Silicon Valley Watcher - conversations and observations at the intersection of technology and media

Ribbit, the SIlicon Valley based subsidiary of BT, the UK telecom giant, this morning launched its Ribbit Mobile service which offers a suite of products ranging from control over phone lines to transcription of voice mail--all managed from a web browser.

Users can make free phone calls over the Ribbit network; they can switch calls to other numbers in mid-call; they can create a "clone" of their phone through a web browser; they can have voicemail messages transcribed, and many other services.

The cost for the premium service is $30 per month. Although Ribbit calls this a "consumer" service it is really designed for the mobile business person, a "road warrior." There is a free, and a $10 a month version with certain limitations.

Ribbit is a platform...

Last week I met with Ribbit CEO Ted Griggs, Don Thorson CMO, and Crick Waters EVP Strategy and Business Development.

It might seem that Ribbit is a developer of telephony applications such as Ribbit Mobile but that's not the case. Ribbit enables applications like Ribbit Mobile.

It has built a technology platform that merges voice and data telecommunications networks over the Internet using a software switch approach. Developers use its APIs to create a wide diversity of telephony services and to integrate them into other applications.

"Ribbit Mobile is a complex service, but yes, a third-party developer could have created it," said Crick Waters, EVP Strategy and Business Development.

A Silicon Valley phone company...

Ribbit likes to call itself "Silicon Valley's first phone company." I have written about the company several times and recognized its potential to disrupt the larger Telco companies.

When it was acquired by BT last year, I was disappointed. I wrote:

It is disheartening if we, as journalists, pick up interesting companies to write about only to see them being acquired by the very companies they are supposed to be disrupting.

Ted Griggs, CEO, said: "The BT acquisition enables us to scale our technology across a large telecoms network. And BT's international business connections become very beneficial in helping us to enter new markets -- it would have taken us much longer if we were to try and do this ourselves."

The acquisition of Ribbit was masterminded by BT's JP Rangaswami, managing director of innovation and strategy.

I met with Mr Rangaswami in July, during a visit to London, and I was impressed with his understanding of how Ribbit's technology could be used to move BT into new markets. I was also impressed by his strategy of moving BT into many types of innovative services, recognizing the business potential in becoming a platform for thousands of third-party developers rather than trying to own the applications.

Google Voice and other competitors...

While there are competing services to Ribbit Mobile such as Google Voice, there isn't any competition in terms of the combined telecoms platform that Ribbit and BT can provide.

This is something that Google will have to address, not just for Google Voice but also for other services. Google will have to partner or acquire a large telecoms platform otherwise it can be blocked in its future ambitions.

Showing developers the money

The key test for Ribbit will come from its ability to attract developers.

Don Thorson, CMO, has come up with an unique way to reward developers. "We will offer the applications for free and then split the revenues with developers based on how much usage they get per month per user."

This is a much better model than for iPhone or Android developers. Apple likes to point to the more than 85,000 iPhone apps but this is not a sustainable business model if just a tiny fraction of developers are making money. The winning platform will be the one on which developers can make money.

Plus, Ribbit developers get access to BT's billing systems and BT's existing relationship with millions of households and businesses.

Clone your phone...

There is another aspect to Ribbit that is very interesting, it allows you to "clone" your phone. A web based version of your phone is available from any computer device. If you were to lose your phone you would still be able to access it from any web browser.

This potentially provides an end-run around all the phone wars and takes BT beyond the phone and beyond the confines of its own network. Android or iPhone, it doesn't matter in Ribbit's world.

Ribbit becomes the point of the spear for BT's new business ambitions while at the same time allowing third-party developers to share in the action.

It's a potent business strategy and one that I don't see at any other telco. It'll be interesting to see how competitors will react. In the meantime, Ribbit and BT have a head start.

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Please see additional coverage:

Ribbit challenges Google Voice with Ribbit Mobile | VentureBeat

Ribbit Mobile’s Launch Shows BT’s Strategy Isn’t Just All Talk

Ribbit Mobile Launches to Challenge Google Voice, VoxOx

Mary Coughlan, the Tanaiste, or Deputy Prime Minister of Ireland, is in Redwood City this evening announcing a deal between Ireland's innovative telecommunications company Cubic Telecom, and Qik, the popular cell phone based video blogging service.

Cubic Telecom is founded by Pat Phelan, one of Ireland's top entrepreneurs. Cubic Telecom provides the MAXRoam service, consisting of Travel SIMs that can be used with any cell phone and provide users with local call rates no matter what their location.

The deal with Qik will enable MAXroam enabled cell phones with cameras to stream live video from more than 160 countries without the high charges from roaming fees. Their slogan is "Go mobile, not broke."

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Please see:

Here is a quick 3 minute interview with Pat Phelan when he was in town last September.

I come across a lot of people that believe that the media is making the downturn worse because it reports on negative stories. I wish it were true because then the media could turn around this recession by writing positive stories--it would be a lot cheaper than any stimulus package.

I don't think there is any risk in making things worse by reporting a fascinating post on the Facebook ACTA Open group--an excellent source of global financial analysis. Here is a recent post on the massive collapse in Japanese industrial production.

Japan's industrial production fell almost 10% in December compared with November, worse than the METI (Ministry of Economy, Trade and Industry) forecast. METI has re-done its forecasts for January to a 9% drop, and February down another 5%. That knocks almost 30% output since September, putting it back, at the level of the early 1980s. It took 25 years to reach levels that have been unwound in five months.

This is unprecedented destruction of Japanese industrial production--far worse than any comparison with the Great Depression.

The numbers coming out of Japan are no longer about degradation, but historically unprecedented destruction.

Here is the entire post:

I couldn't agree more with the following essay on the current economic crisis from David Roche, submitted to the ACTA Open dialogue: Using public debt to fund private debt delays the inevitable and could extend the economic recession.

There is too much comparison of the current situation with the period of the Great Depression and the Japanese economic problems of the 1990s. Mr Roche states that "We have created our own very serious, but quite unique, mess."

Using public debt to prevent deflation of assets will extend the current crisis. A better approach:

. . .forcing the banks to write down their assets to market and take the hit to shareholder capital before recapitalization begins. Without this, there is no way of knowing how much capital is needed and no telling which institutions are solvent or distinguishing between good and bad banks.

In the US, about 90 per cent of all the measures to deal with the credit crisis aim to prevent asset prices falling to market levels, at which they would clear. The balance sheets of borrowers and creditors will remain encumbered by dud assets and liabilities, slowing the resumption of credit expansion and risking stagnation of the process of intermediation between saving and investment.

It is a hard pill to swallow but it must be swallowed if we are to reset our economy.

Also, I continue to be amazed at all the economic experts that come up with bailout packages of one kind or another. It seems clear to me that none of them, including our chief regulator, Alan Greenspan, have a good grasp of how the economy functions\. Mr Greenspan's recent visit to Washington was astounding, he admitted that there was a serious flaw in his understanding of financial markets! For forty years he and his staff "regulated" the US economy based on faulty assumptions!

YouTube - I Was Wrong! Alan Greenspan

Since no one really knows how things work the best thing to do is to let the economy correct itself without interference.

That means we write down the inflated assets, and take the bitter pills, and let the economy unwind its huge leverage, and then we can clearly see where the economic stimulus packages can be applied. Trying to fix things based on assumptions can only make things worse, imho.

Here is the full essay Thrift is the Future: Interventions will only Prolong the Credit Crisis by David Roche:

The current economic crisis has yet to make itself felt in all of its fury. One of the most sensible commentators is Nassim Nicholas Taleb, a former "quant" on Wall Street. I've been recomending his book "The Black Swan" for more than a year.

Here is a very recent interview with the author on Charlie Rose, note: it is not for the faint of heart!

One piece of silver lining is that Mr Taleb recommends a portfolio balance in safe cash/bonds and only 10 to 20 per cent in high risk investments because the "medium risk investments" have hidden risks. That could be good for venture funds. Somebody should start a Black Swan Fund.

Here is Mr Taleb's web site: http://www.fooledbyrandomness.com/

"My major hobby is teasing people who take themselves & the quality of their knowledge too seriously & those who don’t have the courage to sometimes say: I don’t know...." (You may not be able to change the world but can at least get some entertainment & make a living out of the epistemic arrogance of the human race).

Here is Mr Taleb getting angry about bankers and economists. "The crisis might not even have started yet..."

Great interview with Mr Taleb.

Nassim Nicholas Taleb: the prophet of boom and doom - Times Online

The reason we have such a huge choice of low cost computers and all sorts of gizmos and gadgets, smart phones, and electronic toys is because of the amazing advances in chip designs. Hundreds of small chip design firms are producing incredibly advanced semiconductors that power a slew of innovative devices.

But the reason we have so much innovation in the chip industry is because of a manufacturing revolution that began more than twenty years ago. In 1987, Taiwan Semiconductor Manufacturing Company (TSMC) was founded as a new type of chip company--it was a semiconductor foundry--it made chips for other companies.

This completely transformed the chip industry and ushered in an innovation explosion. Chip designers didn't have to build their own chip factories, they could buy production time from chip foundries. Previously, chip startups had to raise hundreds of millions of dollars, primarily to pay for chip production--yet their value was in the designs.

Chip foundries led to a dramatic cut in the cost of establishing a chip company. Investment now went into chip design, not building a manufacturing line and learning how to run it.

This simple manufacturing revolution is responsible for all the innovation in electronics. And that's a model that could be effectively applied in the automotive world, and unleash a wave of innovation.

Manufacturing expertise . . .

I support a bailout of the automakers for one key reason: manufacturing expertise. If they shut down then we lose many decades of manufacturing knowledge and processes--it would be hugely expensive to recreate.

That manufacturing expertise can be used to build a Hummer, or it can be used to build hybrids, electric cars, and anything with wheels and an engine.

There is a tremendous amount of innovation in transportation that could be unlocked if you didn't have to have build your own factory to make the vehicles.

General Motors and the other car makers know how to re-tool lines to make all sorts of vehicles. They know what designs, and components work, and what doesn't; they have relationships with parts manufacturers, they have software design systems, test systems, air tunnels, algorithms...

They also know how to get through the red tape of qualifying vehicles for US roads. There is a massive amount of knowledge and expertise within the Big 3 that could be applied to producing the greenest of green vehicles.

My proposal is to use government monies to convert the Big 3 auto makers into car making foundries, in a similar fashion to chip-making foundries. That way, small startups with great ideas could quickly get their designs into production without requiring massive amounts of capital and learning how to build and operate a car factory.

Tesla Motors . . .

Take a look at Tesla Motors, one of the most innovative car companies of the past decade. The Tesla Roadster is an innovative all-electric sports car made with a carbon fiber body that has a range of 244 miles and does zero to sixty in less than 4 seconds. It received Time Magazine's 2nd best inventions of 2008.

But you have to very rich to buy one of these $109,000 cars primarily because building a manufacturing line is so expensive. It also means that Tesla had to raise massive amounts of capital to fund the manufacturing lines. This means the innovative Tesla technology will take years to trickle down to mainstream models--yet that's where it's lower carbon-footprint would have the most value.

Tesla ran into lots of delays because of manufacturing problems, and also problems with some of the components.

What if Tesla contracted with GM to make its cars? GM would know how to quickly tool up a production run, it probably would be able to help out with some of the drive-train problems Tesla had. GM would know what things work and how to avoid many problems that Tesla had to learn the hard way..

It is this kind of manufacturing expertise that could be leverage across a new industry. Small startups with great designs and technologies could quickly come to market without having to build their own production lines.

Car foundries could set off a huge wave of innovation at precisely the right time when we are searching for more responsible and sustainable forms of transport. And the US could grab a leadership position with such a plan.

Let's turn the Big 3 auto makers into foundries that can create a platform for a new type of innovative auto industry.

DK Matai, chairman of the ATCA Open has written a terrific essay about how global shipping has come to a halt because of the lack of letters of credit.

Just five months ago it cost about $234,000 to rent a 170,000 tonne Capesize bulk carrier. That priced has collapsed 98 per cent to less than $5,000!

That means that globalization has come to a screeching halt. Read more:

The Global Shipping Halt: Is The Great Unwind Disrupting The Freight Market?

By DK Matai

Freight shipping prices for transporting dry raw materials have collapsed in November 2008. The Great Unwind is like a Tsunami that is engulfing and halting the shipping world at an accelerating rate. The Baltic Dry Index sounds like a weather report, but what it really does is track the price of shipping bulk cargo -- such as coal, iron ore, cotton and grain. Recently, the Baltic Dry Index has fallen through the floor. It has slumped by nearly 95% over the past five months. In real dollar terms, at the peak of the market in June, a 170,000-tonne Capesize bulk carrier cost USD 233,988 to rent. Recently, it was available for USD 4,793 - that is a crash of 98% and is below the cost of paying for crew, insurance, maintenance and lubricants. Why?

1. Of the USD 13.6 trillion of goods and materials traded worldwide per annum, 90% rely on letters of credit or related forms of financing and guarantees such as trade credit insurance. International shipping works on "letters of credit." These financial guarantees are issued to buyers of bulk cargo by their banks. This system has greased the wheels of global trade for the last 400 years by transferring payments internationally from buyer to seller once shipments have been delivered. With the collapse of the credit market - and banks now sitting on their hands, refusing to lend - the fast-moving wheels of global shipping have come close to halt.

2. There is a collapsing demand for credit driven expensive product purchases like cars and as a consequence, the transport of associated raw materials and sub-assemblies. Auto sales are falling in double digit percentages across most of the G7, ie, the US, Japan, Germany, UK, France, Italy and Canada. The pace of car sales growth is slowing down across most of the remaining G20 nations as well, including China and India.

This is a massive disruption in the freight market with asymmetric consequences for world trade, which poses systemic risk for many nation states. Liquidity has to return because if there is insufficient money to provide standard finance, world trade is being sharply cut back and economic growth is not only stalling but likely to implode. If cargo trade stops, a whole lot of supply chain disruptions start. For example, if the iron ore does not go to the refinery, there is no plate steel. If the plate steel does not get shipped, there is nothing to fabricate into components. If there are no components, there is nothing to assemble in the factory. If the factory closes the assembly line, there are no finished goods. If there are no finished goods, there is nothing to restock the shelves of the shops. If there is nothing in the shops, the consumers cannot buy. If the consumers cannot buy, there can be no sales!

On a more sobering note, if bulk shippers cannot buy cargoes, then a lot of US and world grain could end up rotting in warehouses while big portions of the world go hungry. For example, the Saudis are the biggest importers of food in the Middle East. They probably have the money to pay cash for their food shipments and may not therefore need letters of credit. But for the approximately 2.7 billion people in the world who spend 80% of their income on food, a disruption in the global shipping trade could mean the difference between quiet poverty and going hungry day-in, day-out. That will not last for long before there is social disorder on a massive scale.

The Baltic Exchange based in London is the world's leading maritime marketplace. Their dry index, a measure of shipping costs across different ship sizes, hit a record high of 11,793 points in May but has since fallen by 93% to 815 points last week. The UN Conference on Trade and Development (UNCTAD) has said that the financial crisis had begun to affect international trade, noting sharp falls to key shipping indices. Much lower shipping costs mean national markets are more contestable by foreigners, which should limit the ability of domestic firms to raise prices and therefore this should reduce the possibility of inflation. We can safely conclude that the majority of The Great Unwind's forces moving through the markets now seem to be deflationary, and not inflationary.

The ravaged worldwide demand for cargo ships is due to the chronic global financial crisis affecting credit availability, an unprecedented synchronised economic downturn across most of the major national economies in the world caused by massive demand destruction, and the resultant collapse in commodity prices. At the same time, container rates in the Asia-Europe routes have plummeted by around 75% this year and a price war between companies seems to be driving rates lower and lower, destroying the profitability of container shipping and placing huge stresses on companies struggling to meet their commitments. A significant component of the dramatic decline in shipping indices has been due to the difficulty in arranging trade finance during the credit crunch. Demand has been slashed because the global credit squeeze has made it very difficult for buyers to attract funding. At the same time, perceived counter-party risk in the physical markets has slowed trading to a trickle, exacerbating the freight slide. Many big players involved in the shipping of dry commodities and goods cargo are unwilling to trade with some parties fearful of their financial footing. There are big chains of owners of the chartered ships in the supply chain, so if someone goes bankrupt half way through the chain, it has a knock-on domino effect for everybody else. Another problem is that there are quite a significant number of players walking away from cargoes at present. So anyone who has taken cargoes to hedge the vessels they have chartered is now finding themselves with the ship without the cargo to carry.

ArcelorMittal, the world's biggest steelmaker, on November 5th said its global output will decline by more than 30 percent. Cia Vale do Rio Doce, the world's biggest iron-ore producer, said last month that it will cut production.The fall in demand for many raw materials, which began at the beginning of June, first squeezed the profit margins of producers since they faced fixed high raw material costs and falling prices for their finished products. This was followed shortly by a squeeze of freight costs as they tried to pass the pressure from the profit margins to the freight market. One could be forgiven for not noticing what the world has experienced in recent years by way of an unprecedented growth in shipping and shipbuilding, fuelled by cheap imports from Asia and the seemingly unstoppable rise of economies such as China and India with their insatiable demand for raw materials. For some time charter rates went through the roof and reached a zenith in May/June this year and demand for new ships out-stripped supply. A different picture is now emerging. Companies are starting to struggle with too many ships chasing ever decreasing rates.

This slump not only means a fall in revenues but also less revenues to service debts. In turn, the current 'credit crunch' means extreme difficulties for struggling shipping companies seeking to raise capital. UNCTAD revealed in its annual maritime transport review that the world's merchant fleet had expanded to a record 1.12 billion deadweight tons, with the order book for new vessels reaching a peak of 10,053 ships in 2008. However, from mid-2008, companies were cancelling new ships on order, even when they were losing their 10% deposit in tens of millions of dollars. Mitsui OSK Lines (MOL), Japan's largest bulk shipping company is said to be considering laying-up and even scrapping vessels as revenues collapse. MOL may mothball some of its largest vessels. The company is considering scrapping seven of its Capesize dry bulk ships from its fleet of a 100 vessels. This suggests that MOL may be getting ready for a protracted down turn lasting several years. Reports are already filtering through of companies seeking sheltered waters to lay up their giant vessels to weather the financial storm. Just as in the days following the oil crisis in 1973, we could see the same happening with the great lumbering bulkers and container vessels, which now seem less and less attractive as they ply the waters with their great bellies less than full. In the space of less than half a year we have seen the shipping world ride the crest of a massive globalisation expansionary wave and then plunge into a financial storm that could sweep most vessels off our oceans, and with them, companies who cannot weather the crisis caused by The Great Unwind.

We welcome your thoughts, observations and views. To reflect further on this, please respond within Facebook's ATCA Open discussion board.

Best wishes

DK Matai

Chairman, ATCA Open

LaLa has launched a unique online music service that has the potential to be a one-stop music web application for most people. It cleverly blends people's personal collection of MP3 songs with a choice of more than 6 million songs available for streaming--and accessible from any Internet connected device.

Users let LaLa scan their PCs for the MP3 files they already have and the music service matches them automatically with its online catalog. If it's not in the catalog, its Music Mover application automatically uploads the songs to make them available online.

In addition, users have access to 6 million songs in the LaLa catalog that they can listen to for free--once. For 10 cents per song users can buy lifetime access to a streamed version of that song. If they then want to own that song on their local hard drive, they can buy it for 79 cents.

What makes LaLa even more compelling is that it recommends music that you don't have, and enables discovery of music that you might like. Plus you can subscribe to other people's playlists, create your own playlists, and also gift music to others. If they don't like the track, they can keep the credit.

Bill Nguyen, founder of LaLa, gave me a demonstration of the service earlier today. "This service goes beyond owning CDs, it goes beyond owning music files, for ten cents a song you get lifetime access to that song over any Internet connection. Our research shows that people listen to 30 per cent of their own music and the rest is music that they don't yet own. Search and discoverability of music is a key part of this service."

LaLa does not believe that a subscription based monthly music service, or an advertising supported music service, can be successful.

"If you are a subscriber there is no incentive to encourage you to listen to more music because you become less profitable to the service, it costs them money for every song you listen to," says Mr Nguyen. And with advertising based models, music services have to place adverts between the user and the music they want to listen to to pay for the service, which harms the user experience.

Foremski's Take: LaLa has come a long way from its start in early 2006 as a CD swapping service using snail mail. This latest incarnation of LaLa leapfrogs the many varieties of online music services available with a great user interface, and a business model that integrates licensing agreements with four major labels and 175,000 independent labels.

Behind the scenes is LaLa's data center which is designed to be scalable and to use any cloud computing platform available. "We built a data center to get things started but our system can run on Amazon or any other platform," says Mr Nguyen.

The key to LaLa potential success is that it has incorporated a commerce platform into the music service that can then cross-sell new music based on a user's existing library as a guide.

I love the idea of scanning my drive and having access to my music from any internet connected device without needing to upload gigabytes of music. I also like the discoverability within the system in that I can find new music easily and get one free play of any music in the LaLa catalog.

Even though 10 cents per song isn't expensive, I like the Yahoo Music monthly "all you can eat" service for one low payment--but I'm sure I can get used to this risk-free method of discovering new music.

Here is my "Forecast" from LaLa which you can listen to for free:

Last week I popped into SDForum's first "Corporate Innovation and Research Fair." I recorded part of the lunchtime panel on video and there were some very good points made by a stellar panel.

Here is an edited highlights version:

From left to right:

Roger Meike, Sun Microsystems

Harold Yu, Orrick

David SMith, Tynax

Deborah Magid, IBM

Roy Levin, Microsoft

Dr. Ike Nassi, SAP

Towards the end I ask a question about the term innovation and if it has been over-used. Dr. Nassi agrees, and says it has lost all meaning.

Harvard Business Review published a feature article by Anita Elberse: Should You Invest in the Long Tail?.

She concludes that there really isn't much profit to be found in the "Long Tail." This is very very bad news for the many Silicon valley startups that have business plans heavily dependent on "Long Tail" economics.

Anita Elberse writes:

For Chris Anderson, the strategic implications of the digital environment seem clear. “The companies that will prosper,” he declares, “will be those that switch out of lowest-common-denominator mode and figure out how to address niches.” But my research indicates otherwise. Although no one disputes the lengthening of the tail (clearly, more obscure products are being made available for purchase every day), the tail is likely to be extremely flat and populated by titles that are mostly a diversion for consumers whose appetite for true blockbusters continues to grow. It is therefore highly disputable that much money can be made in the tail.

She adds:

The companies that will prosper are the ones most capable of capitalizing on individual best sellers.

This is why book publishers compete fiercely in bidding wars to secure blockbuster titles. She describes the fierce competition for a specific book:

Hyperion was determined to get it; New York magazine quoted an industry insider as saying that “jaws hit the floor over how much they paid.” Everyone recognized it as a high-stakes gamble in a high-risk genre. But ultimately it paid off big.

What was the title of the book? The Long Tail by Chris Anderson. It seems that there are plenty of profits in the Long Tail, at least for Chris Anderson and his publisher!

Backachya . . .

Chris Anderson hit back after a "quick read" and basically concluded that nothing had changed and that it all depended on where you say the "head" is and where the "tail" is located. Debating the Long Tail - Harvard Business Online's Conversation Starter

My point is not to suggest that Elberse is wrong and that I'm right, it's only to point out that different definitions of what the Long Tail is, from "head" to "tail", will generate wildly different results.

Foremski's Take: Well, if you get widely different results depending on where you slice the head and tail then there really is no "Long Tail." You can prove or disprove the concept as much as you wish.

As a business you want to be in the "head" because that's where the profits are the fattest. You don't want to be in the "tail" you'll get there anyway.

If you are a startup start well in the "head" is my advice. Don't try to build a "Long Tail" business or you'll get your head handed back to you.

Please See:

Choking On The Long Tail - The Unbearable Burden

Long Tail Economics - Bonanza Or Bogus?

Rave reviews find out why! - Order the The Amazon Kindle Electronic Book Reader!

You need video services! Creation, Distribution, Attention. Contact Aron Pruiett at SF Media Collective- 415 533 4487 - Here is a demo reel.

Silicon Valley Watcher Consulting services - call Tom at 415 336 7547

Ribbit is on my SVW 2008Watch list. It is a very impressive company with a spot-on business strategy and technology for leading the telephony sector in enterprise, and in consumer sectors.

At the Demo conference in Palm Desert, CA, Ribbit unveiled Amphibian, a consumer application based on its technology that demonstrates the versatility of its telephony platform. Amphibian provides a mobile phone user with unprecedented control over their incoming and outgoing calls.

Through a web browser, it provides users with services such as visual voicemail, you see a picture of the person, plus you can choose to view a transcript of the voicemail. The transcript can be emailed to you along with the MP3 sound file. Or it can be viewed through SMS.

When a call comes in, Ribbit goes out to the Internet and brings back information about the person calling, such as blog posts, videos, photos.

If you don't answer your mobile phone, the caller is routed to Ribbit which will record a voicemail or route it to another phone, or allow the user to take the call from the web browser on a "virtual phone."

You can also call out through the Ribbit virtual phone and it will carry your mobile phone caller ID, which is very useful since many people won't pick up ID-blocked calls or numbers that are unfamiliar.

There is more info and screenshots here:

* Enhanced Visual Voicemail

* Caller ID 2.0

* Web Portability

Foremski's Take: Reasons to watch Ribbit...

Amphibian as an application is impressive. But what is even more impressive is that this is just one example of what can be achieved with Ribbit's telephony platform. By opening up the platform Ribbit is able to quickly spawn a huge number of applications.

There are already more than 2,500 developers integrating telephony features into thousands of other products by using Ribbit's API. This is going to create an explosion of innovative telephony applications.

Ted Griggs, CEO of Ribbit, said,"If you were going build a telephone company today, you wouldn't build it the way telephone companies are today."

By using software and Internet based communications technologies, Ribbit has built a totally new type of telephone company with a flexibility to offer services and applications that weren't possible before.

For example, the iPhone offers visual voicemail, but that service required AT&T to make a large investment in its infrastructure, and commit to a lengthy development time. Using Ribbit technology, a small company can build an application that offers a similar, but better feature, in days. Time to market for telephony applications has been dramatically shattered.

Ribbit has leapfrogged the established telephone companies, which are holding billions of dollars in much older and less versatile, legacy telecoms infrastructure.

E-commerce is built in...

And most importantly, it has created an e-commerce infrastructure that allows developers to charge users. Developers only need to focus on their apps, and not on trying to figure out how to monetize their work.

That same e-commerce infrastructure could potentially be used to monetize other services or products offered through Ribbit based apps, a type of Ribbit PayPal. The e-commerce platform might turn out to be the most valuable part of the company.

It will be interesting to see the types of applications Ribbit enables, and if it can scale its services. Amphibian is a consumer application and consumers are much more forgiving than business users of Ribbit based applications.

Wireless companies don't want to be forced to advertise the full cost of monthly plans, which include hefty taxes and fees to state and federal agencies. The Supreme court declined the case. (Hat tip Jeff Nolan.)

From Cnet by Anne Broache: Supreme Court rejects cell-phone tax case

The case at hand, which pitted Sprint Nextel and T-Mobile USA against state utility regulators, centers on whether states should be allowed to forbid wireless carriers from breaking out various state and local taxes as line-item fees on a customer's bill.

...The wireless companies, naturally, maintain they should be able to establish a visible separation between the base prices of their services and the fees required by various regulators. States and localities have increasingly been passing laws prohibiting those line items expressly in order to "hide" arguably unpopular taxes and fees from consumers, Sprint Nextel and T-Mobile said in their brief to the high court.

I have no sympathy for either side. Cell phone rates are way to high. Let's have truth in advertising and show the full cost of monthly service.

The state and federal agencies are in cahoots with each other anyway, to make sure that no technologies get around their stranglehold on wireless communications. Regulation means you have the government on your side and competition is pushed well to the outside because of onerous requirements.

This cosy relationship between the two sides in this case, enables a wireless digital divide that is bad for innovation and bad for Silicon Valley. Europeans say the US is way behind in mobile comms, and they are right, and this is why.

The wireless companies have shown themselves to be anti-technology. They dumb down the cell phones, they restrict access to the latest communications technologies that could swiftly decrease our cost of providing wireless communications.

And with the regulators on their side, the wireless companies can keep a firm hold on a gatekeeper role that does not offer a level playing field for competition.

The wireless carriers have become the center for a thousand spokes of innovative online services, many of them from large and small SIlicon Valley companies. This is an incredibly powerful position because the wireless carriers have no obligation to carry competitive services over their networks, in what is sometimes called "net neutrality."

Let's see the true price that these modern day Luddites are charging us and let's recognize the true cost to society and to this country's business innovation.

I just had lunch with Peter Adams, president of MatchPoint.com, which is one of many online businesses hoping to break into multi-billion dollar local business markets, territory that has long been dominated by Yellow Pages.

Later this month, MatchPoint will unveil details of its services for local businesses. Although I can't talk about the details of its new service I can talk about its strategy and its bid to provide a better match for consumers and local companies.

Peter Adams is a veteran of LookSmart, the Australian search company. It's good experience for his role at MatchPoint, which is to find a way to connect consumers with products and services, and have local companies compete and bid for that business.

As it seeks local consumers for its services, MatchPoint is offering local online publishers a revenue sharing deal, which potentially would generate more money than partnering with Google's AdSense network.

Key to its strategy is convincing users to part with some information. "Consumers fill out a very short questionnaire about what they want and we pass that onto businesses in their zip code. Those businesses then bid on those leads and they get a phone number, created on the fly, that they can call prospective customers. With local businesses, nearly 100 per cent of their business is done through the phone, not online," said Mr Adams.

On the Matchpoint site there are service categories such as student loans, Lasik eye surgery, interior decorators, career counseling, printing services, and removing a tattoo. "Users trust us to keep their information private, any communications between them and the service provider goes through us."

At the end of this month MatchPoint is launching a national campaign to roll out its services to millions of local businesses using technology from GetVendors.com, which it acquired last year.

Foremski's Take:

Internet users hate filling out anything online and have come to expect search engines to guess what they want. Priming the pump with sufficient numbers of users filling out questionnaires will be a challenge for MatchPoint but it is not an insurmountable challenge if users start quickly seeing results.

The questionnaires are very short, three or so questions, and once filled out it should result in better conversions for advertisers and a better experience for consumers. Matchpoint will need to do some follow up to be able to refine its questions for each category and check with consumers about their level of satisfaction.

If MatchPoint is successful with its approach, it would be a welcome boon to many media and other online publishers that currently eek out a miserly living running Google AdSense ads. MatchPoint is offering a partnership to publishers in which they host a MatchPoint widget and share in the commission it earns from businesses. With the potential for a much improved conversion rate than through Google AdSense, revenues for publishing partners would be higher, plus they would be providing a valuable service to their readers and their local business community.

- - -

Please see:

MatchPoint Blog:

Click Fraud Hits 28% on Content Networks

Do Publishers Need An Alternative to AdSense?

MatchPoint FAQ

Technorati Tags: adsense, matchpoint

BrightIdea.com is one of the companies on my 2008 watch list. The company offers enterprises a process in which they can encourage and manage innovation. Last month I sat down with Matthew Greeley, CEO and founder, at my favorite business meeting place, the "Lucky Penny" diner in San Francisco (24hr breakfasts!).

Managing innovation is easier said than done and large organizations are notoriously bad at being able to generate and monetize great ideas. Xerox Palo Alto Research Center is the poster child for such things, yet all organizations have similar difficulties.

Innovation seems to happen in haphazard ways, if at all. Yet virtually all large organizations love to trumpet how innovative they are, as if by using the term innovation often enough they can make innovation happen. That's one reason why the term innovation is way over used these days.

[Innovation inflation is why Silicon Valley Watcher changed its description from "reporting on the the business of innovation" to "reporting on the business of disruption."]

BrightIdea.com provides a process and tools that help real innovation occur. And the company has had a great 2007, winning large clients such as Cisco Systems and it is on a roll to win more in 2008.

Mr Greeley says that Cisco is using BrightIdea to harvest innovative ideas that it will then fund and develop into businesses:

...the Cisco I-Prize, a competition open to entrepreneurs and innovators around the world. The Cisco I-Prize aims to bring together global teams to develop technology business ideas using Cisco's collaboration technologies and to run those ideas through Cisco's process for identifying emerging technologies to take to market. The winning team may have the opportunity to join Cisco as founders of a new emerging technology business unit. Depending on the value of the idea, Cisco may also invest up to $10 million over three years to fund the new business unit.

Cisco Announces the Cisco I-Prize to Identify New Business Ideas

Other software companies such as Salesforce have begun to recognize the need for a similar service. But BrightIdea has been at it since 1999 and its software is being used by 250 companies, including Hallmark, Bristol Myers Squibb, Bosch, Emerson, ING Financial and the U.S. Department of Defense.

BrightIdea has processes already in place that do the following:
Idea Collection; Team Evaluation; Collaborative Development; Campaign Management; User Profiles; Promotions, Rewards & Recognition; WorkflowAutomation; Real-Time Alerts; Process Monitoring; Key Metrics & Analytics Dashboard; Employee Directory Integration; Microsoft Word & Excel Integration.

It has a wealth of features that aren't found in any other software, and it is scalable to encompass large numbers of users.

I'd love to use BrightIdea's software as a type of brain trust for Silicon Valley. We all have way too many bright ideas to try and monetize them all, why not throw them into a central pool and get a 1 per cent gross revenue return on any that others figure out how to monetize?

Keep an eye on BrightIdea for 2008....

Brightidea.com - On Demand Innovation Management Software

Technorati Tags: brightidea

Comcast's blocking of large file transfers is just the tip of the iceberg. And it is only a matter of time before other cable and telco companies will follow suit.

This is the start of a battle for bandwidth that has been caused by enormous amounts of digital media hitting the Internet and the private networks of the cable and telco companies. It is a battle that nearly all Silicon Valley companies are unprepared for and won't be able to win.

Comcast and the others can legitimately limit third party services because they have a contract with their customers to deliver a slew of digital services from digital phone calls, digital music, and high definition TV. They don't have a contract to deliver the digital services of others.

How long before they kill the video stars? For example, YouTube relies on file uploads up to 100 MB in size, other video hosting platforms take larger files.

How long before they kill most of the Web 2.0 companies? They all seek to share files and information between groups, including video and audio. FaceBook, for example, lets users upload 300 MB video files.

What about new services such as Fabrik's Ultimate Backup Service, which offers unlimited backups for $5 a month. Will Fabrik and others be able to build such businesses?

Why should they provide quality access to digital services (YouTube, BitTorrent, etc) if they don't have a contractual obligation? Access to those services comes second or third to their own services and those of partners.

Corporate Luddites

The cable and telco companies are the most powerful Luddite organizations in the US. They hold a duopoly control over the lines that connect consumers with digital services.

The cable and telco companies are slow in bringing in new technologies, and their wireless operations turn off many technologies, such as wi-fi in cell phones. They have slowed technological progress in the US in so many ways. For example, We have some of the lowest adoption rates and the slowest broadband in the world. We have a huge digital divide.

They will protect themselves from technologies that would disrupt them in the same way early 19th century English Luddites broke industrial machines to save their livelihoods.

The English dealt with their anti-technologists in this way: "Machine breaking" (industrial sabotage) was made a capital crime." (Wikipedia.)

No such luck here. These Luddites have the government on their side, they have among the strongest lobbying groups in Washington, built up over a period of more than 100 years.

The cable and telco companies are anti-competitive and their actions will make sure that the US becomes uncompetitive.

Technorati Tags: Fabrik, corporate luddites, startups

Josh Hallett has joined Voce Communications, which is quite a coup for this Palo Alto PR firm. Voce is one of my favorite Silicon Valley PR firms because they really understand new media/social media and are building a great team of leaders in this area.

Josh has been working with many large newspapers, creating the infrastructure for their blogs and online forums. He is what I like to call a media architect, a software engineer that knows how to implement the media technologies that make up Internet 2.0.

Voce's Mike Manuel writes:

. . . “conversation” and “community” are words that easily roll off the tongues of marketers these days, but too often it’s without knowledge or regard for the technology that’s required to carry these things from conference room concepts to real-world experiences.

This is where Josh excels. The guy’s a master translator between marketers and web developers, between ideas and experiences, and ultimately, between companies and customers.

Josh is the newest addition to our growing team of social media strategists here at Voce. Earlier this spring Andrea Weckerle, a DC-area blogger and author of New Millennium PR, joined our gang, as did Scott Sigler, author, podcaster and social media provocateur. And yeah, yours truly continues to act as this team’s lead wonk.

From Voce Nation - Now With More Cowbell

Earlier this year I published a video of Josh talking about his experiences building media systems for companies such as New York Times. There is tons of great advice and stories here:

Social media in the enterprise: How to deal with IT roadblocks

Technorati Tags: voce

I wasn't sure if I'd be able to make the Outcast PR After Hours party Thursday night because I had four back to back meetings and events. But I managed to catch part of it.

I've worked with Outcast for many years so it was good to see familiar faces. And it was also interesting to hear some feedback on my latest posts about the changing economic models for PR, such as my Wiley E Coyote post.

It was quite clear that I had hit a nerve with many of my PR contacts and hopefully they will have the courage to take our discussion online so we can share it with others. Some took my post very personally, as if I were attacking them by name, which I wasn't. I was pointing out clear economic trends, that's all. That's my training as a financial journalist, to follow the flow of money within industry sectors.

The world has changed for both the media and PR industries, except the media sector is a further along in experiencing the painful disruption of those changes. The PR sector will eventually go through similar painful changes. This is not a welcome message when the PR industry is booming, and hiring like crazy.

PR industry parade

The PR industry is happy because revenues continue to climb 9, 10 per cent and more annually. New media technologies offer PR firms new business opportunities, they aren't viewed as a threat. PR firms charge clients for additional services. New media/social media is a very good add-on business in the PR world.

But when clients realize they can meet their PR goals using new media approaches for far lower costs, then why pay for both? They won't. There many that already don't.

This is a trend that will be played out in different ways by different companies but its overall effect will be the same.

Technorati Tags: disruptive technologies

Thoughts on Strumpette Amanda Chapel resignation...

I've long warned the PR industry that it is on borrowed time. The media industry is undergoing traumatic changes yet PR is thriving. Media and PR industry fortunes have always followed each other in lock step.

PR today reminds me of the Roadrunner cartoons. The times when Wily E. Coyote is chasing the Road Runner and notices he is running on thin air, at which point he plummets thousands of feet to a distant canyon floor. That's how I envisage the PR industry today--about to plummet from a great height.

Strumpette and Amanda Chapel tried to stir up changes in the PR industry and encourage a new form of PR, by openly discussing ethical issues, and all the unpleasant aspects of knowing how the sausage is made.

But nothing changed despite all the transparency around the process of public relations.

Is this a failure of transparency? Yes. Because nothing changes unless you have to change. And you only have to change when you have to change because things have become fiscally painful. The PR industry is awash with money unlike the media industry, so it doesn't change.

Traditional media is changing rapidly because it can't make money the way it used to make money. That business model is being hacked to pieces.

Advertising is moving rapidly online, and it is moving towards search engine advertising, not journalism.

Selling products and services next to a column of journalism is not as effective as selling next to a search engine query--which magically reveals what you are looking for. This is way more useful to advertisers than revealing what you read.

In the PR world, unlike the media world, the companies are hiring like crazy and still doing business the old fashioned way: press releases, white papers, case studies, media (dwindling) relations, etc, ....

Yes, every PR firm offers "social media" or "new media" services but how many of them practice what they preach in terms of using such technologies to drum up business for themselves? Shockingly few.

It is clear that this old model of PR is going to end. In fact, it has already ended but most PR firms don't know it, just like Wily E Coyote's sudden lack of solid ground...

I keep running across Silicon Valley companies that have spent no money on PR or marketing. Zero dollars.

Slide.com, for example, has managed to attract millions of users for its online apps on Faceback and MySpace for no dollars.

There are many smaller startups who have done the same: zero dollars spent on PR and marketing. They have gotten incredible results from the viral nature of their products, services, and their personal abilities to establish though leadership through blogging and other online engagements.

What happens when venture capitalists start demanding that same type of business strategy from their startups?

Consider this: The whole outsourcing trend to India, Phillipines, etc, was significantly boosted by the VCs and their demands that their startups take advantage of the economic benefits from an outsourcing strategy. As a startup, if you can't show you have a viable outsourcing strategy in your business plan, you won't get funding.

Next: Startups will have to show VCs that they have a viable viral marketing and distribution strategy. That means cutting out about $120k to $200K of annual expenditures for basic traditional PR services for a startup.

And larger companies will be tapping into this same trend. They will be cutting back on traditional PR services and investing in their own viral marketing methods. I already see this about to happen at big companies such as Intel (an SVW sponsor), Hewlett-Packard, Cisco Systems, IBM, and this trend will grow.

Dell, for example, recently hired Andy Lark, one of the top new media strategists in SIlicon Valley, imho. What do you think Dell intends to do with that hire? It won't be marketing-and-PR-as-usual, that's for sure.

No Pain, No Change

Change in the PR industry will happen because the old ways won't be as good, or as cost effective as using new media technologies to publish and engage customers. Traditional PR doesn't provide the same bang for the buck.

It is when the PR industry feels the same pain that mainstream media is feeling right now, a kick in the pants to its core revenues, is when change will happen. But without pain, no change.

Technorati Tags: andylark, mediasphere, social media, strategy

Nassim Nicholas Taleb's "The Black Swan" is an incredible book. I give it my highest recommendation, I now have a new hero.

The Black Swan shows how our society, how our experts, consistently fail to consider the effect of events that are unpredictable but totally game changing. The point is to know where we are exposed, not to sweep things under the carpet using the misapplication of mathematics and statistics based on past events.

A Black Swan is an event that is many magnitudes outside of the expected. We can become less of a "sucker" to these types of events, and also open ourselves to the huge benefits of a Black Swan-type event.

In many ways, Silicon Valley's thousands of startups are trying to ride the Black Swan - leave themselves open to the faint possibility of success, which could come from unexpected quarters. Either way, the odds of a startup succeeding are tiny, and rely on many variables lining up precisely. Many of those variables are completely unpredictable.

How many times have Silicon Valley companies acted as "Black Swans" for many established companies and sectors? Thousands of times.

How many times has "The Next Big Thing" in Silicon Valley come from totally unexpected quarters? Every time. That's a Black Swan and we have a great breeding ground for them here.

This is an important book:

Technorati Tags: black swan

(From my ZDNet blog: http://blogs.zdnet.com/Foremski/?p=186)

Silicon Valley is teeming with established companies and startups whose services and products require communications services.

Some of the startups are called Web 2.0 companies, or social networking companies, social media companies etc. It doesn't really matter what they are called, they all require a communications component to unlock the value they create.

This is also true for Silicon Valley's largest companies such as Google and Cisco, they are all increasingly reliant on being able to quickly get to their end user.

Whether it is a text message, or email, or sharing a video clip, or a myriad other many-media forms of communications--they all have to go through one of the big telecommunications or cable companies.

Last mile = Gold Mile

This Telco/Cable cartel sits smack-dab in the middle of Silicon Valley's innovation efforts. The Telco/Cable cartel control the communications gateways, they control the wireless services, and they are the most backward element in our society in terms of resisting technological progress in the US.

And control of these gateways means that it costs end users about $50 plus taxes, or about $60 per month minimum to be able to receive wireless or wired data comms. This is too much money per node and it limits the reach of Silicon Valley's companies, which effectively  places a limit on innovation.

For example, Intel (a sponsor of SVW) has managed to push down the price of computing devices to levels that make them affordable to larger numbers of people than ever before. It has done this with the help of Moore's Law, by being able to reduce the number of computer components to smaller numbers of chips.

And with growing support for the Linux open source operating system, computing devices will become even cheaper.

But without cheaper data communications linking the computer devices, the development of innovative services will slow to a crawl. And the digital divide that separates the rich populations from the poor, in this country and across the globe, will shift at a snail's pace.

This is why Silicon Valley has to, and will, break the back of the Telco/Cable cartel so that communications services become cheaper and more accessible to everyone, and so that innovative companies can continue to compete based on the level playing field of net neutrality.

So how will this happen? The clues are all around us...

- - -

Please also see:

CIO Today: New Rules Could Change Wireless Forever

Financial Post: Google: You ain't seen nothin' yet

and...

SVW 2005: What's Google up to? It's going to become a wireless telco with its own fat backbone...

By Tom Foremski

The Telcos have become the biggest obstacle to the development of new technologies and services. They have become the most backward elements in our society when it comes to rolling out new technologies, applications, and services.

They have filed lawsuits to stop public wireless networks, and they constantly seek to control anything that could threaten their markets. They maintain the digital divide by keeping Internet access prices far higher than they should be.

They control the cell phone and all of its features, disabling built-in functions when it suits them. And they control the services can be offered over their networks.

They don't compete against each other, their pricing is almost identical, almost cartel-like. The only competitive activity they engage in is in advertising campaigns.

Lower telco costs only for the Telcos...

I've long wondered why does my cell phone bill continue to increase year after year--yet the number of hours I have to talk hasn't increased, the same black-spots are still there, and the overall service hasn't improved one iota.

As a veteran journalist covering the business of technology, I know too well that the Telcos have been aggressively adopting powerful communications technologies, such as VOIP, that have lowered their key operating costs significantly. So how is it that our Telco bills continue to increase year after year?

It seems as if that cell phone in your pocket, nestled against your wallet or purse, is somehow sucking ever more money out and sending it to the Telcos--with little to show in terms of new services or added value.

(M)iPhone or AT&T's phone?

Like everyone else around here I've been fascinated by the coming of Apple's iPhone. But while many focused on keyboard issues, or battery life, my question has been: How will AT&T disable or enable the iPhone's Wi-Fi capabilities?

Other Telcos are very sensitive to the issue of Wi-Fi and disable it on phones, or demand $20 per month or more to enable the function. Because easy Wi-Fi opens the door to cheaper calls and cheaper everything else...

Reading the early reviews, it seems that AT&T hasn't done anything to prevent the iPhone from accessing Wi-Fi in public hotspots, or at home. And AT&T doesn't seem to have much control over what applications can be run on the iPhone.

This great news because it means we will see a tremendous amount of innovation, and disruption.

The innovation will come from Silicon Valley and beyond, as startups and others develop applications and services delivered over the wireless Internet directly into people's pockets. The barriers erected by the Telcos will be gradually removed as Wi-Fi hotspots become more common and eventually ubiquitous.

The disruption will hit the Telcos as they lose their control over the gateways to the Internet. Their pain will be compounded by the expensive licenses paid for wireless spectrum while Wi-Fi uses free unlicensed spectrum.

The disruption for the Telcos will accelerate as Wi-Fi networks are built out, and as roaming technologies for Wi-Fi, such as those from Packet Design and elsewhere come into play.

(BTW, Apple TV is Apple's flanking attack on the cable TV cartel...same arguments as above, similar strategy.)

Silicon Valley's Babe Ruth

Steve Jobs has hit another one out of the ball park. For Apple, its a win-win, and win again strategy. It represents brilliant positioning.

If you look at the the TV commercials for the iPhone you might even wonder if it Apple needs AT&T. There is nothing shown in those commercials that requires a cell phone connection.

The TV commercials demonstrate the iPhone displaying family photos, allowing users to view a movie, search for a restaurant, view a Google-like map location. The AT&T logo appears for less than a second at the end of the ad.

And about a second of tech time is all that Apple requires from AT&T. Apple could have released the iPhone as a Wi-Fi phone but then its features would only work in Wi-Fi hotspots, which are patchy and unevenly distributed.

By linking up with AT&T Apple can offer the full integrated set of iPhone features in any urban location. As Wi-Fi is built out, as WiMax comes in, wireless Internet will be ubiquitous and AT&T's network becomes less and less necessary--without affecting the quality of iPhone services. The money that was paid to AT&T now becomes available for other services.

Interestingly, Apple stores are selling the iPhone without selling an AT&T two-year calling plan. I doubt AT&T stores will allow people to walk out with an iPhone without a calling plan.

Will others be able to mimic the success of the iPhone? It is doubtful that other carriers would allow a similar arrangement. But that won't stop companies such as Nokia, Samsung and others from selling unlocked phones with Wi-Fi enabled features directly to customers. They will benefit from Apple's lead.

Shake, rattle, and roll

Without the Telcos limiting access to the Internet, and trying to control handsets, services, and applications, we will see Silicon Valley launch into its next big boom cycle. 

I've been here since 1984 and noticed that each Silicon Valley boom cycle is larger than the one before, and affects more people than the one before. This next one is going to be absolutely massive, more like a sonic boom, and it will shake things up the world over, imho.

 

- - -

Please also see:

Steve Gillmor:

iPhonomics

CNET:

Wi-Fi phones a no-go, Siemens says — June 27, 2007

T-Mobile says hello to Wi-Fi calling service — June 27, 2007

ZDNet:

February 13th, 2007

Nortel's burn the boats strategy...  

 

 

 

Being an entrepreneur is hard work but it needn't be time consuming. Last November I met with Timothy Ferriss (Just Say No To Our Digital Leashes) who is a successful entrepreneur and an advocate of a life style that features a 4 hour work week.

Is it possible? Probably. I've bumped into Mr Ferriss at plenty of parties and events since then, and he always looks relaxed and prosperous.

His book, "The 4-Hour Workweek"  launched this week and is already at #10 on Amazon.

Here is a brief description from Mr Ferriss:

Based largely on guest lectures I've given at Princeton since 2003 (high-tech entrepreneurship), it explains how I tested the extremes of outsourcing and automating life in a digital world over the last two years: virtualizing my businesses 100%, checking e-mail once every 10-14 days, even offshoring my online dating as a social experiment. It also includes case studies of people who have found similar "lifehacks" in more than 20 countries.

A 4-hour work week means local entrepreneurs could probably run 20 startups apiece. It could be a tremendous productivity boost to Silicon Valley's innovation (and disruption!)

. . .

Just Say No to our Digital Leashes

Tim's upcoming book has lots of great tips on this and many other subjects related to our ... I recently met Timothy Ferriss, a kindred intellect. T...

- The Blog of Author Tim Ferriss

... Tim Ferriss. Home. Book. About. Contact. The 4 Hour Workweek by Tim ... Silicon Valley Watcher. Trend Hunter. ZUG - Brilliant Corporate and Office...

It was an interesting turnout at the Social Media Club Tuesday evening. Social Media Club is run by my friends Chris Heuer and Kristie Wells.

Tuesday's theme was introduced by Raines Cohen and the subject was:"Saving the Earth through Social Media: Public Education about the Global Climate Crisis through Blogging and Web Publishing."

Not surprisingly, we barely scratched the surface, which is good because there are many ways to scratch this theme, especially since our tools are so new.

I didn't catch everybody's name but here are some of the web sites associated with the people at Tuesday's event, or recommended by them:

• Kari Daniels and her documentary "Voices of Dissent."
• Raines Cohen
• Greener.com - a green search site.
• Freecycle Changing the World One Gift at a Time
• Podaddies - Dynamic Video Ads
• Yahoo! Answers - How can the human race survive the next hundred years
• Justin.tv
• Tracked in America
• The Digital Tipping Point the culture of freedom in cyberspace
• SOMAcast - South of Market in San Francisco
• mp3death.com
• my-currency knowledge is currency
• Jyte Spread the Cred
• GUBA - Enjoy, upload, and share free videos.
• Webstrategy, Inc

My apologies if I missed anyone. There was lots of great conversation, Chris will post the podcast.

What struck me about the evening was something that I noticed when I first arrived here in 1984--how little debate there is between groups of people. We spend way too much time with people we agree with most of the time.

The culture here rewards agreement but not debate. Americans tend to view debate as a disagreement and therefore it should be avoided. But in the UK, debate and disagreement are considered to be part and parcel of an excellent conversation.

Here, there is a strong tendency to only speak with like-minded people.

I'd love to know how we can use all these wonderful collaborative, social tools to engage in a conversation about global warming that is not parochial. Surely this is an issue that transcends Republican or Democrat labels? How do we get involved in debate rather than grandstanding?

I was discussing innovation Wednesday evening with my old buddy Tom Abate from The SF Chronicle. These chats always provide lots of fodder for posts.

And in talking about innovation I began to wonder if it was synonymous with disruption. I think it is, because if innovation is not disruptive it won't get funding, at least not here in Silicon Valley.

Is there a unit of disruption? I'll propose one: a $1Billion unit of disruption reached over 5 years (BUD).

1 BUD = A business process that has the potential to generate $1bn in annual sales within five years.

That's about the minimum upside that a Silicon Valley startup needs to show in order to get funding. More is better, a five BUD would be stellar.

And 1 BUD = 1 Innovation Unit. Because Innovation has to be disruptive, imho.

Tom Abate: MiniMediaGuy

FAST Search and Transfer has suddenly popped into my sphere of attention and I mean really popped. I got to spend some time at FAST's user conference at the end of last week, and it was an educational experience that got me interested in search again.

This Norwegian based enterprise software search company has made the subject of search compelling again. For too long GOOG has made it appear as if it had already won the search wars--anything better would be an incremental improvement.

Yet enterprise search--which is where FAST has staked its expertise--is a much more interesting subject than I imagined, and much more interesting than consumer search. Enterprise search is much more difficult problem, and one of the most challenging problems in IT.

Consumer search can be vague and still be successful. It can bring up a list of nearly relevant sites or documents, and usually that is all that is needed. But in the enterprise, search is usually needed to find something very specific, a contract, a purchase order, a memo. 

And there are all sorts of conditions associated with access to data, some security based, others are regulatory. Search quickly becomes quite a complex process and one that can lead to other things.

Enterprises use a lot of structured data, but there is also a massive amount of unstructured data too. Search in the enterprise could potentially bring the two data world's together.

You might even be able to create enterprise applications by using modified search algorithms.

This type of scenario gets very interesting: enterprise applications by algorithm. This is already happening in business intelligence, I wonder how far, in theory, such an approach could be taken. Could you create CRM applications through search algorithms?

I'll be writing more about this subject, and FAST, over the next few days.

FAST Search and Transfer, the European based search giant, today announced software that allows online publishers to serve contextual ads to their readers.

The FAST AdMomentum software could increase ad revenues by more than 200 per cent for some publishers, compared with large advertising networks such as Google AdSense and Yahoo Publisher Network.

This is a software package installed in a publisher's data center. FAST says that it could also be used by a third party to offer a ready made online contextual advertising network that could be used to service many smaller online publishers such as blog networks. This means it could be used to compete with up and coming advertising networks such as FM Advertising, and AdBrite.

Publishers collect between 30 per cent to 70 per cent of the revenues that their advertising network partners receive--an amount that varies according to each deal. Google doesn't disclose the revenue split.

With AdMomentum, large publishers can establish their own advertising networks that support contextual ads, and also offer a wide variety of other types of advertising revenue such as impressions, pay per click, and also auctions.

Advertisers have a self-service interface and the software API is compatible with current advertisement tracking tools.

More than a dozen large publishers around the world have been beta testing the software.

Perry Solomon, VP of strategic market development at FAST, told SVW: "AdMomentum can be used to target ads to specific groups of people. One of our customers in Norway is using it to target ads to people on a street by street basis."

"This is a way for publishers to capture the share of the revenues that have been going to the advertising networks," he added. "The publishers already have advertisers, and they have the content, they don't need the advertising networks. We can provide them with a revenue engine."

Nearly one-half of Google's revenues in the past, have come from its AdSense network, which serves advertising on sites owned by online publishers. Large publishers such as New York Times, Knight-Ridder, and Time-Warner use AdSense.

Foremski's Take: This is potentially a game changing product and it brings back the advertiser relationship to the publisher--where it belongs.

For example, I've always wondered why the New York Times would run AdSense on its online front page, and the AdSense ads carry a text link at the bottom "advertise on this site." That says to everyone "we have no clue how to monetise this space and have handed over the customer relationship to a third party." That is suicide in today's world.

The advertising networks take a huge cut considering that they establish self-service advertising interfaces and run a bunch of servers and some software. Well, now the publishers can now do the same and cut out the middleman.

I can also see AdMomentum being used by local newspapers to essentially become the "AdSense" for their regions. They could sign up smaller online publishers within their local towns and neighborhoods and provide a much better targeted service to businesses and residents.

Additional Info:

FAST is headquartered in Norway and is publicly traded under the ticker symbol 'FAST' on the Oslo Stock Exchange. The FAST Group operates globally with presence in Europe, the United States, Asia, Australia, the Americas, and the Middle East.  For further information about FAST, please visit www.fastsearch.com.

A short series of posts on the fastest growing trend in Silicon Valley (and the rest of the world): examining the potential consequences of mergers and acquisitions by massive private equity funds.

- IBM and large Silicon Valley companies are obvious acquisition targets as private equity firms readily raise multi-billion dollar funds.

Click here to read . . .

. . .

- Will companies emerge leaner and meaner from private equity acquisitions? Or will they be weakened from higher debt loads? Their temporary owners know much about financial engineering but what about strategic positioning?

. . .

- Small investors are cut out of the lucrative deals pursued by private equity funds because only the very rich are allowed to invest. Yet many small investors will end up on the wrong end of those deals.

They face a likely scenario that their employer will be acquired by private equity funds and that their new owners will ask for salary and other restructuring concessions. It builds on stress between the super rich and those that aren't.

. . .

- Will we witness the failure of Sarbanes-Oxley (SOX) regulations and the populist movement for greater corporate transparency?

The expense, and the management distraction of SOX compliance is a prime reason for taking public companies private. Plus, private companies suffer less from public scrutiny, a distinct competitive advantage. 

. . .

- What is the future for NYSE, NASDAQ and other stock markets?

With the prospect of fewer public companies as private equity firms snap them up and take them private, the stock markets will have to do something. They will have to merge to maintain liquidity, which is exactly what they have been trying to do.

. . .

More on this topic later today and later this week. .. .

By Tom Foremski for SiliconValleyWatcher

I've noticed lately that I feel more "personal" about my cell phone PDA and its data, than I do about my "personal computer."

I'm quite comfortable to have my email and basic applications such as wordprocessing and publishing reside on my web host's server somewhere out there, or on someone else's server. But I want to keep my cell phone/PDA close to hand, which is not the way I used to feel about my PC and my cell phone--two of the most useful technologies ever created.

Both have added a tremendous amount of value to my life--yet my cell phone PDA (Treo) increasingly feels closer, and more important to me, than my computer (Thinkpad X31).

And I think that personal connection with my cell phone will increase as Google and others, pull together online suites of applications and services. With the recent launch of the beta of Google Calendar (CL2) Google and Yahoo are accumulating many of the key components to build very good online suites. And Microsoft also wants to move its Office suite users online--as soon as it figures out the ad-support business model.

For example, Google will soon be able to offer integrated email, calendar, web publishing, news sources, wordprocessor, maps, search. . . with other services in the pipeline. That's a compelling mix because it will be all pre-mashed, and drag-and-drop/share-or-not (DAD/SON).

And it all lives out in the cloud, and I can access it all from any computer--which makes any PC less of a "personal" computer. But my cell phone/PDA increasingly feels more personal--it is with me 24/7--and I can't simply use someone else's cell phone/PDA and access my phone's data.

As I move more and more of my digital activities out onto the web, my cell phone/PDA grows more personal--but not my computer.

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There is more on this subject on my ZDNet blog.

My post yesterday about my former boss at the Financial Times, Paul Abrahams, and his confessed difficulty in "getting" blogs caused a bit of stir. Mr Abrahams is a very senior figure in the PR world, he runs Waggener Edstrom's European headquarters and is one of Microsoft's strategic consultants.

Frank Shaw, a senior colleague of Paul Abrahams, and a noted blogger with his Glass House blog jumped into the fray very quickly, leaving comments on SVW, and other places, including his own blog. [This is exactly what you do in reaction to any potentially unfavorable publicity, (even if you are in the middle of moving house and family). It is a good case study.]

Ellee Seymour, a UK based journalist and blogger, also wrote about my post. In "More PR blogging shockwaves" she mentioned:

This follows hot on the heels of Colin Farrington’s shock declaration that he was not “that keen” on blogs. He is director general of the CIPR, the UK’s major PR support organisation and clearly does not have his finger on the pulse. His comments sent shockwaves among leading PR bloggers. Here is an extract:

“I’m not that keen on ‘blogs’.

“But then I wasn’t keen on DVDs, mobile phones, Ipods and Blackberries until they suddenly became an essential part of business and social life. I guess there’s a special marketing category for middle aged male professional ‘catchers-up’.

All very interesting stuff. I see this all as part of how things move forward, this is how progress is made. The pushbacks are all part of the process to achieve understanding.

I would sometimes tell people that blogging is the next big thing, and they would laugh. I say, don't confuse the content of many blogs with blogging. Blogging is the most visible part of a two-way media technology.

Internet 1.0 allowed us to publish to anything with a browser, now, with Internet 2.0, anything with a browser can publish back. It is a two-way Internet now, it is the Internet on steroids.

But as with all important concepts/ideas, the first stage is laughter and derision; the second stage is grudging acceptance; and the third is that it all becomes damn obvious.

We are all at different stages when it comes to blogging. But what I do know, is that if you have been blogging for any amount of time, and involved in the blogosphere, leaving comments, etc, then you and I have an understanding, and we are at the third stage.

And the beauty of all of this, is that there is no need to argue with Mr Abrahams, or others about the value of blogs and blogging, and the powerful nature of these media technologies. Because we can see a little bit into the future and we know what the future will bring. I know Mr Shaw at Waggener knows the future, and I know that Paul Abrahams will know it too.

- - -

Please also see Robert Scoble, the former MSFT champion blogger:

Speaking of good and bad PR, did you see Frank Shaw’s blog? He runs the Microsoft account for Waggener Edstrom and he had to clean up a mess by another PR guy in the UK who said “I don’t get blogs.” If a PR person said that to me I’d say “I don’t get why you’re still employed.”

It seems to me that if you don’t understand something you should work hard to understand it.

Source: From Google to Kaboodle « Scobleizer - Tech Geek Blogger

It is the 25 year anniversary of the PC and I have long wondered if the industry standard technologies that resulted from the PC revolution were accidental because the computer industry strongly favored proprietary technologies. It was good to discuss this subject when I recently met with IBM's top strategist, Irving Wladawsky-Berger.

We talked about the disruptive effect of the PC technology. It disrupted huge sectors in the computing industry, nearly all the minicomputer and mainframe companies were put out of business or disappeared through acquisitions. Even IBM barely survived--it had to reinvent itself as an IT services company.

There are many definitions of a disruptive technology, but to me, a disruptive technology is something which disrupts the business models of large numbers of companies. You can see the train wreck happening in front of you, but you cannot get out the way. Just like the minicomputer companies could see what was happening, but they couldn't change course, or downsize fast enough.

Mr Wladawsky-Berger said that it was IBM's research labs, the largest in the world, that helped save the company. "In labs, we were able to see a few years ahead and we could predict the disruptive effect of the PC but our management wasn't able to react fast enough."

He said that making the necessary changes at IBM, the cuts in staff and projects was very difficult to do. "People talk about having to 'eat your children' but those people clearly have no children of their own," he said.

I agree, as a father of two fantastic kids my instincts are to protect them as much as I can, and I can see how that kind of emotional involvement in business ventures, the people you work with, the communities created, makes it so tough to make the hard decisions.

I remember chatting with Ed Zander, the first interview since he left as president of Sun Microsystems. He said the worst thing about his job was laying off people at Sun, following the dotcom dotbust. Sun had never been in that position before, its culture was one of fast paced growth and loyalty to staff.

Mr Wladawsky-Berger said that this was why Lou Gerstner, an outsider, was brought in to run IBM. I read Mr Gerstner's account of those times in his excellent book, "Who says elephants can't dance?" He became the most unpopular person in the company, not to mention the loneliest job, but he had to be incredibly rigorous and disciplined in his ten-year-long transformation of IBM, in response to the incredible disruption wrought by PC technologies.

I asked about the PC standards created, the fact that IBM choosing off-the-shelf components and software for its IBM PC, created an open industry platform that spawned a massive industry. Up until then, proprietary computer systems were the way the computer industry made money, lots of it.

Mr Wladawsky-Berger said that IBM used off-the-shelf technologies to create the PC platform precisely because it did not take the threat from the PC seriously. "We dealt with big, complex computer systems, our management did not look to the PC as something that could seriously challenge our business."

But the researchers in IBM's labs did see the writing on the wall and eventually that message was recognized. IBM had a large enough business base that gave it time to make the changes needed for survival. Others didn't have the same solid customer base to enable such a transition.

- - -

Please see SVW: Thoughtleader: lunch with IBM's top strategist Irving Wladawsky-Berger

Irving blog: A collection of observations, news and resources on the changing nature of innovation and the future of information technology.

Business as a Complex, Continuously Evolving System
Reflections on blogging - one year later

SVW: The remaking of IBM: A chat with IBM chief strategist Irving Wladawsky-Berger

Book: