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

« October 2006 | Main | December 2006 »

November 2006 Archives

November 30, 2006

Resistance is Futile: Diggrz: Lifestyles and Relationships

Lucaso's Note: It's the lifestyle of the new millenium: digitally enabled, creative, environmental conscious, community minded, and productive. We are a band of merry travelers and crafty curators, contributing our new gifts to a world uninhibited by the constraints of the past. We are the people we've been waiting for.

Introducing our new Diggrz lifestyles column is ZigZag. ZigZag is a writer, life coach and poet. She calls herself a practical mystic. You can usually find her inspiring everyone she meets to live their dreams. She has her own life coaching practice, is working on her first book, and takes the stage with her spoken word. Her blog, mszigzag.com, "exposes the unexposed" as she gets personal about dating, relationships, bikini waxes and good books.

By ZigZag for Sillicon Valley Watcher

Whether you are sitting in a cubicle, wearing an Italian suit, bartending, or working for “the man,” odds are you have a project or a dream separate from that working life. You might be conjuring up the newest technological brainstorm, fire dancing on Sunday nights in vinyl Speedos, or strategizing your way into a new galaxy of modern voo-doo. We are the Diggrs, a kultur of the 21Century, and we are on a mission.

One thing I have discovered is that it ain’t easy to have a mission. For instance, my mission is to build a successful business as a writer, speaker, poet and life coach. I have become my own one-woman show, and this is no easy task. To some degree we are all a one-person show, creatively growing and discovering new pathways to inner peace, financial freedom, and a world of unlimited potential.

However, don’t be fooled by the hype. At first it sounds delicious. It’s a world of possibility, but the first thing to know is that you will resist. We are children of habit, so breaking free from a lifetime of comfort zones can be daunting. As you enter into the “discomfort zone” remember that resistance becomes your friend. Think about it, how many times have you heard yourself saying things like: “I don’t have time to do this, ” “Maybe this isn’t my thing, ” or "I'll do it later." Listen to your cues, if you think you are in resistance, it means you’re on the right track. Billboard_1

As a society stuck in fear, our friends and family might try and get us to take the safe road. Afterall, we might fail at something, and so we shoot low hoping that at least we walk away with a small prize because we don’t think we deserve the grand prize. Luckily, we know that we can shoot high, instead of aiming low, because the truth is that all successful people fail. They just recover fast and keep going.

“Races are not won by the fastest athletes. Fights are not won by the strongest men. But the races are won and the fights are won by those who want to win most of all.” – Tommy Lasorda

They say that there is a lot of tension when you embark on a journey or mission, and the tension builds slowly until the most tension is felt right before the biggest breakthrough. The problem is that most people give up at 11:59 when they should have held on until 12:00.

So hold on tight. Enjoy the ride. Make it bumpy. Fall down a few times, and then, when you’re ready, fly...or should I say, dig.

US and Polish Web 2.0 companies swap notes at Stanford

By Tom Foremski for Silicon Valley Watcher

Wednesday evening I was cursing to myself as I tried again, and again, to find the James H Clark Center on the always confusing, sprawling Stanford University campus. One last try and then I would leave, I told myself, and that's exactly when I found it, a striking, all-glass building. And I found the circular auditorium buried in the center of the complex.

The panel was already well underway and there were quite a few people on the stage. I sat down and looked around at a reasonably full room, to see who else was interested in this event: "Web 2.0 Wave in the US and Poland. "

Top Polish entrepreneurs from Meetro, 3S Generator, Onet, plus senior people from Google, Intel, Linked In, and PBwiki were on stage[Please see panelist names at end of article.]

I was glad that I persevered in finding my way because it was an excellent panel discussion (I've sat through many hundreds of panels and I've slept through quite a few too... :-)

Also, this was a very young looking set of panelists and refreshingly so, because we didn't get the same hackneyed Web 2.0 stuff trotted out by the regular John Battelle et al Web 2.0 crowd of regulars. Different faces did produce a fresher Web 2.0-or-whatever-it-is, conversation.

There were some excellent gems in the conversation, here are some, and my notes and observations on the evening:

There was a question about what type of business models the companies had.

-"We have what we call 'oh shit!' business moments," said Ramit Sethi, co-founder of PBwiki. We look at our what our users are doing and where they come from and we find out things such as the fact that educators are our largest user group and they are recruiting others.

We also found out that our China users are growing really fast and doing all sorts of interesting things and then suddenly we lose them all because the China firewall has locked them out. It's 'oh shit' because we didn't know we had a business in those groups...

-The Polish companies were asked how to create new companies. One said get a garage. Marcin Malinowski, director of Onet, Poland's top portal, said, put passion into your code and then attach a business model to it. Paul Bragiel, head of top Polish gaming and social networking sites said find something you love doing and just start, start doing it.

-Poland has a very high quality software engineering community, Polish coders regularly win international competitions. It has a history of expertise in math especially in algorithms. Also, it know Western European culture very well, it has always been very westward looking.

"My Polish programmers totally 'get it' which isn;t true in other places such as China," said Mr Bragiel.

[I think this is a very important point because understanding culture is vital for any business that wants to succeed in that culture. Cultural literacy is learned over many years through experience, there is no quick way to teach it.]

-Poland has a population of 40m, half are under 35, with about 30 per cent Internet penetration.

-The pace of change for businesses in Poland and elsewhere is fast and getting faster and faster, said Mr Bragiel. [He just might be the fastest English speaker I have heard.] He says that companies that can listen will do well, and that means listening to the young people in organizations because they are better tuned into the times.

[I agree. I often have the most interesting conversations with the youngest people within organizations because they haven't been taught how not to do things. They see things with a fresh eye and see how things are changing. But few organizations have the will or the process to tap into this resource.]

I liked the comments made by Konstantin Guericke, vp marketing at business social networking site Linked In:

- In the beginning a social network has little value because the value is from the users and their connections. We just look at what they do, how they try to increase their productivity and try to support that as best we can with new features. We've begun to show users what other users are doing, so that it encourages them to do similar things, such as promotions, or the number of contacts added.

-Our users are our marketing, they recruit others. VC love it when users market to user but you have to give up control. It costs us about 3 cents to acquire a user , and when they pay for premium services is about $300.

Another good contributor was Greg Welch, Director of Strategy and Industry Initiatives at Intel (Intel is an SVW sponsor) who contributed a lot of insightful and intriguing comments:

-Second Life is not a fad and that it represents Web 3.0 it is the way we will all interface with the Internet. All product design is done in digital, and has been for a while, now it can be tested out in virtual worlds such as Second Life. A hotel company is building a new type of hotel in Second Life where its design can be tested in the digital world before building it in the analog world.

-WiMAX technologies will enable Poland to quickly bridge the digital divide without having to dig trenches to carry copper Internet connections.

-Intel is always looking to help develop viral technologies that are spread by users and can get around the IT department within enterprises. Consumer adoptions will lead to enterprise adoptions. [Important point, IMHO the IT department is the most conservative and resistant to change organization within the enterprise.]

-You will be amazed by high definition video conferencing, I've seen a demo bn a quad core Intel chip running over regular internet speeds.

-I love anything that sucks mips!

A man in the audience said that he recently re-read Snowcrash, the 1992 science fiction novel because so much of it has come true.

[I have to agree, I have been thinking about Snowcrash myself since I became a journalist blogger because so much of it has come true, or is coming true, it is a truly remarkable book--my favorite concept is " hacking the brain stem."]

Mentioning Snowcrash sent the panelists' heads nodding vigorously, and they threw out a few other seminal favorites such as Code by Lawrence Lessig, Interface and Mirror Worlds.

Greg Badros, director of engineering at Google and its Adsense business, gradually warmed up and became quite interesting:

-Pagerank doesn't work as well in enterprise search because there is less user data, however there is also less spam, so it requires a different approach.

-The more user data Google acquires the better its language translation, which is based on a statistical analysis of which words are used and their order within sentences. No special artificial intelligence is required.

-I wish people would put more data into Google Base, I wish people understood it more, I wish we at Google understood how to use it better, I wish we had much more structured data.

The Polish panelists said that they were envious of the huge number of early adopters in the US. In Poland there are lots of great ideas but you have to fight for the early adopters. You could have something totally cool and killer but it could fail because of the smaller pool of potential users.

This is why Polish internet companies have to have a global strategy from the beginning. But Poles are very interested and passionate about new Internet services and applications, for example Poland is the third largest Skype market.

- - -

It was a very good evening and one of the key organizers was Clay Bullwinkel Board Member, U.S.-Polish Trade Council and a key connector between US and Polish companies in various joint projects.[Bullwinkel (at) usptc.org]

I'd love to see more such events, but in a different venue. I don't see the academic world contributing much to the conversation about the social/conversational online worlds and economies that are being created here, in Poland, and everywhere else. A better venue would be San Francisco but I'm biased because that's where I live. Also, $70 at the door to get in is steep and a barrier to other contributors.

Some additional info:

Panelists:Greg Badros, director of engineering at Google Inc., Greg Welch, director of strategy and industry initiatives for Intel’s Software and Solutions Group; and Marcin Malinowski, director of the business incubator department at Onet, Poland’s 20-million subscriber version of Yahoo.Paul Bragiel, CEO of the Meetro social networking site; Michael Faber, founder of BiznesNet.pl; Konstatin Guericke, vice president of marketing for Linked In; and Ramit Sethi, co-founder and vice president of PBwiki.

The event was moderated by Dr. Charles Petrie, Stanford Consulting Professor and founding executive director of Stanford’s Network Research Center.

It was a pleasure to meet George Slawek, a local entrepreneur and president of the US Polish Trade Council. Like myself, Mr Slawek grew up in the United Kingdom. He has been here since 1986.

The US-Polish Trade Council is a group of U.S.-based international business leaders with professional and technical accomplishments in both Poland and the U.S.

US-Polish Trade Council

785 Market Street, 15th Floor
San Francisco, CA 94103

(415) 762-0706 or info@usptc.org

kultur shock : string sling

By Maria Mouk for Sillicon Valley Watcher.

Its that time again, so get your days-off with your kicks, beats, and percussions-in.

Friday Eve

The Kronos Quartet performs Friday evening at Stanford University Lively Arts Center. Talented string musicians that have been at it for the last 30 years, Kronos differsifies by covering a very broad range of musical genres.(Past work has included movie soundtracks, experimental, Mexican, etc...)

Also Friday evening; the Unity Church of San Leandro (501 Joaquin Ave, San Leandro, CA)will have a showing of the movie "The Secret". Though the concepts behind the movie are simple, they are groundbreaking in the sense that there is finally a practical presentation for the ideas that focus on the law of attraction and manifestation. If you don't watch it now, check it out online. It's worth the watch.

After you've blissed out, head over to Ambiotica, a new edge salon, hosted by record label Cyberset and collective Anon Salon, from 8:30 to 3am. This month's trip will begin with the MindMeld discussion circle at the Lofty Thoughts Gallery (1286 Folsom Street) followed by an evening of inspired music, art and interaction at the adjacent Anon Salon Gallery/Climate Theater. MindMelt topic spans "What is your religion?" with Erik Davis, author of Techgnosis, Visionary State (Religion of Vision), Chris Deckker; founder Earthdance International (Religion of Peace), and Jim Wanlesscreator, creator of Voyager Tarot. Musical performances will include B. Smiley, Medicine Man, Leslie Shill, Neptune, Irina Mikhailova, Estas Tonne, amd Waterjuice. I'll be on hand serving smart Amazonian herb cocktails. Chillin_flyer

If all that sounds like outer space, get grounded, at the Chillin Productions Holiday Sale Fashion Show. Mezzanine will host 60 fashion designers, 80 painters/photographers, and 60 filmmakers, with musical performances by DJ JOHANSON, Russell Vargas, DJ Laron, Kerowack, Dirtyhertz, Dave Madix, and more. A personal fav presenting will be KAYO, with her winter line of fleece apparel. Drop on in, and leave with something saucy.

Saturday Eve

Saturday night, Addictech presents a breaks breakdown, with peformers spanning the globe, including Autobots, Lawgiverz, SOTEG, Kosmikniel, and locally loved Eskmo, Audiovoid, Ripple, Dov, Aaron Jae, Friction,Evan Bender, Bertzerker & Hypnotech! Go big or go home.

Also Saturday, techno collective Kontrol makes you itch with Fred Giannelli aka The Kooky Scientist's live PA. Talk about ooold school. From his early work with Psychic TV to collaborations with Richie Hawtin and Dan Bell, this man has seen and done it all, twice. If you missed out on the DEMF this year, this is your opportunity to catch this tick. Playing also is [a]pendics.shuffle, LA's multi-monikered maestro with dirty, dance-floor destroying minimal.

If you're looking to go the distance or to a strange Gypsy slinging rockout, Primus plays with Gogol Bordello opening, at the Berkeley Community Theatre. A bizarre combination indeed but its sure to be a night of well, like I said, Gypsy slinging.

After you've recovered from any weekend overextension, there's still time in the weekend to make the San Francisco Bicycle Coalition's Winterfest at SomArts. Bikes, apparel, gourmets, designers, and salons, will be on hand, ready to convert you or confirm your cycling love.

After The Buzz Wears Off

And dont forget First Tuesdays of the month mean free museum crawl. So take an early day or extended lunch, and take advantage of one of SF's creative possibilities.

11.30.06: Google's Wi-Fi invest, patent obviousness, and oh yeah, Vista

Google is one of several bridge investors in Meraki Networks, a wireless mesh provider that Google has shown interest in regarding the San Francisco WiFi Project, Katie Fehrenbacher writes on GigaOm.

co-founder Sanjit Biswas Biswas wouldn’t specify the amount but said the round was under a million dollars. “We’d bootstrapped the company so far, so this cash is really just for growth/acceleration . . .and for the development of some products we plan to launch next year,” says Biswas. The company currently sells a $49 wireless 802.11b/g router (beta price) that allows users to build a wireless mesh network or extend the range of a municipal network.

Microsoft officially released Vista and Office 2007 to business customers. But after so much delay and build-up, the official launch of Vista is fairly anti-climactic, especially since it's still not available to consumers. Infoworld:

This is a big launch for them but for everyone else it's ho-hum," said James McQuivey, a professor for Boston University's College of Communication who specializes in marketing research and business management. "It's the biggest wait-and-see event of the week. Customers are going to wait and see when they need [Vista] and if they need it."

Paul Kedrosky points to the transcript of oral arguments (PDF) before the Supreme Court in closely watched patent case. The case has big ramifications for software because the Court may reject the current "obviousness" standard for awarding patents.

This is important stuff, and changes -- which look inevitable, based on justice comments this morning -- could have a wide-ranging impact across a range of companies in all sectors, from consumer products, to life sciences, to information technology. We had justices calling the curent Federal Circuit standard vague, gobbledy-gook, and generally un-useful to everyone except the lawyers being paid to lawyer the thing. Here is Justice Scalia pointing out how absurd the current non-obviousness standard remains, despite its supposed universality: "It is misleading to say that the whole world is embraced within these three nouns, teaching, suggestion, or motivation, and then you define teaching, suggestion, or motivation to mean anything that renders it nonobvious. This is gobbledygook. It really is, it's irrational."

November 29, 2006

11.29.06: Another video deal for Verizon

The best thing is mobile, apparently, is video. A day after cutting a deal with YouTube in which Verizon users will be able to download YT vids - and more importantly - upload them, Verizon announces a deal with Revver.com, according to an AP report.

Revver.com shows ads at the end of each video and shares revenue with uploaders; however on Verizon's V Cast service, there will be no ads. Rather folks who upload videos to Revver via Verizon will get a share of revenues when their videos are played on the site.

"This is a breakthough for our creative base in that they will be paid 50 percent of all the revenue that's generated from this relationship with Verizon Wireless," said Steven Starr, founder and chief executive of Revver, which he said has 40,000 content contributors.

Writing on The DailyReel blog, Kevin Nalty notes of the YouTube deal:

It makes perfect sense. Carriers are vying for customers and lack any rich-media content beyond annoying ring tones. Video sites need growing distribution to substantiate their business models and delay disintermediation.
For the past year, Verizon and other wireless carriers have been quietly circling the independent film scene; knowing they needed short-form content but lacking any traction in this emerging medium. Now the carrier has decided to enter the market with help from a company that has developed learnings, content, eyeballs and a brand.

- Richard Koman

11.29.06: BitTorrent snags $25m, founder Cohen is out as CEO

By Richard Koman for SiliconValleyWatcher

Om Malik reports that BitTorrent has raised $15 to $25 million in venture funding. But that big investment comes at a cost: Founder Bram Cohen is on his way out as CEO. Following up on Om's lead, Michael Arrington pegs the number at $25 million from Accel Partners and Doll Capital Management. And says Arrington:

CEO Bram Cohen, who created the BitTorrent protocol, is definitely on his way out. The company has retained the well known headhunting firm Heidrick & Struggles to find a replacement as soon as possible. No word on what, if any, role Cohen will have going forward.

At ValleyWag, Nick Denton notes he received a comment from an anonymous VC investor: "I don't understand any 'platform for rent' business models these days. I think investors are paying up for brands like bittorrent and brightcove without digging into the business fundamentals."

BT has cut deals with major TV and Hollywood players to sell movies and shows for $1 a download. That would way undercut the prices Apple was able to get. But as Om notes:

BitTorrent has not yet launched its long-awaited video store. Perhaps this latest funding will boost the company’s e-commerce rollout. BitTorrent spent some of the year announcing truces and partnerships5 with Hollywood, but it has been quiet lately.

November 28, 2006

Italians investigating Google for abuse videos

Google is facing more legal trouble in Europe. Italian prosecutors are suing Google over some videos showing a Down's Syndrome patient being abused, AP says.

Oddly, the suit seems to fly right in the fact of EU law, which excuses Internet providers for content uploaded by users.

"As far as I understand, the entire European Union has decided there is no responsibility for the Internet provider for content. You can't blame the Internet for being a means of diffusing something whose causes lay somewhere else," said Carlo Alberto Carnevale Maffe, president of Assodigitale, a think-tank on digital technology. "You can't blame the manufacturer of paper because someone prints an insult on it."

The investigation is sought by Vividown, a Downs advocacy group.

Vividown President Edoardo Cenzi said that although Google removed the content within 12 hours after they reported its existence to authorities, the group took further action because "we don't believe these videos should be circulated without controls."

But Google says they don't want to "hide behind laws," said Stefano Hesse, a spokesman for Google Italia.

"We have clear policies about content and we always remove what we think is illegal content and what our users flag as illegal content," Hesse said. But he acknowledged that sometimes what is deemed offensive varies by culture.
"It could be religious. It could be pornography. It depends on the culture or the way of thinking of the people looking at the video, since it is a worldwide platform," Hesse said.

No money down: How IBM leverages Silicon Valley's VC billions

By Tom Foremski for Silicon Valley Watcher

IBM, the world's largest computer company, has a successful venture capital group operating in the heart of Silicon Valley, yet it makes no investments in startup companies. Instead, it tells VC firms what types of startups it might want to acquire and waits for the Silicon Valley innovation machine to do the rest.

It's a very good system for IBM. There is no need to make risky investments, to spend years on boards helping to nurture and grow startup companies, and certainly no need to hit the road to raise new venture capital funds.

It is a beautiful system that leverages tens of billions of dollars of other people's money, and it can all be done with just a few people. IBM's Venture Capital Group in Menlo Park consists of just half-a-dozen specialists plus some support staff.

Because there is virtually no tech IPO market to provide exits for investors in thousands of startups, VCs are more than happy to offer IBM the cream of the startup crop. Since the IBM Venture Capital Group was formed in 2000, it has had a hand in 15 acquisitions, and that rate is increasing.

But acquisitions are just one way IBM benefits from Silicon Valley's bountiful crop of startups. It also partners with about 1200 startups in various endeavors in which it uses their technologies in IT services deals through business partnerships. Business partnerships as a whole account for one third of its annual revenues, or about $27bn.

There is also a very nice business to be had in selling technology licenses to startups. IBM has a massive portfolio of patents and it offers favorable terms to startups. This might be a good insurance policy since Big Blue has lately become much more aggressive in pursuing companies that it believes are using its technologies without payment. (See News.com: IBM: Amazon violates our patents – October 23, 2006.)

Tomorrow on Silicon Valley Watcher: Interview with Drew Clark, co-founder of IBM Venture Capital Group - find out what types of startups are on his shopping list.

- - -

Additional info:

VC-backed ISVs: Open Source Opens Doors

Startups to have access to IBM's entire patent portfolio with simplified terms

IBM announces formation of Venture Capital Advisory Council

IBM launches new initiative to help developers in emerging markets build skills and open standards solutions

November 27, 2006

Weeklet- November Reload

By Maria Mouk for Silicon Valley Watcher

Whether you celebrated or not, I'm sure you've gotten your fill of turkey stuffing and stuffy grocery stores. Time to burn off the mind-halt and not let the cooling nights deter you from gaining inspiration and riding on productivity.

Tuesday Eve

Head over to the Independent for an 8:30 show by The Coup and Mr.Lif. Politically radical and banging out lyrical beats since the early 90's, 'Coup' is characterized by electronic sounds and bass driven backbeats overlaid by humorous, cynical, and sometimes violent lyrics criticizing American politics.

Wednesday Eve

Get your art snob fix, by going over to SF Camerawork for their 2006 Auction Preview Reception of fine photographic prints(6pm). Scope out the shots worth your walls before bidding at the Live Auction on Saturday afternoon.

Also, Wednesday is the SEO (Search Engine Optimization) for Web 2.0 Presentation. Held in Mountain View, at Google Inc. from 6 to 9pm, the event will focus on increasing traffic, ranking, and structural barriers limiting indexability and maximizing the spiderability of web sites.

Speakers for Web 2.0 include Adam Lasnik-SEO Strategist-Google, David Hahn-Director of Advertising-LinkedIn, Markus Hoevener-Chief Visionary-Bloofusion, and Joelle Kaufman-Vice President Experience-of Engage.com. The event is hosted by the Silicon Valley WebGuild with a focus on providing a collaborative environments within monthly meetings.

Thursday Eve

Drop into the Commonwealth Club, for Defining the Self in a Virtual World: Online Personas. They are founders of the most successful and innovative web sites allowing people to interact, trade, meet and network. They will explore how their sites are evolving to keep up with the future of online networking.

Do some physical networking beyond the screen Thursday eve at DNA Lounge, for Reload, brought to you by tech talkers and music junkies. Included will be a Second Life virtual and live performance, with the assistance of Electric Sheep Company, an intro Podcast meetup, drink specials thanks to Splashcast, blog cast/ mp3 casts through IODA Promonet, including music with DJ Cez, Pants Pants Pants, Black Fiction,Halou w/ Zoe Keating, and DJ Tom Thump. For information you email crazywanda@gmail.com

Editor's Note: We're trying something new here at Diggrz and including a link to the band's music for you to preview before the event. Check out Black Fiction:

"Magic Hands" (mp3)
from "Ghost Ride"
by Black Fiction
Howells Transmitter

Buy at iTunes Music Store
Stream from RealNetworks / Rhapsody

11.27.06: Google settles with two Belgian groups

Google has settled with two of the five Belgian publishing groups suing the company for damages in a Belgian court, according to Bloomberg. The deal with Sofam, representing photographers, and Scam, representing journalists, removes the groups from the suit and allows Google to use their content in exchange for some undisclosed payment.

This could have a ``huge impact'' on how Google is approaching content providers and could even ``have an impact on their business model,'' said Stijn Debaene, a lawyer at Allen & Overy in Brussels.

Deals like this, and one with AP last year, suggest that Google News will have to pay its own way, compensating publishers for the content it uses, even if it does push traffic to newspapers' sites.

- Richard Koman

11.27.06: Psiphoning off censorship

The New York Times reports on psiphon, an effort to beat back censorship in repressive countries.

“The problem is growing exponentially,” said Ronald Deibert, director of the University of Toronto’s Citizen Lab, which designed psiphon. “What might have started as censorship of pornography and Western news organizations has expanded to include blogging sites, religious sites, health information sites and many others.”

How it works: A user in an uncensored country runs the psiphon software, essentially turning her computer into a proxy. Someone in a restricted country can access that machine via an encrypted connection and get full access to the Net. If he clears his browsing history and cache, no record of his viewing censored material will be stored on his computer.

The breakthrough may be in psiphon's simple operation, so no technical expertise is required. In addition, the anti-censorship browser will allow users to post to blogs and to Wikipedia.

“So far it’s been tech solutions for tech people,” said Dmitri Vitaliev, a human rights activist in Russia who has been testing psiphon in countries where the Internet is censored. “We have not had very good tools so everyone has been eagerly awaiting psiphon.”

- Richard Koman

11.27.06: Apple working on tablet, chip deals, bringing Beatles to iTunes

Fortune's Tim Arango:

Although Apple and the Beatles were recently sparring in court, it looks likes the Beatles' AppleCorps will give iTunes limited exclusive rights to be the online store for the Fab Four.

GigaOm:

PortalPlayer, in the process of being acquired by Nvidia, is providing an applications processor for the forthcoming iPhone and a new graphics chip for future video iPods. Total value of Apple-Nvidia/PortalPlayer deals: $280 million.

Smarthouse's David Richards:
Apple researchers have built a full working prototype of a Mac tablet PC and three Companies in Taiwan are now costing a product for a potential launch in mid 2007. Sources in Taiwan say the focus is on the home and the education environments. This could be a touch screen to control a home media center Apple plans to launch in 07.

BBC:

OS X has a bug in how it handles disk images (DMGs), which can cause system corruption and allow hackers to hijack a machine.

- Richard Koman
November 27, 2006 | Permalink | Comment on this post | Tag: News Watch
View blog reactions | RSS Feed | Subscribe to daily SVW Newsletter!
November 24, 2006

11.25.06: French film firm sues Google Video

By Richard Koman for SiliconValleyWatcher

More franco trouble for Google. After appearing in a Brussels courtroom today to defend its use of Belgian publishers' news content, Google lawyers might as well hang around the continent to deal with this suit (reported by UK-based PC Advisor)

Flach Film says that Google acted as a fully responsible publisher (rather than a passive host) when Google Video users streamed or downloaded the filmmaker’s documentary, "Le monde selon Bush" ("The World According to Bush").
The film, which is no longer available on the French Google Video site, had more than 43,000 views in a short period of time, Flach said.

Flach wants compensation for the unpaid views on the video site. Google says it doesn't have liability because its user agreement forbids uploading copyright material and because it quickly took the video down when alerted. The case is file in France so American protections for online services wouldn't apply unless similar protections are offered by French law.
November 24, 2006 | Permalink | Comment on this post | Tag: News Watch
View blog reactions | RSS Feed | Subscribe to daily SVW Newsletter!
11.25.06: Security flaw in Firefox 2 as browser battle heats up

By Richard Koman for SiliconValleyWatcher

With the upcomng release of Vista and IE7, Microsoft is putting Mozilla on notice that it go through the open source program with a fine tooth comb looking for security flaws. Robert Chapin, an independent IT consultant and Microsoft- certified systems engineer, found a good one today. Firefox is susceptible to a hack - the reverse cross-site request - that reveals a user's stored passwords, NewsFactor reports.
On sites that allow users to enter HTML into a form, a hacked form can trick Firefox into sending its stored usernames and passwords. Because the site would be otherwise trustworthy, the antiphishing mechanism won't kick in - and because the form can be invisible, it would be impossible to visually identify a compromised site.
It's a thin line of distinction for Microsoft, though, because Redmond admits IE is also susceptible to RCSRs, but Firefox's method of storing passwords makes it a more likely target. Concerned? Turn off password autosave (Tools/Options menu.)
November 24, 2006 | Permalink | Comment on this post | Tag: News Watch
View blog reactions | RSS Feed | Subscribe to daily SVW Newsletter!
11.25.06: Google heads to Brussels court in copyright suit

By Richard Koman for SiliconValleyWatcher

Google will get its day in court today, as a Belgian court reconsiders an earlier decision to fine Google as much as a million euros a day for copyright infringement against Belgian news publishers, AP reports. The Court of First Instance also ordered Google to remove the publishers' content from Google News.
"We're glad to have the opportunity to argue the substance," a Google spokeswoman said. "We think that search engines are real benefit to publishers and drive valuable traffic to their Web sites."

Google argues that it's counterproductive for publishers to block their stories from appearing on Google News as the site drives a huge amount of traffic to publishers' sites. Most blogs would kill to get a prominent link on News - but because the site is heavily weighted to traditional news sources, that is a very rare occurrence.
Google's new Sitemaps product, released last week, aims to make it easier for publishers to specify what content Google should index.
In other developments, Google has agreed to pay The Associated Press for stories and photographs. No terms released.
November 24, 2006 | Permalink | Comment on this post | Tag: News Watch
View blog reactions | RSS Feed | Subscribe to daily SVW Newsletter!
November 22, 2006

11.22.06: Anatomy of a spam node

Niall Kennedy notices a weight-loss column at the top of Digg and deconstructs how that particular bit of spam leveraged various social networking engines to work its magic. A fascinating read.
- Richard Koman
Scanning the sidebar links and adjacent content it was obvious this content was out of place on a page optimized for dental insurance. The webmaster of i-dentalresources.com had inserted some Digg bait, seeded a few social bookmarking services, and waited for links and page views to roll in, creating a new node in a spam farm fueled by high-paying affiliate programs and identity collection for resale. ...

November 22, 2006 | Permalink | Comment on this post | Tag: News Watch
View blog reactions | RSS Feed | Subscribe to daily SVW Newsletter!
11.22.06: Blogger kings' spitball fight

By Richard Koman for SiliconValleyWatcher

Something to file under "Who Gives a F-": Jason Calcanis and Nick Denton pissing on each other on respective blogs and comments, with Dave Winer, Mike Arrington and Robert Scoble all chiming in. Somebody wake me when its over.
On Monday Denton said that Calcanis' departure from AOL was not out of loyalty to fired boss Jon Miller but because his performance at Netscape.com sucked rotten eggs.
The numbers are brutal: in the middle of June, before Calacanis overhauled Netscape's front page, the property commanded over 130m pageviews per week. Within two months, traffic had declined nearly 70%.
One of Jason's great strengths is his shamelessness: a willingness to spot good ideas, copy and improve them, fast. He'd offered to buy Digg for $4m, and been turned down; his solution for Netscape was to steal Digg's model, and some of their star contributors. Classic Calacanis.
Except Netscape visitors, most of whom only stuck with the neglected portal out of habit, were the worst subjects possible for Jason's radical experiment. Traffic the week of June 18th, before the Netscape team remade the front page, was 137m pageviews. The following week, as Netscape decommissioned areas such as news and weather, it declined to 115m. The new front page, a clone of Digg.com, went live on June 29. The first full week after the change, traffic had plummeted further, to 72m pageviews. The Comscore numbers, which help advertisers allocated their budgets to different internet properties, mirror this decline.
Calacanis has resigned from AOL ostensibly out of loyalty to Miller ... Valleywag's more cynical theory: he messed up Netscape.com, and used Miller's departure as cover.

And later that a comment from Calcanis:
Another classic Nick Denton hit and run story about a competitor...

Some facts:
1. If you look at unique users before and after the move uniques are down only 22%--which is just fine given that we move the email users over. In fact, the webpage views are up if you take the email users out.
2. We DIDN'T LOSE THE EMAIL USERS... we moved them to another domain inside of AOL (i.e. aim.com). AOL did this because they didn't want to manage the old Netscape email system which was not keeping up with new free email standards (think 2gig free).
3. The email page views are worthless--no one buys email inventory on the web.
4. The reason why the uniques are still high and the page views went down was because the email users do 100's of page views a day--AND WE DIDN'T LOSE THESE PAGE VIEWS... WE MOVED THEM TO AIM.COM.
5. The stats were not leaked--you're talking about COMSCORE. Give me a break.

Feel free to slam me Nick... I know you're having fun taking down anyone who competes with you during your time on Valleywg. First John Battelle... now me. Don't let the facts stand in your way of course.

You should do a blog post on Engadget vs. Gizmodo, Joystiq vs. Kotaku, and Autoblog vs. Jalopnik and how Weblogs, Inc. has crushed Gawker media in the only three verticals we ever competed in.
Or maybe you should do a blog post about how you're always asking your bloggers to out people--I've heard this from three Gawker bloggers so far.
Anyway, good to know that you're still the hit-and-run, facts are secondary, publisher you've always been.
We don't expect anything less from you Nick!
best j

And more opinions from Arrington (Denton's piece a poorly researched hit job), Winer (Maybe Mike is protesting because the new Valleywag is getting a little close to TechCrunch? Nahh, couldn't be), and Scoble the peacemaker (TechCrunch is all about building companies and people up while Valleywag is all about tearing companies and people down. Both functions are needed. If you have hype without anti-hype, no one will believe the stuff that really should be listened to.)

But by now I've forgotten what all this cross-linking is about ... Why Calcanis quit AOL? Apparently, there are some people who care.

The acceleration in the disruption of media

By Tom Foremski for Silicon Valley Watcher

I'm often invited to talk to groups of people about what's going on in the media sector, and I often start with a simple observation: At no other point in our lives will we be witness to such a massively disruptive/destructive time in the media industry.

That's exciting to me because the transition in the underlying business models in media are happening much faster than in software, hardware or anything that Moore's Law has been able to unleash. The disruption means there are many opportunities to create new types of very viable media businesses while the old guard figures things out in committees.

The dark side of all of this, however, is not very appealing and it is something I've been writing about for nearly two years. To put it simply, what happens if the old media dies before the new media learns to walk? By which I mean what happens to us if we lose the "Fourth Estate" - that fourth vital "component" of our society?

I look at media--in all of its forms--as the way society thinks things through ...

, how it moves through a process and solves problems. The serious "60 Minutes," the investigative "Frontline," and the fluffy entertainment- type Fox news shows are all important in that process.

But this type of mainstream media is being torn apart--not by blogging--but by search engine marketing. Quite simply, it is more effective to sell products and services next to a search box than next to journalism.

That's not good. I'm not blaming GOOG or YHOO for the success of search engine marketing. But I'm asking who will pay for high-quality media?

We are in trouble if we don't find that solution. We need high-quality, trustworthy media, so that we can make the right decisions as a society.

And we have some very tough collective decisions to make: about the environment, healthcare, foreign policy and many other serious issues. How can we make the right decisions with an increasingly fragmented media sector, one that is rife with misinformation?

But that can be the exciting part, and the worthwhile part, in all of this. There is an opportunity to help in the speedy transition to a new media, a new society, one that is better than the old.

We can have a future media world that incorporates the best qualities of professional journalism, citizen journalism, and what I call "smart machine" journalism--the automated aggregation through search algorithms of relevant sources.

I'm confident that we will get to this type of better media world. But I'm concerned that we will first have to go through some troubling and challenging times. And some of those troubling signs are in the acceleration in the pace of disruption in the media sector.

This acceleration is seen in the recent revisions upwards of online advertising spend, across all markets. Here is a recent Merrill Lynch report:

Raising ML U.S. online ad forecasts - We are once again raising our online forecasts to account for both the Q3 IAB results and our higher Q4 growth estimate. We are now forecasting Q4 growth of 30% y/y, up from 27%, and FY06 growth of 34%, up from 31%. For FY07, we are now forecasting slightly higher growth of 23.3% v. 22.5% previously on the continued strength of search and branded.

Here is the full report: http://rsch1.ml.com/9093/24013/ds/072_4149.PDF

The old media companies can't benefit much from more online traffic because they can't monetise that traffic to the same extent as the new media companies GOOG, YHOO, and the others.

When I worked at the Financial Times my employer collected advertising revenues so that it could pay my salary so that I and my colleagues could produce high-quality independent journalism.

GOOG and YHOO have no interest in collecting advertising revenues to pay for journalism--no matter how useful that would be to societies and communities. Their content deals cover just a fraction of the cost of producing top notch journalism.

And that's the difference between the old media and the new media companies--the awareness of a social responsibility IMHO.

November 21, 2006

11.21.06: Update: Google 500

By Richard Koman for SiliconValleyWatcher

Google hit 500 today, closing at $509.65. That puts the company's market cap at $155 billion. Is this crazy?

No way, analyst Jordan Rohan told Forbes. There's just no underestimating the earnings potential of the search and ad giant.

"The bigger deal is what they’ve done to the Internet landscape. “Google 500 underscores how important it is as a disruptive force on the Internet. If there is no disruption there is no change and change is generally good.
"Google has an unparalleled ability to monetize traffic or restate it to internet viewers into advertising revenue for the portals they visit,” Rohan said. “No other company has a machine with that sort of power.”

Anthony Noto with Goldman Sachs told the Times that Google is running a “flywheel.”

“They can reinvest at a faster rate, they can innovate at a faster rate, they can create value for advertisers and users at faster rate."

And Paul Kedrosky points to this calculation of Google's market cap as a percentage of Microsoft's.

UPDATE: From Tom Foremski

Roger Ehrenberg over at Information Arbitrage has a great analysis of how simple it is for GOOG to make money by simply acquiring users at a price far below the money it can make per user:

“The Tube” spends most of its dollars on technology to route, upload, access and search videos, based on user requests. Google paid $1.6 billion for 72 million unique monthly viewers. That equates to an acquistion cost per customer of $22. You can argue over the 72 million users, so if we cut that in half (to forestall any arguments) to 36 million, that’s a cost per customer of $44. So to Google, a YouTube customer cost somewhere in the $22-$44 range.
3. Other Media Outlets - By the Numbers

TV

Fox’s American Idol has 21.1 million viewers. At $660,000 for a 30 second spot, a 1-hour show would have close to 15 minutes of commercials yielding a revenue of $950 million a year (30 spots a show X 4 shows a month X 12 months), or an implied value of $45 per user.

NY Times

The New York Times Company, has seen better days. In the last 2 years the stock has gone from the low 40s to the low 20s. Imagine that - 50% of its market cap erased in 2 years - a direct result of online media taking its toll on MSM. NYT currently has a market cap of $3.3 billion, Net Income of $259 Million, and a 5% profit margin. They have 1.7 million print subscribers and 37.7 million unique web viewers per month, which includes About.com. For arguments sake we’ll put them together for a total of about 40 million viewers. Using our admittedly rough methodology a NYT customer appears to be worth approximately $82.

The Googleplex

With a market cap of a stunning $144 billion, Net Income of $1.4 billion and 25% Profit Margin, what is a customer worth to The Beast? In the strictest sense Google is all about advertising, and it has rapproximately 380 million unique monthly users according to Neilsen/NetRatings - spending an average of 22 minutes on the site. The market cap divided by the number of unique users per month nets a per customer value of $380. Zowie.

4. YouTube - the Verdict

With YouTube valued at $22-$44 dollars a user, Google must see this and be licking its chops. Or, to me, “This is a grand arbitrage opporunity.” Google knows what it can squeeze from a user, how it can scale users and how much it should pay to acquire users. I’d say that $380 in vs. $22-$44 out represents the kind of margin of safety value investors can get their arms around. Even if the ad market gets increasingly competitive (say, if Yahoo! can ever post a credible challenge), and they can monetize even at the levels of the NYTimes, that’s a YouTube valuation of $2.8 billion ($82 X low-end 34 million customers). In short, this represents a pretty nice IRR given the likely monetization time horizon. Even a little exposure to the Googleplex can go a long, long way.

Read more here: http://www.informationarbitrage.com/2006/10/google_a_ben_gr.html

Cisco's M&A Chief talks with Wharton about acquisitions

Ron Piovesan from Cisco writes:

Hi Tom, I thought you'd be interesting in podcast we have posted, which is an interview with Dan Scheinman and Wharton management professor Saikat Chaudhuri. It's a great 16 min conversation about the art and science of M&A, the importance of integrating an acquired company, and the importance of timing when making a deal.
I know you've spoken with Dan before, but as background, Dan has overseen over 30 Cisco acquisitions including Airespace ($450M), Linksys ($500M) and Scientific Atlanta ($7B).

Cisco SVP Dan Scheinman and Wharton's Saikat Chaudhuri Discuss Acquisitions and Innovation, Part I: An Innovation 'Ecosystem'

http://newsroom.cisco.com/dlls/tln/services/media/scheinman_acquisitions_and_innovation.mp3

Cisco Podcasts

http://newsroom.cisco.com/dlls/tln/services/etl_podcast.html

Keep up with breaking tech news with our SVWatcher RSS news feeds toolbar

Silicon Valley Watcher now has its own toolbar with preconfigured RSS news feeds from major news sources, and more are being added.

The RSS feeds allow you to quickly scan the headlines and stories on breaking news in Silicon Valley and the tech world without having to visit each news site separately. We've done all the setup for you so there is no need to deal with XML files.

The SVWatcher toolbar can easily be switched on or off in your browser window. Plus it has lots of other great features such as a news ticker and internet radio.

Check it out, it installs in seconds, it's really fast.

http://siliconvalleywatcher.ourtoolbar.com/

November 20, 2006

11.20.06: ValleyWag speculates wildly on Benioff visit to WSJ

By Richard Koman for

Nick Denton has been furiously following up on his Friday scoop that Salesforce.com's Marc Benioff had Wall Street Journal reporter Pui-Wing Tam (one of the several reporters tailed by HP) arrested when she tried to get close to the five-acre estate he's building on the Big Island.

Denton says that Benioff also flew to New York with a money-looking fellow Journal reporters assumed to be a lawyer, specifically to "brow-beat" top brass about the reporter's activities. Denton offers no details of that meeting but plenty of speculation that the meeting was responsible for the fact that the Tam's story makes no mention of the incident. To be clear, Denton is accusing the Journal of squashing that part of the story out of some sort of gentlemen's agreement with Benioff.

That the accusation is the wildest of speculation based on the thinest of evidence is apparent from Denton's own words:

It's not clear whether Benioff's visit to the Journal's headquarters came before publication, [if] he [was] trying to head off publication, or at least mention of the incident; or, less likely, that the visit came after publication, and an effort to head off further such intrusive coverage. ...
The Journal, and [managing editor Paul] Steiger in particular, deal with aggrieved CEOs on a regular basis. The usual tactic is to be mollifying, without making any firm commitments. These discussions are generally off-the-record, so the paper would not normally feel able to disclose the fact of the conversation, or the content of Benioff's complaint. The paper, also, tries to keep its reporter's personalities, and their subjective personal experiences, out of the way of the story. However, the arrest of a reporter would be unusual enough normally to pierce even the Journal's usual discretion. ...

I suppose Valleywag is still looking to hire that seasoned reporter with strong journalistic instincts....

11.20.06: Internal memo: YHOO's peanut butter strategy is what ails the company

By Richard Koman for SiliconValleyWatcher

The Wall Street Journal has a hard-hitting memo from Yahoo senior VP Brad Garlinghouse that calls on senior management to radically restructure the company, cut redundant positions and do away with confusing competitive services.

We lack a focused, cohesive vision for our company. We want to do everything and be everything -- to everyone. We've known this for years, talk about it incessantly, but do nothing to fundamentally address it. We are scared to be left out. We are reactive instead of charting an unwavering course. We are separated into silos that far too frequently don't talk to each other. And when we do talk, it isn't to collaborate on a clearly focused strategy, but rather to argue and fight about ownership, strategies and tactics.

Our inclination and proclivity to repeatedly hire leaders from outside the company results in disparate visions of what winning looks like -- rather than a leadership team rallying around a single cohesive strategy.

I've heard our strategy described as spreading peanut butter across the myriad opportunities that continue to evolve in the online world. The result: a thin layer of investment spread across everything we do and thus we focus on nothing in particular.

I hate peanut butter. We all should.

Perhaps Garlinghouse's diagnosis serves to explains Yahoo's immoral actions in China. If Terry Semel isn't willing to change Yahoo China's policy, there may be no one else in the company who can own issues like this and push forward an agenda of corporate responsibility. It's a shame Garlinghouse doesn't address Yahoo's China problem because because it seems to me a sign of the problems he does point to.

"We're scared to be left out," he writes. Exactly. Yahoo is scared to be left out of China and it doesn't know where its values are. What would not cooperating with China look like? Yahoo doesn't know. They can't miss out, so they can't say no. Go back to Semel's "Nazi Germany" quote, reported in the Journal and plucked out of obscurity by ValleyWag:

One attendee asked Mr. Semel if Yahoo would have cooperated with Nazi Germany the same way it has with China. His response: "Yahoo has a basic obligation not to have a point of view on basic content, and to present content ... and aggregate things and to allow people to make their own choices. I don't know how I would have felt then."

OK, here's the full memo - because you never know when things will go behind the wall at the WSJ:

Three and half years ago, I enthusiastically joined Yahoo! The magnitude of the opportunity was only matched by the magnitude of the assets. And an amazing team has been responsible for rebuilding Yahoo!

It has been a profound experience. I am fortunate to have been a part of dramatic change for the Company. And our successes speak for themselves. More users than ever, more engaging than ever and more profitable than ever!

I proudly bleed purple and yellow