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February 9, 2006

The new and old Beatnicks celebrate Neal Cassady's birthday

It's a warm Wednesday evening in North Beach San Francisco and it is Neal Cassady's 80th birthday and the remnants of the Beat generation, Jack Kerouac's remaining drinking buddies, are inside a small storefront.

It is also the opening of the Beat Museum, and I'm there with my buddy Paul Hrisko to chat with Neal Cassady's son John, and visit with a slice of San Francisco's history from the late 1950s.

I've become very interested in the Beat generation, the mostly East Coast/New York intellectuals that came to San Francisco, and were chosen by the media to represent the rebellious youth of those times.

From Wikipedia: "The members of the beat generation were new bohemian libertines, who engaged in a spontaneous, sometimes messy, creativity. The beat writers produced a body of written work controversial both for its advocacy of non-conformity and for its non-conforming style...

. . . Echoes of the Beat Generation run throughout all the forms of alternative/counter culture that have existed since then (e.g. "hippies", "punks", etc). The Beat Generation can be seen as the first modern "subculture"."

The Beat Generation created a literature that was passionate, raw and emotional. This was a time when a poem, Allen Ginsberg's Howl could spark arrest, and trials for obscenity. The poet Czeslaw Milosz said of Ginsberg: "Your blasphemous howl still resounds in a neon desert where the human tribe wanders, sentenced to unreality".

I've become interested in Neal Cassady, who was somewhat of a mysterious character to some degree, because his writings are rare. Yet Neal Cassady became the muse, an influencing force on the writers, poets, and cultural icons of those days. People such as Jack Kerouac, Michael McClure, Allen Ginsberg, Lawrence Ferlinghetti, and later, Ken Kesey, Tom Wolfe, Hunter S. Thompson and many, many more.

What makes him even more interesting is that Neal Cassady was not of their world. He was a working class kid, or rather a skid row kid. When he was six he came under the care of his alcoholic father, a part-time barber and lived with him in Denver's skid row, during depression times that were brutal to families already living on the edge.

I'm reading a book written by Neal Cassady, called the "The First Third." I'm about a third of the way through it, so it was great to get a chance to go to his 80th birthday celebration and chat with his son John.

I asked him about the book. "That was something we found in the corner of his closet, very little of his writing survived. And I'll tell you what happened to his writings, I don't think this story has been published yet..."

Brilliant. This is why I love my job. John looks to be in his 50s, lots of energy, talks a mile a second just as his father, and I'm hearing new stories about a time in America that was in the midst of a cold war and a very rigid post-war Fifties society.

John tells me that most of his father's written work was lost when he parked his car for two weeks at a friends place, then took off for two or so weeks of carousing in the very North Beach neighborhood that we were standing. When he returned to pick up his car it was gone. And so was about 500 pages of his fathers literary work.

Wow, I wonder if they still exist in some garage, attic or gully. We should send out cultural archeologists to try and track down what happened, who stole the car, where it was found, comb the area for clues and the manuscripts. Even if the pages are weathered, magnetic resonance technology can render the ink visible. That would be a very interesting project.

John Cassady goes on to tell about how the term "Beatnicks" was hated by his father and the others. "The bongo playing dressed in black and wearing berets was a complete invention of the media. The closest they got to bongos was one time at a rent party just around the corner...[at a rent party you pay 50 cents for the wine so the hosts can pay the rent]. Jack (Kerouac) was handed some bongos and he noticed the skins needed tightening so he went to the kitchen and lit the gas burner to heat and tighten the skins. He was distracted and he burnt right through the skins."

So more stories followed, and then Wavy Gravy shows up and holds court, and tells his stories, and then it's hot and crowded and I wander outside and chat to many more people.

Then we meet many more characters from the neighborhood, and those times, in a bar just around the corner...but more on that at another time :-)

Later...why I think the Beat generation and the Blogging generation have common ground.

December 28, 2005

Ten things I learned in 2005. . .

. . .in no particular order of importance.
Tom Foremski, Silicon Valley Watcher

1-Blogging is the most honest form of self-promotion bar none because if you can't walk the talk you won't get the clicks.

2-Content will be king because all those links have to point to something of value--otherwise they are pointless.

3-Every company is part media company--it is both publisher and publication and tells stories all the time.

4-Every startup company should be able to say what it does in 20 seconds--not 20 minutes.

5-The old media is dying much faster than I expected.

6-Attention deficit disorder is affecting all age groups--especially those that spend more time online.

7-The more that I write the more authentic I become online and offline.

8-Blogging represents the next big thing: the two-way communications media technologies that characterize Internet 2.0.

9-I can communicate more with fewer words.

10-I learned a heck of a lot more than ten things...more to come in 2006 :-)

December 18, 2005

Announcing the first AJAX banner ad!

Tom Foremski, Silicon Valley Watcher

A little while ago I challenged my readers to come up with something different from advertising banners and marketing messages.

I have asked many people, "What else could you do in the space taken up by a banner ad, or a side-column skyscraper ad? Something that is novel and is useful to the readers rather than flashing and annoying marketing messages. Maybe something which demonstrates your thought-leadership or that of your clients."

Well, I've been collecting some excellent suggestions and we've only just begun.

My favorite so far, is from SVW sponsor Tibco, which is to produce an AJAX based "banner ad." It will showcase Tibco's AJAX prowess, but it could also usher in an entirely different type of media component.

As far as I know this will be the the world's first AJAX banner ad!

And it will be the first banner ad that is also an application!

But what should the content of such a new AJAX banner ad be?

We're working on two ideas, which should be ready by the new year. And I'd love to hear your thoughts on this, and just what do you think would make for great content or application, utilizing this concept.

Also, this is exactly the kind of thing I, and hopefully you, my readers want to be involved in: innovation. This comes from the application of technologies, processes, and insight. And it is a lot more exciting than doing things the old way, imho :-)

- - -
Please see: The new media needs new types of innovation--not more banner ads

December 6, 2005

The latest content versus index wars: European publishers slam the Oodles of Googles

By Tom Foremski, Silicon Valley Watcher

It's the latest round in the battle between content creators versus the index creators. Human versus machine-produced content.

"By HELENA SPONGENBERG, Associated Press Writer
BRUSSELS, Belgium - European publishers warned Tuesday that they cannot keep allowing Internet search engines such as Google Inc. to make money from their content.

"The new models of Google and others reverse the traditional permission-based copyright model of content trading that we have built up over the years," said Francisco Pinto Balsemao, the head of the European Publishers Council, in prepared remarks for a speech at a Brussels conference."

http://news.yahoo.com/s/ap/20051206/ap_on_hi_te/europe_internet

Google, Yahoo and the Oodles of this world will shrug and say, that's fine, we'll stop indexing you and I guess you don't want all the traffic we send you.

But maybe the traffic isn't that great? The traffic that news sites get from search engines isn't high quality traffic. It is the web surfer, happy-go-lucky, a click here, and one there, then gone.

News is not consumed through a search box. You cannot search for news because you wouldn't know what to search for. It's new. That's why there are products such as Google News, so you can see what is news.

But advertising on news pages is not very efficient. Conversions are the highest on search pages.

So, if Google and others publish headlines and extracts of news content on their pages, it takes away traffic because that is all the content most people need for news. Fewer visitors means it makes it more difficult for the news organizations to pay their journalists--and that must affect the quality of journalism.

Let's also mention the devastating effect Google et al are having on newspaper/ news sites and their classified ads and small business advertising.

This is a double whammy against the professional media sector, imho.

November 28, 2005

One of the new rules of the new society (when everyone is a publisher)

By Tom Foremski, Silicon Valley Watcher

Dos&Donts.jpg What is socially acceptable to blog about? That's one of the questions I have pondered when everyone can be a publisher, and when most in my social circle are publishers/bloggers.

And the answer is simple: if you are at a private event, among your friends, then everything is off-the-record you do not publish anything that could embarrass anybody, or republish anything that was said/done unless you have an agreement to do otherwise.

That has to become one of the new rules of our new society: Everything in a social setting is off the record unless agreed otherwise.

Because if a person wanted to broadcast to the world, then they themselves would publish it to the world. For example, if I say something to three people, I only wanted to say it to those three people, not the world.

The exception is a press/promotional/public event or announcement. Otherwise, in social situations, everything said is off the record unless otherwise agreed.

November 20, 2005

Updated with more comments! The most important rules for today's workforce bar none

By Tom Foremski, Silicon Valley Watcher

My three rules of today's workforce:

--Carry and use your own cell phone/number for business

The workforce now is mobile and temporary even if you have a salaried job. You need to be in control of the center of communications: you.

--Carry and use your own email address even at work

Otherwise your contacts and the relationships you build can be severed when you leave a job, and that is an investment that you have a right to maintain--as does your employer.

--Carry and use your own health insurance

Because otherwise, you will be stuck in a job that makes you sick just to keep the health insurance.

[I've followed these three rules for years...]

From Mitch Ratcliffe: Ratcliffe Blog

http://www.ratcliffeblog.com/archives/2005/11/new_rules_for_2.html

To Tom's rules, I'd add:
Incorporate and work on contract rather than as an employee.

This allows you to negotiate the same kind of stock compensation while allowing you to keep your business costs, even the ones you can't get compensated for at work, on your own taxes while increasing the flexibility you have as a working person.

Carry and use your own hardware, building tech expenses into your compensation.

This prevents lock-in to a job through access to technology. Sure, you may have to work with a less impressive laptop, but you're also forced to think more like the people who really buy computers, software, services and so forth.

Update #2 thanks to Neville Hobson at NevOn, via David Newberger-The Geek Guy Rants

Create a blog and establish your personal presence in the new marketplace
In this new age of global inter-connectivity, linking and influence, a blog is a prerequisite if you want to build your own credibility, be found easily and connect with others. Forget the static website. Forget the fancy brochure. Do a blog. It works - I speak from personal experience.

Join a business network like LinkedIn or OpenBC
However you actively use these or not, they can help establish your individual credibility and provide avenues of contact with others for mutual benefit.

Anybody have any more?

November 9, 2005

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

By Tom Foremski, Silicon Valley Watcher.com

It's always good to catch up with Irving Wladawsky-Berger, one of IBM's chief strategists and architect of its Linux and open standards policies.

I used to cover IBM when I was working at the Financial Times. It is a fascinating company because it has managed to adapt to the changes in the IT industry with an agility that masks its huge size. It is the world's largest computer company, it is also the largest IT services company, the second largest software company, and one of the largest chipmakers.

And it was the first to recognize and capitalize on the broad industry move to IT services, and outsourcing IT systems.

Now, it is signaling a new direction: becoming a vendor of highly automated business processes. Companies that need to add a business process within their industry will one day be able to buy one off the shelf, so to speak. IBM is collecting best practices within each industry, within each business process, and using applications, middleware, and its integration skills, to create ready-to-go business process modules that can be rapidly slotted into a company's operations.

This means faster time to market, lower IT costs, and having the most efficient business process without having to do it all yourself. It's a compelling vision and one that fits perfectly into the New Rules Enterprise idea that I've been describing here on SVW over the past year.

"Companies want to buy a business process, they don't want to buy applications," Irving explains.

This is also the reason why IBM is not in the applications business and has no plans to acquire a big apps company such as SAP, as some of the leading Silicon Valley analysts (Ray Lane) seem to think it should.

"We don't need to be in the apps business because we can get the apps from others. We pull together the right apps, and the other software and hardware components to create automated, highly optimized business process modules."

But to become a business process vendor requires the adoption of many industry standards within many different industries--a long, slow process. "Once we have the standards in place, such as agreement on document formats and many other categories, we will then have the building blocks that we can use to build the business process modules."

Irving said that the health care industry is a chief focus for IBM, and it is offering free access to its current and future patent portfolio to those companies in the health care sector that adopt industry standards. The goal is to create a common standards platform on which many others, including IBM, can innovate and create far more efficient healthcare systems.

"The Internet was based on common standards, it was more of a standards revolution rather than a technology revolution."

But to remake IBM into a business process vendor will require huge amounts of R&D to figure out how things are done today, how business processes can be best optimized, develop the tools to design and implement automated business processes, and many other related issues.

It will be a long haul but Irving says IBM is well equipped for the job. It is acquiring companies that have domain expertise, and it has its former PricewaterhouseCoopers group of 30K business consultants with multi-vertical industry expertise to draw upon, plus the world's largest R&D labs, spending more than $5bn a year on research work.

Please see: SVW--I told IBM they should buy SAP-- Kleiner's Ray Lane says...

Please see: SVW--These are the new dotcoms of the new rules economy...

November 1, 2005

The SEA change: Microsoft "Live" is Microsoft the follower and this time around that strategy won't work...here's why

By Tom Foremski for Silicon Valley Watcher.com

The announcement of Microsoft Live seems a couple of years late. Of course, Microsoft has done well over the years by following others that pioneered markets and then cleaning up because of its scale. But following a company like Google won't work for Microsoft this time, because by the time MSFT figures things out the market has moved on.

I spoke with one of MSFT's lead engineers recently and he was telling me about the fantastic search technology that they have in the labs. That it is better than GOOG's. But the conversation has moved on: it's about Search-Enabled Applications now, it really is a SEA change (and the apps are AJAX).

Rebranding some MSN stuff and adding layers of subscription based services is not going to get MSFT very far.

MSFT can live off the fat of its enterprise market but that won't last forever. And it cannot compete against GOOG's low operational costs--GOOG is much more New Rules Enterprise than MSFT. And it will be MSFT's legacy culture and thinking that will sink the company.

BTW, GOOG does not see itself as a MSFT competitor. The fact that it added a few programmers to help out OpenOffice is not significant.

The New Rules business mantra is: just focus on making sure you execute in your own business--the competition will take care of itself.

GOOG just needs to make sure it is always a step ahead of MSFT (and anybody else)--MSFT will take care of itself. Its legacy burdens will see to that.imho.

Cnet's story on Microsoft Live launch:
Gates: We're entering "live era" of software

The Google Zeitgeist and the walking dead...

The new Dotcoms will eat lunch this time around. Some of the rules of the new rules enterprise

October 31, 2005

"Life is too short to click on an unknown" - No blind links on Blogs says Web Design Guru Jakob Nielsen

By Tom Foremski, Silicon Valley Watcher.com

Blind Links.jpg Earlier this year I was pestering Jakob Nielsen--the uber web design guru-- to do a study of weblog usability. Jakob was reluctant at the time because he said there was no money to fund such a study. It takes about $200k to do a full study.

Nevertheless, Jakob did just recently publish: Weblog Usability: The Top Ten Design Mistakes:

This is my absolute favorite:

4. Links Don't Say Where They Go Many weblog authors seem to think it's cool to write link anchors like: "some people think" or "there's more here and here." Remember one of the basics of the Web: Life is too short to click on an unknown. Tell people where they're going and what they'll find at the other end of the link.
Generally, you should provide predictive information in either the anchor text itself or the immediately surrounding words.

I'm always very pleased when Silicon Valley Watcher is linked by my readers in their posts. I'm even happier when the link is described as coming from Silicon Valley Watcher :-)

October 26, 2005

A Momentary Publishing Incident in the Blogosphere

...must everything be embedded in the permalink concrete?

Bat Signal.jpg By Tom Foremski, Silicon Valley Watcher.com

Dan Gillmor and I were involved in what could be described as a momentary publishing incident just a little while ago. We had both published posts on a particular story starting to make the rounds.

I had requested a Dan Gillmor bat signal to be shot into the muddled brown smog of the San Jose sky, because I needed advice from Dan. Dan is like the Pope of this new media world, and I value his advice.

It is not usual for "standalone journalists" to do this; but we had a chat about it , because we both felt it required a second look. It was the way in which the information was leaked to us that looked a bit strange, and warranted a fourth and fifth look.

Because Dan and I were able to swap notes and step through the timeline of the leak, we both felt uncomfortable; and Dan said he was immediately pulling his post down for further review.

I was about to leave and run down to the Peninsula; but I started thinking about the post, and I felt uncomfortable publishing it too, even though it was in a questioning format. So I took it down. I want to chat more about this with Dan and other buddies in the SV hack pack.

This incident of momentary publishing is interesting, because it is unfolding right now as I type. It might provide a lesson for the future practitioners of this artful craft--at least it provided me with an interesting point to write about.

Standalone journalism does not work

And this is also why teamwork in this new journalism is very important. Standalone journalism does not work, you need a team. I have an editor, Mike Faden, old school and very good. He edits for clarity and errant late night great ideas :-)

And I have an illustrator, Chris Dichtel; and I also have a head geek, Nick Aster, when he is able to surface from under the the heavy load of his his green MBA studies. I could do with more people--especially a business manager and a lawyer on the business side, but also people on the editorial side.

Working with other journalists is the best way to keep the juices flowing, and also to swap notes and be able to double check each other. Working in a editorial team is the best way to maintain consistent editorial quality.

In my profession we've been producing news sheets/newspapers for more than 400 years; and in many cases, there is no need to reinvent the wheel in terms of best practices. If we can take what we've learned from the centuries of news journalism, and apply it to this incredible medium without legacy issues standing in the way--then that is a killer combination.

That's my goal in a nutshell: use what we have useful from the traditions of journalism, and then technology-enable-it with tools such as blogging, wikis and a whole slew of what I call two-way media technologies.

Dan's BayoSphere

October 19, 2005

Let's kill the sacred cow of "Community" and reveal the hidden commercialism

By Tom Foremski for Silicon Valley Watcher

Tuesday evening I was trying to find my way to a class room in South Hall, a building on the massive, meandering UC Berkeley campus where Quentin Hardy, a senior editor at Forbes is teaching a journalism class.

Quentin invited Dan Gillmor, John Shinal from Dow Jones' CBS MarketWatch, and myself a former mainstream journalist, to speak to his class about the new online media and how it affects our sense and understanding of self.

There were about 30 students and we chatted about a lot of things, and the word "community" kept cropping up, and up and up; not among the students, but from my fellow panelists.

It reminded me of my dislike for the term "community" because it is charged with an almost sacrosanct cultural meaning, to such an extent that it defies and discourages challenge. It is a revered word/term/concept and it is one that has become broadly appropriated by commercial interests, and deliberately so.

In the blogosphere and the larger mediasphere, community is used in ways that clouds meaning and cloaks commercial enterprise.

During a chat after class, Quentin noted that he heard the word community constantly at the recent Web 2.0 conference, where the $2800 per seat audience applauded "community" business models and services from the $30K per vendor pitches.

I think this sacred cow needs to be slain and we should not use highly charged words or terms unless we mean them to be used that way.

We should use more culture-neutral terms which don't engage society's sensitivities.

Here's my contribution to slaying the cow: I pointed out to the class that commercial interests love online communities, because they are an aggregated blob into which you can more cheaply throw marketing messages.

And let's not forget the "conversations" of the online communities, which are collected and diced and sliced and packaged and sorted and sold. By Technorati, Feedster, and a gazillion others--because it is all out in the open, in the commons.

Commercial interests are acceptable--after all, everyone has a landlord or banker that needs to eat--but cloaking commercial interests behind sacrosanct terms and ideas and concepts is beyond the bounds, imho.

October 5, 2005

Sun Microsystems will help Google build the world's largest computer with Sun's SPARC microprocessors....

. . .imho
By Tom Foremski for SiliconValleyWatcher
Nothing there! Says perplexed tech industry and media on the Sun and Google pact announced earlier this week.

That was the consensus, but they were looking in the wrong place, imho.

Eric Schmidt and Scott McNealy were very likely talking about computer architectures. These are hardware geeks not software. Sun knows how to build highly scalable massively parallel SPARC microprocessor based systems.

Free Google computers

Sun understands 64-bit microprocessor design and the total system design of large IT systems very, very well. Oh, and before I forget, Sun also has a lot of IP in the client/digital gadget side of things...

Within a year we'll see a Google consumer computer announcement, and it'll be free, and cheap to make and made from inexpensive chips because the machine processing power moved into the big computer in the ether(net).

Google and the price of oil

I know for a fact that Google has bought large Intel Itanium systems in the past. And I know it will need massive amounts of computing power over the next couple of years.

Building everything with PC boards is massively inefficient and incredibly electric power hungry. A big Sun system uses far less electric power per microprocessor cycle than that generated by racks of PC servers.

Jet Blue to JFK

I wouldn't be surprised if Mr Schmidt shows up at Sam Palmisano's office in Armonk next to order some IBM POWER systems. Like Sun, IBM has tremendous expertise in the microprocessor PLUS IT system design that Google needs.

And this doesn't mean Itanium systems are being replaced--by SPARC or POWER.

Google is not concerned with either/or, it is concerned about more!

September 27, 2005

Trawling for stories at the CTIA show...

Openwave's David Peterschmidt and how Inktomi saved Yahoo; OQO--caught between a PDA and a notebook is a hard place to be; Gail Redmond, SozoTek's image enhancer; Audio Bar targets the anti-book masses; Lost my Treo brick and found it (sigh); ipsh! text message marketing king.

By Tom Foremski for SiliconValleyWatcher
It is CTIA week in San Francisco, and this wireless conference has brought in a lot of mobile technology companies. Mobile is definitely the hottest space right now in tech, and also the most challenging.

You need powerful software that can perform wonders in a device with limited resources. If you are a device maker, you have to have highly integrated chips that sip battery power yet can handle, Swiss-army-knife style, a wide range of communications standards, display and audio demands.

And you have to have great design too. Because for consumers, a cell phone says a lot about its owner, so the way it looks, sounds and the personal information it contains are important.

This point was made well by David Peterschmidt, chief executive of Openwave, when I met with him Monday evening.

Openwave is an interesting company in itself, but Mr Peterschmidt interests me more because he is one of Silicon Valley's legends. He has built many large businesses groups here and he knows more about the inner workings of Silicon Valley, (and where the bodies are buried ;-) than almost anyone else.

To most people, he is probably best known as the former CEO of Inktomi, which he grew from 20 people into the hottest search engine company of its time. Inktomi's search engine technology continues on, but under a different brand: Yahoo.

Inktomi was sold to Yahoo in 2003 and Mr Peterschmidt firmly believes that "if it wasn't for its acquisition of Inktomi's search technology, Yahoo would not have been able to compete against Google so effectively."

Openwave is best known for browser software that enables mobile phone companies to deliver a large number of applications to customers.

This is a key, strategic position in the market. And Openwave is determined to strengthen it further; this week it announced the acquisition of Musiwave for more than $121m, which adds a variety of digital music services capabilities to its portfolio.

OQO-the "pocketable" PC

I ran into Virginia Jamieson from OQO and I got to see a rather nifty mobile device the company just introduced, the OQO 01+.

It is an "enhanced ultra personal computer which comes with 512MB RAM, 30GB hard drive, USB 2.0, internal speaker, improved pen-based digitizer, car/auto charger." Here is more info...

It's described as a PDA with all the functionality of a Windows XP notebook. Which means you don't need to learn a new interface. The OQO is perfectly placed between a PDA and a laptop, yet I don't think that's a good place to be because of the form factor.

It is too large to be a PDA and too small to be a decent notebook. It has all the price ($1900) of a notebook but without the functionality. Yes, the guts are the same, but the keyboard is a thumb keyboard. I can thumb on my Treo 600; but I can't do it for long.

I'd rather have a 12-inch Centrino notebook sans optical drive. And the OQO doesn't even have a camera(!) I'm clearly not the target market...

Here are some enthusiasts though, at Engadget...

SozoTek: Fixing camera phone images

Imaging is a large theme at CTIA; and phones are coming out with ever-larger mega-pixel cameras built in. The image quality, however, is not that great. But SozoTek has an interesting solution.

I spoke with Gail Redmond, the president and CEO of this Texas based company, who said the solution to better camera phone images lies within the carrier network.

"Our technology dramatically improves the image when you send it from your phone to someone else," she said. The technology sits on the carrier's servers and intercepts images on-the-fly, using sophisticated image enhancement technology developed at Kodak and IBM.

There is no denying the market size and hockey-stick growth projections around mobile phone imaging, and such services might help wireless carriers differentiate their services. But SozoTek is the lone provider of such technologies which means it has to educate the market, and the user.

That's a tough position but Ms Redmond seems tough enough from prior leading positions at Sprint and Telespree, to name a few.

Soccer and Manja at Germany's Audio Bar

German soccer fans are a primary target for Audio Bar, an interesting German startup. Erbil Kurt, who at one time was Deutsche Telecom's youngest-ever board member, has put together an interesting portfolio of images, ring tones and video clips--all designed specifically for small screen mobile phones.

And what I saw was very good. Mr Kurt has personally created most of the ring tones, images and audio himself. And he even traveled to Istanbul so that he could come back with a rare interview with one of Germany's top soccer personalities.

But it is not just soccer fans that interest Mr Kurt. "Did you know that 40m Germans have never bought a book?" he asked me. That's what surveys have revealed; and that is a business opportunity.

That's because it is a market that consumes its stories and information through images. And Japanese manja is the inspiration for several "story book" projects that Audio Bar hopes to sell a chapter at a time.

The demo I saw was very good, and reminded me of the Aha video "Take on me." It worked well in that small screen form factor.

Lost my Treo...

It's ironic that I seem to have misplaced (lost) my cell phone at the cell phone show, or rather during the evening festivities.

But, I can't say I'm sorry to lose my Treo 600--a brick of a phone and one of the least reliable devices I have ever owned. I got one of the first ones, but within a year, I was on my fifth Treo 600.

And it was not because I'm harsh on phones, it was because they would stop working. When I look at annual cell phone shipment unit numbers, I now wonder how many of those units are replacements for shoddy units...

And now I found it! Literally, as I finished the above sentence, my land line rang and my phone was found on the bar at 111 Minna.

ipsh!--marketing through short text messaging

And speaking of 111 Minna, I must mention my hosts ipsh! who threw a fun party at the art gallery.

The company is using SMS--short text messages in innovative ways in marketing and promoting events. And Ellisa Feinstein introduced me to some interesting people there that I'd like to follow up with at a later, and quieter time...

September 23, 2005

Silicon Valley Watcher wins excellence in media award: Best Bay Area Blog

Please excuse a few moments of horn blowing and a little crowing, but Silicon Valley Watcher has won the Best Bay Area Blog Award from the prestigious San Francisco Bay Area Publicity Club!

I met some of the members of the club earlier this year when I spoke at one of the organization's lunchtime events, organized by Ellisa Feinstein and colleagues. Don Clarke from the WSJ was there too, as well as editors from Wired and Cnet. And the Q&A afterwards was one of the best.

Thank you all and my apologies for not being able to accept the "Pubby" in person. I had already promised to be in New York at NYU on a panel with Joe Trippi at the Impact '05 conference. Otherwise I would have loved to have been there.

Here is some info on the awards:

The San Francisco Bay Area Publicity Club, a non-profit network of public relations professionals, announced today the nominees for the 9th Annual Pubby Awards. The "Pubby" award signifies excellence in media in 2005.

Nominees for the Pubby Awards are elected by the Club's Board of Directors and winners are chosen by ballot by current members of the Publicity Club. www.sfpublicityclub.org or by calling (415) 437-4440.

September 20, 2005

More crumbling in the crumbling print business model as New York Times and Philly papers announce hundreds of layoffs...

. . . the sharp end of the disruption process

By Tom Foremski for SiliconValleyWatcher

My recent post about the center of the media industry moving to Silicon Valley and nobody told New York drew some attention, especially from the excellent I Want Media web site run by New York based journalist Patrick Phillips.

In the post (fourth item) I said Google, Yahoo, Ebay are technology enabled media companies and they are hiring like crazy while New York's venerable media industry is not.

It was good timing given that the New York Times just announced 500 job cuts, and Knight Ridder said 100 newsroom jobs are going at the Philadelphia Inquirer and Philadelphia Daily News. Just the latest crumblings of a crumbling print business model.

It's not much fun being a journalist inside a crumbling business model. You are doing two or three jobs, everyone is in a bad mood, there are no pay raises, and on top of everything else, you are often expected to "blog" for your employer.

I tell my journalist friends that they should come and join me. It is far better to be on the side of the disrupting forces than to be on the sharp receiving end of the disruption.

It's true that I don't yet have much of a business model, but, I know that things can only get better on my side of the equation. Not much chance of things getting better on the print side of the business...

I'm not against print; it is just another distribution channel, as is is online. The problem is that if you have a business built on the old economics of the print advertising model, it can't be supported by today's advertising (print and online) ad revenues.

But if you start off from the lowest cost position (a blogger(s) in a bedroom :-) you will eventually inherit the earth. Because nobody can get in under your cost model (except for a blogger in a bedroom living free at their parent's house and using mom's computer!)

What worries me, however, is that online media business models are still being created and they cannot yet distinguish between good content and bad content. We need that virtuous cycle to be established so that the best content creators are rewarded and can re-invest in producing yet more great content.

Right now, the old media business models are in trouble and the new media business models are not yet in place.

What happens if we continue to lose the former and we are unable to create the latter?

September 12, 2005

Infineon's Media/Analyst conference. . .and hot laps with Mario

By Tom Foremski for SiliconValleyWatcher

During my recent lengthy apartment/office move, I took a break and went to the Infineon Technologies media/analyst conference in Sonoma. Infineon, a founding sponsor of this site, attracts a decent-sized crowd to this annual event.

It is held at Infineon Raceway, one of the premier automotive racetracks in the US and just 40 minutes north of San Francisco.

The media and analysts are invited to listen to a few hours of presentations, updates from Bob LeFort, president of Infineon USA, and panel discussions on current issues from Infineon and third-party experts.

It's a quick and effective way to catch up with what the largest European chipmaker is doing, and the issues and trends that affect its business strategies.

Hot Laps

And then after lunch, Infineon invites everyone to play on the racetrack in a variety of motor sports events, including the opportunity to do "hot laps" with Mario Andretti.

This means sitting next to the seven times world champion race car driver as he barrels at incredible speeds into impossible turns in a racing Porsche GT3 Cup car. Seeing this racing legend work his craft at such close range is very very impressive.

[Last year, Nathan Brookwood, Insight 64 microprocessor analyst, had an interesting experience with Mr Andretti. As they came into a turn, one of the wheels fell off, and rolled right ahead of them(!) Mr Andretti maintained complete control of the car and within a few minutes he was back on the track with all four wheels, and plenty of eager passengers waiting in line.]

Automotive chips--Silicon drivers

My regular contacts at Infineon USA are Christoph Liedke, and his boss Gerhard Zimmermann of the comms team, aided by Mansi Agarwal. I met Christoph and Gerhard several years before Infineon became a sponsor of this site, when I was covering the chip sector for the Financial Times.

To Wall Street and many others, Infineon is viewed somewhat plainly, as Europe's largest chipmaker, spun out of Siemens, the German industrial and engineering conglomerate.

It is one of the world's largest memory chip manufacturers, but this is not always a welcome accolade. That's because memory chip markets have notoriously low margins and follow a brutal business cycle marked by long bust periods and very brief boom periods.

And that is why Infineon is pushing into higher margin chip markets such as automotive chips, a market in which it dominates in Europe but lags in the US. Which is why it bought the the ten year naming rights to Infineon Raceway, formerly known as Sears Point Raceway.

Now in its third year, it has been a very good move for Infineon. The popularity of motor sports in the US has grown tremendously over the past few years. And the venue has hosted NASCAR and many other national and international racing events, helping to associate the Infineon brand with high performance automotive technologies.

Infineon's controversial CEO

Infineon came alive for me when I first interviewed its CEO, Dr Ulrich Schumacher. He was one of Germany's most prominent business leaders and on a meteoric career path -- a business wunderkind.

He was the youngest ever director at Siemens, one of Germany's largest and most respected companies; and when Siemens decided to spin-off Infineon Technologies in April 1999, Dr Schumacher presided over a very successful IPO at the height of Germany's dotcom mania.

Infineon, within Germany, represented the crown jewel of the country's tech boom and it became one of the most widely held tech stocks in Germany.

Dr Schumacher was very much in the public eye and he used that position to push for reforms in German laws that burdened German companies in global markets. And he gladly tackled the hard cultural battles within a society that doesn't tolerate mavericks very well.

What began to fascinate me about Infineon was that it was a new company emerging from a large and well established parent. And it was trying very hard to shed the old business culture and old ways of thinking prominent in the German business community.

Escaping Munich

Dr Schumacher recognized that Infineon must become a global chipmaker, not a German or European chipmaker. He would sometimes hold board meetings in different locations around the world to encourage a global perspective within the company.

I remember asking him what brought him to San Francisco one particular time. He said he had just had a company board meeting in Napa. "I have to have an excuse to get these guys out of Munich some of the time."

He also wanted to separate as much as possible from Siemens, and worked hard to reduce Siemens' stake in the company and its majority control, which he felt sometimes restrained Infineon's abilities to manage its business within very tough chip markets.

Alliances not acquisitions

Dr Schumacher pursued a very savvy business strategy, establishing numerous manufacturing partnerships with other leading chipmakers, such as IBM. This spread the capital investment risk, and it enabled Infineon to co-develop leading manufacturing processes and technologies.

And Infineon was very conservative in its acquisitions, avoiding large deals but happy to help bid up the price of acquisitions targeted by rivals.

The low margins in the memory chip business also forced Infineon to become highly disciplined and cost-efficient in its manufacturing, which it then applied to its other chip products, improving the profit margins on those lines.

Outspoken payback

Mr Schumacher trod on many toes during his tenure at Infineon. And his outspoken opinions and attempts to limit Infineon's exposure to European labor earned him the enmity of German trade unions and many others. He resigned from Infineon in March 2004 during a board meeting.

Dr Schumacher's strategy and culture still continues at Infineon. And the company maintains a strong presence in Silicon Valley with several thousand workers in San Jose and other locations in the US.

It's not just the talent pool in Silicon Valley that Infineon benefits from, but also from the the region's culture of entrepreneurship, risk taking, and innovation. I've seen such associations with Silicon Valley transform companies and they are very important, more important than we sometimes realize.

Where were you?

Infineon's sponsorship of SiliconValleyWatcher shows it is a stalwart supporter of innovative approaches, and keen to explore the opportunities emerging from the use of innovative/disruptive media technologies such as blogging. And it has been willing to experiment with the medium directly, establishing InfineonWatch.com.

But it has not been easy sailing for Christoph Liedke and Gerhard Zimmermann, who have had to step out on a limb with their support of SiliconValleyWatcher. The chip industry has slipped into yet another downturn, and they have smaller budgets and have had to face questions about their support for "blogging" type media publishers.

Obviously, I think Infineon's money is well spent and the association with SiliconValleyWatcher is helping both parties build our brands in mutually positive ways.

Plus, what excites me the most, is that we all get to be part of an amazing phenomenon that is changing the global media sector; and it will lead to some very profound and historic changes in our global society, some of which we cannot yet predict. And we will be able to say to our grandchildren: "I was there." imho.

- - - - - - - -

[Infineon is listed on the DAX 30 index of the Frankfurt Stock Exchange and on the New York Stock Exchange (ticker symbol: IFX).]

July 15, 2005

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

By Tom Foremski for SiliconValleyWatcher

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Here is our interview with Joe from earlier this year.

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

http://www.jotspot.com/

July 14, 2005

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

By Tom Foremski for SiliconValleyWatcher

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

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

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

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

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

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

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

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

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

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

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

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

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

July 12, 2005

Top blog-happy PR firms

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

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

June 28, 2005

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

. . . Route 66 at hyper speed

By Tom Foremski for SiliconValleyWatcher

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

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

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

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

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

Encouraging the unpredictable

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

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

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

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

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

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

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

M&A deals in hot photo sector

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

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

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

Will big always win?

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

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

. . .
From Cnet:
Shutterfly buys out Memory Matrix

HP to acquire Snapfish photo service

Yahoo buys photo-sharing site Flickr

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

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

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

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

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

. . . Route 66 at hyper speed

By Tom Foremski for SiliconValleyWatcher

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

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

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

Encouraging the unpredictable

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

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

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

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

M&A deals in hot photo sector

Will big always win?

. . .
From Cnet:
Shutterfly buys out Memory Matrix

HP to acquire Snapfish photo service

Yahoo buys photo-sharing site Flickr

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

June 21, 2005

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

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

By Tom Foremski for SiliconValleyWatcher

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

From Next Fifteen:

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

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

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

Consolidation in PR mirrors the valley

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

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

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

New communications threats on the horizon?

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

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

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

Next Fifteen gains aggressive duo

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

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

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

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

Next Fifteen also gets Marc Benioff

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

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

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

A Marine boot camp

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

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

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

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

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

From the Next Fifteen press release:

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

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

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

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

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

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

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

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

By Richard Koman for SiliconValleyWatcher

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

On his blog, Cohen writes:

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

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

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

June 17, 2005

WSJ: Google Readying PayPal Competitor

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

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

June 14, 2005

Sirius radio to be available on Sprint mobile phones this year

By Damien Stolarz for SiliconValleyWatcher

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

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

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

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

June 13, 2005

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

By Luke Maroney and Dawn Montefusco for SiliconValleyWatcher

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

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

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

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

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

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

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

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

June 10, 2005

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

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

By Tom Foremski for SiliconValleyWatcher

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

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

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

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

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

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

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

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

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

PC emerged from revolt against institutions

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

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

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

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

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

What the Dormouse didn't say

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

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

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

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

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

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

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

Part one is here:

June 7, 2005

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

By Tom Foremski for SiliconValleyWatcher

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

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

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

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

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

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

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

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

Cisco online mag larger than most independent mags

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

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

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

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

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

EXTRAS:

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

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

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

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

By Damien Stolarz for SiliconValleyWatcher

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

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

Technically Unsurprising

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

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

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

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

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

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

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

Fast Roadmap

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

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

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

Attack of the Clones

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

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

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

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

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

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

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

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

June 6, 2005 | Permalink | Tag: Apple [AAPL]
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June 4, 2005

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

By Tom Foremski for SiliconValleyWatcher

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

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

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

Still, there were some very good nuggets:

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

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

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

The Google recruitment pitch

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

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

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

Google the innovation machine?

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

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

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

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

Mobile phone becoming more important than PC

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

If a shipment of lava lamps arrives at your company

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

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

I just saved you an hour.

May 31, 2005

Tales from Syndicate conference - Tuesday: Sneaking out to catch the Star Wars geeks .......and dinner with the in-crowd

...the final prequel to the climactic pre-finale of the series recounting a week's epic adventures at the Syndicate conference in New York...

By Tom Foremski for SiliconValleyWatcher

Time Out journalists and Star Wars geeks

It's Tuesday in New York city, the first day of the Syndicate conference, and it's almost lunch time. I run into my buddy Dave Galbraith, a co-author of RSS 1.0, co-founder of Moreover and now, the founder of the flickriscious Wists.com (is that enough plugs Dave?). With Dave is Buck Smith, channel dev manager from Moreover.

Buck suggests we skip out and visit the geeks lining up for the opening of the latest Star Wars prequel. We walk about six blocks to where the movie is scheduled but there are no geeks, just a few tents with British flags. There is a guy in a stormtrooper uniform on the corner, but it turns out to be a bunch of journalists from Time Out magazine raising money for charity and charging $5 per Polaroid pose with the stormtrooper.

We're reluctant to pay the $5 (and Dave is Scottish) but they sweeten the deal with “we'll throw in a couple of girls into the shoot.” In that case, fine, I say, and pay $20 for photos all around. But do we need to have the stormtrooper in the picture, I ask?

It's all for a good cause, I'm told. Unfortunately, I can't remember which one.

I suggest they also offer boys, just to be fair.

The 8,000 pound gorilla wants to make an announcement - NOW

I catch the RSS and advertising panel at Syndicate. Here is the writeup:

It got a little bit bizarre when one of the panelists, Shuman Ghosemajumder, business product manager at Google, announced AdSense for Feeds right in the middle of the panel discussion. He jumped up, ran over to the podium, forcing the moderator to scoot quickly out of the way, gave a ten-minute PowerPoint presentation, then sat down. Panel discussion resumed.

Afterwards, I asked him how it would stop people from grabbing other people's content and creating RSS feeds from it. He said Google would carefully monitor the feeds and the organizations that sign up.

Sounds a bit people-heavy to me - not the Google way, which is if it needs people, we are not interested. That's because it's not scalable if it is not machine-based. You can't scale to keep pace with the internet if you have to rely on adding people to handle these kinds of tasks, IMHO.

Syndicate organizers say nice things about SVW

I meet some of the Syndicate organizers and they are very happy at the turnout and also at the traffic SiliconValleyWatcher sent to their online site. They said most of it was from our readers, which is great news.

And it was the lunch panel organized by one of our sponsors, Nooked, SiliconValleyWatcher, and Jeremy Pepper, featuring A-list blogger Robert Scoble, Forrester's superstar analyst Charlene Li, InfoWorld's Jon Udell, Dave Galbraith, and EVP & Director of Worldwide Operations for Edelman David Dunne, that brought a lot of attention to Syndicate and brought out some of the media big guns.

The Syndicate organizers said they are planning another conference in San Francisco in November and I said we would be happy to help out again, in organizing panels, additional tracks, etc. After all, this is our backyard...

Carnivorous Bloggerati

Syndicate and Matt 030.jpg The place to be Tuesday night was eating steak at Gallagher's Steak House with all the top digerati attending Syndicate, A-list bloggers, various fathers of internet standards, and a few flacks and hacks. It was organized by one of our sponsors, Nooked, and Nooked's flack, Jeremy Pepper.

I arrived a little late. I had stopped first to visit with my old friend Lauren Stein, who lives just a couple of blocks away in Hell's Kitchen. Lauren works as assistant vice president at Financial Dynamics but used to work in San Francisco at Outcast and Ruder Finn.

By the time we got to Gallagher's the Nooked dinner party had taken over at least three very long tables and were hard at work trying to drink their way through Nooked's marketing budget for the year. I remember chatting with Heidi Cohen for a long time, she had some interesting ideas about online marketing strategies.

It was good to see the same old crowd at these things: Marc Cantor holding court on his table, Fergus Burns tucking into his Guinness, Renee Blodgett hoping around in social gadfly mode, XML co-author Tim Bray looking dapper in his hat, and the rest of the gang...

Blog: Is it an online lie detector?

Truth Dial.jpg At the dinner, I got into a discussion with Robert Scoble about whether it is possible for a journalist to write unbiased news stories even if that journalist is biased. I said it is possible.

He said he did not think it was possible and that if the news reporter revealed their bias, he would be able to better judge whether that news story was biased.

I said that was too much work, and that the danger was in introducing his (Scoble's) bias into the mix. Because he would adjust for revealed bias, which might not be there. (It is not difficult to write a fair and balanced story yet hold a personal opinion otherwise.)

Robert Scoble said that each time he doesn't tell the truth online, his readers find out. I said that maybe we could construct a type of “Turing test” to see if a truthful blog voice can be picked out from fraudulent scammers.

Would readers be able to spot who was lying and who was truthful, just by reading a blog post? I think it is possible and I would love to try this out. How about it Robert? Let's set up a few tests and see...

Find out what happened on Wednesday:Moderating two celebrity panels at Syndicate

Find out what happened Thursday. A bleary-eyed blogger on Wall Street

Find out what happened Friday. Blogger swagger in the heart of New York city

May 31, 2005 | Permalink | Tag: Tom Watch
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May 24, 2005

Video download is patent infringement, and there's a price to pay

By Damien Stolarz for SiliconValleyWatcher
Patent Panner.gif I used to keep a patent watch blog that tracked peer-to-peer (P2P) technology patents. Basically, when you start a company, you're expected to patent your technology, either offensively or defensively, whether you think it warrants it or not. So every company that enters a field starts patenting everything it thinks up, and, to take a cynical view, as long as the diagrams in your patent are different than other patents, you'll have a unique invention - enough to safely do what you're already doing without risk of being sued for patent infringement.

But what if your patent covers your entire industry? And what if you never build your technology but simply sell the patent to a licensing company? That's the case with a company called Acacia (just Google "acacia patent"), which has been enforcing its Digital Media Transmission (DMT) patent since 2002. The patent basically covers any kind of video transmission: download, progressive download, over any type of network, as long as there is file storage involved. Legally, Acacia has a patent on pretty much any type of digital download.

Instead of going after the technology creators, however, Acacia has decided to go after people using the technology profitably. This makes perfect business sense.

With big companies, patents are a sort of barter currency, cross-licensed so that each company can continue to do what it was already doing:

Company 1: "We've got the patent on smaller hard disk drive arms".

Company 2: "Fine, we've got the patent on smaller hard disk drive heads. Lets trade."

It all makes sense when the patents are owned by the same companies that create the technology. But it gets weirder when patent-holding companies enter the picture.

The thing about patents is that by merely writing the patent, you've "invented" the technology. You don't have to have it implemented when you draft the patent, although an expert in your industry must be able to build the invention from your patent.

With a patent as seemingly strong as Acacia's, you'd think the company would be rich - and recently, it has been collecting about $2M per fiscal quarter from the patent. According to Dan Rayburn of StreamingMedia.com, Acacia has sent out more than 20,000 letters to companies it believes are infringing.

Acacia's website does not list a licensing price. So Acacia can decide how much it should demand as a "streaming tax," depending on peoples' ability to pay.

So how much does it cost? From digital cable companies, Acacia is requesting $2-$2.50 for every subscriber. On the Internet side, it used to request a $5000 fee from educational institutions, but has lowered that to $500 in some cases.

Many companies go ahead and pay these relatively nominal flat fees, which include an "amnesty" for back royalties, instead of litigating. This is because it can cost $500 just to have your lawyer sign a letter and fax it on your behalf.

About 200 licensees have paid up so far, including big names like Bloomberg, Disney, Playboy and Virgin.

Acacia clearly sees great potential in this business model. Recently, the company bought another patent that might seem familiar. If you've ever used a WiFi hotspot, you'll notice that it redirects you first to a PAY NOW web page. Once you've paid, you can start using the web as normal. Well, that's patented. Kinda like one-click purchasing on Amazon, in the sense that many techies will cry "foul!" and others will go, "well, yah, if I had invented that I'd think it was clever and I'd want to make some money off it..."

Already, Acacia has taken several companies to court, notably some adult-industry (streaming or downloadable porn) suppliers as well as regional (smaller) cable companies.

One of the deepest ironies is that Acacia's quarterly reports, in digital media form, are hosted by a non-licensee. Also, StreamingMedia.com, which has created a clearinghouse of information about this patent at http://streamingmedia.com/patent/) has conferences archived on its site as downloadable video. StreamingMedia is not a licensee of the patent - and has never received a letter.

Patents are often cited as a way for the "little guy" to protect him/herself from the big corporation that might steal his ideas. It now appears that corporations such as Acacia are stocking up on patents that they didn't invent and certainly never implemented, so they can charge little guys - who use such inventions.

This patent prospecting is such a good business it makes California real estate look like Beanie Baby futures. I just started my own patent holding corporation and we've just purchased patents for the video previews feature on digital cameras, and we also just bought a patent for the key fob. Instead of going after camera manufacturers and car manufacturers, we've decided to take the infringement lawsuits directly to the users.

Please submit your address information in the feedback area below so we can send you a bill.

[Sponsor Watch] Infineon, IBM, Macronix Researching Phase-Change Memory

Crystal Memory.gif
On "Star Trek: Deep Space Nine," Odo was a shape-shifter, able to rearrange his molecules to inhabit different forms. Now the idea is being applied to computer memory, as Infineon Technologies AG (a SiliconValleyWatcher founding sponsor) has joined up with IBM and Macronix to research phase-change memory, a new technology that stores data in a special material that can change structure, the AP reported Monday.

Research will be conducted at IBM's Watson Research Center in New York and Almaden Research Lab in San Jose. In phase-change, the material changes from an amorphous to a crystalline structure; the technology promises high speed, high density storage. Data could be saved and available even when the computer is turned off.

Link: AP story

May 24, 2005 | Permalink | Tag: Tech Watch
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May 19, 2005

Perspective: TimesSelect is all about the print model, not digital media

By Richard Koman for SiliconValleyWatcher

NYTimes toll.jpg I've had a few days to chew over the Times' announcement that they'll be charging $50 a year for TimesSelect, which offers access to the archive back to 1980 as well as to op-ed and columnists. Here's my off the wall assessment: This is not a move to make the online nytimes.com profitable so much as it is an effort to shore up circulation figures for the print paper.

After all, as Doc Searls pointed out in his closing keynote at Syndicate, print carries huge, gargantuan infrastructure costs - the Times owns and leases more than 5 million square feet of space.

By selling access to archives at roughly $3 a pop, the Times Online generated about $1 million in revenue. Pretty small potatoes for a company that creates $3 billion in revenues and $500 million in operating profits. So clearly they need to better and one-price-beats-all is an appealing approach.

But how much value can they really extract out of old news (today's news is tomorrow's birdcage liner)? Consider that 2004 circ revenues were over $600 million and that circulation is down at the Times 1.2% from 2003. (Circ earned $87 million from their regional papers, down 1% from '03.) [Annual Report (PDF)]

To see how much value the Times ascribes to digital archives compared to circulation, consider this: TimesSelect is a freebie for folks who subscribe to the printed paper. The bottom line is that by charging for the online Times, the value of the printed paper is enhanced. Why join TimesSelect for $50 when you can get the daily paper AND online access.

Locking up archives and columns behind a paygate hurts the online advertising business, hurts the Times' visibility online (google doesn't archive pay-only pages), and will generate relatively modest revenue in return; even if they increase revenue 1000%, that's $10 million. By contrast, if the Times can increase circulation 10% (at least in part by the added benefit of free access to the fee-based website), that's $60 million in revenue (not profits.)

A newspaper's website is an extension of the paper, not a freestanding business. There are numerous things the website can do to support the printed paper but ultimately that's what it does. That's what the Times is asking of its site whether its really knows that or not (I suspect they do). Ultimately, this is problematic because the costs of running a national printed paper are so high.

Unlike Doc, I wouldn't suggest the Times charge for today's news and give the archive away. I would actually suggest that today's paper be available online not today but tomorrow and that the archive be given away for free. Everybody loves to talk about the Times, from the anti-MSM bloggers to Berkeleyites. The Times could encourage this, put itself out there as the source material for people to annotate, explore, deconstruct, etc. They could actually use technology to find ways to organize, display, link to the many ways bloggers interact with the content. They could sell advertising on all of this. They can insert references to Times content in About.com pieces. They could offer a Google Adwords-like feature to website operators (include links to Times articles based on your content). They could develop premium, for-pay content.

What they are doing is something different, something ever so Old Media: they are beefing up their circulation numbers.

May 17, 2005

NYT exec Nisenholtz discusses the Gray Lady's premium content move, About acquisition and growth in RSS

By Richard Koman for SiliconValleyWatcher

Monday, the New York Times announced [press release] that columnists and Op-Ed essays would no longer be available for free online but would be part of a $50 offering called TimesSelect. The service includes full access to the Times archive back to 1980.

In his keynote speech at Syndicate conference, Martin Nisenholtz (senior VP of digital operations for the Times) floated an idea for an Amazon-like affiliate program, essentially where websites and bloggers would earn a kickback for converting users to TimesSelect customers.

"That could be a new revenue stream for people down the tail who can use New York Times information as a way into an affiliate program," he said. And it needn't be NYT only. "There could be an information affiliate program across a variety of content providers."

Sitting in the front row, Marc Canter asked whether this meant the Times would be a "publisher or a pimp" - that is, would the Times be "hustling me to make money off of me." Suffice to say, Nisenholtz didn't care for that characterization; he said several times that the Amazon model seems like a strong way for the Times to go but that the idea was not fully baked.

He also talked about the Times' acquisition of About.com on March 18 for $400 million. He noted that 80% of About's traffic comes from web searches while 85% of the Times' traffic comes through the home page. About, then, is a "long tail" product, the kind of site where Adsense ads work particularly well. The Times, of course, is not a long tail business. Nisenholtz sees the two as "highly complementary. ... The New York Times can learn a lot from About," he said.

Nisenholtz also emphasized the growth in RSS at the Times. "Something like the top 15% of RSS feeds on My Yahoo come from the Times. We have gotten RSS out there - we've gone from 500,000 page views to 7 million - its the fastest growing distribution channel we have. As more people use RSS, it's becoming the way that a lot of people are accessing the Times' content."

As a result of this increasing RSS use, the percentage of Times online visitors accessing the site by the front door will shrink from the current 85%. "This has real ramifications," he said. "The Times as a newspaper considers itself an organizing principle for the world - all newspapers feel that way. There's an editorial sensibility that print publications bring that organizes the world. As we see the content become unbundled from the organizing principle, what's the new organizing principle? The standard answer is the individual, but I'm not sure that the right answer. There's a demand also for a shared sensibility with the rest of the world and serendipity," as well as user-filtered content.

An audience member asked Nisenholtz when the Times would start adding hyperlinks to their stories. It's not easy to do, he said, because the editorial management system doesn't support that. The Times' solution is to create a system in which there are 10,000 topic pages under the content. "What will start to happen as we layer in these topic pages is that the content will start to light up. It will be a much more random reading experience."

May 17, 2005 | Permalink | Tag: Media Watch
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May 13, 2005

IBM is preparing to launch a massive corporate wide blogging initiative as it seeks to extend its expertise online

By Tom Foremski for SiliconValleyWatcher

Updated

IBM is planning to introduce what could be the largest corporate blogging initiative so far, in a bid to encourage any of its 320,000 staff to become more active in online tech communities.

The world's largest computer company has prepared a broad range of programs and online materials that staff can access to find out how they can start to blog. The move would help establish IBM's "thought leadership" in global IT markets.

The IT industry continues to suffer from lower levels of corporate spending following the boom years of the late 1990s. IBM's most recent quarterly financial report missed Wall Street expectations and led to announced layoffs of 15,000, with more than 13,000 of those lost jobs in Europe.

The company said that the blogging initiative was not related to its recent cost cutting measures and had been planned for several months.

IBM employees will be guided on what is appropriate blogging content. There have been a small number of incidents in which bloggers have lost their jobs because they published inappropriate content.

IBM used wiki, a simple technology that allows groups to collaborate on projects and share knowledge, to help produce the guidelines for its corporate bloggers.

Wikis are not as sophisticated as IBM's Notes collaborative software, but they are making some inroads into corporate departments where they sometimes displace the use of the Microsoft Excel spreadsheet for small applications.

IBM's position in key IT markets could benefit by having more of its tech gurus participating in online communities and discussion groups.

"We're not telling our people what to say, we could never do that. It's a natural extension of the work IBM has been doing for many decades, in establishing its expertise in key areas," Jim Finn, senior communications executive at IBM told SiliconValleyWatcher.

Mr Finn was head of corporate communications at Oracle before leaving late last year. He is part of a senior group of IBM executives charged with defining and rolling out the blogging initiative.

Mr Finn said that IBM does not see a connection between blogging and layoffs. However, many companies have found that blogging can be extremely effective in evangelising their products and technologies and that this can reduce advertising and marketing costs—a very large line item for most companies. Such savings might offset future job cuts—the traditional way tech companies reduce their costs.

"We are not planning any changes in our advertising and marketing spending," Mr Finn said. IBM is the largest tech advertiser and any shift in its budgets would be further bad news for many print publications. Tech advertising in print publications has been falling at about a 30 percent annual rate for several years.

Leading the IBM troops into the blogosphere will be it's chief strategist, Irving Wladawsky-Berger, who will begin writing a blog. He is credited with persuading IBM to become an early advocate for Linux, and to cultivate relationships with the open-source developer community. This resulted in a significant competitive advantage for IBM because it reduced software development costs, and the open-source movement became a thorn in the side of Microsoft, it's largest competitor.

Mr Wladawsky-Berger will author a blog but Mr Finn says readers might find less on tech and more on baseball — an interest that relates to his Cuban heritage.

IBM's blogging initiative includes drawing attention to its staff who are already bloggers and are becoming well recognized within their online communities, such as Catherine Helzerman. She says it has been good for her career. "Blogging has provided me with recognition within the company, and outside," says Ms Helzerman.

She said that Robert Scoble, a leading blogger at competitor Microsoft, recently posted a link on his blog Scobleizer to her site, which boosted her readership.

May 12, 2005

3D versions of Star Wars movies on the horizon; could 3D be Cinema's savior?

By Damien Stolarz for SiliconValleyWatcher

In recent articles at Guardian Unlimited and at Movieweb, Lucas and Star Wars producer Rick McCallum are quoted saying that they'll start converting the Star Wars series of movies to digital 3D in 2007.

They also mention that they're waiting for the cinemas to catch up. Once HD DVD comes on the market, you will have a situation where the resolution and sound quality of home cinema will rival the quality of today's ubiquitous analog cinema. A digital HD DVD experience will be consistent, sharp, with none of the analog glitches and wear that an over-run movie has today.

Apparently, episode 3 of Star Wars (the one being released this month) was originally intended to be shot in 3D. Lucas says that converting a movie to 3D will take only about 5 million dollars. I find this price rather low, as I would imagine it requires 3D modeling of the entire movie, but there must be some well-automated process for doing it. In fact, a company called In-Three Inc. offers a 3d-ization process for any movie, that they can do after-the-fact.

I wonder what else, besides IMAX and 4K digital, cinemas can do to compete with HD DVD besides a large screen and the sentimental smell of rancid butter.

(If you happen to have a pair of those red-blue 3D glasses lying about, click on this thumbnail to pop up a 3-D version of the Darth Vader graphic! --Chris D.)

May 11, 2005

Journalism's bright future: Blogging promises a more vibrant mediasphere

quilled Cavalry.jpg [This is a version of an article I wrote for the latest edition of New Communications Forum Blogzine--edited by the talented Jennifer McClure.]

The current debate about who is a journalist is due to the fact that the cost of entry into online journalism/publishing is virtually zero. At the same time, the online publishing business model is growing ever stronger due to a boom in online advertising.

In contrast, established media business models in print, radio and television have a high cost of entry and are growing weaker. Traditionally, this high cost of publishing kept out competition and limited the number of journalists.

Those barriers are no more, and that is a good thing - because each time the cost of publishing has fallen, it has helped to accelerate changes in society.

The revolution will be blogged

The Gutenberg press certainly helped Martin Luther; inexpensive publication of pamphlets helped in the American and French Revolutions; and low-cost newsprint helped in the Russian revolution.

I'm not saying blogging will cause such drastic changes in society. But I believe that the use if two-way [push-pull] media technologies such as blogging and RSS will undoubtedly lead to a more vibrant "mediasphere" - one that will trade in a broad currency of ideas, rather than requiring a lot of currency to broadcast ideas.

This upsets the balance of power in society. Wealthy organizations and individuals have always been able to exercise their free-speech rights to a far greater extent because the costs of publishing and influencing the media, have been high.

Those wealthy special interest groups now face a situation where publishing costs are low and the cost of influencing a fragmented mediasphere has gone through the roof.

PR companies know how to work with an established media in which the journalists are well known and tracked by media watch organizations such as Bacons. It is easy to find out the names of journalists, where they work, what they write about and how to reach them. And stories are "placed" by chatting to reporters, hosting news events and maintaining a symbiotic relationship.

The higher cost of influence

But the cost of reaching large numbers of blogger journalists through such PR channels would be extremely high. There would be too many relationships to establish and maintain.

One solution is to challenge whether bloggers are journalists. If bloggers are deemed not to be journalists, then their influence will be greatly lessened.

This challenge of blogger's rights to journalistic expression can be seen in Apple Computer's recent legal action, which sought to identify the source of leaked confidential papers.

A legal definition of "journalist" was needed because journalists have the right to shield the identity of sources, especially if it is in the "public interest". The "bloggers" in the Apple dispute claimed that journalistic privilege. But if they are shown not be journalists, then they have to reveal their sources.

No get out of jail free card

The judge in the Apple case neatly avoided answering the question of who is a journalist because this was not the key issue. He said that if a law was broken nobody, journalists included, has immunity from the law. He said that Apple could proceed with claims of violation of trade secrets law--a very loose term.

The judge also ruled that there was no "public interest" in revealing the trade secrets of a company. Just because there is a lot of public interest in a story doesn't mean a public interest is being served. He spelled out that the only protection journalists have is against a charge of contempt of court in refusing to reveal sources.

Yet somehow, journalists were running around thinking they had a "get out jail free" card in their back pockets that allowed them to publish anything they came across. And they thought they were working in the "public interest" by breaking news stories on future company products, acquisitions, and competitive plans.

Morrissey…not Bono

As such things happen, we (SiliconValleyWatcher.com) found ourselves in the story. As the Apple court case was unfolding and we were writing about it on our blog/news site, I received information that Apple had signed a contract for a new mobile multimedia chip, likely for the next iPod.

Apple's legal actions, however, did cause a delay in the publishing of our news story. Not because of a concern to protect material assets, (as a journalist/blogger I live a monk-like existence with few material possessions--just my simple icons of Steve Jobs :-), but because I didn't want to spend time with lawyers or in a courtroom. Plus, I didn't relish the prospect of colleagues and friends having to organize "Free the SiliconValleyWatchers" music concerts in Golden Gate park (BTW, if it happens, no Bono please... maybe Morrissey...)

A muzzle on the media

I sat on the story for a while but in the end, I felt I had no choice but to do what I was trained to do as a news reporter: seek out scoops and publish as accurately and as widely as possible.

I figured that if this issue were truly a significant one, then the big guns in the established media world would step in and sort it out. That's because Apple's legal actions would prevent the media from publishing anything about a company that could be defined as a trade secret, a very loosely defined term.

This would effectively muzzle the press, and I felt confident that the media giants would refuse to wear that muzzle.

However, Apple CEO Steve Jobs might just be tempted to try to put the muzzle on. He is sitting on top of the world, and hitting on all cylinders with spectacular performance at Apple and Pixar. If I were Steve Jobs I would have trouble resisting that temptation (clearly Mr Jobs is a much wiser and more evolved person than I :-)

Here comes the cavalry

SiliconValleyWatcher did join a "bloggers" Amicus brief on the Apple suit, along with a gallant band of others determined to stand up for the rights of journalists, online or print. And the cavalry finally arrived: Some of the large California newspapers filed an Amicus brief of their own.

The newspapers' brief referred to all as journalists or online journalists, no distinction was made regarding bloggers. This makes perfect sense because if a newspaper publishes a blog written by one of their journalists, then why would the blog be considered something other than journalism?

Journalism--a definition

I have a simple definition: if it looks like journalism then it is journalism. No legal definition of journalist is necessary because there is no immunity from breaking the law.

And since anyone can be a blogger/journalist and publish a web page as easily as send an email or read a web page, the cost of publishing free speech plummets.

Do we now have the makings for a true democracy of ideas?

Do those with money no longer have the same ability to shout their free speech (significantly) louder than others?

Will this grease the wheels of cultural change in similar ways to past "revolutions"?

Let's see what happens.

May 6, 2005

Open-source enterprise applications can be sold just as profitably as proprietary software

A guest article by Charles Oppenheimer, CEO, Recursive Technology, for SiliconValleyWatcher

Larry Augustin of Medsphere, the open-source electronic health records company, gave a talk last week at the SDForum SIG on open source. It was a great talk, especially for the unfortunate few of us whose entire creative energy revolves around enterprise software. There was lots of audience interaction, and we barely got out of there by 9pm. The thesis of Larry's argument is that open source based companies can operate with profit margins similar to those at typical enterprise software companies that rely on license revenue. And the time is right for open source products at the application layer, which is significant because applications are why customers invest in the whole technology stack in the first place.

There was a general acknowledgment that in most areas open source applications are not challenging existing enterprise software companies yet. But as more open source applications come out with wider distribution and lower cost, they will put pressure on the more expensive software providers from below. It was noted that a few application-level open source companies are already doing quite well, including Compiere, SugarCRM, Asterisk, and Medsphere.

Expanding the open source area, even when it means reducing license revenues, actually expands the total size of the enterprise software market due to the larger number of businesses that can afford lower-cost enterprise software systems.

Enterprise software vendors are like vacuum-tube radio providers, in an era where the transistor radios represented by open source are still of a lower quality. Eventually, transistor radio technology moved upstream in quality, redefining the market. We know how that turned out. Pretty exciting stuff.

Some highlights of the talk:

- The cost of sales at a typical enterprise software company (he used Siebel as an example) equals about 75% of total license revenues
- Therefore, companies that buy enterprise software are essentially paying for the sales cycle
- A successful open source project that has a high volume of downloads, such as SugarCRM, has greatly reduced cost of sales, approaching zero in some models
- Enterprise software companies have very high general & administrative costs, due to their wasteful operations and big profit margins
- Research and development costs are typically lower in open source companies
- Larry did some magic with the numbers, removing license revenue, and showed how the gross margin % remained the same without license revenues

Some critical comments:

- One of the key questions in this assumption is whether the sales cost could be kept down as larger deals are pursued. Large deals would be critical for legitimate enterprise software companies, open source or not. Assuming that an open source product will have a huge distribution and no sales cost is not an accurate expectation. Companies such as RedHat that sell to enterprises (although not in the application space) have high sales costs, similar to standard enterprise companies
- In enterprise software sales, in my experience, price is rarely the primary decision factor. It almost always comes down the features, or the ability of the vendor to sell the features. Only when an open source application can compete head to head with a commercial application and win on merit will there be significant traction. It’s a fair prediction that there will be more and more applications that can do that. JBoss can beat WebLogic now, and JBoss Inc. has an extremely low sales cost. That is the ultimate model, but it takes great software.

May 6, 2005 | Permalink | Tag: Guest Writer
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May 2, 2005

A Silicon Valley veteran offers an explanation on top marcoms shuffles at top tech companies

The following is an email from a long-time Silicon Valley communications professional, who prefers not to be named. It is in response to our recent post on changes in top marcomms positions at leading Silicon Valley companies.

Hi Tom,

Hope all's well. Read your blog this morning and couldn't resist offering my two cents on the senior marcomms piece. In my 20 years toiling away in marketing and corporate communications roles, I've seen time and again that whenever an organization is undergoing significant change and faces more than the usual set of business challenges, the tendency is to park many of the problems at the feet of the senior communications person, who is given the job of "fixing up" the company's image.

The naive thinking is that he or she can wave a magic wand and simply make media, analysts, employees, investors, suppliers and any other significant audience think and say nice things about the organization.

Never mind that the senior communications person typically has no direct authority over sales, operations, personnel or senior management. More often than not, the organization has been on a steady decline or in a state of churn over a period of quarters &mdash and the problems are usually more than superficial. Often they're systemic.

Ultimately the only way to fix the image is to first fix the reality, but often times the senior management, board, etc. is too impatient and they want the improved image to precede the fixed company. I can almost hear the CEO/board members at the companies you mention tasking the communications leader to "make everything right out there &mdash and overnight, please, as there's no time to waste!"

It's often a proposition doomed to fail. Even in the best circumstances it can be a thankless assignment. When companies do manage through a turnaround or rough patch, how often does the senior marcomms person appear on the cover of a business magazine, or become the toast of Wall Street? Just some thoughts to consider...

May 2, 2005 | Permalink | Tag: Letters to SVW
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April 30, 2005

Jeff Lettes has left Oracle as senior marcoms changes continue at top valley companies

By Tom Foremski for SiliconValleyWatcher

Jeff Lettes, Oracle's communications chief has left Oracle just a few months after joining SiliconValley's largest software company.

This is the latest in an unprecedented number of changes in senior marcoms VPs at Silicon Valley's top tech companies over the last six months.

Here are some of the top changes: Jeff Lettes leaves Applied Materials; Cindy McCaffrey leaves Google; Jim Finn leaves Oracle soon to be followed by Jennifer Glass; Alison Johnson leaves Hewlett-Packard; Andy Lark leaves Sun Microsystems; Pam Pollace leaves Intel; Robin Stoecker leaves Tibco Software; and now Jeff Lettes leaves Oracle.

Is it over? Did I leave anybody out? Is this a trend and what does it mean? I’m not sure what’s going on, if anything. But, it does seem a bit odd and I'm hoping some of our readers might know of an explanation. Leave a comment here or ping me: tom@siliconvalleywatcher.com. And there is also the annonymous tip email on the side of this page.

April 25, 2005

Are bloggers journalists? This is one of the most important cultural questions facing society today....

By Tom Foremski for SiliconValleyWatcher

confused spanky.jpg Here is a version of an entry I wrote for New Communications Forum, in which I postulated that one of the most important cultural questions facing society is: Are bloggers journalists?

It is an important question; because the media is part of the trusted channels of communication that society uses to think, distribute ideas, and exercise its right to free speech.

It's an important question; because the answer carries with it considerable responsibility. If bloggers are indeed journalists, then they deal in the same currency of ideas and influence as the established media.

But this fragmentation of the mediasphere, into millions of blogs, upsets society's trusted ways of distributing its ideas and free speech; and, in the process, journalism is being transformed in many ways. Print journalism, the most dominant form, is under economic threat from online media, with its lower cost business models. And the profession of journalism is under society's microscope, as millions of bloggers challenge the accepted notions of what journalism is, and who can, or should be allowed to, practice it.

The Internet is a disruptive media technology

This transformation of journalism is best understood if the Internet is understood as a disruptive force, not of the technology sector, but of the media sector. The Internet is a collection of disruptive media technologies; and blogging, RSS, wikis, podcasts, etc., are part of a second wave of powerful media technologies that are accelerating this disruptive process.

The first wave of Internet media technology was the flood of web browser technologies that enabled anyone to read a web page, regardless of the computer or operating system. Similarly, blogging allows anyone to easily publish a web page, regardless of the computer or operating system.

But blogging is more than a web browser; it is more like an "asynchronous" media technology, Geek speak for "can move both ways." And this is reflected in how the early pioneers understand this Internet 2.0 or Web 2.0 emerging phase of the Internet.

Richard MacManus, one of my new colleagues on SiliconValleyWatcher, (and ionRSS.com coming soon!), has a web site called ReadWriteWeb.com. Joe Kraus, co-founder of JotSpot, developer of a corporate wiki platform, said he'd considered using Escher's drawing of a hand drawing a hand for the logo of his company.

This two-way web concept is just emerging into the mainstream culture, having been closeted in the Geek community for the past few years. But the concept of a two-way media is more than just a handy way of describing the blogging phenomenon. It is leveling the "free speech" playing field of journalism between established and new media.

In a nutshell, bloggers can now publish their free speech, their ideas, their influence, and reach 4/5ths of the world's population for virtually nothing. I'm not saying that 4/5ths of the world's population would read the bloggers; but the reach is there, and essentially for free. It costs less than $10 per month to host a blog; and the online network of bloggers can carry the content far and wide for free.

Anyone can have a powerful web publishing platform that is near completely automated. And that upsets the channels of influence in our society, which were protected from competition because of the high cost of publishing high quality content.

In Part II: Apple's hunt for leaksters threatens to muzzle the press...
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April 21, 2005

Google execs look ahead and see even more more from their powerful business model

By Richard Koman for SiliconValleyWatcher

I've transcribed my notes from the analyst conference call Google held today to discuss their earnings. It was a pretty interesting conversation, I must say. I believe they really care about providing great user experiences. Ultimately, I think they're mostly interested in the improvements that also allow a rich stream of data to flow back to Google, from which they can figure out better ways to sell advertising and targeted marketing. I don't think it's any more nefarious than that; but I do think it's the basis of their ability to monetize user patterns as brilliantly as they do.

OK, here's the conversation, at least the part that I managed to take notes on.

Q: Can you talk about monetizing some of the non-search products, such as Google News and Froogle?

A: We don't think about it that way. Many of our products are integrated into the main search product. These products improve our core products and the core products enhance our ability to monetize the other products.

Q: Are you going to extend the advertising content to support graphical ads/more brand-oriented ads?

A: There are a number of efforts to make advertising more graphical which will be rolled out in coming months. We're also working on doing more targeting, which is pretty minimal right now.

Q: Can you explain the increased capital expenditures (which went from $86m to $142m)?

A: We invest in technology needed to provice services at the level we do. We build very sophisticated hardware platforms to do that. Not all of that money is in computer equipment but most of it is.

Q: I know you've said you're not building a browser, but are you thinking about products that let users get at content without having to go through IE or Firefox?

A: Well, you can already do that through Google Desktop. But our goal is to solve very large user problems. You can see amazing things are going to be possible inside the browser if you look at Google Maps.

Q: [Some question about Adsense]

A: We're looking at a number of ways to extend the advertising network. We're already shipping image ads and testing targeting techniques.

Q: MSN is running on 64-bit architecture. Do you think you'll also switch to 64-bit?

A: I think architecture is invisible to users, so it's not really a competitive factor.

Q: Talk about how you'll monetize video?

A: Right now we're just collecting video, we're not distributing although we want to. We're not sure what the details are.

Q: Enhancements to advertiser support?

A: [Eric Schmidt:] For large advertisers, we have support teams and people we call maximizers, who make sure the creative really works well. We have automatic tools to submit, rank and change your advertising, so they can change what they're doing every week, day, hour, minute.

[Sergey Brin:] The system is really optimized for the middle. We do special solutions for larger advertisers. We need to achieve greater simplicity for new and smaller advertisers.

Q: Is there some intention to monetize the new Search History function (which recently came out in beta]?

A: The only intent is to deal with a real user issue. It's a great research tool. I don't think anyone has thought about advertising with respect to Search History.

Q: Any plans to institue a stock buyback plan?

A: We're focused on accumulating cash right now, so no.

Q: Have you thought about extending Google's approach and brand into offline media?

A: The way we look at questions like that is, what is the end user benefit? Our advertising model is a beautiful thing and we're certainly going to extend it as far as we can.

Q: Comment on the French news service AFP's suit against Google News?

A: We've got a number of situations where we've become an important distribution channel. Our strategy is to work with copyright holders; our goal is to make all information available and accessible while respecting the rights and needs of copyright owners.

Final comment from Sergey: We are very busy here at Google.

We're focused on end users. We're focused on making better products for end users and advertising will flow into that. This is a very powerful model.
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April 21, 2005 | Permalink | Tag: Google [GOOG]
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April 18, 2005

Can't beat them? Buy them. Adobe to take over Macromedia in $3.4b deal

By Richard Koman for SiliconValleyWatcher

It was just a month ago that Adobe wowed stockholders with fantastic Q1 results - 23 percent year-over-year growth in net income, 12 percent in revenue. Adobe has been hitting on all cylinders - consumer photo, pro design and Adobe products, but they had basically ceded pro web design to Macromedia with their Dreamweaver and Flash lines. In a March interview with BusinessWeek, Adobe CEO Bruce Chizen took aim at Macromedia:

"I'm not willing to stand up and say we're going to beat them tomorrow or the next day. It'll take a long time, but we're going to get more aggressive, especially on alternative platforms like mobile and devices connected to HDTV.

Well, if you can't beat them, buy them. Adobe announced this morning that they are buying the company for $3.4 billion. Macromedia shareholders will get .69 shares of Adobe stock for each share of Macromedia stock.

Technology gadfly Marc Canter is happily singing the praises of the deal, to the tune of "Ding Dong, the Witch is Dead." The creator of Director, Canter sold the company that started it long ago and has been singularly unimpressed with the management of the company that pretty much abandoned his product when it started up Flash. He suggests he would be willing to return, a la Steve Jobs, now that MACR is in new hands, but if he thinks he's going to find in Adobe a company that doesn't sell software in a box, design for single users, or depend on patent protection, I really don't know what he's been smoking.

Over at the Macromedia user forums, dedicated Macromedia developers are definitely depressed - the forums are filled with words like shock, disappointment and sadness.

So Adobe will add Dreamweaver to its list of aging dominators and make more money. But where are the real synergies? It's hard to see synergies between the companies' two platforms: Flash is light-weight and strongly server-oriented. Acrobat is heavyweight and download-focused; they've had great success in data-centric industries like finance.

Over at Jupiter, David Schatsky notes:

[The CEOs] alluded to the importance of mobile applications and cited Macromedia's greater presence there as an advantage to the combined company that can help pull Adobe's technology onto a new platform.

He also hints, "Let's also see what sounds come out of Redmond."

Flash is the right app for mobile, especially with all the server-side stuff that Macromedia has added over the years. Perhaps they have some ideas for combining Acrobat and Flash; but it's hard for me to see. My suspicion is that Dreamweaver and Flash take them where they want to go; and and after years of acquiring the wrong companies, Adobe just decided to snatch up the real deal.
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April 18, 2005 | Permalink | Tag: Promo 3
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April 14, 2005

[Sponsor Watch] Not just for blogs anymore, RSS is looking like the media technology of the near future

Leading RSS-istas converging on New York City in mid-May for Syndicate conference

By Tom Foremski for SiliconValleyWatcher

I’m not sure how many leading lights there are around RSS but it’s not many. It’s early days yet but RSS is very likely going to be the next important application, rivaling email and the web. We definitely want to be in this conversation, and you will see us expanding our coverage to key emerging media technologies, including RSS.

We're also pleased to sign on as a media sponsor for the Syndicate conference, May 17-18 in New York. Produced by IDG, the conference is an indication of how far RSS has come in the past year.

Case in point: ING Groep, a global provider of information services, recently started using RSS to broadcast information to employees using KnowNow technology. ING found that spam filters make email an unreliable medium for corporate communication.

It certainly looks like the media sector is rapidly shifting towards dominance by technology-empowered media companies. RSS can enable new types of media business models, and it can even do IT data messaging. And so far, it’s the most secure communications channel available, being spam- and spoof-proof, or at least tough to spoof.

I’ll be moderating a panel at Syndicate on the topic of "Enterprise Syndication with RSS." On that panel are Ross Mayfield, who has been selling wikis for several years at SocialText; Michael Terner, CEO of KnowKnow (which is sponsoring the panel); David Schatsky from Jupiter Research; and Paul Kedrosky of UC San Diego.

I hope to see some of you there.

April 7, 2005

PSP-Pod? Could Sony's latest mobile gaming system beat out Apple's forthcoming multimedia "mPod"?

. . .communities of users are hacking into the PSP and creating a platform device

By Richard Koman for SiliconValleyWatcher
The big question about our story on Apple's "mPod" (our pet name for it) is, what exactly would it be capable of? In his analysis, Tom argues that just as they did with music, Apple could convince Hollywood studios and production companies to entrust Apple's DRM with their precious content -- an enormous coup for Steve Jobs.

The Broadcom Alphamosaic chip that Apple has ordered is capable of video, wireless and 3D gaming. Which makes it seem an awful lot like the Sony PSP. So folks at Apple might well be looking at what's happening with the PSP these days.

The PSP contains a movie player, game system, music player, a JPG image viewer -- and most importantly, a Wifi receiver. Hmm, Wifi and video on the same device? Can you say BitTorrent? Sites like PSPCrazy, PSP 411, and 8Bit Joystick have dozens of links to tutorials on hacking the PSP.

Check out How to get iTunes DRM-protected music onto the PSP, How to read RSS on the PSP, and How to convert video for PSP viewing.

Dave Weinberger wonders how long until Sony tries to shut down this outpouring of creativity. Well, they might be unpleased to realize that Sony films are being pirated onto their very own device, but it's hard to see how one shoves the cat back in the bag.

I was particularly fascinated with the
tutorial on PSPcasting, where I learned about ANT, a video enclosure RSS reader for Mac.

When you think about podcasting, you realize that this is a totally unexpected side effect of trends not in Apple's control. The iPod became a hardware platform for network application -- without itself being a networked device. Imagine the possibilities of a networked, video-playing iPod directly running ANT. What hackers are doing right now, with difficulty, on PSP, Apple could make available to the masses.

Imagine further a development platform for the mPod. As Jake from 8Bit Joystick says:

It would be slick if Sony would allow other developers to make mini applications or plugins for the PSP via a Firmware update and a SDK. I am sure that there are plenty of software hackers that would love to put together an RSS reader, and web browser for the PSP.

To do so would not, I think, run in opposition to their coalitions with Hollywood. I still don't think that a 3.5in screen is a great way to watch feature films (although I'm impressed with the fact that the PSP screen perfectly fits the letterbox format). But consider MTV's announcement of a Web-based channel for videos and interviews. That is the perfect content for PSP/mPod.

It would be in perfect step with the "rip, mix, burn" philosophy that the Macintosh line is built on. In his ETech keynote, Larry Lessig talked about "kids writing in video," meaning the digital manipulation of media content for self-expression. Portable networked media devices are the perfect platform for that expression.

The major meme of the recent ETech conference was "remix," and Rael Dornfest pointed out that hacking is quickly moving down the food chain to average (young) consumers.

More than ever, if manufacturers do not provide the tools for self-expression, which includes sharing, the hackers will step in.

Foremski's Take: Richard has highlighted a potentially tremendous competitive advantage for Sony, should it want to take it. Our advice to Sony is leave the PSP hackers alone, let them use the device in any way they want. By the time the mPod comes out, (probably early 2006) there will be a large number of "open source" hacks and the Sony PSP community could have an unassailable momentum.

It used to be that Apple was the upstart, the iconoclast, but that image has changed a lot in recent years as the company has sought to make it very difficult to copy and "remix" protected digital content. Clearly, this has been done to assure the recording industry that Apple offers a secure DRM platform. And this will have to be the same philosophy applied to the mPod, making it far less hackable, to show Hollywood that their content will be safe.

Also, Sony has games, Apple doesn't. Microsoft has games....ah, maybe mPod could be Microsoft Pod? Microsoft won't get any DRM business because it can't safeguard its operating systems, let alone a DRM, so an alliance with Apple might make sense.

And doesn't the new Xbox use an IBM Power microprocessor? Apple Macs are Power based, and IBM has embedded Power chips available...it all starts getting very interesting.

March 30, 2005

Wary of stifling innovation and unwilling to countenance widespread IP theft, Supreme Court seems torn in Grokster case

With Hollywood and Silicon Valley, not to mention the electronic frontier community, anxiously watching the oral arguments in MGM vs Grokster yesterday, observers were hard-pressed to predict how the Court would rule in June. "The Court was clearly divided, with several justices expressing frustration over the dearth of factual findings about the magnitude of copyright infringement," the Legal Times' Tony Mauro reported.

"... Any prediction about what the court will actually decide appeared perilous," said the NY Times' Linda Greenhouse. "The justices themselves seemed taken aback."

At issue is whether Grokster and Shoutcast Networks could be held liable for the copyright-infringing actions of their users. Grokster argued that the landmark Sony decision, which protects technologies "capable of substantial noninfringing uses," should protect them from the Hollywood suits. That test was applied by the Ninth Circuit Court of Appeals in deciding for Grokster.

The movie studios are asking for a different standard -- whether or not the "business model" is built on copyright infringement. Legal blogger Tim Armstrong found MGM's thoughts here "a little odd," explaining: "On this view Sony is off the hook, because Sony is not a company that is primarily in the business of copyright infringement; but Grokster should be held accountable because they intentionally founded a business based expressly on encouraging infringement."

On the one hand, Scalia and other justices expressed concern that the studios' rule would allow copyright holders to shut down new technologies "right out of the box." Scalia wondered if there would be a window of time to establish noninfringing uses. Souter asked, "How do we give the developer the confidence to go ahead? On your theory, why isn't it a foregone conclusion from the outset that the iPod inventor is going to lose his shirt?"

Other justices were clearly concerned about allowing wholesale copying of copyrighted materials. "The Court showed some signs of unease with the adequacy in the Internet age" of the Sony precedent, writes Lyle Denniston on SCOTUSblog.

"You want to say that unlawful uses can be used as startup capital," Kennedy challenged Grokster's lawyer. Justices were also concerned that Grokster's vaunted decentralized networks was an endrun around the Napster decision, in which the P2P pioneer was liable because they controlled machines that kept track of where files were located. Decentralized systems like Grokster's let users make the discovery on their own.

MGM's lawyer talked extensively about how Grokster's business was built on promoting infringement, which led Ginsburg and O'Connor to hint that the case might be sent back to the lower courts to decide on a charge of "inducing" customers to break the law, rather than a secondary liability claim. Such a result would leave the Sony decision standing. There are also suggestions that the Court might alter Sony, since both sides were asked for input on how Sony should be changed.

The decision is expected in June.

Uncovering the madness of crowds...the flickrliscious effect on research labs

By Tom Foremski for SiliconValleyWatcher

I was at HP Labs Tuesday morning, chatting with Josh Tyler and Philippe Debaty about their work in trying to determine how people will use camera phones. A primary goal of HP Labs is to be able to predict novel uses of consumer technologies and develop supporting computer products or services.

But in today's world, these researchers are realising that they cannot do things the old way, and that they have to get out of the labs.

One of the HP Labs' projects was photo-blogging. About 20 researchers carried camera phones linked into a location-aware cell phone network. As they took pictures with their camera phones, the images would be uploaded to a central database along with location data. A heavy concentration of images in a location would flag that some type of event took place. It would also uncover large aggregate social behaviors, a subject of high interest to Mr Tyler.

The photo blogging project closed because HP doesn’t make camera phones, Mr Tyler said.

But, I asked, hadn’t Flickr obviated the need for this project anyway? If you want to discover aggregate social behaviors around photos and sharing, take a look at Flickr’s millions of users. There are communities on Flickr that could not have been predicted. And this is true of all true platforms--in the current sense of technology platforms for groups: unpredictable behaviors and communities will arise.

Using 20 HP Labs researchers is not going to reveal many, if any, novel uses. How many people using a platform technology would it take to flag the potential for large aggregate social behaviors, I asked?

That’s a question we have been pondering, says Mr Tyler, and "we don’t know" is the answer.

Mr Debaty showed me a photo-sharing slideshow project where you can add your own voice narration using an iPaq handheld computer. That project is still in development because it uses an HP device.

On the way home, I wondered how HP Labs or other researchers will be able to plan innovative consumer products if they cannot predict how people will use them, or what unexpected types of services will be needed. Product development and design of consumer digital devices is expensive and takes about 2 years.

Clearly, these researchers will need to change their approach. They should be out on the Internet crouching in the bushes and taking notes on what people are doing, and then determine new product development. In fact, these should be boom times for anthropologists. Surely, now is their time(!)

Spotting potentially large aggregate social behaviors, and being the first to monetise them, is going to be the name of the game in the consumer digital space.
cd1015

March 28, 2005

New look for the Watcher ... a new approach to sponsorship ... Future plans

A note from the publisher

By Tom Foremski for SiliconValleyWatcher

Thanks to our media tech architect Nick Aster and media/managing editor Richard Koman (plus Amy’s advice), we have added a new look to SVW and a design feature that helps showcase our top stories, interviews and scoops. And it will make it easier to introduce other voices/writers and guest bloggers.

The showcase panel gets around the problem of our best stories being pushed down and down the page, and eventually off the page by the most recent stories--a characteristic of blogging software.

User interface design is often difficult to implement in blogging software because of the use of cascading style sheets (CSS). This allows for an unprecedented level of central control over the design of an entire web site, but CSS it is not easy to use well. Fortunately for us, nobody has more experience with blogging software and CSS in commercial environments than our Nick Aster.

InfineonWatch: a different approach

Nick has been working with our sponsor Infineon Technologies, setting up a web site to show the world through Infineon’s eyes. On InfineonWatch, in addition to deep links into the main Infineon site, you’ll be able to see what links, articles, ideas, Infineon is following externally.

These are based on the daily media watch collection of newspaper and magazine clippings that all large companies produce for internal use every day.

It’ll be interesting to see what types of external stories Infineon will choose to highlight. Will it be something that readers find valuable and interesting? Will the selection of stories communicate something about the culture of Infineon?

We’ll see, but it’s exactly this kind of project that we like to be involved with because it is a central topic of interest: how enterprises use media technologies. This is what drives markets.

Can Infineon, and our other sponsors, forge a way of communicating a brand identity/voice by showing the world what stories and issues they are watching? Are their other ways to use this format?

Our sponsors get to experiment with new media technologies, and they start building valuable experience in this area.

There are many questions within the enterprise sector about blogging and communications. We have some of the answers, and we will develop more answers over time. And as a media technology enabled publisher, we will share our top experts and what we learn with our readers, sponsors, partners, clients and others.

Our editorial coverage...

This blog is transitioning towards my original goal of establishing an online news magazine reporting on the business of Silicon Valley. This is an economic region that is one of the world's wealthiest, and a global brand that inspires millions of people to tackle some of the most challenging problems through innovation.

The newest trends are the emerging media technologies, such as blogging, wikis, RSS, that are becoming an important part in helping drive this next Silicon Valley business cycle.

We will also report on the many other aspects of Internet 2.0, the companies, the people, and the issues. I want to find the new generation of Silicon Valley leaders, the disruptors of conventional thinking. I’m bored to blazes with the same old media brands and the same old Silicon Valley establishment characters/executives. One more moderate-sized bubble will clear out this aging establishment and Silicon Valley will be a much different place by 2010.

We will add more bloggers and editors and guest writers. And we plan to use some of the media technologies to launch new types of publications and media businesses. We are especially interested in harnessing RSS, the syndication technology at the heart of the media technologies...and reporting on developments in this area.

RSS will be very important because it is an unpolluted communications channel. At least for now...

March 23, 2005

Serial Advice from a Serial Entrepreneur: RightNow CEO Greg Gianforte holds forth on the secrets of starting and growing a company

Could this be our first advice column?

By Tom Foremski
The headline in this entry is a fantasy title for a column that I think Greg Gianforte, CEO of RightNow Technologies, could do very well. That’s because he loves to give advice on how to build startups. His book on how to bootstrap startups is coming out soon, and he’s been a guest lecturer at Harvard Business School.

I recently spoke with Greg at the SD Forum conference on Software as a Service (SaaS). As we talked outside the conference room about bootstrapping and how startups change in different phases of their growth, he soon attracted attention from several local entrepreneurs who heard him speaking on these topics and were eager to have his answer on a range of issues they were facing.

Greg was there to promote his enterprise SaaS company, RightNow, but he spent at least an hour chatting with entrepreneurs about his management methods and approach. So, instead of standard report on “my chat with Greg,” we'll let Greg dole out his advice for startups in a Dear Abby format. The questions were asked by people at the SD Forum conference running small startups.

The RightNow Way: Serial advice from a serial entrepeneur
by Greg Gianforte

Dear Greg: My head of sales isn’t performing so I’d like to move him into business development. How would I best do that?

Greg: You might not want to do that in the first place. It is hard to do but you have to change your teams for different stages of growth. The people you started with will not have the same skills you need two years later.

As a startup moves into a second phase of growth, you will find that you almost need an entirely new team. That’s what I did at one of my earlier ventures. I couldn’t figure out why we had plateaued and we couldn’t get going again, until I realized my team didn’t have the skill set for the next stage. It was hard because you have a connection to people, but it does not serve them to ask them to do a job they are not able to do, and it doesn’t help the business. So, over a two-year period I replaced almost every member of a 40-member team.

Look for more of these “serial advice from a serial entrepreneur” segments. If you like them, I can go get more! In fact, send me some questions, I’ve no idea if Greg would answer them but he might. He has a book to promote after all, so that might tempt him, not that he needs an excuse. He loves to dole out advice on startups and it’s been working for him very well.

Coming up next on Serial Advice: Greg says selling is one of the most noble professions in the world - “Delegating the head sales position should be one of the last things you do, you have to spend time at the coalface, you have to get to know the coalface.”