TECHNOLOGY REPORT

Microsoft is demonstrating a very exciting touch technology – Surface Computers – that are coming soon to a Las Vegas near you. Check out the demo tape at Channel 10. (hmmm – loading problems?). Wait, here’s a shorter one at Popular Mechanics.

Aside from the potential $25,000? cost to spill your coffee and ruin this computerized table this really is an awesome technology, bringing two great user interface features to the “table” literally and figuratively.  The first is touch, which is a nice interface for many forms of navigation and the second is a large screen, which is almost always desirable as a big enhancement of the user experience.

Imagine sitting at your coffee table pulling up email, adjusting the TV, ordering up a pizza for delivery, and researching the influence of the Jacobian Matrix on search engine results.    It doesn’t get much better than that.

Josh at Redeye VC has some *excellent* points about the coming big battle between Facebook and Myspace for web developers:

If you ran a venture-backed company and had to decide whether you wanted to focus your effort on: (a) a property that welcomed you in and let you keep 100% of the revenue you generate or (b) a company with a vague policy that doesn’t let you generate any revenue, which would you choose? I don’t think it’s even a decision. It’s an IQ test.

However, it is significant that Myspace remains far larger than Facebook in terms of a user base and also important is that users, not developers, have driven the success of Myspace.

Facebook is hard to analyze because until very recently they had a much more restrictive policy on new accounts, opening them only to groups associated with businesses or universities. To join Facebook I initially had to contact my old alma mater – University of Wisconsin – to get an alumni email set up, then redirect that to my current mail. No big deal but certainly a barrier to entry. Facebook now (wisely) has opened itself up to everybody and (also wisely) is pursuing a very open approach to API usage and social media. Most importantly Facebook is going to allow those who build applications around Facebook to keep 100% of the revenue those create.

I think this “100% revenue share” is a brilliant approach because the Facebook “whole” will be much greater than the sum of these parts. Thus Facebook can make a *lot* of money through the extra traffic and advertising created by websites and developers and users gravitating to the Facebook social media ecosystem. The loser in this equation would be Myspace and other sites (that would be MOST sites) that try to create social media environments but don’t share much of the revenues.

Today Facebook launches a social media initiative that is significant enough to possibly become a web milestone, depending on how the developer community views and uses all the new capabilities that Facebook is offering to them.

Rafe Needleman‘s got a video of the conference today and Techcrunch will, as usual, have insightful summary of the implications of all this.

Based on my quick first look into what they are up to this really looks like a brilliant move, and a sign they won’t be selling to a bigger player, rather trying to rise up and eat the bigger fish.

If Facebook can capture the imagination of enough developers and become “the” key platform for social media they’ll likely be very glad to have turned down the billion+ dollar buyout offers earlier this year.

At the least Mark Z and his crew deserve huge props for going for the gusto and offering to take the development community along for the ride.  This is not only great stuff for Facebook and social media evangelism, this appears to be consistent with the grand and open internet community vision that one hopes will ultimately prevail.

Jimmy Wales, founder of Wikipedia, discusses his Wikia search projectand the internet. He’s the chairman of Wikia, Inc. He thinks it’ll be 2-3 years before they have a robust product.

“Democratic, participatory” search project.
“Google, Yahoo, Ask” have similar, proprietary and closed search. He wants to break up the idea that a few companies should be so dominant.

Making search ubiquitous. He thinks Google may not have problems with WIKIA because they can keep matching up ads, advertisers, and buyers as they have been.

Wales thinks Facebook made the right decision to turn down Yahoo’s billion+ offer for Facebook, calling it an “interesting gamble”. “He’s a pretty sharp guy” (Zuckerman), and Wales thinks that unlike Myspace, Facebook is doing right by the customers. Notes increase of spam and advertising intensity of Myspace.

Wikia major initiatives: Search, Reference Works for humor, opinion, sports. 66 languages plus a “Klingon language” project. “Roll this revolution” into many other areas. What makes the internet great is that it’s a “global platform for people to share knowledge”. Keeping it “open” appears to be a key guiding principle for Wales, and his admirable efforts at Wikipedia support his sincerity in that mission.

Wales suggests that Firefox is the best browser, primarily due to features that he sees as the result of the open source development model that created Firefox.    He says that monopolistic activity by Microsoft has slowed innovation, but feels that Google is a friend of Open Source.     Wales recounted telling Bill Gates at Davos that Microsoft search is so bad people are switching away from it as the Vista default, and suggests that he’ll have fun trying to build a better search than Google with Wikia.

Yahoo may buy Bebo, the British “Myspace”, for a billion dollars. That is a LOT of money – about 3% of Yahoo’s market cap. Presumably this, like Yahoo’s unsuccessful Facebook aquisition attempt, is Yahoo’s approach to recapturing the market dominance it enjoyed back in the day. Dominance through the aquisition of a social network rather than developing their own.

They should know better than to trust their existing criteria for decisions about aquisitions. Yahoo is the company that aquired Overture’s pay per click technology years ago, and then managed to cede dominance in that area to Google. Ever heard of Google? Yahoo probably could have *owned* Google, but it seems higher management didn’t think search had the monetization potential of … broadcast.com which was purchased for billions.

Isn’t it time for top management at Yahoo to let innovation, not aquisitions, rule the day? This approach has worked very well for Google, who’s main mistakes now appear to be in aquiring things like YouTube which in my opinion is unlikely to recover YouTube’s 1.6 billion price tag and will certainly pester Google with big money lawsuits for decades. Yahoo’s still got a LOT of great technical people, especially in the developer and new business divisions. More importantly, the world is producing hundreds of thousands of new, brilliant innovators every year, most of whom are chomping at the bit to bring new and exciting innovation to the hungry online world. Why not devote the billions to this rather than purchasing companies with marginal revenues and long term prospects that are more hope and prayer than reality?

With the latest flurry of high priced aquistions it almost seems like, to the big players, the billion dollar deal is the new million dollar deal. I remain skeptical that deals of this size pay off in the long run – certainly very, very few of the early pre-bubble ones did not pay off for companies. I’d suggest that the smaller deals (e.g. Flickr) do have potential, but that Yahoo’s top management is looking for a killer deal that simply does exist while the innovation approach (ie much, MUCH more support to the core values and teams at Yahoo) is starting them in the face. Traffic? Yahoo’s got plenty of it. Modest changes can send millions of Yahoo users to any new idea, so why not do this *a lot more* and test *a lot more ideas*.

Edison suggested that there is always a better way, and it’s time for Yahoo to ….. find it.

More Bebo-logy from Techmeme:

Yahoo may net Bebo owners $1bn

Link Search: Google, Ask, Technorati, Sphere, and IceRocket

+

Bebo/YHOO: My Rumor’s Bigger Than Yours

Yahoo May Be Bidding For Social Network Bebo: Report

Yahoo: When You Can’t Buy Facebook, You Buy Bebo

Bebo is not for sale

Here in Southern Oregon, Applegate is the charming valley and river that was named after early settlers. For Silicon Valley the new term “AppleGate” refers to the top tech blog Engadget’s posting of a fake email suggesting that Apple’s iPhone would be delayed. The report led to an almost immediate sell off of Apple stock and a 4 billion dollar decline in Apple’s market capitalization, though the stock rebounded quickly when it became clear the email was a fake.

This appears to be a *superb* example of how information is reflected by the stock market and how quickly. I get the idea the (bogus) iPhone delay rumor affected the price of APPL almost immediately but have not checked the timing.

Mike at TechCrunch has a nice play by play and graph of AppleGate, and the Engadget post AppleGate post is here.

It’s no wonder Jonathan Schwartz is one of the coolest CEOs in tech.    His response to the Microsoft lawsuit onslaught on open source is simple, suggesting that innovation beats litigation.

Here is a nice post from Google about their new policy to anonymize search info from users. Like many I have been critical in the past of Google and others for storing this information with little regard to who owns it or saying what they’ll be doing with it.     Yahoo and MSN do not (yet) have similar policies so I think Google can rightly claim a higher road since they have also been the one who has fought Government attempts to nab search data.   (I have mixed feelings about that since, unlike folks like Battelle, I fear commercial abuses  more than I fear the Government will use my data in illegal and harmful ways.

I love this idea of choosing to either pay for your soft drink or watch an ad and get it for free.    We’ll see a LOT more things like this over time as consumers start to demand that companies cut out the middleman and pay them *directly* for providing attention and the potential to be influenced by advertising.

To me it’s very natural for a consumer to be compensated directly for their attention, It’ll shake up the ad industry in new, fun, and interesting ways.

Interesting.   My Chico the Wonder Dog SEO experiment is yielding some unexpected results.    A tweet about this is now higher in the ranks than the original blog post page.

Chico the Wonder Dog has been trading places with another Chico the Wonder Dog.   That post is much older and may have more incoming links since that guy seems to spend more time posting about his dog than I do, though based on my quick analysis of this and a few other cases I think it indicates that Google looks carefully at the rate of link growth, and if it slows they tend to put back the “old, tried and true” page in favor of the newcomer. This makes sense from an anti-spam perspective although in Chicos particular case it probably does not yield the top dog.

However, the Twitter reference rising to high seems really surprising because Twitter posts are generally small and insignificant (as it is here).  I’m surprised Google ranks these at all, let alone makes them competitive with meaty postings.  Perhaps Google has elevated “social media” in some algorithmic fashion though my guess is this is a defect that will be corrected – ie Twitter is structured in a way that links to these posts from many Twitter people and this is messing up the Algo’s handing of this insignificant material.    If I’m searching for “Tesla Coil”, let along pretty much anything of any relevance, I hardly want a bunch of Twitter posts!