baskins would have been apprised of that information as well.
The Washington Post recounts several emails that show that Hunsaker - and thus, presumably, Baskins - knew about the illegality.
In February, HP global security investigator Vince Nye told a Boston colleague working with him on the leak probe that he had "serious reservations" about how they were obtaining phone-record information in an internal probe to ferret out the source of media leaks.
He said he thought the method, impersonating someone else to trick the phone company into providing call data, "is very unethical at the least and probably illegal."
"I am requesting that we cease this phone number gathering method immediately and discount any of its information," Nye wrote in a Feb. 7 e-mail to Gentilucci, one of four members of the internal investigative team reporting to HP's legal department. Nye sent a copy of the e-mail to Hunsaker, then HP's chief ethics director and superviser of the probe.

Baskins' actions are also very suspicious in that she asked for legal opinion on the legality of the program not from Wilson Sonsini but from Ron DeLia's lawyer. DeLia was the investigator that former chairman Pattie Dunn initially worked with. That smacks, IMO, of CYA legal advice, not of an inquiry genuinely interested in knowing the answer.
Dunn will say in her testimony today that she relied on DeLia's assurances that it was legal. Again, the question remains, if she or Baskins were so interested in the actual answer, why would they rely on private eye DeLia rather than Larry Sonsini or any other top-line law firm in the country?
Baskins may also be implicated in charges of lying to the SEC for filing 8-Ks that at first neglected to give a reason for Tom Perkins' resignation, and then misrepresented that he didn't give a reason for his resignation.
The resignation suggests that Baskins is facing criminal charges in the case and that her lawyer advised her not to speak publicly, for fear of incriminating herself.
HP press release:
“I want to thank Ann for 24 years of outstanding service and devotion to HP,” said Mark Hurd, HP chairman and chief executive officer. “She began her career here shortly after law school and worked her way up to serve as the company’s top lawyer, earning along the way a reputation for hard work and integrity. She has admirably supported our business needs across the globe and will be missed. Stepping down was a very hard decision for her, but by doing so she has put the interests of HP above her own and that is to be commended.”

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September 27, 2006

San Francisco Summer Music Conference(at the end of September!)

[diggrz: an SVW tag for arts, culture, trends, and events in and around Silicon Valley- new from SVW] -
By Maria Mouk for Silicon Valley Watcher

Tommorow, Thursday 28th- 2006, marks the beginning of San Francisco's Summer Music Conference ,including two days of panels followed my innumerable performances the entire weekend, featuring leading industry developers, pioneers, trendsetters, world dj's, artists, and producers.
Those musically driven, should grab an All Access Pass which provides entry into all conference panels & presentations, Technology Expo, the InGrooves A&R Contest, 6 Months FREE subscription to Remix Magazine, discounts to all SMC Events, and a Backstage Pass for the SMC Festival on Saturday September 30th, 2006 with FREE drinks from 1pm to 6pm.
Highlights this weekend include:
Thursday evenings' SMC Industry Party @ 1015 Folsom with the one and only Dj QBert.
Friday panels covering technology - industry standards, tools of the trade, branding and earning potential, and new marketing distribution concepts with speakers ranging from ProTools, IODA, Ingrooves, Om Records, RealNetworks, to name a few.
Friday night brings too many music options to name, but I suggest you stop over to Crystal Method@ Ruby Skye, Tipper @ Mighty, Ministry of Sound@ Temple, or check out the NiteVibe SMC Guide to decide for yourself.
SMCFestival , with proceeds going to the Music Education 4 Children's Fund.

Tag: diggrz

[diggrz refers to the nomadic lifestyle offered by mobile digital technologies and gadgets - creating a "nomadig" culture. The diggrz name is also a tip-of-the-hat to some of the ideas of the Diggers, a democratic group that arose in 1649, out of the English revolution .

The Diggers were a radical group that cultivated and protected common lands, and sought to create egalitarian, self-sustaining communities. The Diggers would have found kindred spirits in today's software engineer culture,  and the focus on creating commonly owned technologies through egalitarian open source community projects. - Tom Foremski]

Tag: diggrz

September 27, 2006 | Permalink | Comment on this post | Tag: diggrz
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Gary Bloom speaks; Seagate's $1m charity challenge; Silicon Valley goes to Oxford; Citizen Journalism defined; Tips on dealing with journalists; Telcos getting into news

. . . Lunch with Gary Bloom, former CEO of Veritas, former exec vp at Oracle, and hear him talk about Silicon Valley and its recent headlines, among other things. - Oct. 12 at Ristorante Don Giovanni organized by the IABC.

CEO Perspective: Communicating during challenging times.

. . . Seagate CEO Bill Watkins issues personal challenge to raise $1m for the Bay Area Leukemia & Lymphoma Society and will buy lunch for the team that out-raises Seagate, in addition to matching $25,000 donated by his employees.

Corporate Cup Challenge - Light The Night

. . . Silicon Valley pioneers are heading to the Oxford Saïd Business school in November for "Mass Collaboration."

Oxford Saïd Business School Silicon Valley Comes to Oxford

. . . Mark Glaser over at PBS' MediaShift has a long post on citizen journalism, its history, and tons of links to online resources.

Your guide to citizen journalism

. . . Want to know how to communicate with journalists? Here is some good advice on what not to do!

The Care and Feeding of the Press

. . . Telcos are getting into the news business, Amy Gahran says this is scary considering the net neutrality context.

Poynter Online - Telcos in the News Biz? Great and Scary

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Two years ago I became a journalist blogger . . . and discovered a terrible thing

By Tom Foremski for Silicon Valley Watcher
It was about two years ago that I started "blogging." I had left the Financial Times in early June and took the summer off, I spent most of it chatting to people about my plans.
It was a good exercise, to try to explain to others what I was doing. I wasn't sure myself.
It took me most of the summer to boil down a 30 minute explanation to one sentence: I am publishing an online news site reporting on the business of Silicon Valley.
Two years ago I knew in my gut that we were at a crucial point in a rapidly changing media sector; and that taking this risk (two kids and an ex-wife to support) would be worthwhile.
I knew that business would not be getting better for my employer because: technology advertising wasn't coming back due to the dotbomb fallout; M&A taking away large advertisers; and financial services advertising wasn't coming back either because the IPO market was a bust.
In addition, advertising was rapidly moving online...
I didn't realize at the time that I would become the first mainstream journalist to leave to become a professional "journalist blogger."
Other journalist that also blogged, Dan Gillmor, Om Malik had day jobs. It would be another seven months before Dan Gillmor left the San Jose Mercury, and two years before Om Malik left Business 2.0 to become fulltime journalist bloggers.
I also didn't realize the effect this would have on my surroundings. One of my contacts at a large Silicon Valley company told me, "Suddenly, we realized that because you had left the Financial Times to become a blogger, we needed to take blogging seriously." It was a comment I heard at other companies too.
But when I left the Financial Times I had never blogged. And I'm ready to admit, I didn't even read blogs.
However, I knew that the blogging platform was incredibly robust and that I could produce a column of Tom Foremski for a lot less than it cost the Financial Times. And that my journalism wouldn't be shut away behind a subscription barrier.
My posts, if they were good enough, would be distributed by my readers and shared among their peers. This is a far better model than trying to limit distribution of content to paid subscribers.
True, I didn't have a business model at the time, but I knew a business model for online publishers would be inevitable.
I also knew that the costs for a newspaper business are much higher than online business models can support. That means that "you can't get there from here" a wonderful American expression that sums up the huge challenge media businesses have in downsizing/rightsizing for online revenue models.
My costs are very modest compared with any traditional newspaper business, with its large legacy infrastructure, pensions, its legions of editors, layers of administrators, office buildings, distribution systems, printing presses, janitors...
The change in media business models has been created by the simple fact that it is more effective to sell products/services next to a search box than next to journalism.
The reason online companies such as Google, Yahoo, or Craigslist can provide advertising at such low costs is that they don't have to pay for the journalism.
Over the past two years I've taken up this point time and again because it is very important that our society find an alternate way to pay for journalism.
But how will we pay for professional journalism if the bulk of advertising moves to search marketing?
If we don't have high quality trusted media sources we will face a future filled with a confusion of many mini-media sources of dubious quality and trust. In such an environment misinformation will be common and will be commonly encouraged by third parties serving their needs.
Software engineers have a term for this: garbage in, garbage out. We need high quality trusted media sources so that we can make important decisions.
And we have some very important decisions to make, about global warming, energy sources, bird flu, politics, war. Yet the financial structure to support our professional media is being taken away by low cost online services.
I've been trying to raise the alarm on this issue since I started being a "journalist blogger." I do know that we will solve this issue, that we will figure out a business model for professional media, but we don't have it yet.

In the meantime, our society will face a troublesome period of muddled information that will likely lead to bad decisions.
. . .

I will write more about my adventures in the blogosphere in the two years since I left the Financial Times. I had no idea that something as simple as blogging could be so interesting and lead me to so many insights and discoveries... :-)

September 27, 2006 | Permalink | Comment on this post | Tag: About SVW
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AMD loses big chunk of case against Intel

By Richard Koman for SiliconValleyWatcher

AMD just lost a big chunk of their suit against Intel. AMD had charged that Intel strong-armed computer makers into buying Intel chips, but Intel responded that many of the charges were in fact international antitrust claims not domestic ones.
Intel had responded that many of AMD's charges were for lost sales of German-made, Asian-assembled microprocessors to foreign customers. It called such damages "a foreign antitrust injury (if it is one at all) for which the U.S. courts cannot provide relief," Reuters related.
Late yesterday, federal judge Joseph J. Farnan Jr. agreed.
"AMD has not demonstrated that the alleged foreign conduct of Intel has direct, substantial and foreseeable effects in the United States which gives rise to its claim," Farnan wrote in an 18-page opinion.
At best, he said AMD's allegations described activity that might have had "ripple effects" in the United States, but not enough to give rise to an antitrust claim.

September 27, 2006 | Permalink | Comment on this post | Tag:
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September 26, 2006

diggrz: Symbosis Gathering

[diggrz: an SVW tag for arts, culture, trends, and events in and around Silicon Valley- new from SVW] -
By Maria Mouk for Silicon Valley Watcher
Look up symbiosis in the dictionary and you're unlikely to find photos of this past weekend's Symbosis Gathering at Angels Camp in the Sierra Nevadas. Yet "A close, prolonged association between two or more different organisms of different species" is quite an accurate description of the experience this past weekend.

Second year in the making, and growing to twice its original size, Symbiosis brought together a variety of creative and curious minds.

From the tree tops and city skylines and from all over the west coast corridor, heads of all sub-cultures gathered to hear over 90 acts. Musical artists representing live bands, breaks, hiphop, psy, and experimental genres, with world names such as Shpongle, Germany's X-Dream , Spoonbill of Australia, Tipper, EdIT, Skream, and Zilla, played continuos music for over three days.
Personally impressive, was my discovery of Abstract Rude, stemming from the LA hiphop underground, with lyrical flow so conscious and smooth, that I was inspired enough to hike uphill to camp just to jot down some of my own.
Looking out into the night; cascading lights- radiant art pieces, altars mimicking dragons from afar, and tapestries waving in the trees with projections of dream states-- it reminded me of a civilization untapped by pop media, yet impressive enough to be a full blown LA stage production.
Besides the music, live painting, guest speakers(like Erik Davis), raw food, and starry nights, there were also workshops, films, and the possibility to exchange ideas with rappers, vegans, or enlightened newbies.

As summer fades to fall, recall- that the ability to maximize cooperation with other species is what most directly contributes to an organism's ablility to endure in nature. We take example and converge.

Tag: diggrz

[diggrz refers to the nomadic lifestyle offered by mobile digital technologies and gadgets - creating a "nomadig" culture. The diggrz name is also a tip-of-the-hat to some of the ideas of the Diggers, a democratic group that arose in 1649, out of the English revolution .

The Diggers were a radical group that cultivated and protected common lands, and sought to create egalitarian, self-sustaining communities. The Diggers would have found kindred spirits in today's software engineer culture,  and the focus on creating commonly owned technologies through egalitarian open source community projects. - Tom Foremski]

Tag: diggrz

September 26, 2006 | Permalink | Comment on this post | Tag: diggrz
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Intel announces 80-core microprocessors and offers $1m in PC design competition

By Tom Foremski for Silicon Valley Watcher

Intel (a SVW sponsor) Tuesday announced an advanced chip design that has 80 cores and can perform at a trillion floating point operations per second.

This would make possible inexpensive supercomputers that could model complex events such as global warming, designing safer cars, and be used in drug discovery.

Prototypes of the chip were shown by Paul Otellini during his keynote speech that opened the Intel Developer Forum conference in San Francisco. The chips are about five years away from commercial introduction.

Intel also said that a quad-core server microprocessor would be introduced in November and followed by a desktop PC version early next year.

The announcements reflect Intel's bid to regain some lost ground to rival Advanced Micro Devices. Intel has focused strongly on its chip design and manufacturing prowess to produce chips that use much less electric power.

Large computer data centers are running out of electric power. In order to expand computing facilities, computer systems that use less electric power are in high demand.

To boost sales of PCs in the home Intel announced it would pay up to $1m in prizes to designers and manufacturers of "sexy" PCs. The Intel Core Processor Challenge aims to encourage PC makers to go beyond the "beige box."

Intel is trying to establish its Viiv PC platform in the living room as the heart of a digital entertainment system for the entire home. And a stylish format would help sales.

Eric Kim, vice president and general manager, Intel’s Digital Home Group said:

Consumers today make home PC purchase decisions based on more than just price and features; they also consider the size, shape and style. Ultimately we want to see more stylish and smaller PCs that have the performance and power efficiency thanks to Intel Core 2 Duo processors, as well as the essential multimedia capabilities that Intel Viiv technology delivers. . .

Related links:

Intel To Pay Up To $1 Million Bounty For Sexy, Small, Stylish PCs

Intel Develops Tera-Scale Research Chips ›

Intel CEO: Silicon Advances Usher in New Era of Energy Efficient Performance ›
Intel, DIRECTV Poised to Connect PCs and TVs in U.S.

Intel, Omnicom Media Group Announce Collaboration to Bring Internet-Delivered Ads to TVs Through Intel® Viiv™ Technology

SVW stories:

SVW Top Chat: Henri Richard sales chief at Advanced Micro Devices

The Empire Strikes Back - Sean Maloney leads Intel's push to win back markets

September 26, 2006 | Permalink | Comment on this post | Tag: Intel [INTC]
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diggrz: Hypervideo, CG reality, Metroproper: On the Radar

[diggrz: an SVW tag for arts, culture, trends, and events in and around Silicon Valley- new from SVW] -
By lucaso for Silicon Valley Watcher
As hypertext transformed the written web, so too may hypervideo transform the multimedia web.
Imagine watching a video piece on the web. Up pops an image of Hunter S. Thompson. You click on the image and the video you're watching stops and takes you to a video interview with the Gonzo journalist and Johnny Depp. You click on the image of Johnny Depp and you're brought to a clip of "Fear and Loathing in Las Vegas." You complete the clip of "Fear and Loathing..." and you're brought back to the original clip where you first saw Thompson. This is hypervideo: a non-linear approach to web video viewing that is now in the early stages of development. Thanks to Crazy Wanda for pointing this one out to me.

CG reality

Is this photo real or CG? Spirit Monkey posted this on his tribe blog today and I was definitely blown away. Check out the CG society for more info on CG developments.

Metroproper: On the radar
My friend Phil Tadros has been working hard on this project for over a year. He tells me they're very close to launch date. Metroproper is a social network for business or personal profiles with citizen journalism in 400 cities around the world. I like the design a lot and I had sneak peak at the interface, which looks hot. Sign up to be notified when they go live at Metroproper.
September 26, 2006 | Permalink | Comment on this post | Tag: diggrz
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House subpoenas DeLia, Hunsaker, Gentilucci

By Richard Koman for SiliconValleyWatcher

Mark Hurd, Patricia Dunn and Ann Baskins have already said they would appear Thursday at a congressional hearing into HP's spying practices. But Ron DeLia, the security outsourcing specialist who did the pretexting, has said he would not. And Hurd's lawyers' investigations have made it clear that Kevin Hunsaker, senior counsel for ethics, and Anthony Gentilucci, manger of global security, were intimately involved in probably illegal activities.

Yesterday, the House Committee on Energy and Commerce said it wants to see DeLia, Hunsaker and Gentilucci in Washington on Thursday and it issued subpoenas to back up that desire.
Gentilucci said through his lawyer that he would take the Fifth on Thursday, while Hunsaker hasn't yet said what he will do. DeLia will refuse to answer questions. Gentilucci has already lost his HP job and Hunsaker is on the way out, although he is still employed by HP today.
Calif. Attorney General Bill Lockyer is concerned that subpoenas could mean Congress offers immunity to get testimony, the Times reports.
“In light of today’s developments, the attorney general will again be contacting the committee to express his concern,” Mr. Dresslar said. “We’re not trying to issue a red alert here, but this is an important case and it’s only prudent for this office to take all appropriate steps to protect the integrity of our investigation.”
He said the attorney general had been told by Congressional officials that they had not granted immunity to any of those subpoenaed and that it was rare to do so. Congress does not have the power to grant immunity from state prosecution, only from federal prosecution, Mr. Dresslar noted.

It's not just the congressmen that will be looking to Hurd for a full and complete reckoning of the affair on Thursday. HP's stock recovered somewhat yesterday from its beating last week but major pension funds are making demands for more control of HP's board, MarketWatch reports.
e New York State Common Retirement Fund, the Connecticut Retirement Plans and Trust Funds, the North Carolina Retirement Systems and the American Federation of State, County and Municipal Employees Pension Funds together filed a proposal that seeks access to H-P's proxy in order to allow shareholders groups more say in who gets on the H-P board.
The proposal asks H-P to changes it bylaws to allow groups that hold 3% or more of the company's stock for at least one year to be able to post nominations for H-P board members. The four funds own a combined 30 million H-P shares worth about $676 million.

September 26, 2006 | Permalink | Comment on this post | Tag:
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Cisco develops video blogging systems for businesses

By Tom Foremski for Silicon Valley Watcher

Cisco Systems introduced several appliances in its Digital Media Systems, an emerging markets technology business group, that will make it easier for companies to produce and distribute video presentations.

The technology was developed internally rather than by acquisition--Cisco's traditional form of business development. The digital media system has been in use by the news@Cisco group, which publishes press releases and features.

It is the first in a series of planned product announcements. Cisco believes that the enterprise video market could become a $1bn business opportunity.

From Cisco:

"While the digital media explosion has taken off in the consumer world, businesses are just beginning to realize the potential of video. The Cisco Digital Media System, combined with the power of the IP network as the platform, allows organizations to move to a business environment where compelling interactions and experiences are created and shared," said Marthin De Beer, vice president of Cisco's Emerging Markets Technology Group.

A basic setup which includes a portable digital video encoder, the digital media manager, and video portal costs about $133,000.

The components:

Cisco Digital Media Encoders: The Cisco Digital Media Encoder 2000 is a studio-level appliance with multiple channel support. The Cisco Digital Media Encoder 1000 is a portable encoder that can be used wirelessly for single-channel encoding. Both encoders support live and on-demand encoding in many formats.
Cisco Digital Media Manager: The Cisco Digital Media Manager manages and publishes digital media and provides tools for users to add and archive media; assign metadata and keywords; preview content and manage workflow; and schedule instant and future deployments. Cisco Digital Media Manager integrates with Cisco Application Networking Services technologies, including Cisco's Application and Content Networking System and wide-area content engines, for business-class digital media deployment across the network.
Cisco Video Portal: The portal allows users to browse, search and view digital media content. It features a customizable program guide and search functions; personalized playlists and featured lineups; advanced player controls, full-screen playback; and a usage reporting system. It is also fully integrated with the Cisco Digital Media Manager and supports Windows Media, RealPlayer and Flash file formats initially, with QuickTime and MPEG4 following later this year.

Related Links

Cisco Introduces Integrated Digital Media System for Business, Government and Education
Cisco Introduces Comprehensive Digital Media System

September 26, 2006 | Permalink | Comment on this post | Tag:
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SVW Journal: Out and about at WebEx and SaaScon . . .

By Tom Foremski for Silicon Valley Watcher

It is a busy week in San Francisco with the Intel Developer Forum (Intel is a sponsor of SVW), the Clean Tech California Awards, the software as a service conference, and in San Diego DEMO is happening.

I stayed close to home this week. Monday, I managed to miss a lunch time media roundtable about software on demand because I was trying to catch up with tons of stories, and trying to tweek my CSS style sheet on SVW.

. . . Cisco rolls its own instead of buying

I did speak with Cisco about their Digital Media Systems business, which they say could become a $1bn business group. It is being launched by an internal venture group.

This is a sharp departure from Cisco's normal way of growing business, which is to seek out companies for acquisition once the market horizon reaches that magic $1bn level. Internal development versus acquisitions? Does this mean acquisitions of private companies are getting a bit too richly valued for Cisco?

. . . enterprise software is turning into one big mashup

In the evening I ran over to the WebEx event at the W Hotel and spoke with David Knight, VP pf product Management at WebEx. This was the launch of the WebEx collaborative application platform.

I said to Mr Knight that every enterprise application seems to be turning into the same thing: collaborative apps linked into CRM, ERP and legacy systems. In a year or two, how will I tell the difference in features and capabilities between services from WebEx, Salesforce, RightNow Technologies, Siebel, SAP, Microsoft, and many other enterprise applications; all vying to be enterprise platforms built around collaboration tools.

Mr Knight said there will be a difference and I agree. The winner will be the one that can capture the most vital segment within a company and I think that segment is the salesforce. And do it with a killer user interface. WebEx has 2m users, that's a significant base to sell into.

. . . hunting stories from Greg Gianforte RightNow Technologies

I ran into Greg Gianforte, CEO of RightNow Technologies, one of my favorite executives in the enterprise software sector. I asked Mr Gianforte how his book "Bootstrapping Your Business: Start and Grow a Successful Company With Almost No Money" was doing.

He said it was doing well and he was enjoying letters and emails from readers who had taken his advice to heart, which is to raise money from your customers and not from VCs. [I'm republishing Mr Gianforte's column from last summer in SVW at the end of this post--it is worth reading many times.]

Go out and sell something encapsulates a lot of Mr Gianforte's advice, and it is true, many people find it hard to sell. But if you have a service or a product that can make someone's life better, then you have a responsibility to offer it to that person or company.

Mr Gianforte lives in Montana and he always has some good hunting stories to tell, and as he likes to remind me, he always eats what he kills. He is down in Silicon Valley a lot, but his Montana HQ provides a fresh perspective on our localized thinking.

Silicon Valley is a great place to be, it exposes everyone to cutting edge conversations and concepts. But sometimes we get too intoxicated by our own hot air, and get a bit ahead of ourselves. So it is always good to hear a fresh perspective from outside of the local echo chamber, and that's what a conversation with Mr Gianforte often provides.

. . . Soonr is better than later

I ran into the Soonr management team, also their very able representative Anastasia Marin from Connecting Point Communications.

I had a very interesting chat with Cindy Gordon, CEO of Helix, an e-commerce consultancy group based in Toronto, Canada. She introduced me to Mark Organ. CEO of Eloqua, also in Toronto. And Raghu Raghavan, CEO of Act On Software, based in Portland, Oregon.

. . . Back stabbing or back scratching?

I chatted with a lot of other people too, a lot of WebEx partners. And there are many of these platform + partner roll out events these days.

Everyone supports everyone's platform and turns up for each other's events but it seems there is little love lost between the partners and the platform providers. It may look like scratch my back and I'll scratch yours, but that's just on the surface ... :-)

. . .

Here is the excellent advice column from Greg Gianforte, CEO of RightNow Technologies. You should print it out and stick it on your bathroom mirror:

Reasons not to take venture capital

- 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.

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 : "Bootstrapping Your Business: Start and Grow a Successful Company With Almost No Money."

SVW affiliate link:

And he welcomes questions from SiliconValleyWatcher readers.

September 26, 2006 |