25 October, 2011

How Airbnb failed its way through “the trough of sorrow” to a $1 Billion valuation

Posted: 25 Oct 2011 09:18 AM PDT
Today Airbnb is one of Silicon Valley’s hottest startups, but it has definitely failed its way to glory.
That made yesterday’s Failcon — a San Francisco event where entrepreneurs revel in their most humiliating defeats — an ideal venue for co-founder Joe Gebbia to talk about his company’s five-year journey to legitimacy, and some serious revenue generation.
The key to success is finding your way out of “the trough of sorrow,” where an entrepreneur’s true mettle is tested, said Gebbia.
After the initial buzz and excitement of a company’s launch wears off, a long and grueling trek to adoption often follows. (The so-called the trough of sorrow.) Gebbia and his co-founder Brian Chesky went through a period of 18 months where they were completely broke, owed $15,000 on their credit cards, and were struggling to get potential investors to understand their vision.
“Our whole premise was a fail,” said Gebbia, showing slides of early versions of the company’s site design and logo.
Airbnb  pairs people who have extra space in their home or apartment with those travelers who are willing to pay to stay with strangers.

While the idea is not for everyone, the opportunity to save a significant sum off the price of a hotel has propelled to company  to massive user adoption. Gebbia said Airbnb expects to book 3 million stays on its platform this year. In July the company raised $112 million in new financing in a round led by Andreesen Horowitz, DST and General Catalyst, at a valuation in excess of $1.3 billion.
During the 18-month trough of sorrow the founders couldn’t raise a dime, but they were able to attract significant attention on more than one occasion. During the 2008 Democratic National Convention, the company emerged as one of the success stories of the conference, because they helped find lodging for many of the nearly 100,000 travelers to Denver, a city with only 20,000 hotel rooms. Attention flooded in, traffic spiked temporarily, but user growth did not follow.
“I think most people fail when they’ve hit the trough of sorrow,”  Gebbia told me after his presentation. “If you can get through the trough of sorrow, you can get through all the adversities of starting a company. The trough of sorrow makes or breaks people.”
Airbnb has become so successful, that the name itself has become synonymous with the concept of collaborative consumption; sharing the things you own and aren’t using, with strangers. While showing pictures of the apartment he shared with Chesky, where the first Airbnb users slept, Gebbia said he was literally laughed out of meetings with potential investors.
Through it all, though, Gebbia and his partners never lost site of the initial vision, which gave them passion and dedication which fueled their eventual success.
“Because we’ve experienced it, we could believe in it,” said Gebbia.
[Image Credit: Jaymi Heimbuch/Flickr]

Filed under: VentureBeat

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Posted: 25 Oct 2011 09:05 AM PDT

In a world where  information overload is driving us further apart, Loku has today launched a powerful contextual search technology that leverages the power of  ”Big Data for local," in an effort to connect neighbors to their community, and help people find cool things to do nearby.
Loku boils down huge feeds of data from sources such as local blogs and weekly newspapers, social media, restaurant reviews and deals, arranging them in a gorgeous webzine layout that’s automatically customized for your neighborhood. Currently Loku is rolling out in 15 cities.
Loku was created to solve a very real problem for founder Dan Street, who worked in private equity, and then as a consultant for a total of eight years. He spent four or five nights per week on traveling. Street says that he turned this road warrior lifestyle into a game, and tried to experience life the way a local would. “I became obsessed with the idea of how do you become part of the community,” says Street.
At the same time, Street says, people within neighborhoods don’t really feel all that connected to each other, and often there isn’t a good way to stay on top of what is going on around them. ”People don't feel there's a problem, because there's nothing to solve it,” he says.
In our mass media age, we are unaware of just how disconnected we our from our neighbors and our neighborhoods.
Street says that people see their home as a sanctuary, and are generally pretty happy with what they have, until they see how things could be different. With Loku, he hopes that people will be able to harness the torrent of social media data, and the constant stream of information to have more meaningful local interactions.
Building Loku has taken three years and $350,000 of Street’s own money, with $1 million raised from angel investors, including Dave McClure’s 500 Startups.
“Where I'd like to have the biggest impact is certainly an automated version of Patch, with more tools for discovery,” said Street, referring to Aol’s network of community news sites that has been rolling out across the U.S. over the past two years. ”A little bit of Google, a little bit of Patch and a little bit of Yelp,” says Street.
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Filed under: social, VentureBeat

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Posted: 25 Oct 2011 09:00 AM PDT
Tech200 WinnerThe following post is sponsored by Lead411.
The startup space is getting more and more crowded with companies that want to skyrocket to fame and riches, but only a handful actually get there. Each year, Lead411, an information services company, hosts the Technology 200, a list focused on the top revenue-producing startups in technology.
The list is ranked based on the highest percentage revenue growth from 2008 to 2010. More than 600 companies applied, all of whom are based in the United States, are private, and earned over $500,000 in revenues in the year 2010.
The list is getting tighter. Initially, it focused on 500 of the top growing startups, but the company wanted to hone in on the cream of the crop, so it whittled the list down to 200, says Tom Blue, founder of Lead411 and the Technology 500.
"Everyone's got a top 500 list. But we wanted to see how the top 200 fared," said Blue, "The higher up the list you go, the more trends you see in terms of what's helping these brands succeed."
A Diverse List
The top ranking company on the Tech 200 is inStream Media, a company that connects brands with consumers through multi-channel marketing programs. The company experienced 3,509% growth over the past two years, and brought in $3.6 million in sales in 2010.
Massachussetts-based inStream Media wasn't the only marketing and advertising company on the list. Also joining it are Spongecell (for the second year running), HubSpot and TubeMogul.
The Tech 200 list is diverse in its industries. It boasts electronics recycler ecoATM, enterprise software support company Rimini Street and social job search tool Climber.com, as well as other companies in consulting, hardware, mobile and more.
"We always love seeing the diversity of who makes our list," said Blue, "I personally love digging in to each of our finalists' stories."
What the Numbers Tell
As part of the Tech 200 application, companies are asked to answer a survey about their marketing spend, ROI and overall outlook for the future. Their answers are indicative of the startup community at large, if not the greater business climate.
Over half of the applicants no longer (or never did) use traditional advertising (think print ads and direct marketing), which speaks volumes about where marketing is headed. The largest number put money into trade shows as a marketing tool (25%).
Despite more companies starting to use social media in their marketing strategy (63% of applicants do), the spend there was surprisingly low, with only 6.9% of the companies' budgets going into social media. We can glean from this that either they're not putting as much effort into social media as they could, or that social media's just a cheaper form of marketing that requires fewer resources.
It's always nice to see successful startups that got that way without taking on investors. A full 60.2% of applicants have never received funding for their businesses, and 84% consider themselves profitable.
And as far as the future looks, 71.5% of the companies on the Tech 200 think the future is going to get better soon.
Where the Future's Headed
In looking at the industries that keep popping up on the Tech 200, there are some interesting trends.
1. People are responding to "new media" marketing. Companies like Spongecell are growing faster than lightening because people are embracing advertising that's tailored toward their tastes.
2. Mobile continues to grow. No one is tired of buying the latest iPhone or Android phone, or buying apps to enhance their lives. If anything, the addition of the iPad to the space created even more opportunity for app designers.
3. Traditional industries are getting a new spin. Climber.com helps job seekers find work. Nothing new about that. But its approach, which leverages social media and content aggregation, makes the process that much easier.
4. Small businesses are an untapped market. While so many companies focus on offering solutions to corporations, small businesses have historically been left behind. But companies like CrowdFlower are catering to the small business market, which helps them grow and keeps small businesses running despite lean times.
5. Consumers want to control their privacy. Not only are we making advertising our own, but we also want a say in who's handling our data and personal information. Evidon is one of the companies working on privacy and compliance for digital media.
6. The cloud is getting bigger. Now that we can back up and store just about anything on a cloud server, expect to see more startups in this space. Transcend United Technologies and BlueLock are just a few of the finalists working in the cloud space.
More to Come From the Technology 200
The Technology 200 is picking up speed, and will continue annually. See the list of this year's winners here.
Here are the top 50 finalists from the Tech 200.
1. inStream Media
2. Spongecell
3. Evidon, Inc
4. Climber.com
5. CrowdFlower Inc.
6. Code 42 Software
7. HasOffers
8. FastSpring
9. InContext Solutions
10. BrokersWeb.com, Inc.
11. Pace Computer Solutions Inc
12. ecoATM
13. TubeMogul
14. Slingshot SEO
15. Transcend United Technologies
16. Bluelock
17. SBG Technology Solutions, Inc
18. Three Pillar Global Inc
19. HubSpot
20. One Source Networks
21. SoftLayer Technologies
22. OmniPoint
23. HubPages
24. Varrow, Inc.
25. Acquirelists
26. SEOmoz
27. QStart Labs
28. Tapjoy, Inc.
29. Zilker Ventures, LLC
30. Increase Visibility, Inc.
31. Compliance11
32. Touch Ahead Software, LLC
33. Rimini Street
34. Motionsoft
35. Yodle
36. Cognis IT Advisors, LLC
38. Mediaura
39. Virtensys, Inc.
40. Zillow
41. Panthera Interactive, LLC
42. FiberLight, LLC
43. Openwire Solutions
44. Verengo Solar Plus
45. SevOne, Inc.
46. Reliable Government Solutions Inc
47. Tableau Software
48. MediaTrust
49. AutoClaims Direct Inc.
50. Cool Life Systems, Inc.

This post was written by Susan Payton, President of Egg Marketing & Communications. She also contributes to Lead411's blog.

Filed under: mobile, VentureBeat

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Posted: 25 Oct 2011 09:00 AM PDT
A picture is worth a thousand words. Electronic Arts is launching Battlefield 3 on Oct. 25. The screenshot above shows you what the images in the 3D combat game will look like on a PC. Compare that to a shot from Battlefield 2 (pictured below), which was released as a state-of-the-art game in 2005.
Battlefield 3 is one of the best-looking titles being released this fall, and it will compete with some of the best games of the holiday season for the hearts and minds of gamers.
Of course, rival Activision Blizzard, maker of Call of Duty Modern Warfare 3 debuting on Nov. 8, will likely point out that it’s how those images move during actual game play that will determine just how cool they are to gamers. Activision Blizzard says its game will look great at 60 frames per second, while Battlefield 3 will run at 60 frames per second on the PC and only 30 frames per second on consoles.
Gamers are going to expect graphics that look as beautiful as Battlefield 3 from this day forward. That means game companies are going to have to make heavy investments in graphics or just go home.
It’s quite possible that Battlefield 3 will sell some high-end PC hardware. Valve’s Steam digital distribution service conducted a survey of gamers recently and found that only 16 percent of its customers have computers capable of running Battlefield 3 at the recommended hardware specification, requiring an Nvidia graphics chip at the level of the GTX 460 or better.

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Posted: 25 Oct 2011 08:42 AM PDT
Shopping-tool startup Project Slice is releasing its All My Purchases app for Gmail today, which opens up the ecommerce tracking tool to an additional 200 million users worldwide.
Previously available for Yahoo Mail users, Project Slice helps shoppers track their purchases from checkout, to their doorstep in one central location, as opposed to having to comb through their inbox for information about each purchase from sites like Amazon.com, eBay and Groupon.
"Today's online shoppers are provided with every convenience imaginable, but once they complete checkout, the post-purchase phase of the shopping process can be a complete mess," said Project Slice CEO, Scott Brady. "As we move further into an era of digital receipts, the time is right to track and organize what we buy across the Web in a better way."
Project Slice makes it easy to locate  relevant information such as the tracking number for packages, the purchase amount, or the customer service number, in case there is anything wrong. Lemon.com and OneReceipt are two competitors that are also doing ecommerce tracking for the inbox.
The company is also releasing a price drop feature for Gmail and Yahoo Mail users that notifies customers when the price has fallen on an item they have previously purchased.
The video below demonstrates the Yahoo Mail integration of Project Slice, which today has come to Gmail as well.
The Project Slice team is based in Palo Alto, and its backers include DCM, Lightspeed Venture PartnersMichael Birch,  FLOODGATEInnovation Endeavors , and Rick Thompson.

[Image Credit: alter falter/ShutterStock]
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Posted: 25 Oct 2011 08:29 AM PDT
Nest Thermostat
An intelligent thermostat seems like an odd project for the minds behind Apple’s iconic iPod, but in a strange way, they may just be the perfect team to revolutionize home heating.
The project is the Nest Learning Thermostat, a Wi-Fi connected thermostat that learns your heating preferences and optimizes your home’s temperature to save energy. The brains behind it are Tony Fadell, Apple’s former SVP of its iPod group, and Matt Rogers, former lead engineer of iPod software, founders of Nest Labs.
At first glance, the duo’s Apple heritage is plain to see in the Nest. The device’s design is simple and elegant, sporting a metal outer ring that lets you control the temperature (which also resembles the original iPod’s mechanical click wheel), and an internal display that changes depending on what you’re trying to do. When it’s warming up your house, for example, it sports a nice toasty red. It also sports a leaf when you’re saving energy (usually by lowering the temperature).
But the Nest also has brains, in addition to beauty. The thermostat learns your heating routine, and after about a week it will be able to automatically adjust your home’s temperature without much input on your part. “It never stops learning,” the company states (somewhat ominously) in its promotional video below.
The Nest is powered by six sensors which tracks things like the temperature (obviously), humidity, motion, and ambient light. The sensors allow the device to determine when you’re home, which makes it smarter than other thermostats that just rely on a time schedule. Multiple nests can also communicate with each other — so when you come home, your upstairs Nest could start to warm up your bedrooms.
Given the way the Nest optimizes your home’s temperature, the company says you could save around $173 a year in heating costs. With those figures, the Nest would more than pay for itself within a year-and-a-half.
Naturally, there’s also an iPhone app for the Nest that allows you to remotely control the temperature and manage other settings. The company says an Android app is in the works. You can also manage all of your Nest devices online at the company’s website.
The Nest will cost $250 — much less than other smart thermostats on the market — and will be available in major retail stores like Best Buy. The company says you should be able to install it yourself in under 30 minutes, but the less tech-savvy may want to hire some help.

Filed under: green, VentureBeat

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Posted: 25 Oct 2011 08:06 AM PDT
viewsonic-viewpad-7eWhile its not as exciting as the similarly priced Amazon Kindle Fire, Viewsonic has announced its upcoming $200 ViewPad 7e Android tablet will be available in a matter of days.
If Google Android tablets want any chance of erasing the steep gains the Apple iPad has already made in global market share, it will be through innovating in the inexpensive tablet space. There are plenty of cheap Android tablets available now or soon to be available, though, so it may be hard for some manufacturers to attract users.
The Viewsonic ViewPad 7e could attract people simply based its spec list, which is fairly decent for the small price tag. It features a 7-inch screen with an 800 x 600 resolution, a 1-GHz processor, a micro-HDMI port, a 3-megapixel camera, a 0.3-megapixel front-facing camera for video calling, 4GB of internal storage and a microSD slot compatible with up to 32GB cards. On the software side, the ViewPad 7e runs Android 2.3 with a customized 3D-like user interface.
Lenovo also recently began offering a similar Android tablet called the IdeaPad A1, which runs $199. The IdeaPad has similar specs with its 7-inch screen with 1024 x 600 resolution, 1-GHz Cortex A8 processor, 3-megapixel camera on the back, .3-megapixel camera on front, a GPS receiver, 2GB of internal storage and a microSD card for extra storage.
That said, the Amazon Kindle Fire looks to be the $200 Android-based tablet to beat this holiday season. It will be available Nov. 14 and features a 7-inch screen with 1024 x 600 resolution, a dual-core processor, 8GB of onboard storage and a custom skin of Android that doesn’t actually look like Android. On top of those specs, it will offer access to Amazon’s wide array of e-books, music and streaming TV and movies.
What Android tablet are you most interested in?

Filed under: mobile

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Posted: 25 Oct 2011 07:12 AM PDT
Concept illustration showing what an Apple television might look likeApple has apparently turned to Jeff Robbin, who created iTunes and co-developed the iPod, to spearhead development of an integrated television set.
Three sources with knowledge of the project divulged the news to Bloomberg. If true, it means that Apple is prioritizing development of a TV set, potentially called the “iTV.”
In his official biography, released yesterday, Steve Jobs claimed he “cracked” the code for an integrated Apple television, saying “It will have the simplest user interface you could imagine.” That news was buoyed by rumors from Piper Jaffray analyst Gene Munster that said Apple already has big screen TV prototypes in the works. (Munster has been crying wolf about an Apple TV set for years now.)
We reported in August to several signs that Apple would be releasing a TV set at some point next year, though the exact shape of that device was still in question. I argued that it makes far more sense for Apple to focus on smaller TVs below 30-inches, since it wouldn’t be that big of a shift from its large-screened computer monitors. But, according to Munster, Apple could be aiming all the way up to 50-inch TVs.

Filed under: media, VentureBeat

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Posted: 25 Oct 2011 07:06 AM PDT
HipmunkTravel search site Hipmunk has added another wonderful new feature to help you book your travel plans: Google Calendar integration.
The new integration will allow users to check their flight (or train) listings against their personal schedule within Google Calendar to determine the best possible times to book a trip, Hipmunk announced today.
While other travel search sites allow you to import your travel schedule into Google Calendar, Hipmunk is the first that lets you actually compare flight times with what’s already on your schedule. It’s just one of the many small perks that makes Hipmunk so much more convenient than competitors (like Orbits and Expedia). In addition to Google Calendar integration, Hipmunk aggregates ticket fares from airlines and allows people to sort them by time, price, flight duration, airline as well as "agony” — Hipmunk's algorithm for discovering the most enjoyable flights.
After entering in your Google account information, Hipmunk gets to work helping to take even more “agony” out of booking a trip. Your calendar will appear on top of the site’s grid of flight listings in yellow. You can then either change your schedule to fit the perfect flight, or tell Hipmunk to hide all trips that would conflict with things in your schedule. Hipmunk also takes into account the locations of your scheduled events, and can suggest hotels that are close to your meetings, dinners, etc.
Co-founded by Adam Goldstein and Steve Huffman in 2010, the San Francisco-based startup has $5.2 million total funding from Ignition Partners, Y-Combinator and a handful of angel investors. The company has a total of 10 employees, including Hipmunk Senior programmer Christopher Slowe, formerly of Reddit.

Filed under: social, VentureBeat

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Posted: 24 Oct 2011 09:00 PM PDT
Zaarly Mobile marketplace Zaarly announced today that Hewlett-Packard chief executive Meg Whitman is joining its board of directors, and that it’s getting a $14 million investment led by Kleiner Perkins Caufield and Byers.
“I just love her,” said Bo Fishback (pictured left), co-founder and chief executive of Zaarly, in an interview with VentureBeat. “She built the biggest peer-to-peer marketplace on the planet Earth … I just know she’s going to make me a better CEO.”
Meg Whitman has seen her share of ups and downs, from joining online marketplace eBay as chief executive when the company had just 30 employees, to running an unsuccessful campaign for governor of California, to joining HP as chief executive last month. Zaarly, at just 30 employees itself, sees a big opportunity to learn from the woman to who Fishback credits the success of eBay.
Zaarly started six months ago as the “mobile Craigslist.” The service focuses on the buyer, allowing people with the Zaarly app to upload what they want, say how much they are willing to pay for it and give the amount of time they need it in. For example, you can “Zaarly” a pint of Ben and Jerry’s, say you will pay $10 and you need it in two hours.
“We’re at the intersection of Craigslist, eBay, and a lot of market places that don’t exist but should,” said Fishback.
That’s where Whitman and her eBay experience come into play.
But in the midst of attempting to reviving a major technology player after an equally major pivot — potentially spinning off its PC arm — you would think Whitman had a little too much on her plate. Fishback, who didn’t even know HP was a thought in Whitman’s mind, was also concerned upon originally hearing the news. He e-mailed her the day of her announcement, asking what this meant for Zaarly. Whitman replied within 20 minutes that she was canceling everything on her plate to focus on HP — except Zaarly.
“When I call her on a Saturday, she answers every time,” said Fishback of Whitman’s availability.
How does a six month old startup with a $1 million angel round under its belt meet people like Meg Whitman? By having a compelling enough product to get it in the door of well known venture capitalist firm Kleiner Perkins Caufield and Byers. Fishback recalled sitting across the table from Whitman, who is a strategic advisor at the venture firm, after having entertained dozens of VCs before receiving Kleiner’s call. She was very receptive and wanted to move on Zaarly right away.
Zaarly obviously intends to expand and become more competitive with the $14 million from Kleiner. For Fishback, it’s obvious that Zaarly is going to take Craigslist head on, a company from which Zaarly was recently accused of poaching visitors. It will do so with security enhancements for the nearly $7 million purchases it has fueled thus far.
Meg WhitmanFirst out of the security door will be a verification option for Zaarly users who want to prove they are trustworthy. You will be able to verify a number of things, including your e-mail address and Facebook account, while still remaining anonymous. Next, Zaarly will roll out buyer and seller reviews, features in which Whitman will be directly involved.
When asked how the company is doing financially, Fishback was reserved.
“With marketplaces like this, there are 50 different ways to monetize them,” said Fishback, who mentioned the company does take a transaction fee for all purchases made with credit cards over the service.
He also mentioned that Zaarly is looking into the best way to perform those transactions and has three major players on the brain: PayPal, American Express and Square.
“We love Square, they’re just doing a beautiful job on execution,” he said while also mentioning the global draws of PayPal and the “slick” qualities of AmEx’s new mobile payments service, Serve. Currently, the company uses Y Combinator alum PoundPay.
As for the future, Zaarly wants to be a bright spot on Whitman’s radar, especially as mobile payments comes into play. The company still has that new startup smell, and is thinking optimistically about its new relationship with Whitman.
“I hope we’re the single most fun thing she gets to work on,” said Fishback.
[Photo courtesy of Meg Whitman for Governor/Flickr]

Filed under: mobile, VentureBeat

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Posted: 24 Oct 2011 05:42 PM PDT
AnonymousHacktivist group Anonymous has taken down the servers of Freedom Hosting, which Anonymous said was providing hosting services for child pornography websites.
“When we came into this virtual realm, we were disgusted with the content that was provisioned and readily available for the perverted masses,” said a computerized voice on the group’s YouTube manifesto. “You know who you are and so do we.”
The realm Anonymous is referring to is called the Darknet, a hidden and secured internet where visitors can use and distribute content securely, generally without infiltration. Though “darknet” has negative connotations, such networks, such as the Tor Project, were created to allow for secure communications. The Navy originally created Tor for its own content sharing and communications needs. Journalists use it to speak with fearful whistle-blowers, or to access home websites, when reporting from unstable countries. Simply, darknet is a way to surf the internet without revealing yourself, without leaving an IP address, without a dense virtual trail.
While surfing the Hidden Wiki, a Tor site, Anonymous members stumbled across “Hard Candy,” a section dedicated to child pornography links. The hackers swept the section and removed the links, which were promptly replaced by an administrator. In this process, the group noticed 95 percent of the links had a digital fingerprint tracing back to Freedom Hosting, which Anonymous found was hosting a large number of child pornography sites on its servers.
A large enough number, in fact, that Anonymous claims Freedom Hosting holds the most child pornography on the internet. The group issued a warning to Freedom Hosting to remove all of the child pornography and when the ultimatum was not met, the group hacked the servers and shut down operations to all of Freedom Hosting’s clients.
The group also found child pornography website Lolita City on Freedom Hosting’s roster, infiltrated the website and published a list of its 1,589 active users.
“By taking down Freedom Hosting, we are eliminating 40+ child pornography websites, among these is Lolita City, one of the largest child pornography websites to date containing more than 100GB of child pornography,” the group said in its statement.
Any other server found to host child pornography will be taken down as a part of Anonymous’ OpDarknet.

[via Ars Technica, photo by Meghan Kelly]

Filed under: security, VentureBeat

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Posted: 24 Oct 2011 05:23 PM PDT
Netflix ended the third quarter of 2011 with just 23.8 million total subscribers — 810,000 fewer than the previous quarter, the company revealed today in its latest earnings report (PDF).
So, where did those lost subscribers go? Most of the losses are attributed to the company raising subscription rates by 60 percent on its DVD-by-mail service. The low numbers are also reflective of Netflix’s unpopular decision to break off its DVD-by-mail business into a separate company called Qwikster — a move that Netflix later canceled after receiving backlash from its customer base.
In a guidance update issued in September, Netflix did predict it would lose subscribers in the third quarter. However, those predictions were lower than the company’s original estimate of dropping from 25 million subscribers to 24 million.
It’s also worth noting that subscribers to both its streaming and DVD business were down (a prediction that was supposed to hold true for only the DVD side of the business). Netflix ended the quarter with 21.5 million streaming customers, compared to the estimated 21.8 million. As for DVD subscribers, the company had 13.9 million, compared to its estimated 14.2 million prediction.
In a letter to shareholders, Netflix CEO Reed Hastings and CFO David Wells said they expect both revenue and profits in the fourth quarter to decline more than expected. However, the company should still remain profitable overall due to Netflix’s entrance into new international markets, like the UK and Ireland.
Despite additional revenue from international launches in Latin America and Europe, Netflix's stock price has been taking a beating. The company's stock was hitting $300 a share earlier this summer but is now hovering just below $100.

Filed under: media, VentureBeat

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Posted: 24 Oct 2011 04:49 PM PDT
Code-slinging warriors from 17 Silicon Valley startups met for a gridiron foam-dodgeball clash on Sunday. The games, which raised money for charity, were part of the Octocat Dodgeball Invitational and were hosted by code repository company Github.
The event was a chance for members of the startup community to get together and do something good for charity. At stake were bragging rights for the winning team, and a prize purse of $57,000, to be donated to the victors’ charity of choice.
While the the idea of a bunch of geeks trying to annihilate each other with foam balls seems like the punchline of a joke, the level of competition was fierce.
"I was actually very surprised how intense some of the players were," said Engine Yard's Josh Lane, who was himself sporting a freshly-cut mohawk reminiscent of Robert De Niro's character in Taxi Driver. "Some of these people definitely practiced before they came here. They wanted to win."
Participating teams were from Github, Twitter, New Relic, Twilio, Zappos, Engine Yard, Source Ninja, UserVoice, Heroku, Perforce Software, Lookout Mobile Security, Open Stack, Context Optional (a part of Efficient Frontier), Plum District, Code for America and Sequoia Capital. In order to play in the tournament, the teams had to contribute to the prize pool. Cheerleaders worked the crowd with plastic jack-o-lanterns to collect extra donations.
Members of Heroku’s team, Dodging-Samurai-42, were the eventual winners, taking home the Dodgeball Octocat Trophy and raising $30,000 for the charity Heifer International.
“It was great to have all those companies come together for charity, and everybody just have fun,” said Lane. “Nobody took it too seriously.”
Oh really? You’ll have to take a look for yourself in our photo gallery.

Filed under: social, VentureBeat

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Posted: 24 Oct 2011 04:12 PM PDT
The willingness to fail is the key ingredient in success, billionaire investor Vinod Khosla told the audience at Failcon today.
Failcon is an annual event where people gather to talk about failing their way to success, and unique forum that celebrates mistakes.
Khosla has had may successes, but he also knows about failure first-hand. He was one of the founders of Sun Microsystems, as well as a partner at Kleiner Perkins, before starting Khosla Ventures, which has invested heavily in cleantech, web startups and social media.
“Most people reduce risk to the point that what you're doing is so risk-less, when you succeed, what you're doing is inconsequential,” Khosla said to the Failcon audience
Knowing 90 percent of companies inevitably fail has never deterred Khosla from taking risks. Even though not all of his investments pan out, he knows it’s still important to take bold action.
One of Khosla’s many failures was with a product called Dynabook, which was like a 1980s version of an iPad with a pen. Prominent investor John Doerr was on the board, and the management team had an impressive set of credentials. The marketing team came up with the tagline “the pen is the point,” and, Khosla said, “we started believing that bullshit.” But while the management had been caught up in the technology, what mattered to users was actually mobility.
He went on to point out that some of the Silicon Valley’s biggest successes also risked being its biggest failures.
The best thing to happen to Steve Jobs was Apple’s failure, said Khosla, and it was key to Steve Jobs becoming one of the most influential figures in the history of technology. While Jobs was crucial to Apple’s early success, he was forced out of the company, and his follow up venture, NeXT, was largely seen as a failure. However, when Apple brought him back, Jobs had the freedom to swing for the home run, because the company was on the verge of filing for bankruptcy and had nothing to lose.
Khosla Ventures recently raised a new $1.05 billion fund, with half devoted to cleantech.

Filed under: VentureBeat

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Posted: 24 Oct 2011 04:01 PM PDT
htc-radar-mangoT-Mobile will offer the HTC Radar 4G, the carrier’s first smartphone to run the next generation of Windows Phone 7 OS, starting Nov. 2nd, the company announced today.
The Windows Phone 7 mobile operating system has an uphill battle ahead of it this holiday season, with fierce competition from the brand-new Apple iPhone 4S and Google Android devices such as the Galaxy Nexus and Motorola Droid Razr. Several research firms like IDC and Gartner have predicted strong growth for Windows Phone during the next few years, but I suspect it will have much stronger sales in the rest of the world than in the U.S., at least initially.
Still, if Microsoft and its manufacturing partners want to maintain and grow its U.S. user base, they have to keep new products coming down the pipeline. The HTC Radar 4G is one such product, and it features a 3.8-inch screen, 1-GHz Snapdragon processor, a 5-megapixel rear camera, front-facing camera for video chat, and 4G HSPA+ connectivity.
The Radar 4G will retail for $100 after a $50 mail-in rebate. (Note to carriers: Please stop with this mail-in rebate nonsense.)
Those looking for a bit more power and heft with their Windows Phone running Mango might want to look out for the dual-core HTC Titan, which is headed for AT&T. Other phones out this holiday season with Mango include the Samsung Focus S and Samsung Focus Flash.
Will you purchase a Windows Phone 7 device this holiday season?

Filed under: mobile

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Posted: 24 Oct 2011 03:50 PM PDT
Google is eyeing Europe as a possible location for building a high-speed fiber network, according to a Google executive’s statements.
Google Senior Vice President David Drummond said at a French Industry Ministry meeting Friday the company was “looking very closely” at building an experimental, Google Fiber-like project somewhere in Europe, MarketWatch reported.
Google Fiber is one of Google’s many projects focusing on creating a faster Internet. Most of Google’s speed-oriented projects are on the developer side — new web standards, new programming languages, etc.
However, Fiber is a user-side experiment that will give normal people in normal communities insanely fast access to the web. The fiber in question is a fiber-optic strand of glass as thin as a strand of hair. The fiber transmits light to send and receive information, much more information than can be conducted through metal wires. Google says its fiber networks will be able to achieve speeds of 1 gigabit, around 100 times faster than a typical broadband connection.
For its inaugural project in fiber optic connectivity, Google chose to build out a network in Kansas City, KS and Kansas City, MO. Google announced the partnership with the city back in May; by the end of July, engineers were surveying the area and kicking the metaphorical tires.
Based on Google’s progress with building the fiber network in Kansas City, we do know that if and when the company decides to build a similar network in Europe, the community in question may experience some economic competitive advantage. Google will likely be hiring local contractors to build the network and will also likely keep local green initiatives top of mind. The company’s priorities seem to focus on giving access to schools, public benefit organizations and consumers first, but small and local businesses are also part of the plan.
Right now, with just a single project in a relatively small community in the U.S., it’s unlikely that Google would roll out a private, EU-wide fiber network. We’ve contacted Google for more details and will update you as more information becomes available.

Filed under: VentureBeat

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Posted: 24 Oct 2011 02:06 PM PDT
Entrepreneur Arianna O’Dell couldn’t stop wondering why no one else had thought of it before: An About.me website generator for small businesses.
So she decided to build out that idea with co-founder Ludo Antonov, and a few weeks later, JustAbout.co is sending out its first batches of beta invitations (you can get yours below, but we’re making you read all the way to the bottom).
“All business owners are stressed and always have a lot on their plate. The last worry many establishments need is the hassle of creating a complicated website or social pretense,” said O’Dell (no relation to the author) in a recent email exchange.
JustAbout makes it easy to create a stunning, one-page representation of your business that gives visitors a visual and textual overview of what you do. You can also link to places where people can get more information, such as a Facebook page, a Google Places map, a phone number, an email address or even an existing company website.
“There are so many businesses today that have yet to establish a web pretense simply because they think it’s too hard or too expensive to be online,” said O’Dell. “We don’t think this should be the case.”
There are scores, possibly hundreds, of tools for small business owners to create and manage their own websites, but few combine the two winning propositions of consumer-focused tools like About.me or Flavors.me: 1) Dead-simple ease of use and 2) a laser focus on beautiful and modern design. Aside from JustAbout, we also stumbled upon Onepager and Central.ly, both free site-builders for businesses.
But the JustAbout team says their product is better because it gives businesses more ways to connect with existing content online. For example, restaurants can link their JustAbout pages to their pages on Yelp, FoodSpotting and many other food-oriented sites. Lawyers can link to Avvo accounts; photographers can link to Flickr, DeviantArt and Picassa; real estate agents can hook their JustAbout pages up with their Zillow accounts.
For the tech-challenged, JustAbout is as simple as picking a good photo and typing in a description. For those with enough knowledge to be dangerous, there’s also HTML editing and social media integrations available.

The idea for JustAbout was prototyped last month during a hackathon. Since making the prototype in 24 hours, O’Dell and Antonov have spent the past month filing away at the rough edges: squashing bugs, adding features and generally getting the product ready for today’s launch.
Within the next few weeks, JustAbout will also launch premium upgrades. For a fee, business users will be able to get custom domains and more. “We’re still playing around with what should be an upgrade and what should be freemium,” O’Dell wrote.
If you’d like to give it a shot yourself, use the invite code #VBEATBOSS, and don’t say we never gave you anything.

Filed under: VentureBeat

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Posted: 24 Oct 2011 02:04 PM PDT
BeeriiPhone 4S voice assistant Siri can talk, find restaurants, recite closing stock prices, and might be a good listener if you’re lonely. But now it’s breaking out of her aluminosilicate glass and stainless steel mold (see: asking Siri what it’s wearing) and moving into the physical world — to pour you a beer.
When Siri arrived, Matt Reed, developer at Nashville marketing agency Redpepperland, realized it could be used for more than just virtual-world tasks. Indeed, Reed concluded the voice assistant could solve one of our favorite first-world problems: the elusive beer.
You know, that moment when your beer is in the fridge and your thighs are sadly suctioned to the hot leather couch? We’ve seen the problem tackled with dogs — the St. Bernard is often portrayed with a small keg around its neck — with robots, and other gadgets. Why should Siri be excluded?
So Reed came up with Beeri, a technology concoction of Siri, Twitter and a modified remote controlled truck. First, Reed and team created a Twitter account, @beeribot, and then created a corresponding contact in an iPhone 4S titled “Tweet Beeri.” The contact, attached to the number 40404, works the same as tweeting through text message. Next, the team modified the remote control truck with a micro-controller connected to Wi-Fi.
Beeri splashTo make the truck run, Reed prompts Siri to text the “Tweet Beeri” contact with the words “Could you pour me a beer?” Siri texts the contact, which then automatically tweets the message to @beeribot. The truck, with it’s new electrical settings, scrapes @beeribot for the word “pour,” which triggers a set of commands, hurtling the truck with an attached beer can toward a spike in a wall. Yes, it’s time to impale some booze.
But Beeri isn’t the most focused with its pours.
“We started with a six-pack to test it out and maybe got one beer out of the whole six-pack,” Reed told VentureBeat in an interview. “A lot of good men lost that day.”
The truck tends to make a mess as well, but Reed chalks it up to beta testing and hopes to see less mess and more practicality in the next iteration. He’s so confident, in fact, he intends to see Beeri go commercial.
“Once people see the practicality of it… who isn’t going to want one in their bar?”
Check out a video of Beeri in action:

Filed under: mobile, VentureBeat

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Posted: 24 Oct 2011 01:26 PM PDT
Daily deals site Groupon is launching its IPO roadshow this week and is seeking a $10 billion valuation for the company, less than half of what was rumored when the company first filed to go public in June. That’s a big haircut.
With the recent turmoil in the markets, it’s a terrible time to bring a new offering to market. But Groupon may have no choice: based on the numbers we’ve seen from the company to date, it’s burning through cash and may have to go public in order keep the lights on.
According to the company’s latest S-1 filing, its merchant liabilities have increased 19% from $392 to $467 million in the last quarter. Its current liabilities exceed its current assets by more than $300 million.
Groupon uses money from new deals to pay off merchants from previous deals, so Groupon’s continued existence is dependent on consumers and merchants having confidence in Groupon’s continued existence.
In recent weeks, Groupon has experienced a barrage of negative publicity from a wide range of media outlets, including The New York Times. Neither Reuters nor The Associated Press had a positive quote from analysts in their coverage of the company.
If consumers believe that Groupon deals might not be honored and stop buying them, the company will be starved for cash and will collapse.
If merchants believe that they might not be paid for Groupons that they issue and stop running Groupons, the company will be starved for cash and will collapse.
If markets were perfectly efficient, Groupon would collapse overnight like Lehman Brothers.
Groupon bears a lot of similarity to the subprime mortgage crisis:
  • No one knows how much value is out there in outstanding Groupons. No one has kept track. Groupon is working to improve this, but many Groupons are still tracked by pen and paper or not tracked at all.
  • Groupon issues big checks to merchants without any credit check or due diligence. Groupon is taking on a lot of risk of merchants not honoring their obligations. See my earlier VentureBeat story on the challenges that relying on small businesses poses for Groupon.
  • It’s impossible to tell with certainty who will owe money to whom if Groupon fails.
  • Banks don’t fully understand the risk they are taking on.
  • Groupon merchants don’t fully understand the service that they are buying. Groupon is pitched to merchants as a “no risk” way of reaching consumers. There may be no money down, but running a Groupon has a lot of long-term risk, including losing money on poorly targeted customers and damaging your Yelp ratings.
  • Much like housing market models that relied on housing prices to continue to grow, Groupon’s model relies on continued revenue growth. With the latest S-1, we saw that once Groupon slows investment in marketing, revenue growth slows down substantially.
Here’s my best analysis of who stands to lose if Groupon collapses:
Consumers. Groupon purchasers could lose between $500 million and $1 billion. This depends on two major factors: the extent to which merchants choose to honor Groupons and the ability to dispute charges with credit card companies.
Recommendation: Consumers should only purchase Groupons they can use within 60 days. Avoid Groupons for big ticket purchases (like travel) far into the future.
Small businesses. Merchants who sell products and services through Groupon stand to lose up to $500 million. In the United States and Canada, merchants are typically paid within 60 days of the date the Groupon runs. In the rest of the world, merchants are typically paid after the Groupon is redeemed. The big question is what merchants choose to do in the case of a Groupon failure. Do they continue to honor Groupons that were issued? Or do they tell consumers, “Sorry, not our problem?” Continuing to honor Groupons would be the right customer service move but bad for profits. This will vary by merchant.
Recommendation: While I’ve long advised most categories of small businesses to avoid running Groupons just based on the terrible economics, I believe businesses should consider Groupon credit risk. If the cash from running Groupons is critical to your business, I would recommend against running them.
Credit card companies. These are potential losers that may surprise a lot of people. Companies such as Chase Paymentech and American Express could also lose hundreds of millions. The companies essentially serve as a backstop for consumers.
According to Visa’s Ted Carr, for 60 days after the statement on which a charge appears, “Visa operating regulations provide card issuers and cardholders with protection when a merchant ceases operations and the cardholder does not receive what was paid for (the merchant's bank/acquirer is liable.)”
American Express’s Marina Hoffmann Norville said it’s possible that consumers would be able to dispute charges for longer than 60 days. “We will determine on a case-by-case basis how we will address disputes in those instances where a merchant goes bankrupt or abruptly ceases operation,” she said.
Other credit card issuers like Citi and Bank of America may also lose if they choose to issue refunds in the name of good customer service and can’t recover the money from Groupon’s merchant bank.
With new products like Groupon Getaways, this risk gets even bigger. Instead of a $40 transaction, many transactions are in the hundreds of dollars.
The risk is magnified by the fact that there are often no clear records of Groupon redemptions. Unscrupulous consumers may seek refunds even after they’ve used a Groupon.
Recommendation: Credit card companies are in a tough spot. They can increase the holdback that they have for Groupon. This means that they would hold back more money to cover potential losses. But this would hurt Groupon’s cash flow; that in itself could cause Groupon to collapse. Frontier Airlines was forced into bankruptcy when its credit card processor, First Data, decided to hold back more of the proceeds from ticket sales.
Business partners. Groupon spends hundreds of millions on advertising, much of it on the Internet. Ad networks and publishers stand to lose any unpaid money.
Recommendation: Companies who are heavily dependent on Groupon advertising revenue should look closely at the risk exposure that they have and consider whether the payment terms they give to Groupon are appropriate. This is especially true for ad networks that pay out to publishers in advance of receiving payment.
City of Chicago. Chicago has built its tech reputation on Groupon’s meteoric rise. In many ways, this has been undeserved because Groupon is fundamentally a sales and marketing company, not a technology company. (Fewer than 5% of Groupon’s employees are in technology; many of those are based in Palo Alto.) Some Chicagoans are worried about the impact a Groupon collapse will have on the psyche and reputation of the city.
Rick Summer, a senior equity analyst for Morningstar, a Chicago-based investment research firm, says, “I’m pretty neutral on Groupon’s importance to the city. But I take the longer-term prudent view of’ ‘freeing up good people to run better business.’”
Employees. Groupon employs more than 10,000 people. They stand to lose their jobs and any unpaid wages.
Investors. Of course, public and private investors stand to lose their entire investment. Summer’s analysis values Groupon at $5 billion, less than half the value that the company is seeking. That’s also less than the reported $6 billion that Google offered for Groupon. In Morningstar’s research report, he writes, "IPO investors face a nontrivial risk of permanent capital impairment." That’s a fancy way of saying IPO investors stand to lose their shirts.
I contacted Groupon to give the company the opportunity to respond to my assertions here, but it has declined to comment (SEC regulations typically prevent pre-IPO companies from making public statements).
My points here are not idle speculation. I believe that without significant business model changes, Groupon could cease to exist in the next 12 to 24 months. The company’s recent product announcements seem to be rehashes of long-established online commerce plays (travel, liquidation of unwanted goods) or products that will have little short-term impact (Groupon Now).
A successful IPO will alleviate some of these issues in that it will give the company more of a cash cushion. But the increased scrutiny that comes with being a public company will bring even more attention to every move the company makes. If that news continues to be negative, it will weaken confidence in Groupon.
This same analysis (except my reference to the City of Chicago, of course) applies to all of the companies in the group buying space, with the exception of Google. (Google’s sizable cash horde makes credit risk and consumer confidence non-issues.)
Last week, we saw BuyWithMe, another group buying company, lay off more than half of its staff after it failed to secure more financing. BuyWithMe didn’t have nearly the scale that Groupon does, but what happens to it could be a good indicator of what will happen with Groupon.
Rocky Agrawal is an analyst focused on the intersection of local, social and mobile. He is a principal analyst at reDesign mobile. Previously, he launched local and mobile products for Microsoft and AOL. He blogs at http://blog.agrawals.org and tweets at @rakeshlobster.

Filed under: deals, VentureBeat

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Posted: 24 Oct 2011 01:07 PM PDT
Google+ social features are coming to Blogger, the company’s web-based blogging software. Soon, Blogger users will be able to replace their profiles with their Google+ profiles, and that’s just the beginning.
Last week, Google+ social features popped up on Google Reader, the company’s RSS parsing product.
Google is gradually integrating Google+ features into all its web products. We heard it at Google’s Mountain View campus last week from the Google+ team, and it’s fast becoming a reality.
Googlers see Google+ as “more than a social network or a collection of communication tools; it's Google's plan to bring social information into everything you do on the web, from shopping to search to email and beyond,” the team told us.
The new profile-editing tools show an upcoming integration with Google’s new social tools. Although those features can’t currently be activated, a dialog inside Blogger’s user profile editor reads, "Connect Blogger to Google+: Use your Google profile and get access to upcoming Google+ features on Blogger.”
We’ve reached out to Google for confirmation and more details on the Google+ and Blogger integration and will update this post as more information becomes available.
For the Google Reader integration, Google engineer Alan Green wrote on the company blog, "We're going to bring Reader and Google+ closer together, so you can share the best of your feeds with just the right circles." Where existing Reader features were duplicated by Google+ features, the company decided that it would let old things pass away and all things become new; original Reader mechanisms such as friending and following will be retired this week.
We can imagine the same will be true of a Blogger integration: The tools will likely make it easier to share your posts with relevant circles and might duplicate current Blogger social features.
In the meantime, it’s interesting to note that Google is starting its Google+ infiltration of the Internet with web-nerd-heavy products like Reader and Blogger rather than “normal” user-heavy products such as Gmail and YouTube. We’re anxious to see where Google+ will pop up next — and whether users will enjoy the new integrations.

Filed under: social, VentureBeat

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Posted: 24 Oct 2011 01:00 PM PDT
For publishers and brands the tablet device is the new interface of the web. As tablets continue to invade the marketplace, both will have to provide a tailored interface for users. Below are a few concepts on how to approach building tablet experiences for the web.
Simply put, it is time to rethink everything you know about how users want to consume digital content as we evolve from click driven graphical user interface (GUI) to gesture focused natural user interface (NUI). This consumer shift in human computer interaction (HCI) began with the introduction of touchscreen smartphones and peripheral devices, but the tablet will be instrumental in users getting accustomed to NUI over the next 3 to 5 years.
There are two reasons tablets will lead the evolution to NUI:
1. Screen Size: Screen size is a key factor in determining how much interaction you can build into a user experience. Tablet screen sizes range from 7 to 10 inches, which represents the biggest interactive display most users have personally experienced to date. This larger screen size will allow for enhanced user interactions that other devices cannot currently support. (Just try using an iPhone app on your iPad. It sucks pretty bad.)
2. Multi-touch inputs: The combination of the screen size and multi-touch inputs creates a platform that presents unique user interaction capabilities that cannot be replicated on any other device or platform. With a mouse, you have one point of interaction from a user. With multi-touch, you have ten inputs and that alone changes the game. We have just scratched the surface on using multi-touch inputs to define new gesture architectures for users.
We have started testing what type web interfaces work best on tablets and how we can enhance the user experience based on current user knowledge and expectations.

Make the user feel like a Natural

Making the user feel like a 'natural' is the goal of NUI, so it is very important to take an inclusive approach when introducing NUI. When building for tablets you have to focused on the idea of being inclusive in your gesture architecture, specifically relating to user interactions. For example, if there is a pinch gesture associated with an element on the screen, it should work on tap as well so that it is inclusive for those who do not inherently understand they can pinch the element
With that approach we set out to develop new tactile and fun websites for tablets.

Make the experience tactile

To test out new tactile interactions we developed the CARDS interface (see video below).


The objective of the CARDS interface was to give the user complete control over each piece of media that is displayed for consumption on a webpage by flicking through cards and selecting the desired item from the stack. Browsing through CARDS is a natural process for most users, and it gives them a sense of control over each piece of media and not just the page (e.g. a magazine layout). Also we wanted to present multiple media/content options on a single screen without visually overwhelming the user.


The results from our initial tests were very interesting. The average time spent with the CARDS interface was over 3 minutes based on Google Analytics. This was very encouraging, considering the CARDS interface was focused on a single tactile interaction (flicking) to drive content/media consumption. The user feedback we received was very exciting as well. Users wanted more interactions and different ways to engage with their selected media. This was great to hear because it meant that our baseline CARDS interface made the user want more NUI throughout his or her experience.

Make content consumption interactive and fun

To build on the user's request to add more interactions and ways to engage with selected media we thought to ourselves: What if you could draw on any piece of content/media on a tablet device?
This approach would definitely make the experience more fun and engaging. Also it was a user interaction that is tailor-made for tablet devices. With that in mind, we created DRAW featuring Justin Bieber (see video below).


Make a fun engaging way to interact with content/media at a webpage level on tablet devices.


We saw over 2 minutes average time spent with DRAW based on Google Analytics and some of the funniest pictures ever. (People love their Justin Bieber!)User feedback centered around the ability to share drawings and add filters to the photos. Based on these learnings, we have a ton of new NUI thoughts to make media fun and engaging, which we will be releasing in the near future.
Overall, we feel that these tests show the desire and demand for a more tactile and fun experience on tablet devices when it comes to the web. We believe our approach to building tailored interfaces for tablets is the next step in web user experience. The thought of watering down the user experience on a tablet because you are tied to a website built for GUI (clicks) makes no sense to us.
If you are not thinking about the touchable web you are missing out on a huge opportunity.
Mark Spates is the founder and CEO of ClrTouch, a company that makes it easy to self publish websites on tablets. ClrTouch recently demonstrated at the Fall 2011 DEMO conference

Filed under: dev, mobile, VentureBeat

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Posted: 24 Oct 2011 12:54 PM PDT
Activision has released a new launch trailer for its first person shooter game Modern Warfare 3.
Modern Warfare 3, the next game in the Call of Duty series, will hit shelves November 8. The game features new multi-player modes, new weapons and proficiencies, 16 new maps and much more. As VentureBeat reporter Dean Takahashi points out, it's a big improvement over last year's multiplayer for Call of Duty Black Ops.
The timing of the trailer release coincides with tomorrow’s launch of Battlefield 3 — presumably to keep gamers from spending their money on the rival game. Both games will be fighting it out for billions of dollars in retail spending during the fall holiday season, and both are on our list of the best games of the fall.
We’ve embedded the new trailer for Modern Warfare 3 below. Let us know what you think in the comments.

Filed under: games, VentureBeat

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Posted: 24 Oct 2011 12:02 PM PDT
Amazon is expected to sell as many as 5 million of its new Kindle Fire tablets before the end of 2011.
JPMorgan analyst Douglas Anmuth stated in a research note he thinks the e-commerce company can move 5 million of the Android-based units during Q4.
The 7-inch color, touchscreen, email-fetching, app-running, web-browsing gadget sells for $199, making it the perfect downmarket competitor to the iPad 2, which starts at $499.
And for gift-giving holiday shoppers, the Fire and its ilk (such as the Kobo Vox and Nook Color) represent a great compromise between flashy functionality and recession-friendly pricing.
The highly anticipated Fire will be available for sale starting November 15. On the day of the Kindle Fire announcement, Amazon took 95,000 pre-orders for the gadget. The Nook Color is on sale now. Kobo will start shipping Vox units later this week.
For contrast, Apple sold around 4.7 million iPad units in the second quarter, when its iPad 2 launched. The company stated it was selling the units as fast as it could make them.
While the Fire is more consumer-friendly in its pricing, it also faces more competition in its vertical and price range than does the iPad. Between the Nook and Kobo competing products, the new breed of color, touchscreen e-readers are mighty similar to tablets in their functionality, and it would be difficult to say which of the three is best in class.
Anmuth also predicted consumers will see multiple Kindle Fire variants next year, including 7-inch and 10-inch models and 3G connectivity options.

Filed under: mobile

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Posted: 24 Oct 2011 12:00 PM PDT
Web training site Grovo has quickly become one of the best ways to learn about new services on the Internet. It offers video lessons on web apps and services, and today it’s adding a slew of new features, including collaborative learning, better personalization, and other upgrades.
When it launched about a year ago, Grovo offered short video lessons that added up to courses around 15 to 20 minutes long. Since then the company has added many more courses, a nifty redesign, and has gone freemium — offering some lessons for free, and others for a small subscription fee. This latest batch of features will make Grovo an even more compelling option for those wishing to learn about the web.
You can now create groups to learn alongside your friends, family, and co-workers. Groups can be public, which means anyone can join, or private, which could make Grovo a great way to get your parents or technophobe co-workers up to speed on the latest web technologies. The groups feature will make Grovo an even more useful tool for businesses aiming to train their employees.
Grovo is also adding “Tracks” today, an intelligent collection of lessons that help you learn about something specific. For example, the “Creating a blog” track asks you specific questions about your experience and what you hope to accomplish. It then provides you with the most relevant lessons. Tracks makes Grovo more welcoming to users who don’t quite know what they should learn next.
The company has also upgraded its video player experience. You can now add tips, tricks, and questions at specific points during videos, which will pop up for others when they watch that lesson. There are also closed captioning options now, and you can listen to videos with just narration (which blocks out background music).
Grovo is also more offline friendly, thanks to a new downloadable cheat sheet that holds relevant content for every lesson.
Co-founder and CEO Jeff Fernandez tells me that the company has seen diverse growth, with paying customers in six continents. Large Fortune 100 enterprises have also adopted the service for their employees, including Pitney Bowes. Grovo will continue to add even more Tracks in the future, like an online shopping Track in December, and a health and fitness Track in January.
As I've written previously, Grovo will certainly appeal to users who've always wanted to learn more about certain sites or services but don't want to bother their geeky friends. The site's videos are clear, informative, and professionally made. As somebody who used to train users of all sorts of skill levels, I can attest that there's something for everybody on Grovo, and the site will surely add more lessons over time. It's also worth noting that using Grovo is a lot less demoralizing than owning one of the Dummies series of how-to computing books.
The New York City-based site was founded in 2010 and is privately funded.

Filed under: social, VentureBeat

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Posted: 24 Oct 2011 12:00 PM PDT
As the recent frenzy over the iPhone 4S attests, the appetite for mobile phones and applications is at an all-time high. Directly related to the surge of mobile devices is the growth of mobile payments as a viable form of payment. What are mobile payments? How do they work and how do they compare to traditional payment methods such as credit cards or newer options like PayPal?

Types of online payments

The current mobile payments field can be separated into two groups: proximity payments and remote payments.
With proximity payments, goods can be paid for by swiping a mobile device in front of a reader. These types of transactions center on near field communications (NFC) technology, a check-out method that’s predicted to revolutionize point of sale payments.  Proximity payments require both the consumer and the merchant to have hardware — the consumer typically uses a mobile device with an integrated NFC chip, and the merchant sets-up a reading device to identify the chip.
When paying for something remotely (outside the point-of-sale) the authentication process needs to be different. These remote payments use existing consumer accounts as an interface to a working billing channel. A unique number authenticates and accesses the user’s account.
Carrier-based billing is the most prominent type of remote payment, due to its minimal requirements. It works with every mobile phone, making it the payment method with the highest penetration worldwide after cash. To make a purchase, consumers provide their mobile phone number. The method is both comfortable — everybody knows his or her mobile phone number by heart — and secure. A personal identification number is sent to the device via SMS to provide transaction security.

Five industries ready for mobile payments

Since proximity payments are limited to point-of-sale scenarios, they mostly address a single industry: retail.
Remote payments however, especially carrier-based, provide several solutions with a track record of monetizing offers. Today, every company offering digital entertainment or information can profit significantly from implementing a mobile payments solution. The hottest industries include the following:
  • Online, social and mobile games
  • Online publishing (online magazines and newspapers, as well as e-books)
  • Music
  • Movies
These industries have a lot in common. Most business models in these industries are based on micropayments. Their consumers will be looking for a frictionless, secure and fast payment method — typing in a 16 digit credit card number online or signing a receipt is not.

Translating European success to the U.S.

The U.S. is already starting to embrace mobile payments, thanks to its leading role in social networking. Social networks use remote payments to make money of of virtual credits and game items.
But mobile payments can be used for other types of companies as well. Even vintage offline industries such as ticketing can be digitized and "mobilized," as a current example from Europe shows. In what is called mobile ticketing — for example physical tickets for events, public parking or public transportation — are completely replaced by digital tickets on mobile phones. What is more, these tickets are purchased via carrier-based billing, enabling consumers to handle the entire process from searching to purchasing to redeeming tickets on their mobile devices. Already merchants all over the world are adopting this new concept.
Mobile payments have set out to change the way consumers pay for their purchases. Mobile devices are here to stay and so are mobile payments, which are quickly changing the way consumers pay for their purchases online or in person. For now, mobile payments represent a toolbox of payment methods and monetization options, but technologies will develop and eventually grow together to provide the mobile consumer with the best shopping experience.
As Managing Director for mopay Inc., Kolja Reiss oversees all aspects of corporate relations and operations for mopay in North America. He has over 14 years of experience in the telecommunications industry and holds a Master’s Degree in Business Information Systems from the University of Paderborn in Germany.

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Filed under: Entrepreneur Corner, VentureBeat

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Posted: 24 Oct 2011 11:35 AM PDT
WikiLeaks has suspended publishing of leaked documents to draw awareness to its precarious financial plight.
In many ways, it strikes us as a more dramatic version of NPR’s Pledge Week: If you support the organization financially, your regularly scheduled programs just might resume.
“We are forced to temporarily suspend publishing whilst we secure our economic survival,” reads the WikiLeaks homepage today. “We cannot allow giant U.S. finance companies to decide how the whole world votes with its pocket.”
In a packet of documents [PDF] on what WikiLeaks is calling a “financial blockade,” the organization reveals it has been running on cash reserves since the end of 2010, when a number of financial and web services companies began denying service to WikiLeaks.
The denials were ostensibly based on WikiLeaks’ violation of various Terms of Service, which prohibit the use of services such as Amazon’s web hosting and Paypal’s money transfers when connected with copyright-infringing or illegal activity. However, WikiLeaks has stated that the companies chose to stop servicing WikiLeaks for political reasons.
The organization now says that over the course of the past 11 months, the “arbitrary and unlawful” blockade has prevented more than 95 percent of donations to the organization and has cost WikiLeaks “tens of millions of dollars in lost revenue.” WikiLeaks further states that organizations such as Amnesty International and Greenpeace could be in similar straits.
“Any organization that falls foul of powerful finance companies or their political allies can expect similar extrajudicial action,” reads a statement from WikiLeaks, which also notes that various UN and U.S. government officials have stated there are no legal grounds for blacklisting the organization.
As detrimental as the December 2010 “blockade” was, it also coincided with a huge spike in successful donations to WikiLeaks. Successfully completed contributions peaked that month at around 800,000 euros.
WikiLeaks is particularly zeroing in on Bank of America, which it says was responsible for an extensive and expensive smear campaign against the non-profit. In February 2011, WikiLeaks published a series of slides that it said showed a collaboration between Bank of American and tech security company HBGary to discredit WikiLeaks, hack the organization’s infrastructure to get the identities of leaks, and destroy the reputation of its founder, Julian Assange. Bank of America says it hasn’t seen the slides yet and has no interest in seeing them.
WikiLeaks is now attempting to raise around $3.7 million to cover the following costs:
  • Salaries and staff: $500,000
  • Productions: $400,000
  • Security: $300,000
  • Campaigns: $300,000
  • Technical information: $500,000
  • Publications research: $500,000
  • Legal costs: $1,200,000
WikiLeaks’ publishing activities will presumably resume once an unknown but substantial figure has been secured.

Filed under: VentureBeat

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Posted: 24 Oct 2011 10:34 AM PDT
My third startup is Brazen Careerist.
When I started building the brand of Brazen Careerist around the year 2000, I talked about ideas like job hopping as a way to build a solid career, and I warned that generation Y's entry into the workforce would be a total shock to employers. I was labeled a heretic and a moron.
But pretty quickly, people started thinking I was right. And I started making $15,000 a speech to discuss these ideas.
The intoxication of being on a trend, and knowing how to monetize it and being excited about being right, that's what makes someone do a startup. So I picked up two partners, I launched Brazen Careerist, and quickly, Mashable called us the number-one social networking site for Gen Y. We were on a roll.
We raised money. We launched products, we pivoted 20 times. We were due to raise more money right after the markets crashed. So of course we couldn't raise money. And of course I did what all startup founders do when they run out of money: I had a shit fit. And then I had a nervous breakdown.
But the thing is, in a startup, everything moves at warp speed, even a nervous breakdown. So I recovered fast, convinced investors to put in more money. And we kept going.
That cycle happened twice. Which is normal. Because startups are hell, and a startup is the perfect convergence of a brilliant idea and a founder just crazy enough to stick with it through anything.
At that point, I was exhausted. And I had to figure out: When is it time for a founder to step down? So I went through a time of personal assessment, which taught me a lot about when you know it's time for a founder to leave:
Financial exhaustion
I had funded the idea with my own money for a few years before I launched Brazen Careerist as a social recruiting platform. I ruined my credit, I cashed out my 401K (don't ever do this!) and I lost a baby sitter because she was appalled that we didn't have any food in the refrigerator.
Emotional exhaustion
I had traveled every week for a year giving those speeches. You'd think I'd have saved a lot of money, but you'd be surprised how much it costs to run a household if you have two kids and are never home to see them. Then I spent a year traveling every week to raise money and being on television. But I was really sad about not seeing my kids.
Marital exhaustion
The dirty secret about startup founders is they can't keep marriages together. Part of the reason for this is they are crazy to begin with. And part of the reason is that you have to be married to your company to do a startup. So divorce rates are high, especially among women, because they are much less likely to have a spouse who is wiling to stay home and keep the family intact.
So I got a divorce. It was on the cover of the New York Times. And all PR is good PR, of course, but I realized, while I was going through the process, that I wanted a successful marriage more than I wanted a successful career. And then I thought, "No. I want both." And I became exhausted wondering how women get both. (Until I realized, oh, this is why women don't do startups.)
Intellectual exhaustion
And it was time to pivot. It was time to turn Brazen Careerist into an event-based social recruiting service. And I knew a lot about recruiting, but I was going to have to learn more. And really, you have to live and breathe the industry you are in if you're going to rewrite the rules to that industry.
And I was already contemplating my next topic: Generation Z. I think that Generation Z will revolutionize school like Gen Y revolutionized work. I think homeschooling is going to be a huge trend that impacts startups, and corporate life, and I was really curious about that. My brain was refocusing whether I wanted it to or not.
Relationship exhaustion
While I was appearing on shows like 20/20 to tell the world how to manage Generation Y, I was having knock-down drag-out fights with my Gen-Y co-founder, Ryan Healy. Founder bickering is a common startup problem. Because if you have co-founders with different skill sets, which you should, then you are going to have different points of view, and inevitably, arguments about that.
Vision for where to go next
Fortunately, though, Ryan had not ruined his personal finances and he didn't have kids. So he still had lots of energy to get the company to the next level. And after seeing all these issues listed on paper, I realized that even though I loved Brazen Careerist, I wanted to step down from the CEO position.
So I started a relentless campaign to get one of the investors, Ed Barrientos, to become CEO. He had already had big exits from two of his own companies. As part of my campaign I told him it could be an interim position (it wasn't) and part of the campaign was to convince him that it was the right time for me to step down.
It was hard to step down, but I needed a vacation. I wanted to have a life. I married a farmer and moved myself and the kids (and sort-of even my ex) to a farm in rural Wisconsin.
And after I’d had a break, I found myself calling Ryan and Ed more and more. I took a keen interest at the board meetings (I'm still a major shareholder) and I asked to be more and more involved, albeit in a different role, which they eagerly accommodated.
For me, stepping down was the right thing to do. It feels right that I did it at a time when the company was in good hands. And it feels good that I can still contribute while I figure out what company to launch next. Because after all that trouble – the physical, financial, emotional exhaustion – I can't stop doing startups. It's just who I am.
Penelope Trunk is the founder founder of three startups. Her most recent is Brazen Careerist. She blogs about her startup life at penelopetrunk.com.

Filed under: Entrepreneur Corner, VentureBeat

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Posted: 24 Oct 2011 10:16 AM PDT
Square, the mobile payment system most often associated with small, hip, urban businesses, is coming to Wal-Mart.
That is to say, Wal-Mart won’t be using Square devices itself, but it will be selling them.
Square said it is signing up lots of new merchants these days — between 30,000 and 50,000 new merchants each month — and we’re sure having its mobile hardware available at such a ubiquitous retailer will only drive up the number of signups as well as the correlated dollar amounts for payments processed and processing fees collected.
The company revealed to BusinessWeek today that its smartphone hardware for reading credit cards would soon be available in Wal-Mart stores around the United States.
Currently, Square devices are sold at select Best Buy, Target and Apple stores. With Wal-Mart on board, Square devices will be sold at more than 9,000 retail outlets around the country.
Between NFC (that’s near-field communication) technologies like Google Wallet and a number of other mobile payment hardware solutions, Square is facing stiff competition.
In addition to the massively mainstream deal with Wal-Mart, Square is also armed with $100 million in new funding. The round also put Silicon Valley rock stars on Square’s board, which now includes Mary Meeker of Kleiner Perkins Caufield & Byers, Vinod Khosla of Khosla Ventures and former Obama chief economy adviser Larry Summers.
As of last month’s funding announcement, Square processes almost $4 million in mobile credit card payments every day. The startup expects that figure to exceed $1 billion by the end of 2011. The company is reportedly valued at around $1 billion.

Filed under: VentureBeat

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Posted: 24 Oct 2011 10:02 AM PDT
Siri on iPad
Just over a week after successfully porting Siri to the iPhone 4, developers have added the popular voice control feature to a jailbroken original iPad.
Siri is arguably the most interesting upgrade in the iPhone 4S. Siri is essentially a voice assistant that fits in your pocket. It allows users to ask it questions (like what’s the weather forecast), lets you update your calendar and email your contacts, and it even finds and recommends things for you to do around the area. However, this great feature is currently only officially available on the iPhone 4S.
As VentureBeat’s Meghan Kelly previously pointed out, Apple has been known to make new features only available for its newest products to make them the most appealing. Anything that doesn’t offcially have Apple’s blessing isn’t going to work very well — even when hackers manage to get around software limitations. Therefore, porting Siri to other devices running iOS 5 doesn’t work perfectly.
Some of the functionality for Siri depends on having your device connect with Apple’s servers. By default, these servers only communicate with devices that can be correctly identified as iPhone 4Ss. And while hackers can trick these servers into thinking a jailbroken iPad is a iPhone 4S, the device still may not gain the full functionality of Siri. As Jailbreak news blog  JailbreakStory points out, Siri's interface could be used to query Google and a few other services, nothing else.
[Source: Jackoplane via Engadget]

Filed under: mobile, VentureBeat

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Posted: 24 Oct 2011 09:50 AM PDT
Groupon’s first technology product Groupon Now appears to be a stinking dud, according to data released on Sunday. The Groupon Now mobile app chalking up some very dour numbers, according to a new report compiled by Yipit, an industry performance tracker. The app has generated approximately $2.6 million in gross sales nationwide in the six months since its launch in May of 2011.
According to Yipit:
From its launch in May through September 30th, Now generated only $2.6 million of total gross billings. Given the lower commission rates from Now! deals (15%-20% compared to 40%-50% for regular Groupon deals), this means that Now! has generated less than $1 million of net revenue in the five months since its launch, representing less than 0.5% of North American net revenue for the period.
Groupon Now has been highly touted  to investors, as the company prepares for its initial public offering on Nov. 4. With the massive scale of the Groupon brand, Groupon Now was supposed to be a technology that would be very difficult to copy by competitors like Living Social. As opposed to receiving a daily email, Groupon Now lets users take advantage of discounted products when they are nearby, in real-time, similar to Scoutmob, another location-based deals app, and daily email.
While smartphone users have made the Groupon app one of the most successful ever from the iTunes store, this has not translated into increased sales for Groupon.
For many merchants, running promotions through Groupon Now isn’t a good deal, either.
"You are better off leaving a table empty than running a Groupon Now! for most restaurants," says Rocky Agrawal, principal analyst at reDesign. Often Groupon Now appeals to the types of customers who are already regulars at the establishments running the deals, which defeats the purpose.

David Sinsky of Yipit writes that part of the failure of Groupon Now may be attributed to its nature as a “pull” product, where users must choose to use it. The company has even offered users a $10 credit towards a purchase to use the mobile app, which has done little to lift its fortunes.
At issue is Groupon’s claim to be a technology company, which would justify its wild valuations, but it is in fact just a highly people-intensive sales and marketing operation.
Facebook CEO Mark Zuckerberg likes to boast that his company has one employee for every 1 million users, while Groupon has 10,000 employees, only five percent of whom are engineers. According to the S-1 Groupon filed with the Securities and Exchange Commission, the company has 547 technical employees out of a staff of more than 10,000. This makes engineering the second smallest team in the entire organization.
[Image Credit: Arena Creative/ShutterStock]
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Filed under: deals, social, VentureBeat

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