The Monkey Lab
  Dell Googles Excellent post from Emergic's Rajesh Jain: Apparently, Google has scored Dell as a big distributor of the information vendor's software and services. Or so says several news sites this afternoon, including Wall Street Journal. The Microsoft doomsayers claiming fierce Google competition will have yet another sign to demonstrate that the sky really is falling (Has anyone at Microsoft ever heard of a character called Chicken Little?). I don't doubt the situation stated by the Journal: "People familiar with Google's thinking have said the deal with Dell wasn't designed exclusively to strike back at Microsoft, but rather to increase use of Google's services." Google has more to gain by making its own business objectives the priority than making deals against Microsoft. The sky isn't falling, and Google isn't looking to get Microsoft. By contrast, Microsoft's bigger business objective would appear to be about getting Google. Some friendly advice: Rather than launch zillions of new Windows Live products and services, Microsoft would be better off making the stuff it already sells much better and getting upgrades, like Windows Vista, out the door on time. I swear, too many Microsoft Chicken Littles grew up playing Risk when they should have learned Chess. Windows is a huge position of strength, but one which needs some fortification. No offense, but Microsoft is fighting a war with a fantom and weakening its position by not protecting its prized asset (Windows) and extending its strength. While terms of the deal haven't been released--and may never be--it's a reasonable to assume that Google agreed to pay Dell a bunch of money for the PC bundling. Microsoft used to, ah, stipulate in its contract against subletting its property (Windows), but the Housing Authority (US Department of Justice) insists renters must be allowed to sublet. It's fairly common practice for software developers and/or service providers to pay a bounty for prime Windows desktop placement. Given recent quarterly results, Dell was a good prospect for subletting space on its consumer, SMB and (some) enterprise PCs. Of course, the deal is good for Google. The company gets prime desktop and Web search, toolbar and other software placement from the world's largest PC manufacturer. JupiterResearch surveys show that more than 80 percent of US online consumers regularly use Web search. Google benefits in all kinds of ways--keywords and contextual advertising, for starters--and directly adheres more of its products, services and brand to consumers. Last week, I tried to rationalize why Microsoft made yet another search announcement--and one oddly timed. Today's deal, assuming the news reports are right, creates context. Deals like Google on Dell ("Dude, you're getting a Google") don't occur in a vacuum. It's sure that Microsoft was privy to negotiates and may even have counter offered. It wouldn't shocked me--and, yes, I'm totally speculating--if Microsoft's most-recent future search announcement without products was pre-emptive. By the way, deals like this would have been nearly impossible before Microsoft's US antitrust case. The landlord (Microsoft) covets his property (Windows). He doesn't like redecoration (changes to the desktop) or subletters (the likes of Google software or services bundled instead of Microsoft stuff). 
  Why wireless will end ‘piracy’ and doom DRM and TCPA – Jim Griffin Interesting interview with Jim Griffin, former CEO of media company CherryLane. Lots of interesting viewpoints on music and digital media. -----
Don't worry about DRM and lock-down computing, says Jim Griffin. Historically they're doomed to fail. The former director of Geffen's technology group believes that wireless networks such as 3G, 4G and WiFi will provide the tipping point at which the entertainment industries come to the table to cut a deal - before political pressure forces a deal upon them. The deal will involve one of the flat-fee models, such as 2002's Blur/Banff proposals [PDF, 473kb (] or the model Harvard's Professor Fisher summarized here ( Both of these envisage a pot of compensation money and a mechanism for divvying it up, permitting the free exchange of artistic goods. And with 'piracy' abolished, there's no need for DRM.
  How newspapers can face online rivals: Is it too late to cooperate? In the same vein as my prior posts on media, the issue of splintering audiences are a problem for music, television, and print. The could there be a need for all media to operate on a consolidated number of platforms? One for print media, one for music (iTunes anyone?) and one for television? Is it economically feasible, what does it mean for competition among labels? Big questions here...all I know is that litigation won't do a thing to slow down the digitization and capturing of data on devices. ------------------ How newspapers can face online rivals Is it too late to cooperate? Bambi Francisco [MarketWatch] | POSTED: 05.23.06 @09:31 In 1846, as the new technology of the telegraph system was catching on, newspapers pooled their resources to create a more efficient news distribution system. Jim Kennedy, vice president of strategic planning at the Associated Press, which was born out of those efforts, says newspapers are facing a similar challenge today. "Fast forward 168 years later," Kennedy told attendees at a recent Las Vegas gathering, "that's the situation we face today." Translation: It's time for newspapermen to stop fighting among themselves and cooperate if they want to survive in the era of splintering audiences, and search-engine news gateways, such as the popular news services created by Yahoo Inc. (YHOO) and Google Inc. (GOOG). Yahoo News has held the No. 1 news property spot on the Web for the last eight months. It commanded 25.7 million unique visitors in April, up 10% from last year, according to Nielsen//NetRatings. Google News was the No. 11 news site last month, with 9.7 million unique visitors, up 19% from last year. Meanwhile, Knight Ridder Digital saw its audience base grow 13% to 10.6 million unique visitors while Associated Press grew a paltry 1% to 6.1 million unique visitors. AP's Kennedy was spoke Friday alongside Tom Mohr, President of Knight Ridder Digital and Colby Atwood, vice president at Borrell Associates, a consulting firm specializing in local media. The panel was part of the Interactive Media Conference, hosted by Editor & Publisher and Mediaweek. The panel was titled "5-year forecast: See the Future Today," but from the comments made on stage, it might as well have been "The final days of newspapers." For offline newspapers, the writing is on the Web. Email delivery of national and niche news on our computers or on our BlackBerry devices has made it less of a priority to pick up a printed newspaper, especially when traveling. Why bother with the added weight? In 1949, newspapers accounted for 37% of the advertising market in the U.S., according to Atwood. Today, they account for 17% to 18%. Given the choices people make on the Web, newspapers -- try as they might -- likely never will come close to having the same market share online that they once had in the offline world. Atwood said that, surprisingly, newspapers still account for 35.8% of the online local ad marketplace, which he estimates to have been $2.4 billion in 2005. About 90% of advertisements in newspapers are local. Increasingly, those offline dollars are seriously at risk. "There's a big race to go after local ad dollars," said Atwood. "I'd say newspapers will likely lose their share," he said. "They're not as well organized as the large dot-coms." Newspapers playing nice? Having spent more time at Silicon Valley conferences with Internet companies and startups, I have to say that this gathering was relatively sobering. Attendees included executives from newspapers and publications with an online presence who wanted to know how to survive against the rise of social networks, vertical or niche-oriented Web sites, and those darn search engines, Google, Yahoo, and Microsoft (MSFT). Don't get me wrong. The panelists were not sounding the death knell of newspapers. But they were provocative in their identification of the problems plaguing the newspaper industry and suggestions for potential solutions. Mohr's presentation, in fact, came off like a rallying cry. Like Kennedy, Mohr encouraged the news organizations to work together to create economies of scale that take advantage of the same technology, in effect a co-op for newspapers. "How are you going to get companies, like Dow Jones, to work with AP and Knight Ridder?" I asked Kennedy? "And, what's the incentive for us?" I added. (Dow Jones & Co. owns MarketWatch, the publisher of this column.) News organizations could theoretically send their feeds into a system own by Associated Press, Kennedy explained. There would be technology to rank those stories based by authority. I didn't have the heart to tell Kennedy that newspaper companies don't have much of a competitive advantage over engineering-powerhouses when it comes to creating search technology. But I did ask how he would propose this theoretical newspaper system measure "authority?" "That's the question," said Kennedy. "We all need to think through how content is ranked." Even with such a co-op, Google News would still exist, I argued. That is, of course, unless news organizations could show that their ranking system would be immeasurably better, which I'm a bit skeptical about. Another suggestion, offered by Mohr, was to have newspapers operate on one technology platform to create efficiencies of scale. Of course, Mohr would like all newspaper companies to let go of their proprietary platforms and use Knight Ridder Digital's. Both ideas -- a news search engine and one federated technology platform -- sound interesting. (Other ideas floated about, for anyone interested, included having newspapers step up their search-engine optimization efforts and buy keywords to drive up traffic.) But it seems they all might be too little too late. Atwood said it best after wrapping up his opening remarks. The "consequences for mass media are... umm, well... troubling." Bebo gets funding Benchmark is taking another crack at social networks. The venture capitalist invested in Friendster back in 2003, when social networks were just getting noticed. But Friendster has not been the success Benchmark would have liked. Instead, News Corp's (NWS) MySpace has become the No. 1 social networking site, and is one of the premier online destinations, rivaling portals. Not to lose out in this social-networking bonanza, Benchmark just invested $15 million in Bebo, a social networking site that's growing faster than Friendster, and is popular in the U.K., Australia, Canada and New Zealand. Bebo operates a lean house, with only seven employees in the U.S., and now three more in the U.K. It's profitable on sales that are below $10 million annually. But if Bebo's traffic follows in the footsteps of MySpace and Facebook, ad sales could surge. Facebook is expected to generate about $60 million in sales this year. Watch for my video interview with Michael Birch, founder and CEO of Bebo on Tuesday. Separately, if you want to get a job with a technology company outside of college, one way to do so is to create a technology and then sell it. That's what five fraternity brothers did. They started HipCal and sold it to Plaxo. 
  Downloading 'myths' challenged Downloading 'myths' challenged People who illegally share music files online are also big spenders on legal music downloads, research suggests. Digital music research firm The Leading Question found that they spent four and a half times more on paid-for music downloads than average fans. Rather than taking legal action against downloaders, the music industry needs to entice them to use legal alternatives, the report said. According to the music industry, legal downloads have tripled during 2005. In the first half of 2005, some 10 million songs have been legally downloaded. Music 'myth' More needs to be done to capitalise on the power of the peer-to-peer networks that many music downloaders still use, said the report's authors. There's a myth that all illegal downloaders are mercenaries hell-bent on breaking the law in pursuit of free music Paul Brindley, The Leading Question The study found that regular downloaders of unlicensed music spent an average of £5.52 a month on legal digital music. This compares to just £1.27 spent by other music fans. "The research clearly shows that music fans who break piracy laws are highly valuable customers," said Paul Brindley, director of The Leading Question. "It also points out that they are eager to adopt legitimate music services in the future." "There's a myth that all illegal downloaders are mercenaries hell-bent on breaking the law in pursuit of free music." In reality hardcore fans "are extremely enthusiastic" about paid-for services, as long as they are suitably compelling, he said. Carrot and stick The BPI (British Phonographic Industry) welcomed the findings but added a note of caution. "It's encouraging that many illegal file-sharers are starting to use legal services," said BPI spokesman Matt Philips. "But our concern is that file-sharers' expenditure on music overall is down, a fact borne out by study after study. "The consensus among independent research is that a third of illegal file-sharers may buy more music and around two thirds buy less. "That two-thirds tends to include people who were the heaviest buyers which is why we need to continue our carrot and stick approach to the problem of illegal file-sharing," he said. Music to go The Leading Question survey also asked 600 music fans what devices they would be buying in the next year. One of the challenges will be to develop the perception of the phone as a credible entertainment device Tim Walker, The Leading QuestionA third planned to buy a dedicated MP3 player, while just 8% said they would be buying an MP3-enabled phone. Reasons cited for not purchasing a music playing phone included worries about battery life and concerns about losing the handset, and potentially their music collection. The fact that phones tend to be frequently replaced also meant people had a low emotional attachment to them. "The phone is not ready to replace the iPod as a serious digital music player just yet," said Tim Walker, director of The Leading Question. "One of the challenges will be to develop the perception of the phone as a credible entertainment device," he said. Providers need to look at features such as dual download to mobile and PC, back-up facilities and improved interfaces between PC and mobile, he said. There is a huge potential market for MP3 phones. The survey found that 38% were interested in downloading full tracks to their mobile phones. And people are happy with the storage possibilities of phones with only 4% wanting to store more than 1,000 songs to take on holiday. Story from BBC NEWS: 
  Music's brighter future - Oct 28th 2004 The music industry Music's brighter future Oct 28th 2004 From The Economist print edition The internet will eventually be wonderful for music buyers, but it is still a threat to today's dominant record labels Rex “DIRTY pop with wonky beats and sleazy melodies” is how the Sweet Chap, aka Mike Comber, a British musician from Brighton, describes his music. The Sweet Chap has no record deal yet, but he has been taken on by IE Music, a London music-management group that also represents megastar Robbie Williams. To get the Sweet Chap known, last year IE Music did a deal to put his songs on KaZaA, an internet file-sharing program. As a result, 70,000 people sampled the tracks and more than 500 paid for some of his music. IE Music's Ari Millar says that virally spreading music like this is the future. It may indeed be, and nimble small record labels and artist-management firms will certainly get better results as they find ways to reach more people via the internet. But the question facing the music industry is when that future will arrive. And the issue is most urgent for the four big companies that dominate the production and distribution of music—Universal, Sony/BMG, Warner and EMI (see chart 1). So far they have been slow to embrace the internet, which has seemed to them not an opportunity but their nemesis. Rather than putting their product on file-sharing applications, they are prosecuting free-download users for theft. They have certainly been struggling: sales of recorded music shrank by a fifth between 1999 and 2003. Today, there is more optimism. In the first half of this year, global physical unit sales of recorded music rose, albeit by a tiny amount. The industry claims that file-sharing has stabilised thanks to its lawsuits. The number of music files freely available online has fallen from about 1.1 billion in April 2003 to 800m this June, according to IFPI, a record-industry body. That said, internet piracy is rampant, and physical CD piracy continues to worsen. But big music's attitude towards the internet has changed, too. Over the past four years the big companies have come a long way towards accepting that the internet and digital technology will define the industry's future. Thanks to Apple and its enormously popular iPod music players and iTunes download service, most music executives now believe that people will pay for legal online music. (Although they have mushroomed, legal online downloads account for less than 5% of industry revenues.) The big companies are trying to work out how they can harness the internet. Consequently, they are having to rethink their traditional business models. In the physical world, the big companies have the advantage of scale. In addition to marketing clout, they own a large back catalogue of music that can be repeatedly reissued. They are also bolstered by music-publishing businesses, which collect royalties on already published songs used in recorded music, live performance, films and advertisements. Historically, the majors have controlled physical distribution of CDs. Yet that barrier to entry will erode as more music is distributed on the internet and mobile phones. Artists can, in theory, use the internet to bypass record firms, though few have yet done this. The principal reason most have not is that they need marketing and promotion, which the majors also dominate, to reach a wide audience. The majors have a tight hold on radio, for example, by far the most effective medium for promoting new acts. (Perhaps their lock is too strong: Eliot Spitzer, New York's attorney-general, is investigating whether the companies bribe radio stations to play their music.) Could the internet challenge them on this too? So far, bands have not been launched online. But that could change, and there is already evidence that data derived from the preferences shown on illegal file-sharing networks are being used to help launch acts. Much will depend on whether the majors choose to address a problem that is just as important as piracy: these days they rarely develop new artists into long-lasting acts, relying instead on short-term hits promoted in mainstream media. That has turned off many potential buyers of new music. In future, using the internet, the industry will be able to appeal directly to customers, bypassing radio, television and big retailers, all of which tend to prefer promoting safe, formulaic acts. That could give the majors the confidence to back innovative, edgy music. But much smaller independent labels and artist-management firms can do the same, offering them a way to challenge the big firms head on. Even in the physical world, the big firms are struggling to maintain their traditional market. Supermarkets have become important outlets, but the likes of Wal-Mart stock only a narrow range of CDs, choosing to shift shelf-space away from music in favour of higher-margin DVDs and videogames. That is a symptom of another headache for all music firms: they face ever more intense competition from other kinds of entertainment, especially among the young. In theory, then, digital technology offers the majors an escape hatch. With infinite space and virtually free distribution online, every track ever recorded can be instantly available to music fans. Of course, smaller firms will be able to do the same thing. Where did all the music go? According to an internal study done by one of the majors, between two-thirds and three-quarters of the drop in sales in America had nothing to do with internet piracy. No-one knows how much weight to assign to each of the other explanations: rising physical CD piracy, shrinking retail space, competition from other media, and the quality of the music itself. But creativity doubtless plays an important part. Judging the overall quality of the music being sold by the four major record labels is, of course, subjective. But there are some objective measures. A successful touring career of live performances is one indication that a singer or band has lasting talent. Another is how many albums an artist puts out. Many recent singers have toured less and have often faded quickly from sight. Music bosses agree that the majors have a creative problem. Alain Levy, chairman and chief executive of EMI Music, told Billboard magazine this year that too many recent acts have been one-hit wonders and that the industry is not developing durable artists. The days of watching a band develop slowly over time with live performances are over, says Tom Calderone, executive vice-president of music and talent for MTV, Viacom's music channel. Even Wall Street analysts are questioning quality. If CD sales have shrunk, one reason could be that people are less excited by the industry's product. A poll by Rolling Stone magazine found that fans, at least, believe that relatively few “great” albums have been produced recently (see chart 2). Big firms have always relied on small, independent music firms for much of their research and development. Experimental indies signed Bob Marley, U2, Pink Floyd, Janet Jackson, Elvis Presley and many other hit acts. Major record labels such as CBS Records, to be sure, have signed huge bands. But Osman Eralp, an economist who advises IMPALA, a trade association for independent music companies in Europe, estimates that over 65% of the majors' sales of catalogue albums—music that is at least 18 months old—comes from artists originally signed by independents. In the past, an important part of the majors'R&D strategy was to buy up the independent firms themselves. But after years of falling sales and cost-cutting, the majors have little appetite for acquisitions, and now rely more on their own efforts. What Mr Levy calls music's “disease”—short-term acts—is not solely a matter of poor taste on the part of the big firms. Being on the stockmarket or part of another listed company makes it hard to wait patiently for the next Michael Jackson to be discovered or for a slow-burning act to reach its third or fourth breakthrough album. The majors also complain that the radio business is unwilling to play unusual new music for fear of annoying listeners and advertisers. And while TV loves shows like “Pop Idol” for drawing millions of viewers, such programmes also devalue music by showing that it can be manufactured. Technology has made it easy for music firms to pick people who look good and adjust the sound they make into something acceptable, though also ephemeral. The majors could argue that they can happily carry on creating overnight hits; so long as they sell well today, why should it matter if they do not last? But most such music is aimed at teenagers, the very age group most likely to download without paying. And back-catalogue albums make a great deal of money. The boss of one major label estimates that, while catalogue accounts for half of revenues, it brings in three-quarters of his profits. If the industry stops building catalogue by relying too much on one-hit wonders, it is storing up a big problem for the future. A new duet There are signs that the majors are addressing the issue. Universal Music and Warner Music are starting up units to help independent labels with new artists, both promising initiatives that show that they are willing to experiment. Thanks to the majors' efforts in the last few years, their music has already improved, says Andy Taylor, executive chairman of Sanctuary Group, an independent, pointing to acts such as the Black Eyed Peas (Universal), Modest Mouse (Sony), Murphy Lee (Universal) and Joss Stone (EMI). And yet even if they can shore up their position in recorded music, the big firms may find themselves sitting on the sidelines. For only their bit of the music business has been shrinking: live touring and sponsorship are big earners and are in fine shape. In the past 12 months, according to a manager who oversees the career of one of the world's foremost divas, his star earned roughly $20m from sponsorship, $15m from touring, $15m from films, $3m from merchandise and $9m from CD sales. Her contract means that her record label will share only in the $9m. In 2002 Robbie Williams signed a new kind of deal with EMI in which he gave it a share of money from touring, sponsorship and DVD sales as well as from CDs, in return for big cash payments. Other record firms are trying to make similar deals with artists. That will be difficult, says John Rose, former head of strategy at EMI and currently a partner at the Boston Consulting Group in New York, because many artists, and their managers, see record companies less as creative and business partners than as firms out to profit from them. Artists' managers will resist attempts to move in on other revenue streams. Peter Mensch, the New York-based manager of the Red Hot Chili Peppers, Shania Twain and Metallica, says “we will do everything and anything in our power to stop the majors from grabbing any share of non-recorded income from our bands.” Mr Mensch says that one way to fight back would be to start his own record company. Independent labels are also gunning for the big firms. For one thing, they are fighting to stop further consolidation among the majors because that would make it even harder for the independents themselves to compete for shelf space and airplay. IMPALA will soon take the European Commission to court for allowing Sony and BMG to merge earlier this year. But the small firms are also optimistic that they can grow at the expense of their big rivals. The majors are cutting back in smaller markets and dropping artists who lack the potential to sell in lots of countries. That leaves a space for the indies. For example, Warner Music Group is thought to be readying itself for an initial public offering in 2005 and, as part of cutting costs in Belgium, it dropped artists this year. Among them was Novastar, whose manager says the group's latest album has so far sold 56,000 copies in Belgium and Holland. The more the majors scale back, the more the market opens up. People who have left the big firms are starting up new ventures. Emmanuel de Buretel, previously a senior manager at EMI, is about to launch an independent record label called “Because”, with help from Lazard, an investment bank. Tim Renner, formerly chairman of Universal Music in Germany, will soon set up a music internet service, a radio station in Germany and possibly a new record label. In the material world Meanwhile, the majors are trying to plot their move to digital. Making the transition will be tricky. Bricks-and-mortar music retailers need to be kept happy despite the fact that they know that online music services threaten to make them obsolete. It is still unclear what a successful business model for selling music online will look like. People are buying many more single tracks than albums so far. If that persists, it should encourage albums of more consistent quality, since record companies stand to make more money when people spend $12 on a single artist than if they allocate $2 to each of six bands. Or it could mean that the concept of the album will fade. Online pricing is unstable too. It is likely that download prices will vary in future far more than they do now. Apple forced the industry to accept a fixed fee per download of 99 cents, but the majors will push for variable, and probably higher, prices. Online prices will have an impact on prices in the physical world, which are already gradually falling in most markets. But the result of all these variables might be structurally lower profits. Edgar Bronfman junior, chairman and chief executive officer of Warner Music Group, expects that paid-for digital-music services via the internet and mobile phones will start to have a measurable impact on music firms' bottom lines as soon as 2006. The new distribution system will connect music firms directly with customers for the first time. It will also shift the balance of power between the industry and giant retailers. Wal-Mart, for instance, currently sells one-fifth of retail CDs in America, but recorded music is only a tiny proportion of its total sales. The best distribution of all will come when, as many expect, the iPod or some other music device becomes one with the mobile phone. Music fans can already hold their phones up to the sound from a radio, identify a song and later buy the CD. At $3.5 billion in annual sales, the mobile ringtone market has grown to one-tenth the size of the recorded music business. But can paid-for services compete with free ones? The paying services need to put more catalogue online if they want to match the file-sharing networks with their massive music libraries. And it is still unclear how much “digital-rights management”—technology that restricts how a music download can be used—people will tolerate. Another key issue is interoperability: whether the various new devices for playing digital music will work with other online stores. Apple's iPods, for instance, work with iTunes, but not with Sony Connect or Microsoft's MSN Music Store. Too many restrictions on the paid-for services may entrench file-sharing. Out of the more than 100 online music sites that exist now, a handful of big players may come to dominate, but there will be specialist providers too, says Ted Cohen, head of digital development and distribution at EMI. iTunes is like the corner store where you buy milk and ice cream, he says, but a customer does not spend much time there. Real Networks'Rhapsody, on the other hand, charges a monthly subscription in return for unlimited streaming music and gives descriptions that lead people to new artists. Recommendation services like these, as well as people sharing playlists, will eventually make the internet a powerful way to market music as well as to distribute it. Jiving with the enemy In September, according to comScore Media Metrix, 10m American internet users visited four paid online-music services. The same month another 20m visited file-sharing networks. The majors watch what is being downloaded on these networks, although they do not like to talk about it for fear of undermining their legal campaign. Online music might truly take off if the majors were to make a truce with the file-sharing networks. The gulf between the two worlds has narrowed now that the industry sells its product online and allows customers to share music using digital-rights management. As for the file-sharing networks, “the other side is more willing to talk and less adversarial,” says an executive at one of the majors in Los Angeles. Music industry executives say that Shawn Fanning, founder of Napster, the first file-sharing network, is working out how to attach prices to tracks downloaded from such services, with a new venture called “Snocap”. Mr Fanning tried to make the original Napster legal back in 2001, but the music industry decided instead to sue it out of existence. Sam Yagan, boss of eDonkey, currently the most popular file-sharing network, says he had meetings with three of the four major labels last summer about how his network could start selling their music alongside free content. As IE Music's experiment shows, that is not an impossible dream. Music executives may not have the confidence yet to make a deal with their arch-enemies. But eventually they have to get bolder. It seems clear that the only way for the majors to stay on top of the music industry into the next decade is to take more risks—both technological and creative—than they have done for a long time. 
  Finally an SaaS SAP attacking app Intacct raises $7 million; promises guerrilla campaign against SAP/Oracle Intacct is a company trying to undercut the big boys, SAP and Oracle, by selling cheaper Web-based financial applications. The San Jose-based company will announce tomorrow that it has raised $7 million in a second round of venture capital, led by Emergence Capital and including existing investors Hummer Winblad and JK&B Capital. Bob Jurkowski, chief executive, told us the company had a record quarter, and is working closely with to acquire new customers. It lets handle a customer's sales management applications, but Intacct wants to manage the "backend" needs of its customers, including things such as project management, and supply-chain management. Jurkowski said he is launching some guerrilla marketing tactics, similar to those of smaller competitor Netsuite, which tried to fluster SAP last week by setting up a conference across the street from SAP's own SAPPHIRE customer conference (Netsuite failed to pull it off). For his part, Jurkowski didn't reveal any details. Posted by Matt Marshall on May 21, 2006 08:22 PM | 0 Linking Posts 
  Space Ninja Sneaks in Japan Anyone who remembers my post about making nunchuks when I was a kid knows this made me squeal with joy.... ------------------ Space Ninja Sneaks READ MORE: Asics, Gadgets, Ninja, Sneakers, Space, TOP, Tabi - GizmodoWhen I was a kid, my Grandma made me a full ninja uniform complete with tabi boots. While I surely did look cool then, I can only imagine how I’d look now wearing these ninja-tastic sneaks from Asics. These are actually made for astronauts. Yeah, you read correctly. Because standard sports shoes hurt in space—something about muscles and circulation—Asics designed a special pair that reduces strain. They’re not available to us non-space ninjas, however. Japan Space Sneakers Are Ultra-High Heels [SpaceDaily via TheCoolHunter] 
  Monkee with a head of hair So after a brief but inspiring converstion with my friend Harsh, I'm going to be growing my hair out Asian rockstar style and you my faithless readers will reap the entertainment rewards. Every two weeks I'm going to post a picture of my actual head to document my hair's growth. I'd venture to say at the end of 3 months I'll have a fantastic looking head of hair that would be the envy of all, including some females. Word up. 
  Walt Mossberg on the "the post-pc" era: Apple fanboy much? This article from the WSJ by Walt Mossberg kind of got my goat. Beyond simply being among the biggest of Apple cheerleaders, he's just plain yanking at the wrong beanstalk. The end to end model is how Ford and GM built their business way back in the Model T days. The era of the "integrated" players is pretty much over as you just can't squeeze out efficiencies in process and supply chain if you design, source, build, and assemble every component of a product. Granted Apple isn't really a pure end to end player in that they still source their CPUs from Intel (formerly IBM/Motorola) and some of the industrial design/assembly is sourced to Taiwan mostly, they still only occupy 3% of the total PC market share of the top of my head. If they increased it to say 50%, then no doubt Apple will have to drastically alter how they architect their supply chain to mimic that of the component model. So the ability to manage a product's entire lifecycle is alot more simple if your turnaround isn't quite as frenetic as say a Dell's which has around 60 inventory turns a year. After some further thinking, also, the reason Apple was able to dominate the personal MP3 player device is classic management consulting strategy. Although flash players existed before, they were among the first to market with hard drives, first to marketshare, first to mindshare. Then they built a platform in iTunes to bind it all. Coupled with fantastic industrial design, they were able to pull off a great win that has raised the tide for all of its products. The same can be said when IBM introduced the modern mainframe in its S/360. Other mainframes existed before them like the Univacs used by the US government, but nothing before it was designed with such thoughtfulness to enterprise needs. For the next 20 years IBM rode its success until the client/server era changed all that up. Apple is trying to do the same with the iPod, making it a hub, but the integrated model can only be successful a) if you live in the 1920's b) if you carve out dominant share in the marketplace. Even then, its pretty short lived the way tech evolves today. For many years, there have been two models of how to make computers and other digital devices. One is the component model, championed by Microsoft. The other is the end-to-end model, championed by Apple. In the component model, many companies make hardware and software that run on a standard platform, creating inexpensive commodity devices that don't always work perfectly together, but get the job done. In the end-to-end model, one company designs both the hardware and software, which work smoothly together, but the products cost more and limit choice. In the first war between these models, the war for dominance of the personal-computer market, Microsoft's approach won decisively. Aided by efficient assemblers like Dell, and by corporate IT departments employed to integrate the components, Microsoft's component-based Windows platform crushed Apple's end-to-end Macintosh platform. But in the post-PC era we're in today, where the focus is on things like music players, game consoles and cellphones, the end-to-end model is the early winner. Tightly linking hardware, software and Web services propelled Apple to a huge success with its iPod. Microsoft, meanwhile, has struggled to make its component model work on these devices and, in a telling sign, is using the Apple end-to-end model itself in its Xbox game-console business. Now, Apple is working on other projects built on the same end-to-end model as the iPod: a media-playing cellphone and a home-media hub. The jury is still out on whether the end-to-end model will prevail in the long term. Many at Microsoft, and some outside analysts as well, believe the new devices will eventually succumb to the component model, and that Apple's success with the iPod will fade, just as its early dominance of the PC market did. Apple officials say history won't repeat itself if the company continues to make great products and avoid the business blunders committed by its past management. I think the end-to-end model can prevail this time, both for Apple and other companies. Consumers want choice and low prices. But they also crave the kind of simplicity and integration that the end-to-end model delivers best. Sure, you can get more variety in music players and in online music services if you opt for the Microsoft-based music instead of the iPod system. But the iPod, Apple's iTunes software, and the iTunes Music Store work so well together that users can just relax and enjoy the music. By contrast, the hodgepodge of players, software and online music stores on the Microsoft side frequently have trouble synchronizing between computers and players. Apple sells as many or more songs than the many stores that use Microsoft software. Critics attack the iPod and iTunes as "closed" and "proprietary," because the songs Apple sells at its iTunes Music Store play only on iPods, and iPods can't play songs purchased from other music stores. But both the iPod and iTunes handle the two most common open audio formats, MP3 and WAV, and the most common open video format, MP4. They work well even if you never buy a song from Apple. And iTunes and the iPod work on Windows computers, not just Macs. So how is that closed? Even the Mac isn't as closed as its critics charge. It's still designed to work with Apple's own operating system and software. But it can handle all the common files Windows uses, can network with Windows machines, and can use all of the common Windows printers, scanners, keyboards and mice. The Mac gives you the same access to the Internet as Windows. Heck, the newest Macs can even run Windows itself. You do get a choice of more software with Windows. And that's great for hard-core gamers and users of corporate, or niche, software. But for mainstream users doing typical tasks, the Windows choice advantage is illusory. Mac users can choose among thousands of third-party programs, including multiple Web browsers, word processors and email programs. They can run Mac versions of popular software like Microsoft Office and the Firefox browser. How much more choice do you need? Microsoft is hedging its bets. It has, in effect, created a little Apple inside Microsoft with the Xbox group. The Xbox team shunned Windows and wrote its own operating system and user interface, and built its own hardware. (The new Xbox was even developed using Macintosh computers.) Some Microsoft officials dismiss this anomaly by claiming that the game-console business is a special case. But now, Microsoft has assigned the Xbox team to create a portable music player it hopes can knock off the iPod. Why? Because the company is frustrated that the component model, which separates hardware and software, has failed in the music market. It's looking for more integration. Still, the end-to-end model isn't a lock. If Apple can't keep churning out cool products at reasonable prices, it could crash and burn. Unlike Microsoft, it doesn't have much help from other companies to succeed. But the iPod experience has shown that the PC model may not be best for all digital devices.
  Amazon CTO Werner Vogels - Learning about the Amazon technology platform A very long but worthwhile interview from ACM Queue with Werner Vogels, CTO,, discussing the architecture, their decision to build on a distributed services oriented architecture, and how they govern and manage development. --------------------- A Conversation with Werner Vogels Learning from the Amazon technology platform Vol. 4, No. 4 - May 2006 Many think of Amazon as "that hugely successful online bookstore." You would expect Amazon CTO Werner Vogels to embrace this distinction, but in fact it causes him some concern. "I think it's important to realize that first and foremost Amazon is a technology company," says Vogels. And he's right. Over the past years, Vogels has helped Amazon grow from an online retailer (albeit one of the largest, with more than 55 million active customer accounts) into a platform on which more than 1 million active retail partners worldwide do business. Behind Amazon's successful evolution from retailer to technology platform is its SOA (service-oriented architecture), which broke new technological ground and proved that SOAs can deliver on their promises. Vogels came to Amazon from Cornell University, where he was working on high-availability systems and the management of scalable enterprise systems. He maintains that research spirit at Amazon, which regularly must solve problems never before encountered. "Maybe other companies call it research. We just call it development," he points out. Interviewing Vogels is ACM Turing Award winner and Microsoft Technical Fellow Jim Gray. 
  Google the new Microsoft? The Economist writes: Google is thus starting to look a bit as Microsoft did a decade ago, with one strength (Windows for Microsoft, search for Google) and a string of mediocre "me-too" products. Google Video, for instance, was supposed to become an online marketplace for video clips, both personal and business, but has been overtaken by YouTube, a start-up that is a few months old but already has four times as much video traffic. Google News, where the stories are, characteristically, chosen by mathematical algorithms rather than by editors, perennially lags behind Yahoo! News, with its old-fashioned human touch. Google's instant-messaging software is tiny compared with AOL's, Yahoo!'s and MSN's. ... Google thus finds itself at a defining moment. There are plenty of people within the company who want it to play the power game. "The folks who are closest to Larry and Sergey are very, very worried about Microsoft, as well they should be," says John Battelle, the author of a blog and a book on Google. Yet the company's founders themselves may not be prepared to drop their idealism and their faith in their own mathematical genius. 
  Open source gang forms to battle IBM, BMC and CA Its interesting observing what's going on in the systems management marketplace. Some observers note that it resembles very much the middleware market years ago until Weblogic, Websphere, and more recently Jboss has emerged as the noteworthy players. Opensource has been a trend contributing to, not simplifying, complexity within the IT landscape. To paraphrase Lou Gerstner, CIO's are tasked with making several elephants dance in synch. Now CIO's have alot of little elephants too with the likes of Red Hat/Jboss, Novell, and MySQL in the mix. Invariably some opportunistic vendors have spotted the opportunity to replicate the MySQL and Jboss business model in Open Source Systems Management. can be a gold mine if you spot the right opportunity as we can observe with companies like Xensource among others. Systems management has emerged as an extremely essential part of the enterprise, even as IBM with its efforts to link up Tivoli and Rational and vendors like BlackDuck and Spikesource build their business models around certifying open source IT stacks for enterprises. It becomes ever more byzantine when CIO's consider the possibilities in cost savings behind hard ware virtualization and to a lesser extent applications virtualization. The cost savings in server utilization and power demands are mitigated by the fact that you have 4 or 5 times more servers in your environment. That's where vendors like Opsware and Bladelogic come into play. The list of vendors offering similar components of the systems managment marketplace becomes long, however, when you look at incumbent vendors with positions of strength in other parts of the stack such as IBM, Microsoft, BMC, and the newly reconfigured CA under Swainson. My prediction is more consolidation down the road as the hot trend in virtualization, from network to server, accelerates the need for operations and systems managment and vendors invariably attempt to be the one stop shop. ----------------- Open source gang forms to battle IBM, BMC and CA | The Register The systems management market has clearly not been a favorite for customers over the years. You have to side with a vendor and then shell out hundreds of thousands of dollars or more for add-on packages to handle various tasks. An open source alternative would clearly give Linux savvy small- to medium-sized businesses a nice option. The OMC pitch weakens in these early days when you realize that its the systems management crowd's attempt to mimic the LAMP (Linux Apache MySQL PHP/Perl/Python) stack that has become all the rage. Companies ranging in size from IBM and Red Hat down to services start-ups have put in a lot of work certifying the core LAMP software to work well together and then certifying additional packages that can fit into the LAMP combination. There's no grand certification effort going with the OMC crowd. In fact, the initial run of OMC is really just a declaration that these open source vendors exist. They've set up a web site with limited information about the partnership, and that's about it at this point. "I think the idea is that a formal structure will come about," said Mark Hinkle, a VP at Emu Software. "The first thing we have to do is come up with the conversation." The organizations backing OMC do eventually plan to do more than just talk. They'll have joint sales and marketing programs and strive to make sure their applications work well together. In addition, they hope to add more companies to the group and even invite the likes of IBM and CA to see where they might contribute. In addition, OMC hopes to carve out some true "open standards" around systems management rather than relying on standards groups that require $100,000 a year for participation. At the moment though, such plans are pretty far off. The OMC group seems set on using "conversation" as its key mechanism, which is a very open source thing to do, but we wonder how far that will carry them. There's no question that open source systems management products deserve more attention. It's only natural that this part of the software market come under siege next with the OS, web server, application server and database conquered to a degree. We wonder though how much IBM or CA will fear the open source "conversation." A more concerted effort to align the release cycles of all these open source packages and provide unified support around them would be welcomed and provide substantial competition against the giants. That said, something like OMC had to happen. If done right, it will no doubt capture the attention of the dominant players 
  Can Microsoft Reinvent itself? Great post from Ed Sim's from BeyondVC. Microsoft has a problem in that they are trying to build Google from the ground up within Microsoft with .NET and Microsoft's own stack of client server infrastructure. Byzantine? We'll find out and Microsoft will find out as well. Think of it as the ultimate experiment as to whether a billion dollar company can effectively scale out on Microsoft products. The acclaim piled upon Microsoft Server 2005 and SQL server 2005 will come to a full test. The problem is investors haven't bought into the idea and actually believe that the 2 billion dollars can be put to better use. From a strategic point of view, this is money well spent. Google is on top of the world and has allied themselves with some angry characters including the forlorn former high flyer Sun Microsystems -- who has been bleeding talent including Vinod Khosla and Bill Joy to Kleiner Perkins. Scott McNealy leaving the helm to Jonathon Schwartz may be too little too late.... Still this is beside the my assessment MS is making the right bet, despite investor sentiment. ------------------- Can Microsoft reinvent itself? Microsoft released its third quarter numbers the other day and while revenue growth was strong, the stock got hammered and dropped over 10%. Why? Microsoft plans on investing for the long term and putting another $2b into the Internet and other new technologies like the XBox. To sum it up, here is Rick Sherlund, Goldman Sachs' Software analyst, "It sounds like you're building a Google or building a Yahoo! inside the company." Looking at the long term, I am quite excited about the prospects of all of this money coming into help grow the Internet sector and SaaS. First, having another big player push the concept of software as a service will only help further educate and soften the market, particularly business customers Secondly, this will mean that Microsoft will be aggressive with hiring and with acquisitions. I remember being at the Microsoft VC Summit a couple of years ago and hearing Steve Ballmer talk about his acquisition strategy. He would either do huge, billion dollar ones or look at acquisitions less than $20mm. That has been changing and will change rapidly with this renewed empahsis and focus. That only means good news for VCs and entrepreneurs. And as a VC, I wholeheartedly agree with Microsoft's CFO, Chris Lidell when he says, "Today, we believe we face the largest array of opportunities for growth and innovation the company has ever seen." I certainly feel the same way from a VC investment perspective. Whether Microsoft succeeds or not is another story, but $2b invested in new technologies will go a long way towards solidifying their position. I would say that they did alright in 1995 when they decided to point their guns at Netscape to make sure the browser and Internet would not circumvent their monopoly on the desktop. The problem is that once they won the browser wars, Microsoft became satisfied, fat and happy. And as we all know, fat cats don't hunt. Others came around and outinnovated them - Firefox, Google, etc. This is Round 2, which really started with Microsoft's purchase of Groove Networks and Ray Ozzie last year. To refresh your memory, I suggest reading Bill's email from October 2005 (also see the Ray Ozzie memo) where he leads the battle charge for the next generation web, the SaaS era. Today, the opportunity is to utilize the Internet to make software far more powerful by incorporating a services model which will simplify the work that IT departments and developers have to do while providing new capabilities..... However, to lead we need to do far more. The broad and rich foundation of the internet will unleash a "services wave" of applications and experiences available instantly over the internet to millions of users. Advertising has emerged as a powerful new means by which to directly and indirectly fund the creation and delivery of software and services along with subscriptions and license fees. Services designed to scale to tens or hundreds of millions will dramatically change the nature and cost of solutions deliverable to enterprises or small businesses. And yes, it sounds alot like the memo Bill Gates wrote 10 years ago called the Internet Tidal Wave where he helped the big battleship called Microsoft reposition itself and point its guns at Netscape and others. Round 2 is no different from Round 1 but the stakes are higher and it will cost Microsoft oodles more cash this time to create a dent in this market. While we all know that memos often do not mean a whole lot, it is clear that Microsoft is quite serious as they are not afraid to piss off Wall Street and really put dollars to work for the long term position of the business. This will certainly be an interesting battle to watch over the next few years. Also lifted from Don Dodge's blog: Here is a list of the 22 acquisitions sorted by product group; * VirtualEarth aka MapPoint - Vexcel and GeoTango do 3D imaging and remote sensing. * MSN - DeepMetrix (web site stats), Massive (videogame advertising), Onfolio (web research), Teleo (VoIP), Media-Streams (VoIP), MotionBridge (mobile search), TSSX (China mobile services), SeaDragon (Large Image manipulation) * Windows Live - FolderShare (file synch), MessageCast (MSN Alerts) * Speech Server - Unveil Technologies (call center SW) * Security - Alacris (Identity Mgmt), FutureSoft (Web filtering) * Systems Management - AssetMetrix (License tracking) * Business Intelligence - ProClarity (analysis and visualization) * Microsoft Game Studios - Lionhead Studios (games developer) * Exchange Server - FrontBridge (email security) * Microsoft Project - UMT (Portfolio Mgmt) * Storage Server - Stringbean Software (iSCSI SAN) * Vista - Apptimum (Application transfer) It appears that many of these acquisitions were focused on MSN properties and consumer based services. One thing to remember about Microsoft...the product groups run the company, and they all work largely independent of each other. They make the decisions about what to acquire and when. There are acquisition teams but they tend to be called in to execute the deal after the product groups have decided what they want to do. So, there will not necessarily be a high level strategy that all these acquisitions fit into, but they make sense on an individual basis. 
  Going to see the Black Spoons tomorrow... Yeah these guys are pretty good....reminds me of David Bowie a bit. They're on the Black Market label with The National and The Yeah Yeah Yeahs. Check 'em out on Myspace here
  Old photos...... I went through a undocumented photography craze...was a lot of fun...just never thought about posting here it is:  
This and that, here and there on tech and other stuff.

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