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February 28th, 2007

Força Barça

Barca Advanced Micro Devices is finally able to match Intel with a complete platform of its own chips following the introduction of the 690 Series chipset today.

The product of its takeover last October of ATI, the Canadian graphics chipmaker, it allows AMD to combine its microprocessor with an ATI integrated graphics processor on a motherboard, something Intel has been doing for years with its own integrated graphics chipsets.

The 690 is designed with Windows Vista in mind, allowing HDMI high-definition connections and superior gaming performance.

Henri Richard, head of sales and marketing, was also talking tough at the launch about future offerings, including Barcelona, the codename for a quad-core processor expected in the third quarter.

“It’s more of a killer product than Opteron was when it was launched,” he said, referring to the processor launched in 2003 that enabled AMD to make major market share gains against Intel in the server category.

“It will be a fantastic second wave of success for our architecture,” he added.

Barcelona cannot come soon enough for AMD, which has been taking a benchmark beating from Intel since its larger rival introduced a new architecture last year and became the first to offer quad-core processors. 

February 27th, 2007

First voice for Second Life

Exp_flying Second Life, the online virtual world, is to offer another dimension to its members other than 3D graphics and a different personality.

3D sound with spatial awareness is coming to the experience, enabling users to escape the text-based conversations that have dominated role-playing games since the days of MUDs.

Linden Lab, Second Life’s creator, will roll out a voice beta next week ahead of a planned full launch in the second quarter.

Linden is integrating technology from Vivox and DiamondWare that allows virtual world residents to hear each other speaking to the right or left, far away or nearby.

They can choose private one-to-one chats or be part of a crowd of up to 100 people talking, with volume adjusted according to distance.

“Voice has always been part of the long-term plan for the Second Life Grid, as we feel it will help residents become more immersed in their virtual lives,” said Philip Rosedale, Linden chief executive.

Techblog predicts this could open a whole new economic avenue for Second Life members as well. Apart from the obvious educational and business applications, think karaoke contests and developers coming up with vocoder synthesisers that can change voices to something more befitting their online personas.

On the internet, nobody need know you talk in a dull monotone. Try a French accent or a Humphrey Bogart impression instead.

February 23rd, 2007

To DRM or not to DRM?

An FT.com poll asking whether music companies should drop digital rights management has received a lot of attention this week, and it would appear that the verdict is in. An overwhelming 98 per cent of more than 5,800 respondents said music companies should drop the software restrictions that prevent users from copying or sharing their digital files.

But is anyone listening? DRM is at the heart of two new online video services that have also been making news lately. Beta testers are already running Joost, the video service designed by the team that founded Skype. Meanwhile, BitTorrent, the company formed around the eponymous download protocol, is preparing to launch an online video store on Monday. For both companies, sophisticated copy-protection has been a selling point in their efforts to bring big studios on board.

The real question, it seems, is whether a general dislike of DRM will translate into action on the part of consumers. That does not seem to have been the case with Apple’s iTunes music store, which has seen more than 2bn DRM-laden songs downloaded since its launch in 2003, while sales of DRM-free CDs have plummeted.

February 22nd, 2007

Salesforce.com: jam tomorrow

Marc_benioffAs Google dabbles with selling access to its software online (seems a pretty good deal at $50 a year), it’s probably a good time to take a closer look at the economics of this business, as exhibitied by acknowledged leader Salesforce.com.

There’s no question that Marc Benioff’s software-as-a-service outfit has hit on a formula that appeals to customers. In fact, it just reported the addition of 90,000 new subscribers last quarter, taking the total to 646,000.

Take a closer look at the business model, though, and this still feels like "case unproven." Like any other business that depends on subscribers, there are a handful of measures that really count: how much does it cost to attract new subscribers, how much do these subscribers pay each month, and how long do they remain customers? In the language of mobile telephone or cable TV companies, you have to watch customer acquisition costs, ARPU (average revenue per user) and churn.

At Salesforce.com, some of these indicators are showing signs of stress. Sales and marketing costs are heading up: they just topped 50 per cent of revenue. Meanwhile, ARPU is coming down (it slipped by a couple of dollars in the latest quarter.) Churn is not a number that is readily apparent from the latest quarterly numbers, though Mr Benioff has said in the past that this remains minimal by the standards of most other subscriber-based businesses.

With competition from Oracle and SAP picking up, all of these measures will bear close scrutiny in future. Over the last two quarters, operating costs have been growing faster than revenues for the first time, according to David Hilal at Friedman Billings Ramsey. There’s also the fact that, after deducting employee option-related costs, Salesforce.com doesn’t yet make a profit.

This doesn’t mean that the model is broken: Mr Benioff’s dash for growth may eventually pay off handsomely. But it seems far too early to declare him the victor in the software-as-a-service game.

February 21st, 2007

The revolution underway in the guts of the Web

Every now and then, it’s worth pausing to take stock of just how far the technology of the Web has come in the past few years - and, with imaginative application, what the impacts might be on business and everyday life.

Take this example, about the use of XML in financial reporting. Back in 2000, when I first wrote about this, it sounded nice in theory but remote in practice: if financial reports posted to the SEC were created using a proposed mark-up language known as XBRL, then the information in those reports would become machine-readable. Want to compare the research and development spending of all companies in the oil industry? No longer any need to dig through the reports, just hit a button.

That, according to chairman Christopher Cox, is what the SEC has been doing as it combs through reams of filings to track down cases of options backdating. Use of the specialised XML taxonomy for financial reporting is still voluntary, and there’s no word from the SEC about how many companies have adopted it yet, but here at least is concrete evidence of how it is already being applied.

(Update: An SEC spokesman says that 40 US companies are currently using XBRL for their regular filings.)

Incidentally, if you haven’t already seen it this video, posted on YouTube by Michael Wesch of Kansas State University, is a fine explanation of how XML is helping to put the "2.0" in Web 2.0. His succinct formulation: "Form and content are separated." Worth a look. (A glitch means you may not see the video below, in which case click here to view it on YouTube.)

February 21st, 2007

Lycos targets European internet hit

Lycos Europe, the German-based internet company, is starting another push to put European internet development  back on the map.

Christoph Mohn, chief executive, said the company is to begin rolling out a pipeline of websites and services, among which he hopes will be a challenger to the dominant US companies like Yahoo, Google, MySpace and Facebook.

Mr Mohn has gathered together what may be Europe’s largest internet developer team, some 400 engineers in Germany and Armenia. They have been working for the last 6 years to develop new, innovative internet products that Mr Mohn hopes will help restore Lycos Europe if not to its former glory, than at least to operating profit.

Lycos Europe is certainly in need of a boost. The company has internet service businesses and online dating services which generate revenues, but it has struggled to climb out of the red. Full year figures on Tuesday revealed a €1.7m profit for 2006, compared with a €20.2m loss in 2005, but this was chiefly due to gains from the sale of its Swedish internet access business for €19m.

The first product, Lycos iQ, emerged from the pipeline around a year ago. This is a local search service, much like Yahoo Answers, which allows people to post questions which are answered by real people knowledgeable on a subject. People ask about finding a good dentist in west London or a kindergarten in Munich.

Mr Mohn believes that with products like these Lycos can hold its own against Google.

"Our concept is not to develop a product that is better than Google at the core search product but to develop a search that is different. Around 30 per cent of searches are regional and these searches we can answer very well," Mr Mohn said.

Lycos iQ is the first of many products to be launched. Next week the company is bringing out Jubii.com, a messaging, photo sharing and internet calling site, in the US, right in the internet heartland. Mr Mohn says no one has yet combined these elements in the way he plans to do.

In total Mr Mohn is planning to launch five to 10 internet products each year. The formula is simple and opportunistic: act like a venture capital company backing dozens of different start-ups, and one of them is bound to be a hit.

"If you look at venture-backed start-ups, around 1 in 10 is a hit product, some do ok and you have a handful of flops. If we bring out a range of new products every year, every second year we should have a larger product on the market," he says.

The company will invest around €5m to €10m each year in building its pipeline.  The pay-back is expected to start around two years from now, although it could be sooner if one of Mr Mohn’s hoped-for hits arrives before then.

February 19th, 2007

VideoEgg hatches, matches and despatches ads

Girl15 Video-sharing websites have grown up a lot faster than the average internet property, including, in YouTube’s case, being bought for over $1bn in record time.

The need to scale to meet booming demand for bandwidth-hungry video, working out an advertising model and trying to placate rights holders have quickly emerged as major challenges.

YouTube made a smart decision in allowing itself to be acquired by Google, given the enormous resources it could tap into, says Matt Sanchez, one of three Yale graduates who founded online video service, VideoEgg, two years ago.

“The environment means video start-ups have to evolve at an extremely rapid pace,” he told us on a visit to our San Francisco bureau.

“When you think about the technical platform, that’s a team of 50 or 60, then advertising sales is another 40 to 50, then how you deal with digital rights management, that’s another 20 and you are 150 people before you know it.”

VideoEgg itself has grown from five to 50 people over the past year. Instead of being a destination site itself, it has focused on providing a video uploading service to more than 50 sites including leading social networking plays Bebo, Hi5, Tagged and Piczo.

It launched the Eggnetwork in October, an advertising network that is introducing ticker-style ads to encourage viewers to pause what they are watching and see targeted messages.

Sanchez is not surprised that YouTube failed to meet its deadline of implementing digital fingerprinting technology that would ease rights holders concerns about illegal use of their content.

He says the technology is still in its early days and VideoEgg itself would use a 3rd party solution such as those offered by Auditude and Audible Magic.   

New video editing tools are coming this quarter as users become more demanding and professional about what they upload.

“The sophistication of users has increased exponentially over the past six months,” he says.

February 18th, 2007

Party pieces

Mexican_mariachi_band_1 For all the socialising involved in social networking, there are not too many Web 2.0 sites out there catering for real-world parties.

MyPunchbowl.com, launched this month, aims to provide an end-to-end solution, as it were, for an eight-year-old’s birthday party at the zoo, or any other social event needing organisation.

Matt Douglas, founder of MyPunchbowl, told us he got the idea from partying a lot himself and struggling to get all the bits together from invites to food to mariachi bands.

The site takes organisers through the whole process from initial emailed invitations to locating supplies and entertainment and posting photos after the event.

It is something of a mash-up of maps, contact management and hooks into photo sites such as Flickr, put together by a team of four in Boston.

Information is understandably sparse at present - partnerships are needed to fill out its limited database of party venues -  but MyPunchbowl is potentially the most comprehensive of the party sites.

Evite, owned by Interactive Corporation. is the big player in invites, while Yahoo acquired Upcoming.org in 2005 in the early days of Web 2.0 to provide user-generated event info. Renkoo uses a number of Web 2.0 tools to enable friends to organise get-togethers and collaborate on times and venues. 

February 15th, 2007

Still the best of friends?

Ballmer_and_mcnealy Whatever came of all those big claims of future cooperation made at the time  of that "breakthrough" agreement between Microsoft and Sun nearly three years ago?

Not much, it seems. Big gestures play well in the media (McNealy and Ballmer swapping hockey jokes? Irresistible!). Keeping track of actual results (or the lack thereof) is far less interesting.    

The thought is prompted by the latest grand claims of collaboration emanating from Redmond. Earlier this week, Microsoft promised headway in a number of areas in its partnership with Linux distributor Novell. That included interoperability in identity management, something that could finally relieve frustrated computer users of the constant need to reinput their passwords every time they go to a new application or website.

Hang on: this is exactly what was promised of the Sun accord. Nothing has come of that. What went wrong?

I had the chance last week to ask Brad Smith, Microsoft’s general counsel. Brad’s response wasn’t very encouraging: the Sun deal was mainly about the settling of past disagreements, not really about future cooperation, he said - though he argued strongly that Microsoft really does "get it" when it comes to the need for interoperability.

I put the same question today to Tom Robertson, Microsoft’s general manager of interoperability and standards (that’s a job description invented last year, when the company says it got really serious about playing nicely with others.) He promised that the new interoperability drive at Microsoft will breathe new life into old agreements like the one with Sun.

We’ll see. Personally, I think plenty of people inside Microsoft truly do believe in the need to make their products more interoperable - something that raises big long-term questions for its business model, development culture and technology "stack". Until the actions match the gestures, though, Microsoft will still be viewed with suspicion by many in the tech world.

February 15th, 2007

3GSM in numbers

At trade shows like 3GSM there are always a huge number of statistics and forecasts flying around as executives try to convince their customers and investors of the huge market opportunities ahead. Here are some of the ones that kept coming up at this year’s Congress, grouped under some loose themes. This might be a fun list to keep and check in a couple of years to see if any of it came true.

(more…)


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