16 November, 2011



With a bold new redesign, AIM could finally be cool again (seriously)

Posted: 16 Nov 2011 08:51 AM PST

It’s been more than 10 years since I’ve used AOL Instant Messenger as my go-to chat client, but the new AIM may just be good enough to change that.

AOL launched a preview of its latest AIM vision today, which includes new desktop, mobile, and web apps. Surprisingly, AOL has cut out much of the clutter that previously made AIM a chore to use — it’s now streamlined and focused on conversations. Group chats are now a core part of the service, and video chats are seamlessly integrated.

The new AIM looks so dramatically different that you could easily mistake it for something from a fresh-faced startup — and that wouldn’t be far from the truth. The revamped messaging client comes courtesy of Jason Shellen and his team, who joined AOL after it snapped up Thing Labs a year ago.

Thing Labs was best known for its social media reader Brizzly, and Shellen admitted to me that there was some Brizzly DNA in the new AIM. That’s obvious from the way the new apps are organized, which resemble Twitter clients more than they do past AIM versions.

There’s less of a focus on the buddy list, and instead recent conversations are highlighted. Conversations are also synchronized, so you can easily hop back into a chat on your phone that you started on your desktop. You can easily add multiple friends to a conversation, which is infinitely more useful than boring old group chat rooms. You can also sign in with your Facebook and Google Talk accounts to chat on those services, which limits the need to juggle multiple clients.

Another nice addition: You can send messages to friends while they’re offline (and vice versa), which will be instantly received when they sign on. In this respect, the new AIM resembles one of the hot new mobile messaging services like Kik or Facebook Messenger.

Conversations are also more interesting now, thanks to the ability to post videos and images inline. That adds some nice spice to chats that previously consisted of text and links. The new AIM also takes a cue from Twitter and Facebook in the way it handles status updates. Your updates are now broadcast to specific people who follow you.

Video chats also seem improved over previous versions of AIM, but it doesn’t yet support group video chats. For now, Shellen says, group video conferencing is available via AV by AIM, a simple web-based solution. (I wouldn’t be surprised if AV eventually gets integrated into the new AIM; AOL would be stupid not to do so.)

Shellen’s crew also fixed AIM’s file sharing problems by giving up on the idea of direct peer-to-peer sharing. Now when you upload a file, it gets stored on AOL’s servers, where it will sit for around 72 to 100 hours. You can easily share links to files that you’ve uploaded via AIM and on the web. Images that you’ve uploaded will also be displayed inline, just like when you link to an image somewhere on the web. Shellen wouldn’t speak to any file size limit, but I would imagine it’s somewhere around a few gigabytes per user.

I’ve been testing out the new AIM iPhone app over the weekend, and it’s definitely an improvement over the previous boring and buggy AIM app. It includes all of the features above, except for video chat, and seems exceptionally polished for an initial release.

All of the new AIM apps feature integration with Twitter and Instagram, though not in the way you’d expect. You’ll only receive updates from those services that are relevant to you, for example when someone mentions you on Twitter, or likes one of your Instagram photos. Shellen tells me that, eventually, the new AIM could morph into a truly cross-service app like Brizzly, but that’s not going to happen anytime soon.

The desktop and web versions of the new AIM are available right now, while the Android and iPhone mobile apps will land later today.

Filed under: mobile, social, VentureBeat

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Visa launches PayPal competitor with developer community to back it up

Posted: 16 Nov 2011 08:47 AM PST

visaVisa announced V.me today, it’s PayPal-like online payments system, along with a new developer center encouraging developers to actually use it.

Visa and the credit card are synonymous. But since the inception of e-commerce, payments don’t just fall into the credit card swipe, written check, or passed cash forms anymore. Now there’s the virtual credit card swipe, direct extraction from bank accounts and even a move toward organized bartering on sites such as Yardsellr and TradePal. PayPal, an online payments system own by e-commerce company eBay, made a significant ripple in safe online transactions, and it looks like Visa wants in on the game. But how to get the attention?

Big names are turning toward their developer communities to market their products not to the people who will use them, but the people who will integrate them, make them available. Developer communities are a huge resource for companies, if they can make their product easy to use and support developers with resources.

V.me allows people who have signed up, to enter their credit card information and store it with Visa. Personal and business consumers alike can then surf and buy on the internet without having to enter a 12-digit credit card number at checkout. The service is not Visa-discriminative, though. You can enter any major credit card information onto V.me and use it from a computer, mobile device.

The Visa Developer Center comes along hand-in-hand to help put V.me on the payments map. The company wants developers in the gaming, financial, e-commerce and mobile industries to incorporate V.me into their products. For instance, gaming developers can use V.me for in-app purchases, and currency, or direct integration with e-commerce check-out pages. Developers will have access to application programming interfaces (API), software developer kits (SDK), as well as simplified documentation provided by Visa and its owned entities CyberSource, Authorize.Net, and PlaySpan.

Developers will also be able to play with V.me’s security features such as APIs to account validation, transaction initiation, money laundering tools, as well as currency exchange for international purchases.

PayPal is on pretty strong footing, however, with 12 million monthly users for virtual gaming goods, as well as passing 100 million overall active users and raking in $1 billion for eBay in this year’s second quarter. Not to mention it has its own developer community, with a big push from eBay to pay attention to that community. The company formed X.Commerce, which has been slowly rolling out new ways for developers to play with eBay’s e-commerce solutions.

Developers are an important part of the marketing process and big brands are starting to see that.

[Phone credit cards photo via Shutterstock]

Filed under: dev, mobile

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U.S. authors: Kindle Lending Library is breach of contract

Posted: 16 Nov 2011 08:40 AM PST


U.S. authors are not pleased with Amazon’s recently announced Kindle Lending Library and are claiming the powerful online retailer is “boldly breaching its contracts” with numerous publishers.

Amazon’s new Kindle Lending Library allows Kindle owners who subscribe to the premium Amazon Prime service to borrow one e-book a month for free. With more than 5,000 titles to choose from, including big-name titles like Suzanne Collins' "The Hunger Games" trilogy, Amazon is giving potential e-book buyers another reason to choose from the Kindle family instead of from Barnes & Noble or Kobo.

Amazon actually pays publishers a fee whenever someone rents a book for free, so why are they up in arms about the move? The Authors Guild, which represents more than 8,000 U.S. writers, says Amazon asked permission from major publishers to participate and after most declined Amazon’s offer, the retailer still decided to go ahead.

“Amazon simply disregarded these publishers' wishes, and enrolled many of their titles in the program anyway,” The Authors Guild wrote in a blog post. “Some of these publishers learned of Amazon's unilateral decision as the first news stories about the program appeared.”

On top of not getting permission, publishers are concerned about consumer expectations of pricing. If a consumer can get e-books seemingly for free through the Kindle Lending Library, they may decide to stop paying for e-books, something that would be devastating to publishers who are trying to make the transition from print to e-books.

The Authors Guild asserts that the real reason Amazon went ahead with the Lending Library without publishers’ consent relates to the launch of the Kindle Fire, and “Amazon's unexpected e-book device battle with Apple and especially Barnes & Noble.” That sounds on the money considering the emergence of the new $249 Barnes & Noble Nook Tablet and the price drop of the Nook Color to $199, which competes directly with the $199 Kindle Fire.

Filed under: media, mobile, VentureBeat

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Dylan’s Desk: How the Internet is dividing publishers into two camps

Posted: 16 Nov 2011 08:30 AM PST

Newsstand sign

Glam Media founder Samir Arora thinks he knows the future of media.

The secret, he is betting, is brand advertising displayed against high-quality, premium content.

That stands in stark contrast to the advertising model that’s worked best for the past decade online, in which increasingly specific text advertising is targeted at potential customers’ immediate desires, largely via search engines.

Glam Media aggregates content from a large network of vertical publishers. And Arora paints an alluring picture that might appeal to many print publishers, that are wondering where their profits have gone in the move to the web.

The problem with search-driven advertising, from the publishers’ point of view, is that it earns them a lot less money. Consider that a typical magazine or large-circulation newspaper page sells for tens of thousands of dollars, and that most magazines contain hundreds of pages of ads, and you can see how people like Si Newhouse and Rupert Murdoch got to be billionaires.

By contrast, it’s a rare web page that generates $10,000 in revenue for its publisher. Most probably don’t even hit $1,000. Even when they load their pages down with ads, web publishers are lucky to see $10 or $20 per 1,000 pageviews, which means only a smash hit blog post, one that’s seen by a million people, generates magazine-like money.

Web publishers respond by publishing more pages and delivering more ads, but that just increases the supply of pageviews, putting downward pressure on the price. Pretty soon you’re looking at an industry that is generating a tenth as much revenue as it used to in print, and publications are laying off staff and folding left and right. In other words, today’s media landscape.

How do you respond to that model? One of two ways (assuming you don’t just give up and write off the publishing industry altogether). Either embrace the search-driven, low-margin model and flood the Internet with as many pages of content as you can, or try to find a new market for high-margin, premium content supported by expensive ads.

The former approach works only if you have a cheap source of content, like Demand Media‘s army of low-paid freelancers.

The latter, high-margin approach is what Arora is trying to do. I spoke with him at a recent conference, where he was touting the recent successes of Glam Media.

Unlike search-driven advertisers, brand advertisers aren’t looking for immediate results: They’re looking to drive their brands deep into our brains, and to do that they need constant repetition of powerful images and words. They care a lot about the context that their ads appear in, so they’re drawn to quality content.

That kind of advertiser is conservative. Arora said that in an economic downturn, 85 percent of ad spending goes to the top 10 media companies. So Arora must be pleased that Glam Media recently came in at No. 9 on Comscore’s list of top U.S. media properties.

Such advertisers are also looking for volume, which Glam now delivers. The company says it has 88 million unique visitors every month in the U.S., and 210 million globally. Its network of content producers now includes 2,500 publishers and 4,000 individual bloggers. Thanks to its recent acquisition of Ning, Glam is also now the second-largest social network, after Facebook.

Does Glam’s approach work? Arora would say yes, pointing to a recent meeting he had with fashion bloggers during New York’s Fashion Week. Both were generating $1 million annually in revenues from Glam. One, however, was the head of a blog with 100 contributors — and the other was a lone blogger.

There is a notable exception, however: Glam’s approach doesn’t seem to work for news. He told me that the company looks for content that has lasting value, that isn’t easily replicated, and which he can use to target and sell high-value brand advertising. That doesn’t mesh well with daily news, which often has a short shelf-life (who wants to read yesterday’s news?) and includes content that is sometimes not friendly to advertisers.

Still, I think Arora’s onto something. The Glam-Demand split will be increasingly characteristic of publishers in a variety of fields, including news. Some will elect to chase high-volume, low-CPM advertising through cheap content, and others will aim for lower-volume, high-CPM advertising through premium content.

In case you have any doubt, VentureBeat has a horse in this race. We are going for the high end, with quality journalism and reporting that, frankly, is harder to scale than building networks of free or cheap bloggers.

Maybe I’m just trying to convince myself — but I don’t think so. I think readers are tired of the same old crap that appears on dozens of blogs with only minor changes.

If readers and advertisers both want decent content, there might be a future for this journalism business after all.

NOTE: Subscribe to my newsletter and you can read these columns a whole day before they appear on our website.

[Image credit: ChicagoGeek/Flickr]

Filed under: media, VentureBeat

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Boxee’s Live TV stick lets you joyfully end your cable subscription

Posted: 16 Nov 2011 08:03 AM PST

Boxee Box Live TV stickBoxee is releasing a new Live TV stick add-on for its streaming media set-top box that will allow owners to gain access to live television channels, the company announced today.

The Live TV stick, which will be available in January 2012 for $49, is basically a high-powered HD antenna that provides Boxee Box owners with local channels like ABC, CBS, Fox, CW and NBC with no monthly fee. Of course, the HD signal has always been free for people in the U.S., but until now there’s never been a compelling reason for many to take advantage of that fact.

Boxee is betting that the combination of free basic live TV channels as well as videos from services such as YouTube, Netflix, Hulu, Vimeo and others will be enough for many people to end their expensive cable subscriptions (a.k.a. cut the cord). It’s likely to work, too.

One of the main reasons people hesitate killing their cable subscriptions, which can reach over $100 in fees each month, is the lack of availability for local programming, live sports and big events like the Oscars and presidential debates. And as the company points out, 89 of the top 100 shows were on broadcast networks last year.

In a new blog post, Boxee CEO Avner Ronen makes a compelling case for why cord cutting is soon to be on the rise. While listening to “Uprising” by the Muse, he writes:

“Cable companies keep telling the press and investors that cord cutting is not real, and that if it exists then it's limited to people who can no longer afford cable. We are sure they are conducting objective and unbiased research, but we are meeting more and more ‘cord never getters’ and ‘cord cutters’ every day. They are more than just people tightening their belts in tough economic times, these are people who have left cable TV behind because it does not fit their lifestyle. They are part of a changing culture, with a changing expectation of how they watch the shows they love. The cord cutters we talk to have changed the way they watch TV. They don't sit in front of it and channel surf hoping to land on something to watch, they don't know when shows air, they sometimes don't even know what channel shows are on. They love TV, but not necessarily on an actual TV. The only time they tune into a channel is to watch something live.”

The news that the Live TV stick will essentially be an HD antenna resolves earlier speculation that the add-on would be complimentary to cable services like Comcast, Dish Network and DirecTV. GigaOM, which got its hand on a new Boxee software update that include support for live TV, was unable to connect, and now we know why.

Some things that the new Live TV stick won’t do is turn the Boxee Box into a DVR. Yet, the company said it’s willing to add support for recording shows via the USB connection if enough people ask for it.

It also can’t compensate for areas in the country with poor HDTV signal strength. However, you can subscribe to a basic cable service (ranges from $13-$20) and connect the coaxial cable to the stick for the same experience.

The Live TV stick only works with the Boxee Box — meaning anyone who uses the Boxee Software on a computer or dedicated media box is out of luck. Right now the company is only supporting Live TV in U.S. and Canada, but additional countries could gain support in the future.

Will Boxee’s new Live TV stick make you cut the cord?

Boxee Box Live TV screen 1

Boxee Live 2

Filed under: media, VentureBeat

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Japanese firms battle for mobile social game supremacy

Posted: 16 Nov 2011 08:00 AM PST

The Japanese are coming. In the wide open field of mobile social gaming, two large-scale Japanese companies, both of which have made major acquisitions of American firms, will soon be going head-to-head for worldwide dominance. Gree is expected to launch its global network sometime in 2012, while DENA's Mobage network recently came out of beta on Android and will spread to iOS soon after.

In Japan, the companies are already carving up a mobile social games market that is worth billions of dollars. But which one will come out on top on a worldwide basis? And is there room for both?


Gree has been growing fast. Between 2008 and 2010 Gree claims to have seen its sales growth rate increase by an astounding 4000 percent. It has 26 million registered users in Japan and, thanks to its acquisition of OpenFeint in April 2011, now boasts 140 million users worldwide. After the announcement of the $104 million acquisition, the two companies explained that they would be creating “a global ecosystem of distribution channels for game developers.”

That ecosystem will come in the form of an all-new mobile social network set to launch in mid-2012. The as-of-now unnamed platform will leverage the installed users of Gree in Japan and OpenFeint in the West with the ultimate goal of reaching one billion users for its free-to-play gaming experiences. It may sound like a lofty goal, but considering Gree's continued worldwide expansion, it also seems like a distinct possibility.

In addition to OpenFeint, which is a wholly owned subsidiary, Gree also has partnership agreements with two very popular social networks in Asia. In April, Gree announced a partnership with Project Goth, the company behind Mig33, a mobile social network with 47 million users worldwide, but with a particular focus on emerging markets like South and Southeast Asia, the Middle East, and Africa.

But even bigger, back in August, Tencent, the largest social network in China with over 650 million users, announced a new platform called the Tencent Wireless Open Platform for Community, which is fully compatible with Gree and allows developers “to take full advantage of each other’s expertise and easily develop social gaming applications on either platform.” The initiative has attracted prominent Japanese developers like Tecmo Koei and Taito and makes it easy for companies to publish games on both platforms, reaching a very large audience of feature phone and smartphone users.

It's not just partnerships, though, as Gree is also hoping to expand its global footprint by opening new offices across three continents. By February of next year the company expects to have bases of operations in London, Amsterdam, Singapore, Beijing, and Sao Paolo. And that's in addition to its headquarters in Tokyo and San Francisco.

One recent setback was that Jason Citron, co-founder of OpenFeint, resigned in September and was replaced by Naoki Aoyagi, previously the head of Gree International.

Just what Gree's new social platform will look like remains to be seen, as will how it integrates the existing Gree and OpenFeint networks. OpenFeint already supports both Android and iOS, and is utilized by notable mobile developers like Halfbrick and Adult Swim thanks to features like developer announcements (which lets developers promote upcoming releases inside of existing games) and the always popular free app of the day. Presumably those features will make their way to the new platform as well.


But while we'll have to wait to see what Gree has in store for us, DeNA and Ngmoco have already released their big new social platform. Japan’s DeNA bought San Francisco-based Ngmoco in 2010 for as much as $403 million. Neil Young (pictured), head of Ngmoco, predicts that the mobile social game market will produce multiple billion-dollar companies and his ambition is to be one of them.

Officially launched earlier this month, Mobage is already being utilized by some of the most popular free titles available on Android, including Zombie Farm and Pocket Frogs. And while the global service is still relatively new, in Japan Mobage boasts more than 30 million users. It will also be expanding from Android to iOS in the near future.

On the surface Mobage is very similar to other mobile networks like OpenFeint or even Ngmoco's own iOS service Plus+. Users can create a persistent profile to use across games, purchase virtual currency, and interact with friends. One of the things that separates the service, though, and makes it particularly attractive for developers is its monetization. More specifically how well its games tend to monetize. In Japan Mobage has been able to create an average revenue per user of $12 a month, which is very high for free-to-play game experiences. This is done through the sale of Moba-coins, a premium currency that can be used across all games on the service.

And it's that kind of success that the global version of Mobage is attempting to emulate. During a recent media event at ngmoco's San Francisco headquarters, Young explained recently that "we want to take full advantage of everything DeNA has learned."

Young, the co-founder of Ngmoco, has stayed on and assumed greater responsibility. He has also hired new executives to expand the Mobage network.

Previously an iOS-focused game developer, since being acquired by DeNA last year, ngmoco has transitioned into what Young describes as a "platform company." And while that includes managing the network across virtually all territories outside of Japan, it also means developing first-party games and creating a third-party development ecosystem. So far Mobage is home to around 30 games from developers like The Playforge and Nimblebit, but according to ngmoco more than 120 games have either been released or are in development. And that includes recently announced first-party titles like SkyFall and Dragon Craft from ngmoco's San Francisco and New York-based studios, respectively.

Unsurprisingly, much like Gree, DeNA has been aggressively expanding into new territories as well. In June the company opened up a subsidiary in Seoul, Mobage was launched in China in July, August saw a new office open up in Singapore, Vietnam-based Punch Entertainment became a first-party DeNA game studio in September, and in October it spread to Latin America with the acquisition of Atakama Labs.


Both DeNA and Gree are gearing up for a war, spending hundreds of millions of dollars on growing their existing services into global products. But they're also going in somewhat different directions. Gree's focus appears to be on size, as its goal of one billion users shows. Its installed base is already huge, but with new partnerships and an expanded global presence, the audience will likely only grow.

DeNA, meanwhile, appears to be putting much of its resources into the actual games, courting users by offering more compelling experiences and then earning a significantly higher amount of money per user. Not only has DeNA managed to court a number of prominent developers, especially in Japan where studios like Grasshopper Manufacture and Namco Bandai have signed deals to develop social games, but it's also putting a good deal of effort into developing its own quality game experiences.

Of course, these aren't the only two players. Apple's own Game Center app has around 67 million users and comes pre-installed on new Apple devices. It's also relatively feature-light and is limited by the fact that it's only available on a single platform. There are also developers such as EA and Gameloft that have their own mobile social networks. But both Gree and DeNA are putting much more effort into their offerings, making them the clear front runners for supremacy going forward. We’ll see who comes out on top.

Filed under: games, mobile, social, VentureBeat

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Yipit’s iPhone app cures deal fatigue with big data

Posted: 16 Nov 2011 07:47 AM PST

Daily deals aggregator Yipit is today releasing its app on the iTunes App Store, bringing shoppers customized deals recommendations from more than 750 deals sites nationwide.

The free Yipit app will be location aware and will enable users to take advantage of nearby deals similar to ScoutmobTheDealMix and TheDealMap, which all allow map-based navigation based on what is discounted nearby.

With the ever-present threat of “deals fatigue,” does the world need another deals app? The answer to that question might be yes, if Yipit were just any other app. While many of the features of Yipit’s app will be familiar to anyone with a smartphone, functionality such as location awareness and push notifications, it’s the company’s mastery of daily deals data that will set its app apart from the crowd.

Yipit is a leading data provider to analysts who watch the daily deals industry. The company has also offered a daily email aggregating deals offered by  hundreds of national and local daily deals providers across the U.S. The company has aggregated more than 1 million deals nationwide, all without spending a dollar on marketing, says Yipit co-founder Jim Moran.

Moran disputes that there is such a thing as daily deals fatigue. ”Nobody complains there are too many products available online,” Moran says, because e-commerce sites such as Amazon and eBay do a good job of filtering products and putting the right offers in front of the right people. Moran says that if consumers received an email with every product available online, they would have ecommerce fatigue the same way people talk about deals fatigue. According to Moran, the true power of algorithms like the one powering the Yipit app is evident not from what you see, but from what you don’t see–namely, the deals that aren’t relevant.

And as the holiday shopping season approaches, Moran says he is excited about using the app to find gifts for his two sisters who live in San Francisco. Yipit is hoping to decouple the idea of local shopping from local consumption. The app will make it easier than ever for someone who doesn’t live in a local area to buy products or experiences for someone who does, without having to sign up for emails, or sift through offers.

Time and again Yipit proved to be a bee in Groupon’s bonnet, as the company geared up for its Nov. 4 IPO. By tracking the number of deals Groupon sold, and calculating the revenue split with merchants, Yipit was able to issue reasoned estimates of Groupon’s true profitability, even as Groupon itself was loathe comment. So Yipit may yet have a strong hand to play with its mobile app.

Groupon and LivingSocial together account for more than 40 percent of the revenue of the entire daily deals industry, but they have less than 20 percent of the total inventory, which means that it falls to consumers themselves to take advantage of additional 80 percent of discounted local products and services that are available.

With the Yipit app the many small players who make up the “long tail” of daily deals, such as Beer Menus, which grabs deals on craft beers,  now may have a fighting chance.

Filed under: mobile, social, VentureBeat

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Inside Will Wright’s next big game: HiveMind (exclusive)

Posted: 16 Nov 2011 07:00 AM PST

Will Wright has created some of the biggest video games of all time, from SimCity to The Sims — games that have sold well above 100 million units and generated billions in revenues. Now he’s moving on to his next idea, called HiveMind.

HiveMind is a game, and it’s also the name of a new Berkeley, Calif.-based startup Wright is unveiling today in an exclusive interview with VentureBeat.

The idea is a new evolution in gaming that Wright calls “personal gaming.” It is a game that can customize itself for the individual player, taking into account aspects of player’s real-life situation as elements of the game.

It’s not an easy concept to understand, particularly because Wright isn’t describing the game in detail yet.

“Rather than craft a game like FarmVille for players to learn and play, we learn about you and your routines and incorporate that into a form of game play,” Wright said.

He noted, for instance, that there may be 50 different dimensions to a person that could be learned through data collection. Some of those dimensions could be location-based, like where you are, where your friends are, and how much money is in your wallet. It may sound like a creepy invasion of your privacy for game to know that about you, but Wright wants to emphasize the entertainment value of sharing and why people will probably share that information gladly.

Wright’s inspiration came last year when he went down to Burbank, Calif., to give a talk and showed up early. He wandered down the street to a 1950s-style diner. There, he found a bunch of car enthusiasts who gather on the last Friday of each month to show off their cars. A car buff himself, Wright had a great time talking to those people. It was random luck, but quite entertaining.

“If I knew about these events, my life would be a lot more interesting,” he said. “How do we expose you to these events, these things? How can we make a system that understands enough about you and gives you situational awareness? It could take into account what time of day it is, where you are, how much money is in your pocket. Imagine if you could open Google Maps and it shows you things that are interesting to you on the map.”

Wright’s idea with HiveMind is to collect data so that the game can discover opportunities for a person to have fun, directing the person to the right place where they could enjoy themselves, based on their interests. If the HiveMind knew enough about Wright, for instance, it could have found that gathering of car experts for him.

“It is about how we make reality more interesting to you,” Wright said.

Harvesting data to entertain you

Although he realizes many people are guarded about privacy, he notes that the younger generation is more comfortable sharing information about themselves. And they will willingly share it if they could be virtually guaranteed a great deal of entertainment in return. If you entice people with enough game-oriented entertainment, they won’t mind sharing that information, he said.

What Wright hopes to do is harvest a bunch of data and then use that to suggest ways to entertain a person. Once HiveMind gathers this kind of data on a lot of people, it could go into a kind of matchmaking service, as happens with sites that collect dating information. HiveMind could mine the data and discover useful things about its players.

“It blurs entertainment, lifestyle, and personal tools,” Wright said. “With that data, the world and the opportunities for entertainment within it become more visible to you.”

“If we can learn enough about the player, we can create games about their real life,” Wright said. “How do we get you more engaged in reality rather than distract you from it?”

Once again, as he has done so many times in his career, Wright is talking about a kind of game that has never been done before.

“This has to do with where gaming is going,” Wright said. “We had our eras in console gaming and social gaming. A lot of this personal gaming will happen on mobile devices. The question here is how can we learn enough about the player to create games about his or her real life.”

The inspiration for this game also came in part from researchers who are talking about “a quantified self,” where they gather everything about their life and behavior and store it in digital form. Researchers like Gordon Bell of Microsoft, who created a project called MyLifeBits, believe they can gain self knowledge by recording their lives in minute detail.

Examples of this include fitness programs like Nintendo’s Wii Fit, where you can measure your daily exercise progress, as well as more recent fitness measurement devices from Basis (pictured) and Striiv. The basic principle behind these fitness devices is gamification, or making a non-game activity more fun by using game mechanics.

But Wright doesn’t want to limit HiveMind to something like fitness. What if, for instance, an application could tap into something as personal as your dreams? That suggestion is way out there, but it is intriguing.

Nor does Wright want to limit his scope to something like augmented reality (layering digital data on the real world), or Foursquare, which gives people achievements when they check into locations.

Such applications might know a few dimensions about a person, but they just don’t go deep enough into gaming psychology, which could really motivate a person to do something. Here, the games will enable HiveMind to mine data about a person.

Wright said it wasn’t a requirement that you have to be near someone playing the same game as you. He called that the “density problem,” something that augmented reality games run into all the time. Augmented reality companies can create multiplayer games, but there might only be one other player within 20 miles of you. Wright said his game won’t rely on players needing to be near each other to play.

Turning to others for problem solving

One of the elements of the game goes back to The Sims. In that game, the artificial intelligence was built into the objects around the simulated people, rather than the people themselves. The objects would advertise themselves to the Sim, which had to fulfill its needs in the order of most urgency. The Sim turns to the object that fulfills the most urgent need.

In his new game, Wright said, you might turn to your friends to help fulfill your needs. They could send messages to you that try to get you to do something that you need to do. In that sense, your friends could help you accomplish some of the things that you want to do in real life. That is a kind of crowdsourcing, where lots of people contribute ideas to solve a big problem, and it is one of the things that the internet is great for.

The internet essentially operates like a “hive mind” when a problem needs solving. And that is why Wright is calling the new company HiveMind. He thinks that collectively, people can help individuals solve problems.

That idea reminds Wright of a sci-fi story by Bruce Sterling called Maneki Neko, named after Japanese gift cats. The story is about the “gift economy” where people contribute gifts to strangers and in return get back everything that they need. People can earn “karmic points” that can be redeemed, a common feature of social games on Facebook.

Wright sees this vision for a game as the logical extension of his game career. He moved from simulating and solving the problems of cities with SimCity to solving individual or family problems with The Sims. Now he is moving not toward solving the problems of a simulated person, but solving the problems of a real person while entertaining them too.

“When you look at the arc of the games I have done, starting from SimCity, they are each mining a deeper level of creativity,” Wright said. “And they are more focused on the individual over time.” Hence, Wright is now in the age of personal gaming, where the “user becomes the game.”

Wright said the ideas percolated over the past six months while he was mulling things over at his other startup, the Stupid Fun Club. That company is more like an idea generator and a think tank, not an operational company. HiveMind’s three founders include Wright, serial entrepreneur Raj Parekh, and game finance expert Jawad Ansari.

Details on the funding for the company, its schedule for releasing games, and other matters will be released over time. The game could be staged on a mobile devices or Facebook, and other game platforms as well.

It is possible that the HiveMind game will interact with other ideas coming out of the Stupid Fun Club, including an unannounced TV show that is in the works based on a Stupid Fun Club idea, Wright said.

Wright is hoping that his announcement today will trigger interest from like-minded developers who have been thinking about the same thing. He plans to scale up the HiveMind business and make it into a big operation with lots of talent, building apps, a back-end system, and anything else needed to make the HiveMind a reality.

“We want to do this in a very big way,” Wright said.

Filed under: games, mobile, social

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Accel Partners announces $155M India fund for mobile, enterprise, and more

Posted: 16 Nov 2011 05:59 AM PST

Showing that there’s plenty of untapped potential in the Indian startup scene, Silicon Valley venture capital firm Accel Partners announced its $155 million Accel India III fund today for seed and early-stage investments in the country.

Accel, which already has 34 companies in its portfolio in India, said the fund would be focused on hot topics opportunities like mobile, digital media, enterprise and software-as-a-service companies, and Internet services. The firm already manages $80 million in India across two earlier funds — this latest addition brings its total amount of funds in India to $235 million.

"While traditional venture capital and growth equity have been increasingly drawn to India over the past several years, the true seed and early stage markets are still under-served, attracting relatively smaller amounts of capital,” said Accel partner Subrata Mitra in a statement today. “We have seen a significant increase in entrepreneurial activity in the last few years, and in particular, we are pleased to see strong momentum from Internet companies in India.”

Accel, best known for its early stage investments in Facebook and Groupon, has partnered with Indian companies like Myntra and Flipkart, which is India’s Amazon-equivalent and one of a handful of Indian outfits said to be close to $1 billion valuations.

Accel currently manages $8 billion globally, $3 billion of which is for later stage growth investments. The firm says that its India team will also be evaluating Indian companies for later stage opportunities.

Filed under: deals, VentureBeat

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Tapjoy and PapayaMobile team up to deliver social market for Android apps

Posted: 16 Nov 2011 05:00 AM PST

Tapjoy and PapayaMobile are announcing a partnership to create a new Social Marketplace for Android mobile app developers.

The market is one more way for developers to get their apps noticed in a sea of hundreds of thousands of competing apps. It helps address the perennial discovery problem associated with mobile app distribution.

For consumers, the market will offer help in finding useful new apps. Since the apps are social, the users can see which ones other people are playing, in addition to finding apps through Tapjoy’s traditional app recommendations.

Beijing-based PapayaMobile has a mobile social gaming network with 35 million users, while Tapjoy runs a value exchange mobile ad network. The Social Marketplace will let players discover new games and apps based on the popularity within the Papaya social network. It will make recommendations based on what friends are playing. The market will also deliver more relevant and targeted ads, and developers can benefit from more engagement and increased monetization through the social network.

Rivals include DeNA/Ngmoco, Gree/OpenFeint, and variety of others. Mihir Shah, chief executive of San Francisco-based Tapjoy, said that PapayaMobile’s social network has the scale and reach across the U.S. and China to make Tapjoy’s ads more targeted and engaging.

Tapjoy’s network has more than 280 million mobile users who watch videos, subscribe to services, install apps and participate in other kinds of ads in exchange for virtual currency in their favorite apps. It is used in more than 10,000 apps.

"Tapjoy is the industry leader when it comes to ad networks that deliver proven, effective distribution and monetization," said Si Shen, CEO and Co-Founder of PapayaMobile.  "By teaming with Tapjoy for a Social Marketplace, we'll be able to offer game developers the very best advertising solution."

Filed under: games, mobile, VentureBeat

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ServiceMesh raises $15M from Ignition to give enterprises more control over the cloud

Posted: 16 Nov 2011 04:30 AM PST

servicemesh-platformEnterprise cloud platform provider ServiceMesh has raised $15 million in its first-ever round of funding to help businesses better manage their cloud services, the company announced Wednesday morning.

“Our platform makes it possible for companies to completely govern their cloud ecosystems,” ServiceMesh CEO Eric Pulier told VentureBeat. “We’re going to take this new capital and scale the company globally.”

ServiceMesh offers customers its Agility Platform, subscription software that allows companies to use a set of APIs to improve efficiency and cut costs when it comes to implementing Agile IT operating models. The Agility Platform (as seen in the photo above) is made up with five distinct products: Planner, Designer, CenterPoint, Manager and Access. The company says it has thus far helped financial, health care and retail customers from the Global 2000 to better manage their “mission critical” systems.

The company considers big-name players like BMC, IBM and HP as its competition, but Pulier says they are still playing catch up to what ServiceMesh offers with its platform. “We welcome companies like IBM and BMC to the space, but they are behind us,” Pulier said.

ServiceMesh has been entirely self-funded up to this point, but it finally accepted the $15 million round of funding from Ignition Partners because it wants to aggressively grow the company.

Frank Artale, a partner at Ignition Partners, will additionally join ServiceMesh’s board of directors. Artale has been guiding investments toward major cloud companies as of late and just last week Ignition led Cloudera’s new $40 million funding round. Ignition also led AppFog’s $8 million round in August.

"To successfully deploy [cloud] services in the enterprise, organizations must be able to bring their cloud, SaaS, and business services together under a unified SLA, governance and compliance framework,” Artale said, in a statement. “And because of the do-it-yourself approach that enterprise IT and business users take toward consuming cloud resources, organizations need a transparent mechanism for departmental chargebacks and usage analysis. The ServcieMesh platform is unique in its ability to deliver these capabilities.”

Santa Monica, Calif.-based ServiceMesh was founded in mid-2007 and currently has more than 90 employees, which is quite a feat for being entirely self-funded.

CloudBeat 2011CloudBeat 2011 takes place Nov 30 – Dec 1 at the Hotel Sofitel in Redwood City, CA. Unlike any other cloud event, we’ll be focusing on 12 case studies where we’ll dissect the most disruptive instances of enterprise adoption of the cloud. Speakers include Aaron Levie, Co-Founder & CEO of Box.net; Amit Singh, VP of Enterprise at Google; Adrian Cockcroft, Director of Cloud Architecture at Netflix; Byron Sebastian, Senior VP of Platforms at Salesforce; Lew Tucker, VP & CTO of Cloud Computing at Cisco, and many more. Join 500 executives for two days packed with actionable lessons and networking opportunities as we define the key processes and architectures that companies must put in place in order to survive and prosper. Register here. Spaces are very limited!

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Qualcomm launches Snapdragon GameCommand app for mobile game discovery

Posted: 16 Nov 2011 04:30 AM PST

Qualcomm is announcing today its Snapdragon GameCommand app for finding and playing mobile games on devices with Qualcomm’s Snapdragon processors.

Qualcomm is also expanding the number of games in its Snapdragon GamePack, which highlights games that run on its processors. The GameCommand app is aimed at bringing console-like games as well as casual titles to the Qualcomm platform. While the company’s main business is selling mobile chips, it sees the GamePack and GameCommand products as a way to make those chips more useful. It’s similar to how Intel invests in apps in order to make its chips more useful. It’s also similar to Nvidia’s Tegra Zone for showing off flash Nvidia-based Android games.

The company made the announcement at its analyst meeting in New York. The new games in the extended Snapdragon GamePack and the new GameCommand app are expected to hit the Android Market in early 2012. The GamePack has exclusive titles including The Ball (pictured at top) from Tripwire Interactive; Fight Game Heroes from Khaeon Gamestudio; and Galaga Special Edition from Namco Bandai Games.

The new GameCommand app provides mobile users with a way to quickly find and learn about the latest featured Snapdragon games. The app allows users to access their favorite games in one spot with one group icon, accessible via a finger swipe on a smartphone or tablet. Snapdragon GameCommand also provides gamers with a source for the latest game news.

"Qualcomm has received great user feedback since launching the Snapdragon GamePack, so we are expanding the quantity and quality of games while making them easier to locate through the launch of the Snapdragon GameCommand app," says Raj Talluri, vice president of product management at Qualcomm.

More than 60 percent of smartphone users regularly play games on their mobile devices.

The GamePack, first included in June, includes games from Advanced Mobile Applications, Babaroga, Booyah Inc., Com2us USA, Digital Chocolate, Electronic Art, Eyelead Software, FISHLABS Entertainment, Glu Mobile, Guild Software, Gameloft, Khaeon Games, Namco Bandia Games America, NaturalMotion Games, Polarbit, PopCap Games, HandyGames, Southend Interactive, and Tripwire Interactive. Qualcomm worked with those companies to make sure their games took advantage of Qualcomm’s Adreno graphics components within the Snapdragon processors.

Filed under: games, mobile, social

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Marketo lands $50M from Battery, IVP, InterWest to continue its marketing automation domination

Posted: 16 Nov 2011 04:30 AM PST


Marketing automation firm Marketo has raised a new massive $50 million round that will help it continue assisting companies with aggressive lead and revenue generation, the company announced today.

“We have a phenomenal growth opportunity now,” Marketo CEO Phil Fernandez told VentureBeat. “Our core business is very scalable and we’re seeing continued growth in areas like search and social media.”

Marketo and competing marketing automation firms like Eloqua, Pardot and Silverpop offer software and services focused on improving and managing sales lead generation. Ideally, any business with a constant need to find new customers (and retain them) can use marketing automation to help them succeed One of Marketo’s most recent initiatives is Spark by Marketo, a lead-generation engine for small businesses rather than enterprise and mid-size clients.

“We’ve more than doubled the number of leads generated for other companies in the last year,” Fernandez said. “And we’ve doubled our own sales team in the last year, for that matter.”

The new funding round was led by Battery Ventures, with participation from existing investors Institutional Venture Partners (IVP), InterWest Partners, Mayfield Fund and Storm Ventures. Including the new round, Marketo has raised an incredible $107 million in total.

Battery Ventures general partner Neeraj Agrawal will also become a member of Marketo's board of directors. "From the moment we first engaged with Phil and the team at Marketo it became clear that the company was powering a revenue revolution," Agrawal said in a statement. "We are bullish on the company's ability to execute and believe they are destined to be a true winner."

San Mateo, Calif.-based Marketo was founded in 2006 and now has 240 employees. Fernandez told us the company expects to “finish next year” with 450 employees, which would be an incredible scaling up of its business if it can accomplish the goal. The company already operates a European office in Dublin and will open new sales offices all over Europe, including in the U.K., France, Germany and Spain.

CloudBeat 2011CloudBeat 2011 takes place Nov 30 – Dec 1 at the Hotel Sofitel in Redwood City, CA. Unlike any other cloud event, we’ll be focusing on 12 case studies where we’ll dissect the most disruptive instances of enterprise adoption of the cloud. Speakers include Aaron Levie, Co-Founder & CEO of Box.net; Amit Singh, VP of Enterprise at Google; Adrian Cockcroft, Director of Cloud Architecture at Netflix; Byron Sebastian, Senior VP of Platforms at Salesforce; Lew Tucker, VP & CTO of Cloud Computing at Cisco, and many more. Join 500 executives for two days packed with actionable lessons and networking opportunities as we define the key processes and architectures that companies must put in place in order to survive and prosper. Register here. Spaces are very limited!

Filed under: cloud, deals

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Zuora raises $36M for subscription commerce and billing

Posted: 16 Nov 2011 04:00 AM PST

Zuora aims to be the leader in subscription billing as it raises $36 million in a fourth round of funding.

Redwood City, Calif.-based Zuora will use the money to fuel its overseas expansion and extend its product lines to address the growth of the “subscription economy” around the world. The company offers subscription billing as an easy-to-set-up yet cloud service with a wide range of offerings.

Zuora says it is rapidly expanding in Europe, particularly in the Netherlands, Germany, france and Ireland.

“We’re going to hit the gas hard, globally,” said Tien Tzuo (pictured), chief executive and co-founder.

The money came from Index Ventures, Greylock Partners, PeopleSoft founder Dave Duffield and Salesforce.com founder Marc Benioff.  Zuora's existing investors also participated, including Benchmark Capital, Redpoint Ventures, Shasta Ventures, and Tenaya Capital.

To date, the company has raised $82.5 million. Mike Volpi, partner at Index Ventures, is joining Zuora’s board.

The company said that in the first three quarters of operations, the European and Middle East countries have signed up $2.5 billion in contracted subscription transactions.

"We are clearly shifting from a product economy to a subscription economy, and Zuora has cemented an early leadership position in helping companies tackle this transformation," said Volpi.

Co-founders Tzuo and K.V. Rao and Cheng Zou made a good bet in 2007 that industries would shift from a “buy once” product-based model to a services-based economy with recurring subscriptions. They call this the “subscription economy,” and it is rising to the forefront in communications, media, technology, consumer services and other industries. Zuora built a platform to enable businesses to adopt subscription commerce quickly.

Zuora is now one of the fastest-growing private enterprise software companies, with more than 100 percent annual growth in bookings. It has struck 10 deals in the last 18 months worth more than $1 million. It signed up 100 new enterprise and high-growth customers in the first three quarters of 2011, and it doubled the company’s number of employees to nearly 200.

The customer list includes AAA of Northern California, Nevada, Utah, Dell, Concur, IBM Coremetrics, Informatica, News International, Reed Business Information, Qualcomm, Ricoh, Tata Communications, Touring Club Suisse, TripAdvisor, VNU Media and Vocus. Fast-growing customers include Box, Cloud9, DocuSign, Marketo, MuleSoft, Ning, Ooyala, Rearden Commerce, Symplified, TimeTrade, Ustream, Xactly, Yammer and ZenDesk.

Zuora hopes to liberate companies from the “constraints of old guard enterprise systems” such as enterprise resource planning software from SAP and Oracle. It calls their solutions outdated and obsolete in the age of subscription business models.

"There is a clear global mandate for companies to shift rapidly to the services-based subscription economy," said Tzuo. "The product-focused, industrial economy and the systems that support it are part of the past. It's time for a new perspective and a new system of record for the subscription economy.”

Gartner says that by 2015, 35 percent of the Global 2000 companies will generate revenue through subscription-based services and revenue models.

Rivals include Chargify, Recurly, Aria Systems, SAP and Oracle.

CloudBeat 2011CloudBeat 2011 takes place Nov 30 – Dec 1 at the Hotel Sofitel in Redwood City, CA. Unlike any other cloud events, we’ll be focusing on 12 case studies where we’ll dissect the most disruptive instances of enterprise adoption of the cloud. Speakers include: Aaron Levie, Co-Founder & CEO of Box.net; Amit Singh VP of Enterprise at Google; Adrian Cockcroft, Director of Cloud Architecture at Netflix; Byron Sebastian, Senior VP of Platforms at Salesforce; Lew Tucker, VP & CTO of Cloud Computing at Cisco, and many more. Join 500 executives for two days packed with actionable lessons and networking opportunities as we define the key processes and architectures that companies must put in place in order to survive and prosper. Register here. Spaces are very limited!

Filed under: cloud, enterprise

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Bunchball brings gamification to Adobe’s digital marketing suite

Posted: 16 Nov 2011 04:00 AM PST

It’s not as sexy as landing Playboy as a customer. But Bunchball is moving further into enterprises with its gamification technology, which makes non-game web sites more interesting by making them game-like. Today, Bunchball is integrating gamification analytics into Adobe’s Digital Marketing Suite.

Gamification is one of the hot trends in gaming, as other businesses seek to learn from the engagement of game fans. At the Enterprise 2.0 conference, Bunchball announced it has joined the Adobe Genesis partner ecosystem. Adobe will gather in-depth analytics around gamification initiatives so that it can enhance user experiences and improve audience engagement.

"The gamification space is changing as rapidly as it grows,” said Rajat Paharia, chief product officer and co-founder of San Jose, Calif.-based Bunchball. “The integration with leading analytics from Adobe adds a new way for companies to really test and maximize how they drive desired user behavior. We look forward to working closely with Adobe on broader offerings over the coming months.”

The integration will compare and overlay Adobe’s data with Bunchball’s Nitro Gamification Platform, allowing customers to make quick and meaningful decisions about their content and user engagement. The work is currently in development and will undergo beta testing soon. To date, Bunchball has managed more than 125 million users through its gamification programs and captured more than 14 billion actions. The company claims its customers have seen big improvements in metrics, including one customer who saw a 130 percent increase in page views.



Filed under: games, social

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HP chases MacBook Air with Folio13 Ultrabook

Posted: 15 Nov 2011 10:52 PM PST

Hewlett-Packard introduced its first business-focused Ultrabook laptop today as it chases after Apple’s vaunted MacBook Air.

The new HP Folio13 is only 18 millimeters thick, weighs just 3.3 pounds, and has up to 9 hours of battery life. It brings new meaning to the description “thin and light.” Apple pioneered the category in January 2008 with its first MacBook Air, and now Intel wants to enable a whole raft of such machines across the whole industry, based on low-power microprocessors.

“This category of product breaks new ground and will be a likely choice for businesses to offer to employees looking for a more consumer centric experience,” said Crawford Del Prete, an analyst at IDC.

He said that he expects Ultrabooks to re-ignite interest in laptops and that by 2015, more than 95 million Ultrabooks will be shipping annually. The Folio13 has a 13.3-inch HD BrightView display. It also has a number of ports, including Ethernet and universal serial bus ports — in contrast to Apple’s machines — so you don’t have to carry converter dongles.

The Folio13 has a backlit keyboard and a solid state drive (flash memory) with 128 gigabytes of storage. It can wake up quickly with the tap of a button. It will have an embedded security chip and HP’s CoolSense technology, which powers up or powers down the machine as needed.

Filed under: VentureBeat

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HP unveils new quad-core high-end Envy laptops

Posted: 15 Nov 2011 10:37 PM PST

Hewlett-Packard started unveiling its fall line of premier laptps today with the introduce of two new HP Envy notebooks.

Born from the Voodoo PC brand (which HP acquired) and meant to take on Apple’s best, the Envy line of laptops exudes power, performance, high-tech technologies and craftsmanship.

HP’s new Envy machines come with 15.6-inch or 17.3-inch screens. They have backlit keyboards with an advanced proximity sensor that illuminates when a user gets near and then deactivates after the user leaves. The machines have Intel quad-core and Advanced Micro Devices Radeon HD graphics processors.

The Envy notebooks feature Beats Audio with six speakers and a subwoofer. The Radiance displays have higher resolution, richer color, better brightness and wider viewing angles than traditional notebooks. The Envy 17 display is 50 percent brighter than standard displays. Users can connect up to three external displays with HDMI or DisplayPort connections. The Envy 15 has a battery life of 9 hours while the Envy 17 can hit 9.5 hours in ideal conditions. The Envy 17 can support a 128-gigabyte SSD and up to two 1-terabyte hard disk drives.

HP Envy 17 3D version allows for stereoscopic 3D viewing. HP also introduced new Pavilion dm4 notebooks that balance mobility and performance. And HP introduced two new accessories: HP Wireless Audio and the Wi-Fi Touch Mouse X7000.

Filed under: games

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Foursquare finally makes its website as cool as its mobile apps

Posted: 15 Nov 2011 08:48 PM PST

Location service Foursquare is showing off its new coat of paint. The company today unveiled a website redesign with a whole new experience for people sitting at their desks. What started as a check-in game all of a sudden seems a lot more like a formidable business in the making.

The fun of Foursquare has long been the ability to check in at destinations using a mobile phone and share location information with friends, but the revamped website brings the sharing and discovery to millions more users who are surfing the web from their desktop computers. As Foursquare wrote  in a blog post today:

It shows everything interesting nearby – your friends, places that are trending (in yellow), places on your lists (green), places with Specials (orange), and places that are popular (blue). You can even drag the map around or zoom in and out and all the interesting places update automatically.

The new Foursquare desktop has an activity feed with pictures and checking from friends, and it also shows suggested restaurants nearby. The app knows what time it is, so suggestions change from breakfast to dinner, if it’s 6pm, as opposed to 8am.

We previously reported that Foursquare is moving beyond the check in, as the location service continues to grow and mature, adding users like mad. At last month’s Web 2.0 Summit, co-founder and chief executive officer Dennis Crowley said there had been more than 10 million downloads of its mobile apps.

The blog post also says that more than 1 million people per day are visiting Foursquare’s website already to get information. The redesign will help visitors to track their favorite bands, celebrities and brands right on Foursquare’s site.

The redesign is also supposed to make the iPad experience superior to anything Foursquare has offered before.

Crowley first created the location-based service Dodgeball, which was sold to Google, but the project failed to thrive within the organization. Today Foursquare is the category leader in location services, alongside such rivals as Gowalla, and Loopt, but neither have Foursquare’s traction, and none have yet to come up with a desktop experience that blends so seamlessly with the mobile app. Now that Foursquare has tipped its hand, expect competing offers in the not-too distant future.

Filed under: mobile, social

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Yahoo launches interactive recipe, shopping and entertainment search tools

Posted: 15 Nov 2011 08:00 PM PST

Search Yahoo for a recipe or gift this holiday season and you might be surprised by what you see. The company is now greeting recipe and product searchers with interactive, image-based windows atop the search results page to save them time on their internet quests.

The new search tools function like guidebooks for recipe and product queries, letting you filter and compare results, and they even let you log in to Facebook from the search page and share your favorite findings with friends.

The search updates are especially interesting because of how much they’re tailored to the searcher’s intent, with a completely different presentation from the usual list of search results. There’s also a lot of social-sharing and discovery baked into each new experience. Recipe and product results encourage the searcher to engage his or her Facebook friends, and entertainment results leverage Yahoo’s partnership with Twitter to create a real-time environment that Google can’t replicate.


  • A recipe search — i.e. any food item plus “recipe” query — will now yield a scrollable window of photos representing the recipes of popular choices from food sites. Searchers can tab through top recipes, quick recipes and low calorie recipes, and filter recipes by ingredients.
    For even more recipe options and ideas, searchers can select the new Yahoo recipe search tab. Here they can use the left-hand menu to sort recipes by preparation time, star rating, diet, meal type, occasion or source.
  • Product-related queries have been spruced up with a flashy scrolling window of photos too, but with results tailored around the comparison shopper. A digital camera search, for instance, will surface an array of cameras (sourced from Yahoo’s Shopping site) with model, price and retail information. Searchers can also filter results by type and price.
  • Yahoo has also enhanced its entertainment results to present searchers with the latest news, videos and tweets on their movie, music and celebrity queries.

“Yahoo has amazing content in almost every major category like sports, finance, local, celebrities, movies, television, music, shopping etc. In the past we have used this content for properties like Yahoo Sports, but never really used it for Search,” Shashi Seth, Yahoo SVP of Search and Marketplaces, told VentureBeat. “Now we have started building a parallel index called the content index, which provides every bit of information about entities. We are using this content index to build these amazing experiences.”

The updates also come at an important time. Holiday recipe and product queries will be on rise and Yahoo’s functionality could help it attract valuable online shoppers away from Google.

Google currently commands 65.3 percent of the U.S. search market, while Yahoo maintains 15.25 percent, according to comScore data for October 2011.

Filed under: VentureBeat

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Google TV 2.0: With apps and more, it’s finally ready for a close-up (review)

Posted: 15 Nov 2011 08:00 PM PST

Google TV v2 home screen

Almost a year after its launch, Google TV owners are finally beginning to receive a major update that will dramatically improve the service with the addition of apps, a cleaner interface and more. But will the update make a dent in the many criticisms — sluggishness, and a lack of web video content, to name a few — lodged against it?

After living with the latest version of Google TV for the past few weeks, I'm happy to say that the updated service finally lives up to Google's initial promises of unifying traditional TV with web content. It's a massive update that makes existing Google TV devices feel completely fresh and new. But new buyers will likely want to hold off until Google announces new Google TV devices before they jump aboard.

First, a bit of history: I've been living with Logitech's Revue Google TV unit since I reviewed it last year, so I'm intimately aware of the platform's existing strengths and weaknesses. But since the update was first made available to Sony's Google TV devices, Google sent me a Sony set-top box to check out. (Google says the update should be headed to Revue units within the next few weeks.)

The good: Apps! Pretty! Speed!

The first thing you'll notice about the new Google TV interface is that it looks nothing like the original — which, frankly, was an eyesore. Gone are the ugly text menus and complicated user interface GTV users have grown to hate, and in their stead are attractive icons and a far more streamlined experience. This time around it feels like Google actually paid attention to how people use GTV, instead of just rushing it out the door.

With the new update, Google TV is now powered by Android 3.1, which opens the door for it to support Android apps. GTV's assortment of available apps is small at the moment, but there are already some standouts like Redux, an innovative app that sorts high-quality web video into hand-picked channels. I've also grown quite fond of GTVBox, a tiny barebones app that supports just about every video file format I throw at it.

Google TV isn't the first connected TV platform to sport apps — Samsung has already made a decent business of selling apps on its TVs, and Roku offers something similar with its multiple channels — but the fact that it runs Android makes it easy for developers to bring their apps into the living room.

Google has also updated some apps of its own: The new YouTube app is a vast improvement over the previous HTML5 app (which is still accessible through the web browser), and a new "TV and Movies" app compiles content available across cable or satellite, Netflix, YouTube, Amazon, and other sources. As I've previously written, YouTube's upcoming original channels could be a boon Google TV owners as well.

Google TV is entirely snappier this time around, which I attribute mainly to the addition of Android 3.1. Moving around menus feels far breezier and more natural than it did on the original Google TV software. The update also brings a full version of the Chrome web browser to the platform, which loads web pages faster than the original GTV browser and is particularly adept at playing high-definition web video. Previously, visiting a site like FunnyorDie on Google TV was an exercise in frustration because of its combination of video and Flash content. Now you can easily navigate the site and play 720p HD videos without any stuttering.

Google TV v2 movies and tv shows

The bad: Deep DVR integration still unavailable to most

The version 2.0 update turns Google TV into a better competitor against companies such as Roku — but the service's initial promise of completely integrating with your traditional TV service is still a pipe dream. Just as it was when Google TV launched, the only way to get the "full experience" — which includes direct access to your DVR and the ability to schedule recordings from within GTV — is by being a Dish Network customer (and spending an extra four dollars a month).

And even if you are a Dish customer, setting up the full experience remains a difficult process. After adding the Google TV integration to your monthly bill, you need to connect your Dish receiver and Google TV devices directly with an ethernet cord, then hope and pray that GTV recognizes the Dish receiver on the other end. This took multiple tries for me, and even after getting it working the connection between the two devices would occasionally drop.

You'll still be able to use Google TV with other satellite and cable providers, but you'll miss out on the DVR features the "full experience" brings. Until Google lands partnerships with other providers, and simplifies the "full experience" connection process, GTV will only feel partly complete.

The takeaway: Great for existing owners, newcomers should hold off

For current Google TV users, the update is nothing but good news. It turns Google TV into a faster and genuinely more interesting platform, while bringing Google one step closer to becoming a living room mainstay.

As Google's performance with Android showed us, it seems to take the company about a year to gain its footing in new territory. When it launched, Android was slow and clunky, and its initial handset lineup was mediocre. It wasn't until the release of the Motorola Droid and Android 2.0 a year later that the platform finally began to take off.

Now it’s Google TV’s time to shine. New hardware is likely close by, which is why I don't recommend picking up one of the existing GTV devices just yet. At this point it looks like Logitech has given up on GTV, but there's word that LG has a GTV television set in the works for CES, and I wouldn't be surprised to see a few more devices popping up before the holidays.

Filed under: gadgets, media, VentureBeat

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Is Socl.com Microsoft’s answer to Google+?

Posted: 15 Nov 2011 07:02 PM PST

Microsoft is testing a new social service, called Socl.com, which looks like the company’s attempt at creating its own version Google+, reports The Verge.

VentureBeat first reported that Microsoft was working on a social network in July, when the company revealed the splash page a secret social project on Socl.com. The project, called Tulalip, had the slogan "find what you need and share what you know easier than ever", and allowed users to signup using Facebook and/or Twitter. Although Microsoft denied the news, it seems that the company has continued its work on Socl.

Much like the original slogan, Socl mixes search, discovery and social, according to The Verge’s report. The design features a standard three-column layout, with basic navigation in the left, a news feed of activity in the middle and some rich media components on the far right. Everything is focused on the search bar. When you type in a search query, a list of Bing results pops up along with possibly related activity from your social networks. If you choose to post your search query as a status update (yes that’s right, search status updates), other users can comment on it. You also have the option of saving select terms (or tags) within each search query to view for later, which is very similar to Google+’s Sparks feature.

Another similarity to Google+ is Socl’s “Video Party” feature. Like Google Hangouts, a Video Party lets you watch a video with multiple friends at the same time and chat with them in real-time. It has support for YouTube videos and (presumably) other videos hosted by Microsoft. The site is built on HTML5, and doesn’t require the use of plugins like Microsoft’s Silverlight.

One big difference between Socl and other social networks is the lack of “listing” features. According to The Verge’s report, Socl doesn’t give users the ability to drop friends into groups based on work, personal life, locations, etc. the same way the Google Circle’s or Facebook’s Smart Lists do. That means all search status updates are shared with whoever you’re connected with on other social networks. The site also lacks the ability to tag individual users (e.g. +Tom Cheredar or @tched).

Right now, Microsoft hasn’t made an announcement about whether Socl will become available to more people for testing. We also don’t know if the company plans to launch the service to the public in the future. However, if it does get a public launch it’ll have quite a bit of catching up to do against Twitter, Facebook and Google+.

[Screenshot via The Verge]

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Say What? iPhone 4S anticipation slowed global smartphone growth in Q3

Posted: 15 Nov 2011 04:41 PM PST

Phone buyers who were holding out for the iPhone 4S or other hot smartphones slowed overall global growth in Q3, even as demand for handsets continued to surge, according to a new Gartner report.

Sales were boosted by strong demand for low-cost phones in developing countries. In all categories, 460 million mobile device units were sold, and more than 115 million of those were smart devices, the report says. Buyers in China, Russia and developing markets helped to boost total sales by 5.6 percent during the third quarter of 2011, according to the Gartner report.

“Strong smartphone growth in China and Russia helped increase overall volumes in the quarter, but demand for smartphones stalled in advanced markets such as Western Europe and the U.S. as many users waited for new flagship devices featuring new versions of the key operating systems,” said Roberta Cozza, principal research analyst at Gartner, in the report.

Sales of smartphones decreased to a 7 percent growth rate between Q2 and Q3 of 2011, while still growing 42 percent from the previous year. A later-than-usual launch for the iPhone (previous iPhone models have been released in the Summer) and rumors of an iPhone 5 may be partly to blame.

“Some consumers held off upgrading in the third quarter because they were waiting for promotions on other new high-end models that were launched in the run-up to the fourth quarter holiday season,” Cozza said. “Other consumers were waiting for a rumored new iPhone and associated price cuts on older iPhone models; this affected U.S. sales particularly.”

While Samsung became the world’s leading smartphone manufacturer during this time period, shipping 24 million units to Apple’s 17, its sales were down 3 million from the previous quarter. The report sees Apple bouncing back quickly because of the company’s strongest-ever preorders for the iPhone 4S, and rapid worldwide availability.

[Smartphone user image via ShutterStock]

Filed under: mobile

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“The cloud” for dummies: A casual chat with Rackspace

Posted: 15 Nov 2011 04:20 PM PST

Rackspace CTO John Engates knows the cloud — it’s kind of his bread and butter.

In this interview, we sat down with the cloudmeister, as we like to call him, and picked apart the definition of cloud technology.

After all, isn’t “cloud” just another word for the Internet? Engates says that’s what many companies would like for consumers to believe, but the actual definition of cloud computing is a bit more complicated.

Engates also name-checks some “cloud-washing” offenders in this clip and explains why developers aren’t too easily hoodwinked by their trickery.

If you’d like an in-depth, textual look at the difference between IaaS (infrastructure-as-a-service), PaaS (platform-as-a-service) and SaaS (software-as-a-service), you should check out our own Sean Ludwig’s feature on cloud computing terms you need to know.

CloudBeat 2011CloudBeat 2011 takes place Nov 30 – Dec 1 at the Hotel Sofitel in Redwood City, CA. Unlike any other cloud events, we’ll be focusing on 12 case studies where we’ll dissect the most disruptive instances of enterprise adoption of the cloud. Speakers include: Aaron Levie, Co-Founder & CEO of Box.net; Amit Singh VP of Enterprise at Google; Adrian Cockcroft, Director of Cloud Architecture at Netflix; Byron Sebastian, Senior VP of Platforms at Salesforce; Lew Tucker, VP & CTO of Cloud Computing at Cisco, and many more. Join 500 executives for two days packed with actionable lessons and networking opportunities as we define the key processes and architectures that companies must put in place in order to survive and prosper. Register here. Spaces are very limited!

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Urban Airship CEO demos Rich Push, a brand-friendly alternative to MMS (video)

Posted: 15 Nov 2011 04:02 PM PST

Urban Airship, a platform-as-a-service company for mobile developers, has soft-launched a new MMS-style notification feature called “Rich Push” to help app makers better engage mobile users.

Co-founder and CEO Scott Kveton demoed the company’s newest feature for VentureBeat at the Intel Capital Global Summit today in Calif.

For those unfamiliar, Urban Airship is the super buzzy platform that developers and brands — think ESPN, Groupon and The White House — are using to power things like push notifications, subscriptions and in-app purchases. The startup just acquired SimpleGeo and secured $15.1 million in funding. Part of the funding came from Intel Capital’s just-announced $100 million AppUp fund.

Rich Push is essentially Urban Airship’s brand-friendly interpretation on MMS. The startup takes the standard push notification to the next level by enabling app makers to send coupons, surveys, videos and music content notifications that, when selected, open up inside their applications. So the mobile user goes from the notification on his screen to the customer’s application instantaneously.

Rich Push is included in the product offering and available to developers at no additional cost.

If it doesn’t sound like a big deal, chew on this: The White House and the Barack Obama 2012 campaign have already started using the feature to deliver content to mobile users. Urban Airship is also the only company offering mobile developers this type of plug-and-play functionality, Kveton told VentureBeat.

Urban Airship currently supports 30,000 mobile applications and has sent more than 7 billion notifications to 250 million devices, Kveton said.

Filed under: mobile, VentureBeat, video

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New CardMunch iPhone app converts business cards into LinkedIn connections

Posted: 15 Nov 2011 02:51 PM PST

CardMunchProfessional social network LinkedIn launched a new version of its CardMunch application for the iPhone today, which promises to help you make sense of all the people you meet during networking events.

The app allows users to take a photo of paper business cards collected from new and potential contacts. It then converts the information on the card into digital, usable text. The updated iPhone app actually takes that information and matches it with a person’s LinkedIn profile — giving you access to a their common connections, work history, education and more.

The app’s navigation has also been overhauled and split into three main screens: a card capture screen allowing you to snap a photo of a business card, a touchscreen-optimized contact list that mimics a virtual Rolodex, and a screen for each of your contact’s details and LinkedIn profiles.

CardMunch still allows for you to add business card information (and now LinkedIn info) to your iPhone address book. However, the new version also lets you add notes below each of the business cards scanned in while you wait for the card to get translated.

This is the first major upgrade of CardMunch since LinkedIn purchased the company in January 2011 for an undisclosed amount.

The move certainly makes sense for LinkedIn because it makes the company’s social network more valuable where it counts the most — in a real life business setting, where people are exchanging contact information and shaking hands.

Filed under: mobile, social, VentureBeat

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MOG launches first on-demand streaming service for cars with BMW & Mini

Posted: 15 Nov 2011 02:48 PM PST


On-demand music service MOG has partnered with BMW and Mini to bring a streaming music application to cars for the first time, the company announced today.

MOG is in a seriously heated competition with other on-demand music services such as Spotify, Rdio and Rhapsody, so the company needs to do whatever it can to attract new customers. One of those ways is through Facebook’s Open Graph platform, which has increased MOG’s number of social users by 246 percent. Another avenue, apparently, is cars — the service will be included in each 2011 BMW or Mini model that comes equipped with BMW Apps or the Mini Connected option.

“It is a real thrill to be the first on-demand music service in the car, and to truly transform a powerful, personal environment for experiencing music,” said MOG CEO David Hyman in a statement. “This will make it fast and easy for drivers to enjoy the music they love, uninterrupted and unlimited, while maintaining their focus on the road.”

To get access to MOG’s on-demand service inside a BMW or Mini, the user must subscribe to the service’s $10 per month option and use the MOG iPhone application. MOG has a catalog of 13 million songs and now has access points through an in-browser desktop app, iPhone app, Android app, and Samsung Smart TVs and Blu-ray players.

Filed under: media, mobile

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YuMe grabs $11.9M, video advertising industry seeing more action

Posted: 15 Nov 2011 02:23 PM PST

YuMeYuMe, a video advertising network, has raised $11.9 million in funding, according to a Form D filed with the SEC.

A YuMe spokesperson told VentureBeat the company is not ready to comment.

YuMe connects advertisers and video content creators, so videos appearing on mobile devices, computers, or connected televisions can include advertising revenue in their monitization plans. It uses the “ACE Relevance Engine,” which pairs relevant video content to an ad with the right message. This is difficult because ad copy can’t be matched with keyword-rich text. Instead it is a much more fluid form of content, making it harder to identify the right areas to place ads.

The funding comes from YuMe’s previous investors Accel Partners, Menlo Ventures and Khosla Ventures. Also on the form D are YuMe’s Co-Founder & chief executive officer Jayant Kadambi, co-founder and chief technology officer Ayyappan Sankaran,  chief financial officer Timothy Laehy, and chief revenue officer Scot McLernon. The form also states that the deal was made in both common and preferred stock.

Other video advertising companies are also getting funding, such as BrightRoll, which announced a $30 million round of funding today. The industry has seen some action lately, with YuMe also recently announcing a dedicated advertising product for YuMe and LG Electronics’ connected televisions. This gives developers creating applications for internet enabled televisions the opportunity to gain advertising revenue in lieu of other forms of monitization.

Blinkx, a video search website, also contributed to the video advertising sphere recently with its acquisition of Prime Visibility Media Group, an advertising agency, which bolsters Blinkx’s existing video advertising program, AdHoc.

YuMe was founded in 2004, and has headquarters in Redwood City, Calif. with offices in the UK and around the U.S. The company’s investors include Accel Partners, BV Capital, DAG Ventures, Khosla Ventures, Menlo Ventures and Intel Capital.

Filed under: deals, VentureBeat

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Apple picks Arthur Levinson as Chairman, Disney’s Iger joins board

Posted: 15 Nov 2011 01:53 PM PST

arthur levinsonApple has named Arthur D. Levinson to the position of non-executive Chairman of the Board, filling former CEO Steve Jobs’ long time role.

When Jobs stepped down as CEO because he was too sick to continue working, he retained his title of chairman. But since he passed away in early October, that spot has been vacant. Levinson (pictured left) makes sense as a replacement because he has been a long-time member of Apple’s board and has been a successful chairman for biotech firm Genentech. When Jobs stepped down as CEO back in August, Levinson spoke on behalf of the board and praised Jobs’ “extraordinary vision and leadership.”

“Art has made enormous contributions to Apple since he joined the board in 2000,” said Apple CEO Tim Cook in statement. “He has been our longest serving co-lead director, and his insight and leadership are incredibly valuable to Apple, our employees and our shareholders.”

The company also announced Disney CEO Bob Iger will join Apple’s board of directors. Iger also had a strong relationship with Jobs, who was Disney’s largest shareholder at one time.

“Bob and I have gotten to know one another very well over the past few years and on behalf of the entire board, we think he is going to make an extraordinary addition to our already very strong board,” Cook said. “His strategic vision for Disney is based on three fundamentals: generating the best creative content possible, fostering innovation and utilizing the latest technology, and expanding into new markets around the world which makes him a great fit for Apple.”

Apple’s board also includes Cook, former Vice President Al Gore, Avon CEO Andrea Jung, Intuit Chairman Bill Campbell, J. Crew CEO Millard S. Drexler and Ron Sugar, the former CEO of Northrop Grumman Corp.

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Now for something completely different: Colombian internet entrepreneurs

Posted: 15 Nov 2011 01:28 PM PST

Alan Colmenares is facilitator for the Founder Institute program in Colombia, a contributor to VentureBeat and writes about Latin American startups at TropicalGringo.

Latin America is home to some notable startup success stories from countries such as Brazil, Argentina and Chile, as I've written about previously. MercadoLIbre an ecommerce company based in Argentina, for example, boasts a market cap of $3.7B. But the lesser-known Colombian startup community has generated some successes too. Here's a quick look at the latest we've seen come out of that country.

One example of a Colombian startup creating real impact is .CO Internet (a joint venture with global communications company Neustar). In a year and a half, .CO Internet has managed to register more than a million domain names worldwide (from a negligible base). Under the leadership of Juan Diego Calle, a serial entrepreneur who sold his previous startup to Yahoo, .CO Internet has managed to convince organizations such as 500 Startups, AngleList and, more recently, the Founder Institute to adopt the .CO extension for their primary domain name.

Another Colombian entrepreneur is Andres Barreto, co-founder (along with CEO Jason Baptiste) of New York-based startup OnSwipe. Barreto previously started or was part of a number of startups, including streaming music site Grooveshark. Onswipe offers technology that makes websites look great on tablet web browsers and recently raised an additional $5 million in funding.

Last but not least, PagosOnline, a Latin American ecommerce payment platform based in Colombia, was recently acquired by South African media group Naspers for an undisclosed sum. The company had positioned itself as a leader in Colombia but is now using that country as a launch pad to expand its platform to other countries in the region.

These are just the most recent, highest profile moves we’ve seen in Colombia, a country with the fourth largest economy in the region. Overall, we’re seeing about half a dozen quality tech startups launch here every year. Some are local plays and some are companies from other countries in the region. Venture funding has been scarce, but new initiatives such as Startup Weekend, international accelerator the Founder Institute and a corporate venture fund from telecommunications firm Telefonica could help improve this situation.

On my last trip to California I met investors at both ends of the scale: those who couldn’t care less about Latin America, much less about Colombia, and those who are intrigued. It seems that investors interested in monitoring Colombia are those who are interested in complementing their deal flow with areas of the world that don’t have so much competition for deals — especially now that Brazil has started to get pretty crowded in that respect.

Research has shown that high-tech startups create the greatest number of jobs, and it's no wonder that entrepreneurs and startups from lesser-known countries such as Colombia are pursuing these opportunities with some success. Moreover, if Michael Geoghegan, former HSBC CEO, is correct, these countries may make bigger waves in the future: "Colombia, Indonesia, Vietnam, Egypt, Turkey and South Africa will take over as the new BRICs, as Brazil, Russia, India and China were dubbed a decade ago."

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How the iPhone got tail fins: Lessons Apple learned from GM

Posted: 15 Nov 2011 01:28 PM PST

Editor's note: Serial entrepreneur Steve Blank is the author of Four Steps to the Epiphany. This story originally appeared on his blog.

It was the most advanced consumer product of the century. The industry started with its innovators located in different cities over a wide region. But within 20 years it would be concentrated in a single entrepreneurial startup cluster. At first it was a craft business, then it was driven by relentless technology innovation, and then a price war as economies of scale drove efficiencies in production. When the market was finally saturated the industry reinvented itself again — one company discovered how to turn commodity products into "needs."

They opened retail outlets across the country and figured out how to convince consumers to flock to buy the newest "gotta have it" version and abandon the perfectly functional last year's model.

No, it's not Apple and the iPhone.

It was General Motors and the auto industry.

In the beginning

At the beginning of the 20th century the auto industry was still a small, hand-crafted manufacturing business. Cars were assembled from outsourced components by crews of skilled mechanics and unskilled helpers. They were sold at high prices and profits through nonexclusive distributors for cash on delivery. But by 1901, Ransom Olds invented the basic concept of the assembly line and in the next decade was quickly followed by other innovators who opened large scale manufacturing plants in Detroit – Henry Packard, Henry Leland's Cadillac, and Henry Ford with the Model A.

The Detroit area quickly became the place to be if you were making cars, parts for cars, or were a skilled machinist. By 1913 Ford's first conveyor belt-driven moving assembly line and standardized interchangeable parts forever cemented Detroit as the home of 20th century auto manufacturing.

Feature wars

The automobile industry was founded and run by technologists: Henry Ford, James Packard, Charles Kettering, Henry Leland, the Dodge Brothers, Ransom Olds. The first twenty-five years of the century were a blur of technology innovation – moving assembly line, steel bodies, quick dry paint, electric starters, etc. These men built a product that solved a problem — private transportation first for the elite, and then (Ford's inspiration) — transportation for the masses.

Market saturation

Ford tried to escape the never-ending technology feature wars by becoming the low cost manufacturer. Fords River Rouge manufacturing complex — 93 buildings in a 1 by 1.5 mile manufacturing complex, with 100,000 workers — vertically integrated and optimized mass production.

By 1923, through a series of continuous process improvements, Ford had used the cost advantages of economies of scale to drive down the price of the Model T automobile to $290.

When the 1920's began there were close to a 100 car manufacturers, but the relentless drive for low cost production forced most of them out of business as they lacked capital to scale. For a brief moment, half the cars in the world were now Fords. To make matters worse, the long service life of Ford and GM cars (8 years for Fords Model T, 6 years for everyone else) retarded sales of new cars. In 20 years, U.S. car ownership had risen from 0 to 80 percent of American families — the market was approaching saturation.

Now cars would have to be sold almost entirely to people who already owned a car.

The crazy entrepreneur

After success as a leading manufacturer of horse-drawn carriages, Billy Durant was one of the few who saw the writing on the wall and got into the car business. Although he wasn't a technologist, he was an entrepreneur with a great eye for acquiring car companies run by technologists. His keen insight was that several carmakers combined under one company umbrella would have more growth potential than one brand on its own.

Like most founders, he was great at searching for a business model but terrible at in large company execution. When his board fired him, Durant bought a competing company called Chevrolet, built it larger than his last company, and used Chevy stock to buy out his old company — General Motors — and threw out the board. Yet a few years later under his brilliant but reckless leadership GM was again on the brink of financial disaster and his new board fired him. (Durant would die penniless managing a bowling alley.)

Durant's ultimate replacement — an accountant named Alfred P. Sloan — would turn GM into the leading and most admired company in the U.S.


Over the next decade Sloan would implement a series of innovations which would last for over half a century. And catapult General Motors from the No. 2 car company (with a ¼ of Ford's sales) into the market leader for the next 100 years. Here's what he did:

Distributed Accounting: Unlike Ford, GM was originally a collection of separate companies. Distributed Accounting turned those fiefdoms into product divisions each of which, could be focused like Ford's mass-produced lines. But Sloan went further. He figured out how to centralize financial oversight of decentralized product lines. His CFO created standardized division sales reports and flexible accounting, and allocated resources and bonuses to the GM divisions by a uniform set of rules. It allowed GM to be ruthlessly efficient internally as well with its dealers and suppliers. It got the division general managers to fall in line with corporate goals but allowed them to run their divisions freely. GM became the prototype of the modern multi-divisional company.

Car Financing: Realizing that Ford would only accept cash for car purchases, in 1919 GM formed GMAC to provide new car buyers a way to finance their purchases through debt.

Consumer Research: Every since his days at Hyatt Roller Bearing, Sloan, and by extension GM, was relentless about getting out of the building — they had an entire department that studied consumers, dealers, suppliers. More importantly, Sloan led by example. He visited dealers and suppliers, listened to customers and was tied tightly to his head of R&D Charles Kettering.

All this would have made General Motors a well-run and well-managed company.  But what they did next would make them the dominant company in the U.S. and eventually put tail-fins on the iPhone.

By the early 1920's General Motors realized that Ford, which was now selling the Model T for $290, had an unbeatable monopoly on low-cost automobile manufacturing. Other manufacturers had experimented with selling cars based on an image and brand. (The most notable was an ad by the Jordan Car company.) But General Motors was about to take consumer marketing of cars to an entirely new level.

Market Segmentation: General Motors had turned the independent car companies acquired by its founder Billy Durant into product divisions. But in a stroke of genius GM transformed these divisions into a weapon that Ford couldn't match. With the rallying cry "a car for every purse and purpose," GM positioned its car divisions (Chevrolet, Pontiac, Oldsmobile, Buick and Cadillac) so they would cover five price segments — from low-price to luxury. It targeted each of its brands (and models inside those brands) to a distinct economic segment of the population. Chevy was directly aimed at Ford — the volume car for the working masses. Pontiac came next, then Oldsmobile, then Buick. The top-of- the-line Cadillac offered luxury and prestige announcing you had finally arrived at the top of the conspicuous consumption heap. Consumers could announce their status and lives had improved by upgrading their brands.

GM had one more trick to make this happen. Within each brand, the top of the line was just a bit less expensive than the lowest priced model of the next expensive brand. The goal was to convince the consumer to spend a little more to trade up to a more prestigious brand.

Market segmentation by price was something no other automotive manufacturer had ever done. While other car companies could compete with one of GM's divisions, few had GM's capital and resources to compete simultaneously with the onslaught of car models from all five divisions.

Planned Obsolescence: While market segmentation allowed GM to use its divisions to reach a wider market than Ford or Chrysler, this didn't solve the problem of market saturation. By the late 1920's, most everyone in the U.S. had a car. And cars lasted 6 to 8 years. Even worse, the market was now filled with used cars that provided even lower cost basic transportation. Sloan, the General Motors CEO, faced two seemingly unsolvable challenges:

  1. How do you get consumers to abandon their perfectly fine cars and buy a new one?
  2. How do you turn a product that competed on price and features into a need?

In another stroke of genius, GM invented the annual model change. Sloan borrowed this idea from fashion where styles changed every year and applied it to automobiles starting in the 1920s. General Motors would change the external appearance of cars every year. Sloan preferred to call it "dynamic obsolescence."

Styling and design became an integral part of GM's strategy. Sloan hired Harley Earl to set up GM's in-house styling staff. Earl would run it from 1927 to 1958.

Before Earl, cars were designed by in-house body-engineers who focused on practical issues like function, costs, features, etc. Each exterior component was designed separately to be functional – radiator, bumpers, hood, passenger compartment, etc. Some companies used 3rd party body-makers to set the style , but GM was the first to take car design away from the engineers and give it to the stylists.

The concept of yearly "improvements", whether styling or incremental technology improvements, every model year gave GM an unbeatable edge in the market. (Henry Ford hated the idea. He had built Ford on economies of scale — the Ford Model T lasted for 19 years.) Smaller car makers could not afford the constant engineering and styling changes they had to make to keep competitive. GM would shut down all their manufacturing plants for a few months and literally rip out the tooling, jigs and dies in every plant and replace them with the equipment needed to make the next year's model.

GM had figured out how to take a product which solved a problem — cheap transportation — and transform it into a need. It was marketing magic that wasn't to be equaled until the next century.

By the mid-1950′s every other car company was struggling to keep up.

Mass Marketing: Starting in the 1920's and continuing for the next half century, automobile advertising hit its stride. Ads emphasized brand identification and appealed to consumers' hunger for prestige and status. Advertising agencies created catchy slogans and jingles, and celebrities endorsed their favorite brands. General Motors turned market segmentation and the annual model year changeovers into national events. As the press speculated about new features, the company's added to the mystique by guarding the new designs with military secrecy. Consumers counted the days until the new models were "unveiled" at their dealers.


For fifty years, until the Japanese imports of the 1970's, Americans talked about the brand and model year of your car — was it a '58 Chevy, '65 Mustang, or 58 Eldorado?  Each had its particular cachet, status and admirers. People had heated arguments about who made the best brand.

The car had become part of your personal identity while it became a symbol of 20th Century America.

After Sloan took over General Motors its share of U.S cars sold skyrocketed from 12 per cent in 1920, until it passed Ford in 1930, and when Sloan retired as GM's CEO in 1956 half the cars sold in the U.S. were made by GM. It would keep that 50 percent share for another 10 years. (Today GM's share of cars total sold in the U.S. has declined to 19 percent.)

How the iPhone got tail fins

Over the last five years Apple has adopted the GM playbook from the 1920′s: take a product, which originally solved a problem — cheap communication — and turn it into a need.

In doing so Apple did to Nokia and RIM what General Motors did to Ford. In both cases, innovation in marketing completely negated these firms' strengths in reducing costs. The iPhone transformed the cell phone  from a device for cheap communication into a touchstone about the user's image. Just like cars in the 20th century, the iPhone connected with its customers emotionally and viscerally as it became a symbol of who you are.

The desire to line up to buy the newest iPhone when your old one works just fine was just one more part of Steve Jobs' genius — it's how the iPhone got tail fins.

It's one more reason why Steve Jobs will be remembered as the 21st century version of Alfred P. Sloan.

[Top car image via Shutterstock]

Filed under: Entrepreneur Corner, mobile, VentureBeat

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