Facebook’s users are bound to be excited by news that the social network is planning to roll out its own chat service in the coming weeks; Facebook developers, perhaps not so much.

There are dozens of developers offering chat applications designed to run on the Facebook platform. Facebook’s decision to get into the chat business for itself means those developers will now have to grapple with an 800 lb gorilla in the room, sucking up all the air

As revealed to reporters on Tuesday, Facebook’s new chat service looks to be a no-frills affair. The service doesn’t allow group chats, and users will only be allowed to chat with other Facebook friends. Still, Facebook’s decision to make its chat service a full-fledged feature of the site means that it will be in pole position to capture users from rival applications that sit on the Facebook platform.

The situation is reminiscent of that faced by developers writing applications to run on Windows in the 1990s. Back then, if a particular application market got big enough, the chances were that Microsoft would move in to try to capture it for itself. That is why Microsoft muscled its way into the highly profitable market for word processing and other office productivity software, where it was able to gain a huge advantage by tying shipments of Office to Windows.

None of the third-party chat applications on Facebook have met with huge success yet. But there are signs that chat could become an important feature on social networks as it has on the rest of the internet, where usage is widespread. AOL, for example, has said that close integration with its AIM messaging service is one of the chief rationales behind its $800m acquisition last week of Bebo, a Facebook rival.

In addition to its new chat feature, Facebook already has applications that let its users share photos, video, and other information with their online friends. The question vexing Facebook developers is, what other popular applications does Facebook plan claim for itself?

  More than a year after the launch of Windows Vista, the first big upgrade is at hand (there’s no official word yet from Microsoft, but Amazon.com is offering the new, improved version for shipment tomorrow.)

Microsoft must be hoping the arrival of Service Pack 1 will mark a turning-point for one of its most troubled big software releases. After years of delay and a redesign that stripped some of the original core features out of the operating system, Windows Vista finally arrived with a slick “glass” interface and a whole bundle of glitches.

In terms of reputational damage, even that pales in comparison to the black eye from the recent revelation that Microsoft manipulated the marketing message for some PCs prior to the software’s launch  (it turned out that “Vista capable” meant anything but, at least if you wanted to run versions with the new interface, which most people did.)

The release of an SP1 is normally the signal for all-important corporate customers to start using the latest version of Windows. For Microsoft, the acid test for Vista is finally at hand.

 When Macromedia first tried to charge mobile phone companies for the privilege of carrying its Flash player for viewing video, even its own executives were surprised by their success. After all, the PC version of the player had always been free. That helped to attract a large number of eyeballs to the player, which in turn meant the company could sell software to creative types who wanted to produce content in Flash (that is the same business model behind Acrobat, the free PDF document reader supplied by Adobe, which went on to buy Macromedia.) Surprise, surprise: it turned out that mobile companies were actually prepared to pay for the player as well.

So when Steve Jobs bad-mouthed mobile Flash earlier this month it sounded very much like a heavy-handed attempt at public negotiation. The current version of the software is not up to scratch yet and won’t be appearing on the iPhone, according to the Apple boss (as my colleague Chris Nuttall wrote here last week, the lack of Flash is one reason third-party developers are sounding luke-warn about their new ability to write applications for the iPhone.) When I spoke to Gary Kovacs, Adobe’s vice president of mobile products, at the end of last week he was tight-lipped about relations with Apple but still managed to hint heavily that this was really about price rather than technical competence: negotiations with Apple are ongoing.

Strengthening Adobe’s negotiating hand will be the news today that even arch-enemy Microsoft is now prepared to pay for mobile Flash. Despite its own rival Silverlight software, Microsoft has signed a licence so that it can package the player with its own mobile software for hardware makers that don’t want to do the integration work themselves. Kovacs wouldn’t give a figure, but he confirmed that Microsoft will pay a per-player charge. With more than 500m Flash players already shipped inside mobile handsets and consumer electonics devices like the Wii and the PS3, this should further strengthen Adobe’s hand.

That makes the Apple/Adobe stand-off an early test of the iPhone’s market power. If Jobs can break the mold and get Flash for free, it will be a clear sign of how he intends to wield his new clout in the mobile world. That’s something that’s already making many in the technology and media industries sweat.

After the acclamation, for Apple opening up its iPhone to outside applications, comes the anxiety.

Developers were expressing concern today at what they saw as a poorly-worded email from Apple that could be read as suggesting many were being left out of the iPhone developer programme for the foreseeable future.

Meanwhile, at the Emerging Communications Conference at the Computer History Museum on Thursday, I listened as Christopher Allen of iphonewebdev.com reeled off a long list of restrictions by Apple on what it will let developers create for the iPhone.

They included no applications that have executable code, which he said ruled out Java and Flash applications. The guidelines also required an application to terminate for an incoming phone call, making it an unsatisfactory experience for users of something like an instant-messaging client. He speculated on whether developers could include non-Apple media codecs such as DivX and he said it was unclear whether there would be access to the iPhone’s Bluetooth wireless capabilities.

On the positive side, there was Kleiner Perkins’ $100m fund for developers, a 70-30 revenue split between developers and Apple, the iPod touch providing an additional market and Apple’s habit of releasing quarterly upgrades to its firmware, compared to the mobile industry’s attitude of expecting users just to buy a new phone for fresh capabilities.

In nine months, the iPhone has grabbed 28 per cent of the US smartphone market and it is the vehicle for 71 per cent of all US mobile internet usage, he said.

Plenty of reasons then for high anxiety as well as anticipation about getting inside and exploiting this ground-breaking device.

You’ve probably heard of Guitar Hero, the best selling game from Activision that puts a guitar-shaped peripheral in gamers’ hands and lets them play along to well known rock songs.

Guitar Hero has surpassed $1bn in retail sales in North America, sold 16m units worldwide, enlivened countless parties and prompted Guitar Hero nights comparable to karaoke ones in clubs and bars across America.

However, you’ve probably never heard of Patent Number 5,990,405 filed by the Gibson Guitar Corporation in 1999 for a “system and method for generating and controlling a simulated musical concert experience.”

The patent document describes it as a virtual-reality device where a guitar player could wear a head-mounted 3D display equipped with speakers and be given the simulated experience of playing a real concert with other musicians. It envisages the invention as a source of entertainment for professional and amateur musicians or as an aid for guitar makers in selling their products by allowing prospective buyers to recreate a concert atmosphere.

The system does not seem to have made much progress. I could find no mention of it among the current product listings on Gibson’s website and the company’s spokeswoman was travelling and unavailable for comment today.

But Gibson wrote to Activision in January alleging that Guitar Hero simulates a musical concert experience in a similar way to the device in the patent. It said it should obtain a licence for the patent or stop selling all versions of Guitar Hero and its peripherals.

In response, Activision filed a complaint in a Los Angeles court this week seeking a judgement that it has not infringed the patent.

The background is that Activision’s RedOctane subsidiary, publisher of Guitar Hero, signed an agreement with Gibson in 2005 to feature several of its famous models, such as its SG and Les Paul guitars, in the game and as peripherals.

They have featured in Guitar Hero I, II and III, but no agreement has been reached for any further titles.

Activision’s senior litigation counsel, Mary Tuck, wrote to Gibson this week saying it “knew about the Guitar Hero games for nearly three years, but did not raise its patent until it became clear that Activision was not interesting [sic] in renewing the License and Marketing Support Agreement.”

She said this suggested Gibson was not acting in good faith.

Gibson has yet to respond but, with millions in future licence fees at stake, a heavy legal riff of its own seems likely.

 Steve Ballmer has a certain inimitable style (I use the term loosely.) This recapitulation of his famous “monkey dance”, delivered last week on a stage in Las Vegas, has Microsoft insiders squirming, but at least it makes a point. The software company now has its sights set on building a technology platform for Web developers, not just the software developers commemorated in Ballmer’s original 2001 outburst.

Google has a quieter way of doing these things, but make no mistake: there is a fight brewing here for hearts and minds. This battle will determine which vision wins out for the next stage in the internet’s evolution as a computing platform.

Google has just reserved San Francisco’s cavernous Moscone Center for a two-day event in May to draw Web developers into its own camp. This is a clear sign of how fast its aspirations have been taking shape. Its first pitch to developers came two years ago with a small conference aimed at people interested in building applications using the Google Maps API. Last year, that turned into a broader developer day that drew 5,000 to San Jose, before graduating this year to the main stage for technology industry convocations.

When I spoke to senior Google product manager Tom Stocky today, he was at pains to play down any suggestion that the internet company was about to go up against companies like Microsoft and Adobe.

“I’m not sure I see it as Google versus anyone else. What we’re really doing is promoting the Web as a platform. There’s no Google agenda.”

Well, up to a point.

Google’s “platform play” has two parts to it. One involves promoting open source tools for Web development - things like the Google Web Toolkit, for writing more effective AJAX applications, or Google Gears, for creating Web applications that can also run offline. Clearly, even if Google does not benefit directly from offering these tools, keeping developers out of the Microsoft and Adobe camps is important.

The other part of Google’s strategy for the May event will be to attract more developers to write applications that ride on top of the internet company’s own services. It has released 40-odd APIs so far, exposing services like YouTube and its Google Docs applications for independent programmers to draw on.

You can expect the blogosphere to be stuffed with laudatory coverage nearer the event about how Google is fostering a more open Web than the one some of its rivals seem to have in mind. Only, don’t expect Eric Schmidt to put on his monkey suit.

 Google appears to be confirming - at least unofficially - Wall Street’s fear that its advertising is not recession-proof after all. This is Tim Armstrong, head of advertising in the US, when asked at a Bear Stearns conference today how search advertising performs in an economic slowdown:

“It does reflect the macroeconomic environment… From a macroeconomic viewpoint, people do search what’s on their mind and what they’re thinking about” (Translation: if they’re tightening their belts, they’ll probably do fewer searches for the latest hot gadgets.)

Armstrong was careful not to issue a forecast about the current quater, and he did point out that the secular shift of advertising to the Web will still benefit Google. Still, any hint like this is guaranteed to be seized on given the current state of the market. Google’s stock is down nearly 5 per cent again today. That’s a 40 per cent fall this year, double the decline seen at Microsoft, which has had the weight of the Yahoo offer to contend with.

How ironic that Microsoft, desperate not to get left out of the internet advertising game, should see the timing of its bid benefit from fears of a cyclical decline in advertising. Where would Yahoo’s stock be now without the backstop provided courtesy of Microsoft’s resilient desktop-software business?

Nick Carr has been wondering whether Microsoft is about to embark on some “vast data center push” that will advance it much faster down the road towards cloud computing.

Not so, says Ray Ozzie. When I spoke to him last week, Microsoft’s chief software architect was nothing if not ambitious (one day, he said, “most major enterprises and many, many, many independent developers will be running their services in our datacentres” - this is the report of the conversation.) But this is what he had to say about the pace at which those datacentres will get built:

“If you step back and say, yes the company’s going to bet big, what is the most responsible [way] from an investor and business standpoint to do that? So you start by securing dark fibre, you start by securing land… and you start building the shells of buildings so that when you need the capacity the lead time is as short as possible to get that stuff in there. You never want to get caught with inadequate capacity at a certain point in time.

Right now the properties that predominatly use the capacity that we have are the MSN properties, the Windows live properties, and there are a lot of smaller ones. Search is the one that takes the majority of the physical computers in there. Over time that mix will shift just dramatically [towards running services for third parties.] As we produce platforms and tools that let third parties use our infrastructure, the nature of how we pre-purchase, how quickly we purchase, will depend on how popular those services are.”

For Microsoft, that new business has barely begun: 

“We’re going to our enterprise customers saying, help us to help you understand how quickly you’d like to go from a world of servers to a world of mixed servers and services, or just pure services. Third party developers, we’re not even in the game yet.

I think expecting a step function of suddenly day one we have 50 new datacentres, I don’t believe that it’s actually going to transpire that way, simply because of the risks involved with taking on this new model.”

The investors in San Francisco start-up Zivity would prefer to think they are funding the next wave of social networking rather than an online peepshow.

Zivity, which serves up photo-shoots of scantily clad and tastefully nude women for subscribers paying $10 a month, is announcing its second-round funding today and has raised $7m from some prominent venture capitalists.

Founders Fund and BlueRun Ventures are providing the financing for the company founded by Scott Banister and his wife Cyan.

The connection is the online payment service, PayPal, bought by eBay for $1.5bn in 2002. Founders Fund founder Peter Thiel was chief executive, John Malloy sat on PayPal’s board before he co-founded BlueRun and Scott Banister was also a director. Mr Thiel was also an early investor in Facebook and both have invested in Slide, which provides popular social-networking widgets.

“The fundamental investment is in people who can make the seemingly impossible possible and the unlikely likely. We’ve worked together on other things and Scott is someone who has done great things a few times over and he is still a young guy,” says Mr Malloy.

The 32-year-old is a serial entrepreneur and co-founded IronPort, an email security company that Cisco bought for $830m last year.

Mr Banister draws parallels with Zivity – IronPort aimed to challenge the dominance of Sendmail in email, Zivity aims to challenge the dominant advertising model for social networking.

“The subscription model is coming and we are interested in having great content and paying the people that create that content,” he says.

Subscribers to Zivity, which is still in invite-only mode, get their own profile page where they can add their details, friends and status updates, but the focus is really on the models and photographers, with members allowed five votes a month to give to their favourites.

Mr Banister says it is giving an unprecedented 40 per cent of its subscription revenues to the content creators, divided according to how many votes they get. His own wife Cyan, as well as being Chief Strategy Officer, is also one of the topless models eligible for the profit sharing.

“You see stars like Lindsay Lohan appearing nude [as Marilyn Monroe] in New York magazine and getting paid for it, but in this era of self-publishing, women do it on MySpace and see their photos taken down by the MySpace abuse department,” he says.

“There’s a big gap we can bridge here, the models and photographers are really excited.”

Despite soft-porn photos being available in abundance on the internet for free, Mr Banister feels Zivity can still create sufficient interest to be a profitable business.

“We’ve close to 30,000 people on our waiting list to get in, the reaction has been incredible,” he says.

“We’re creating something here that is just not available on other social networking sites and we’re providing an outlet for models and photographers that they’ve never had before.”

Life begins at 40 goes the saying and Intel yesterday outlined a new life for itself as it celebrates its 40^th birthday on July 16^th this year.

From mid-year, the company expects to be making major strides with its Silverthorne microprocessor, now branded Atom.

At its analyst day on Wednesday, Paul Otellini, chief executive, outlined how the low-power processor was at the centre of its plans to find new growth and exploit what it views as a $40bn market opportunity by 2011.

It sees four versions of the chip addressing different segments of a new market – for internet-enabled consumer electronics, mobile internet devices (Mids), low-cost PCs it dubs netbooks and the embedded market for smarter machines like ATMs and petrol pumps.

It seems any early fruits of its strategy will come from netbooks, judging by the raging success of Asus’s eee PC.

Sean Maloney, head of sales and marketing, said manufacturers were readying 25 different netbooks using its chips for release mid-year. He described them as suiting the can’t-afford-a-notebook consumer or families looking for a second laptop, as well as appealing to users in emerging markets.

Intel has tried and failed to expand in markets beyond PCs and notebooks before. But netbooks are closer to its core business and Stacy Smith, the new chief financial officer, said the company had not spent huge amounts developing Atom – it reused existing microchip production assets and development had been “really quite inexpensive,” he said.

Mr Otellini said Intel would celebrate its 40^th not with a big party or special T-shirt but with its employees giving 1m hours in public service. If all goes well, they will hopefully find time to raise a glass to Atom as well.