05 December, 2011



StumbleUpon rolls out a major update: new logo, Stumble bar and channels

Posted: 05 Dec 2011 09:00 AM PST

StumbleUpon screenshotLink discovery service StumbleUpon is rolling out a major update today, the first in nearly a decade, that cleans up the site’s user interface, revises the site’s design and adds a new channels feature.

“The changes reflex what our users are looking for, (meaning) I have some free time and I want to be entertained,” StumbleUpon founder and CEO Garrett Camp told VentureBeat.

StumbleUpon's service lets people discover and share new web content based on a broad spectrum of categories. Users click a "stumble" button to discover new content, and then have the option of voting and commenting on the selection. In October, the company announced that it reached 20 million active users and had over 1 billion “stumbles” per month.

The first thing people will notice is the logo. Gone is the familiar blue and green “SU” logo, which has been replaced with a simple orange circle with a more elegant “SU” design. And that’s not the only portion of the site that’s been simplified.

The site’s user interface also got an overhaul. The Stumble bar — which serves as the service’s main navigation — has far fewer buttons., which makes the voting buttons much more prominent. The Stumble button is first on the bar, followed by the selected category of link discovery, voting buttons, simple share and comment icons and the user who submitted the link. The bar also has an integrated Explore Box, a feature StumbleUpon added back in August that allows users to search for more specific categories.

Another significant difference found in the update is the addition of Stumble Channels, which is a way to directly explore content from sites, celebrities and brands. There are currently over 250 channels, which have been hand-picked and authenticated by the StumbleUpon staff to assure quality. Basically, the channel is curated by each celebrity or brand, but it exists separate from the overall discovery algorithm. Eventually, the channel feature may be rolled out to all users, who may wish to create a specific channel for their band, website, etc.

Overall, all the changes made indicate that StumbleUpon is keenly aware of its active user base. Unlike Delicious or Digg, StumbleUpon isn’t trying reinvent the site in an attempt to grab new users and/or higher levels of engagement. The site has a healthy level of both user growth and activity, as we pointed out when the site reached a billion stumbles per month.

All StumbleUpon users can try out the revamped site as of today.

StumbleUpon was acquired by eBay in 2007, only to be sold back two years later by original founders Garrett Camp, Geoff Smith and Ram Shriram, as well as Accel Partners and August Capital. StumbleUpon now operates as an independent company. The company closed a $17 million round of funding in May 2011 and has raised $18.5 million total funding to date.

Filed under: media, social, VentureBeat

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Updated: Gowalla CEO sends note to employees, Facebook deal in “holding pattern”

Posted: 05 Dec 2011 08:57 AM PST


Editor’s note: Soon after this posted, Gowalla announced it is, indeed, being bought by Facebook in a blog post by chief executive Josh Williams. You can find it here.

Gowalla chief executive Josh Williams may not have given the official word that the company is being bought by Facebook, but a letter to his employees doesn’t exactly convey a red light.

Last week, a unnamed source leaked information about the deal to CNN, saying Gowalla projects are to be absorbed by Facebook, and refocused on the social network’s new Timeline feature, a chronological life-view of your Facebook activity. Employees of Gowalla will also be moving from their home of Austin, Texas to Facebook’s headquarters in Palo Alto, Calif., with few remaining to work in Facebook’s remote office.

At the time, the two companies denied comment. But it’s hard to stay quiet when articles, tweets and general Internet buzzing starts to happen. Williams eventually had to say something to his employees, a note which was intercepted and read to All Things D. It states:

Subject: Rumors and speculation

CNN just broke the news that Gowalla has been acquired by Facebook. This story was leaked from an unknown source.

The ink on the deal is not dry, so our holding pattern is that we do not comment on rumors and speculation. I have another email penned that was ready to send you today, assuming you would get this news before the story was officially released.

But now it is all over Twitter, so you have likely heard. A longer email will be sent soon. Until then, I am so very grateful for what you have done to make Gowalla a success.

Given the reference to CNN’s article, the note was probably sent on Friday. Whether Gowalla has left the “holding pattern” and landed in Palo Alto is still in the air (get it?).

As VentureBeat lead writer Dean Takahashi points out, Facebook has often made acquisitions not necessarily for the product, but for the engineers. After losing the location land grab to FourSquare, Gowalla turned into a travel advice site, and has since been looking for the right home.

Filed under: deals, social

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Mobile banking pioneer mFoundry nabs $18M from MasterCard, Intel Capital and others

Posted: 05 Dec 2011 08:53 AM PST

MasterCard mFoundry Riding the wave of mobile payments excitement, mFoundry announced today that it has received $18 million in growth capital led by MasterCard, following a recently announced partnership between the two companies.

Not surprisingly, mFoundry says the funds will be used to push development of new mobile payments products, as well as to expand its mobile banking business. The company provides mobile banking capabilities to almost 600 banks and credit unions across the U.S., and it powers the payments feature behind Starbucks’ wildly popular mobile apps.

Last week, mFoundry and MasterCard announced a partnership to combine the credit card company’s NFC-based PayPass technology with mFoundry’s mobile financial services platform. It gives mFoundry a leg-up with NFC (near-field communications), something it hasn’t been able to offer customers so far, to let consumers use its services on existing PayPass terminals.

"The opportunity in mobile financial services is enormous" mFoundry co-founder and CEO Drew Sievers said in a statement today. "While our existing mobile banking business is scaling rapidly, there are many other related opportunities that we believe can add significant incremental value to our company.”

The growth round also saw participation from Intel Capital, FIS, and Motorola Mobility. mFoundry says that it will continue to work together with FIS around mobile banking opportunities, but it will now also court additional opportunities from the above investors.

Founded in 2004, mFoundry is based in Larkspur, California and has raised $50 million in funding to date.

Filed under: deals, mobile, VentureBeat

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uTest grabs $17M from QuestMark, others to expand its crowdsourced testing biz

Posted: 05 Dec 2011 08:42 AM PST

utestCrowdsourced testing startup uTest has raised $17 million in its fourth round of funding, which will help the company expand its popular testing services for Web, desktop and mobile applications.

uTest helps companies like Google, Microsoft and Intuit extensively test software applications in real-world conditions and commands a community of more than 45,000 professional testers from 180 countries. The company’s focus is on “in-the-wild testing services” that covers the full lifecycle of software development, including “functional, security, load, localization and usability” testing.

Back in May, we covered the company’s launch of uTest Express for Web, which helped uTest expand its scope beyond mobile apps. At that time, uTest CMO Matt Johnston said his company’s growth had been forty-fold from two years ago, and four-fold from 2010 to 2011.

The new funding round was led by QuestMark Partners, with participation from all of uTest’s prior investors including Scale Venture Partners, Longworth Venture Partners and Egan-Managed Capital. QuestMark Partner Tim Krongard will join uTest’s Board of Directors as well.

“The market’s adoption of uTest’s services has been amazing — particularly among retailers, media companies, gaming firms and agencies,” said uTest CEO Doron Reuveni, in a statement. “Given the ever-increasing demands by users that a company’s apps work flawlessly under real-world conditions, the opportunity before uTest is massive. This latest round sets us up to help even more companies, developers and testers launch apps that their users love.”

Boston-based uTest was founded in 2007. The company’s total funding, including today’s new round, now amounts to more than $37 million. The company said its valuation has more than doubled since its third round of funding 15 months ago.

Filed under: deals, dev

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iRobot launches Roomba Revenge game for iOS

Posted: 05 Dec 2011 08:31 AM PST

iRobot, the maker of vacuum-cleaning robots, is launching the Roomba Revenge game app for iOS (iPhone, iPad, iPod Touch) devices today.

The title seems totally out of character for iRobot and its core expertise, but lots of brands are trying to make their products and services better known by coming up with an app for the iPhone. These apps make the companies seem more hip and cool to users, but only once in a while do they take off.

The game is a goofy title where a Roomba vacuum robot chases after and cleans up evil Dust Bunnies. As you can see in the trailer, you clean up dirt, dust, and debris until your home floor is spotless. You have to finish before time runs out. In Revenge mode, the Roomba is invincible and gobbles up the Dusty Bunnies as they hide from the powerful suction.

The game was the work of Brian Genesta senior copy writer, and Scott Lebrun, a graphic designer. The two men exchange text messages about it one night after work. iRobot says, “Whiskey and/or beer may have been involved, but those classified records are permanently sealed.”

The game is available in the App Store for 99 cents. Some of the proceeds will go to Spark, iRobot’s education initiative to encourage students in certain fields.

Filed under: games, mobile

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Box giving HP business customers new cloud offers on PCs

Posted: 05 Dec 2011 08:19 AM PST

HP BoxHewlett-Packard PCs are getting a lift into the clouds through a partnership with Box, today, after nearly being buried by HP. Box is providing new offers with select HP computers.

Box is focused on enterprise cloud storage and file sharing, and is partnering with enterprise hardware makers for an easy in to those customers’ companies. The offers include 10 GB of storage, plus the option to upgrade, with HP’s Compaq Pro 6005 and 6200 series PCs. With an HP Compaq Elite 8200, Box is offering unlimited storage for a year.

“We’re not the only ones out there that recognize how the cloud will transform the wa we work,” read company blog post. “It’s imperative that Box aligns with other leaders in the industry to enable cloud solutions for today’s knowledge worker.”

HP took a hard turn toward the enterprise during its second quarter earnings call this year, when it announced the purchase of Autonomy, an enterprise software company. Since then, the company has experienced a direction upheaval as it changed leadership hands from Leo Apotheker to HP’s current chief executive officer Meg Whitman, decided whether or not to keep its WebOS division, and even kill off it’s PC division all together. A decision still has not been reached on WebOS, but for now HP PCs are no longer facing the chopping block.

The offers are only available when these PCs are purchased through HP’s “Smart Buy” program, which is only available to small and medium sized businesses. In order to keep the offer, customers must activate the offer within 60 days of receiving the computer. You can check out the offers further here.

Filed under: cloud

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Silicon Valley’s airline faces social media backlash as it switches technology

Posted: 05 Dec 2011 08:00 AM PST

Interior of a Virgin America flight. Photo by Artur Bergman/FlickrSince its launch, Virgin America has become the unofficial airline of Silicon Valley. With new airplanes, Wi-Fi on all flights, a Linux-based entertainment system, power outlets at every seat and a beautiful new terminal at its home airport of SFO, it has become the go-to airline for many in the tech community.

But lately, Twitter has been full of gripes about the once highly touted airline:

Used to love @virginamerica but they’ve become undependable and horrible at communicating with passengers. I’ll take on-time over hip.

@VirginAmerica Why would you go live with an online reservation system that doesn’t work? yfrog.com/h45hgzknj

So what happened?

The airline recently switched over to a new reservation system from Sabre, the industry-standard travel reservations network that started in the 1960s. The transition has caused significant issues with the airline’s Web site. Some passengers are having issues changing and canceling flights, making seat selections and viewing their frequent flier accounts. Airport check-in kiosks are also having issues. This has also led to dramatically increased call hold times.

Veteran blogger Anil Dash tweeted, “I’ve been fascinated by the botched Sabre migration. Worst since Hershey’s moved to SAP & had no candy for Halloween” in 2002.

Virgin spokeswoman Abby Lunardini said, “It’s a once in a lifetime cutover for an airline. If you look at the past history of cutovers [to new reservations systems], they never are easy for airlines. Every airline has tended to see issues for weeks, if not months afterward.” She said that airport operations have gone smoothly relative to other cutovers, but the Web side has experienced more issues than they anticipated.

The change was necessary because the rapid growth of the airline.

A reservation system change is one of the more complex technology challenges because airlines are 24×7 operations. “It’s a knife-edge cutover because you have live operations,” Lunardini said. “You have to move everything over to the new system at once.” She said the airline initially increased its call center staff by 30 percent (and later another 45 percent) and thinned its flight schedule in preparation for the switch.

The timing of the upgrade, right before the start of the holiday season, raised some questions on Twitter. Lunardini said Sabre provided two options for the switch: October, 2011 or June, 2012.

“We really felt it was a priority from a Web stability viewpoint but also from the business viewpoint to not wait until June of 2012 to make the switch, which would also be in the middle of the summer travel season,” Lunardini said.

The airline added extra airport staff over the busy Thanksgiving holiday weekend, and Lunardini said that the Thanksgiving weekend wasn’t actually that bad, given the holiday, with a high proportion of flights on time.

Passengers who booked their travel before October 27 are more likely to experience issues than passengers who made their travel plans after the switch to Sabre. For passengers whose travel isn’t imminent, Lunardini suggests trying their request at a later time if it doesn’t work initially. She said that many changes can be made at the airport. The airline is waiving change and cancellation fees for passengers who experience trouble.

Members of the airline’s frequent flier program who traveled during the period received an email apology from the airline’s CEO and 5,000 bonus points, worth the equivalent of a free short-haul flight.

Because consumers have been using social media to complain about the airline, Virgin America has also been using those channels to respond. Virgin has staffed its social media team around the clock.

“We are really the first airline that has gone through this type of business change in the era of social media,” Lunardini said.

The asynchronous nature of social media is also helpful because people don’t have to wait on hold before getting a response. She estimated that the airline has sent about 10,000 Twitter direct messages to travelers since the cutover.

Lunardini said that a major deployment that went in on Friday should fix many of the issues that customers are experiencing. She hopes that any remaining issues will be fixed with another deployment schedules for Dec. 8.

Once the bugs are worked out, the Sabre system will allow Virgin to offer new capabilities such as codesharing with V Australia and Virgin Atlantic, an elite program for very frequent fliers and mobile tools.

“We are hoping that when we get on the other side of these last errors that guests will still enjoy the experience with us and stay with us,” Lunardini said.

In the meantime, frustrated passengers continue to use social media to vent. To its credit, Virgin America is leaving negative comments up on its Facebook page, where it could easily remove them.

“Arrrgffhggh. – based in silicon valley – high tech airline that can not get it’s website working for weeks – wrong. Hold time on phone over 47 minutes !!,” wrote commenter Winston Vaughan.

Rocky AgrawalRocky Agrawal is an analyst focused on the intersection of local, social and mobile. He is a principal analyst at reDesign mobile. Previously, he launched local and mobile products for Microsoft and AOL. He blogs at http://blog.agrawals.org and tweets at @rakeshlobster.

Top photo credit: Artur Bergman/Flickr

Filed under: social

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Can Asia out-innovate America?

Posted: 05 Dec 2011 08:00 AM PST

Go East, young entrepreneur! The chance to become rich and famous with a startup is no longer just an American dream. It's happening in Asia too, as talent, energy and resources flow from the U.S. to the east.

Venture capital investment in Asia has nearly tripled in the past five years to $15.6 billion. China has leaped ahead to become the world's second-largest venture market at $7.6 billion investments, while India has climbed to third place at $5.8 billion.

Together, these dragon and tiger markets account for 13 percent of the $37.8 billion put into startups globally. That's up from 5 percent in 2005.

Since 2005, more than 6,000 startups in Asia – about half of them in India and China alone – have been venture funded.

These two markets are also tops when it comes to mobile service adoption. China ranks highest in the world, with 840 million mobile service subscribers, while India places second with 673 million subscribers. Vietnam has 78 million mobile service subscribers in a country of 89 million people!

China is also gaining ground when it comes to technology patents. The country scores fourth worldwide for new patent applications, up from tenth place in 2005. Two giant Chinese companies – ZTE Corp. and Huawei Technologies – are among the top four corporate patent filers in the world.

For sure, the U.S. still leads the global venture capital market, weighing in with 70 percent of investments in startups and 64 percent of deals worldwide. But VC spending in America has flattened and hasn’t recovered momentum since the last peak more than 10 years ago. The U.S. remains the world's superpower innovator, too, with 28 percent of all patent applications in 2010. But the U.S. share of patent filings has slipped from 34 percent in 2005, while China's portion stands at 7.6 percent, up by 56 percent in 2010.

In other telling signs of the eastward shift, the U.S. slipped to fifth from third place in a recent World Economic Forum ranking of 138 countries by technology development and competitiveness. Singapore ranked second, while Taiwan and Korea moved up among the top 10, China leapfrogged to 36th place, and Vietnam scored with the fastest climb.

Asia's innovation hotspots are fast emerging as first choice destinations for bright young entrepreneurs. By 2014, an estimated 200,000 skilled tech workers leave the U.S. to return to their Chinese and Indian homelands to find new opportunities and to create tomorrow's leading startups. Consider some of the great companies created by Chinese and Indian immigrants to the Valley: Sun Microsystems, Hotmail, Yahoo and YouTube.

This year, Silicon Valley serial entrepreneur Elliott Ng took a job at Google in China and moved his young family there. Raj Gilda left a VP post at Citigroup in New York and moved to Pune in India to ramp up a vocational training and micro-lending operation called Lend-A-Hand. Mentor and tech entrepreneur Bryan Pelz left Los Angeles for Ho Chi Minh City to work with mobile gaming and search startup VNG, which borrows from Shanda, Tencent, Google and Baidu. Yale undergrad Alice Wang left the ivy-covered walls for a job at a Groupon venture in China.

Getting in on the action, Singapore is making good with government hand-outs and skillful coaching for entrepreneurs. KC Wong is jumpstarting Sparky Animation in Singapore and wants to make it in Hollywood. Mobile security startup Tencube, incubated at the National University of Singapore, was acquired by McAfee. Taiwan is luring startups to move beyond their base in churning out more than semiconductors and electronic goods, and has turned on the lights for a number of LED startups.

The super-charged emerging markets of Asia promise to deliver the next Facebook phase – a turning point that will spark a creativity surge like the social media boom. Startups create jobs and wealth, and enthusiasm for future innovations.

Once, Sand Hill Road investors rarely scouted deals outside the San Francisco Bay Area. Now, they can't get enough of Asia. Silicon Valley leader Dick Kramlich of giant New Enterprise Associates left his Nob Hill home and art collection and moved with his wife to Shanghai for more than a year to be in the thick of this happening city. Venture heavy Gary Rieschel of Qiming Venture Partners left behind a Bay Area career and his wine collection to relocate to Shanghai, working from the 39th floor of JinMao Tower overlooking the Bund. Former Sequoia Capital India head Sumir Chadha – now back at WestBridge Capital Partners – moved from his comfortable suburban residence in Burlingame to a sea-facing condo in Mumbai. IDG chairman Pat McGovern has made 100 trips to China and is now exploring new terrain in Vietnam and India, and financing dozens of scrappy young entrepreneurial ventures.

"The opportunity is now. In a few years, it will be too late," says Kai-Fu Lee, the former president of Google China. Now chairman and CEO of Beijing-based Innovation Works, Lee advises young Chinese entrepreneurs in Silicon Valley to “Go East” and he's financing dozens of startups and mentoring the founders.

These trends underscore a shift in entrepreneurial and inventive muscle to Asia. As the currents for tech innovation move across the Pacific Ocean to China and onward to the Indian Ocean, America's long-term competiveness is increasingly at stake. Consider how important venture capital is to economic growth:  In 2009, venture-backed companies in the U.S. contributed 21 percent of the U.S. gross domestic product and 12 million jobs, according to IHS Global Insight.

Powerful tides are shifting, and quickly, as not only Chinese and Indian immigrants return home for improved job opportunities and family ties, but also young professionals and bright college graduates pack their bags and settle into a comfortable lifestyle and community of like-minded dynamos in Asia's top tier cities. It's not a roundtrip ticket either, but a several years' journey or a lifetime commitment.

This exodus is laying a foundation for Asia to out-innovate America.

"Silicon Valley will not forfeit its leadership, but China and India will compete heavily," says Ajit Nazre, a partner at top tier venture firm Kleiner Perkins Caufield & Byers. "We will see hundreds of companies coming out from these markets with huge growth and lots of potential."

This new innovation dawn in Asia is really only the beginning. Over the next two decades, the startup game will play out in a new geography distant from its Silicon Valley roots.

Rebecca A. Fannin is the author of Startup Asia (Wiley, 2011) and Silicon Dragon (McGraw-Hill, 2008). Fannin will be appearing at Kepler's Book Store, 1010 El Camino Real, in Menlo Park, Calif. on Friday, Dec. 9, at 6pm, for a talk, book signing and cocktail reception. 

[Top image via Lu Wenjuan/Shutterstock]

Filed under: deals, Entrepreneur Corner, VentureBeat

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EA continues to target freemium market – offering $60 rides on Theme Park iOS game

Posted: 05 Dec 2011 07:47 AM PST

In an attempt to further monetize its iOS gaming portfolio, Electronic Arts is releasing a freemium version of the popular real time strategy game Theme Park on iTunes.

Although the game is initially free to play, if you want to upgrade your park quickly, you are going to have to cough up some real cash, with some single rides costing the equivalent of $60.

This move comes hot on the heels of EA’s decision to introduce a $30 a year subscription fee to its Tetris iOS game.

The game has not yet been released in the US, but Canadian iPhone owners can already get their hands on it. AOL has reported on the game, in which you build your own theme park, by choosing shops and rides, and says that progressing without spending any real money is a painfully slow process.

Users sticking to the free features in the game are able to unlock a limited selection of attractions, but any really 'cool' items cost Tickets, which are purchased with real money. AOL states that a Skull-Train roller coaster in the game costs the equivalent of $60 to purchase, and that the majority of the game's rides are just as expensive.

There is certainly money to be made in the freemium game market on iOS, with Smurfs Village  and Tiny Tower both having proved their worth recently. Whether EA can replicate its Sims Social Facebook success on iOS remains to be seen, but with the average transaction value for iOS or Android purchase at $14, they may be a little off the mark.

Filed under: games

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Watch out Path, here comes Touch: A new messaging platform for close friends

Posted: 05 Dec 2011 07:39 AM PST

Touch screenshotEnflick, the Canadian creator of popular apps like TextNow and PingChat, is taking a big step forward today with the launch of Touch, a new mobile messaging platform to keep in touch with your closest friends and family.

Yes, that sounds a bit similar to Path, the year-old mobile social network that just recently received a major update. But Touch, available for iOS, Android, and BlackBerry, is more focused on real-time chat rather than merely posting updates. It’s about active communication with your close friends, instead of just passively seeing status updates.

And Touch has one other major advantage over its better-funded competitor: a massive pre-existing user base. The company says it has 21.5 million worldwide users on PingChat and TextNow, and Touch will come down as an update for 13 million existing PingChat users.

Enflick co-founder and CEO Derek Ting tells us that Touch will completely replace the existing PingChat network — which makes sense, since Touch is basically an evolved form of that app. Like PingChat, you can have quick text conversations with your friends and share photos, but Touch will also let you easily keep track of all of your friends’ updates in typical social network fashion.

The Touch app looks attractive (though perhaps a bit too similar to Path), and it lets you easily move friends in and out of conversations to make group chats easier. Like all mobile messaging apps, it lets you know if your messages have been delivered and read, as well as when your friends are typing.

Still, Enflick has a long road ahead, as there are plenty of other messaging solutions on the market. And when it comes to keeping in touch with close friends, many are already praising Path’s new update for its slick new interface and life-tracking features.

Based in Waterloo, Ontario, Enflick just recently raised $1 million in seed funding from Freestyle Capital, the Menlo Ventures Talent fund, and both Justin Bieber and Lady Gaga’s managers (not surprising, given the massive teen demographic for free texting services).

Filed under: mobile, VentureBeat

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Game visionary Jesse Schell talks about the pleasure revolution

Posted: 05 Dec 2011 07:00 AM PST

When Jesse Schell talks, the game industry listens. A talk he gave at the Dice Summit in 2010 garnered hundreds of thousands of views as he talked about the logical extension of spreading game rewards beyond games. This year, the professor of entertainment technology at Carnegie Mellon University has elaborated on that vision in talks on a topic he calls The Pleasure Revolution.

At the end of last month, Schell also gave a Google TechTalk entitled The Pleasure Revolution: Why Games Will Lead The Way. It centered on the idea that if we want to understand how to get people to engage more with our ideas, games, and products, we need to look at what games do very well: motivate us to play them. Pleasure is key to design in the 21st century. Everyone should listen to the talks because Schell is one of the game industry’s deep thinkers who is pondering where gaming is going.

What if the constant monitoring of our lives actually inspires us to be better humans? If the inevitable gamification of everyday activities and objects happens–and Schell believes it will–will it become a gross consumption engine, or one that inspires us to be better people?

This is the question Schell ended with at his Dice Summit talk in February 2010. He’s spent the last year and a half thinking about the discussion generated it, and recently delivered a Google TechTalk about what comes next. Schell is the author of “The Art of Game Design,” and the CEO of Schell Games. He also worked at Disney’s Imagineering Workshop on virtual reality games. Schell also runs Schell Games, which has 65 game developers.

Schell’s central thesis is that the predicted “games in everything” misses the point. In fact, he says, just adding more badges and rewards will have the opposite effect. He argues that content producers, from advertisers to game makers, need to understand that adding more of the outward mechanics of games will not produce the same motivations that games themselves seem to have. It’s not about the achievement points, but the things that motivate people to play games.

To explain what these things are, Schell uses Self Determination Theory, which states that people are motivated by three distinct psychological needs: the need for competence, the need for autonomy, and the need for relatedness. Games are very good, he says, at meeting these needs. Games are good at helping people succeed, as all games have an actual solution or completion point. They’re designed that way. A game, as opposed to work, can be stopped at any time, a strong component of autonomy and freedom. They’re also mostly designed to be played with other people; in the grand history of games, most are multi-player. Think checkers, chess, pong, and the like.

Much of the reasoning behind gamification rests on the idea that rewarding people will make them want more of what they’re being rewarded for. Not so, says Schell, referencing Alfi Kohn’s book, “Punished by Rewards.” In essence, people who are rewarded with extrinsic things like money or other tangible “bribes” are less likely to engage in the desired behavior when the reward is taken away. It’s as if our inner selves get the message that, “this thing isn’t worth doing unless this other reward system is in place.” It seems counterintuitive, but it’s been seen in study after study.

So, he says, if companies who make things want to increase people’s use of these things, the trick isn’t to add more points and bonuses and badges for the sake of adding them, but to find the context of the psychological needs that can be met. A rewards system like an airline mileage program meets the need of business travelers to feel important, competent and relate to others by feeling more valued by the airline. Bringing the same system to a shopping experience like Toys R Us, he says, would be counter productive; calling attention to the large amounts of money customers spend at a toy store would possibly keep them away from the store. However, a grocery rewards program that allows customers to save ten cents a gallon of gas perfectly matches the “save a penny, stick it to the seller” psychological state when grocery shopping.

Ultimately, what Schell sees as the motivating force in games, one that can be applied to all sorts of other “people” systems like commerce, education and games, is that of pleasure. He calls it a Pleasure Revolution, comparing it with a societal shift on the scale of the Industrial Revolution, when society moved from a survival economy to an efficiency economy. Shell argues that we are in the midst of a shift to a pleasure economy, in which the things we do must increasingly be either pleasurable to us, or help us avoid negative consequences. In other words, we are more and more engaged in activities in our real lives in which we try to maximize the “want to” activities and minimize the “have to” activities.

Games, says Schell, do this really well. They’re actually designed purely for pleasure. It’s no wonder everyone from governments to airlines and schools are looking to gamify their activities. The problem is the way it’s being done. Schell says that instead of gamification, we should focus on the motivational design of the experience itself. He suggests that these very same companies, governments, and schools focus on what their guests (or customers or students) will like about the given experience, based on the context of the experience, and try to find ways to increase their pleasure. In other words, how do experience designers get their target audience to like what they offer even more?

Google TechTalks are a series of talks “designed to disseminate a wide spectrum of views on topics including current affairs, science, medicine, engineering, business, humanities, law, entertainment and the arts.”

Filed under: games, VentureBeat

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SAP-SuccessFactors: 9 reasons why this is a smart acquisition

Posted: 05 Dec 2011 03:42 AM PST

SAP SuccessFactorsSoftware giant SAP acquired internet software company SuccessFactors on Saturday for $3.4 billion, in what most accounts praised as a commendable move to embrace the so-called "cloud.”

The “cloud” is a buzz-word that refers to the new way applications are being delivered: over the Internet.

Some analysts said the price SAP is paying for SuccessFactors was "nuts.” It’s a whopping 49 percent premium over SuccessFactors' market value. SuccessFactors sells software that helps manage employee performance. This doesn't exactly exude sex appeal. It's also not a big play in mobile, big data or any of the other buzz-worthy areas considered broadly strategic these days.

But looked at more closely, the SuccessFactors deal is more than just another purchase by a hungry software giant trying to transform itself. From what I can garner, it's actually a brilliant move on several fronts. SAP is way behind the cloud movement, and this purchase could help it catch up. And the deal could even propel SAP into a more compelling beast still, by helping it actually break free from the chains to its existing model, which is to sell software upfront to companies for thousands (or even millions) of dollars — something few companies want to do anymore. More on this in a second.

SuccessFactorsIf SAP pulls this acquisition off properly, it could deal solid blows against Oracle, its main competitor, and IBM, another competitor. My analysis is helped by an interview earlier today with SAP's Sanjay J. Poonen, president of global solutions, and informed by the insights picked up at the CloudBeat conference we produced last week, during which we talked with several experts, including Oracle's Rick Schultz.

Here are nine main reasons this looks like a deft move:

1. Talent management is the future

Talent management is a key area of growth in the economy going forward. Ask your company’s human resources or recruiting expert; they’re likely to concur. With the Web, people can boost their profiles, they become more accessible, and they’re therefore more poachable. That means companies need to act more agressively to protect their valuable employees. Distinguishing the good from the bad performers is crucial.

LinkedIn founder Reid Hoffman once told me created created his company on the conviction that on the web, people have essentially become small businesses (concerned with pushing their personal brands). Employees care more about where they work, and they’ll move quickly to find better work.

Ray Wang, head of San Francisco-based Constellation Research, told BusinessWeek: "What SAP had in human resources — basic transactional software such as payroll — was good enough for the old era. In the new era, performance reviews and talent management will be important."

SAP’s Sanjay J. Poonen, President of Global Solutions, asserted the same thing in his interview with VentureBeat today. He pointed to the growing competition between companies — and countries — to attract employees.

“This is a talent economy,” Pooenen said.

Lars DalgaardSuccessFactors CEO Lars Dalgaard

2. Talent? Well, SuccessFactors has that too

Lars Dalgaard, SuccessFactors’ CEO (pictured left) is considered a passionate, savvy leader, and SAP picks him up with this deal. He'll become the executive vice president of cloud at SAP, helping the company navigate one of the most important future industries.

Add to this the fact that SAP has lost some talent lately, namely John Wookie, who had headed SAP's on-demand strategy, and Jeff Stiles, SVP, Solution Marketing, another executive who led on cloud issues, but who leaves in January.

SAP has flubbed its efforts to build much of worth in the cloud so far, and Dalgaard could really help.  He's shown what he can do: He founded SuccessFactors ten years ago, raised a little more than $45 million, and is now selling it for $3.4 billion — no small feat. By the way, Dalgaard launched  the company’s “Dashboard” product at DEMO, the conference we co-produce, in 2005 (watch this demo to see him in action).

3. Employee Performance gives SAP a leg-up on competing products

SuccessFactors is the undisputed leader in its field. Recently, Forrester rated the Plateau Systems talent management software the best in its sector, and Plateau is now owned by SuccessFactors (SuccessFactors bought it in April). Oracle's horse in this race is PeopleSoft, which is part of the new Oracle Fusion, but the product is widely considered inferior. It didn't even show up in the list of Forrester's top talent management vendors. Indeed, it's precisely the lack of innovation in the so-called "human capital management" (HCM) area by the big software leaders — SAP included — that led to the rise of other players in this space such as Taleo (whose revenues come mostly from recruiting), Workday, Ultimate Software, and Cornerstone OnDemand. Some say the latter is SuccessFactors' toughest competitor.

4. It fills a big hole in SAP's own offering

With the acquisition of SuccessFactors, SAP can now boast it covers the four top segments where cloud providers offer software: customer relationship management (CRM), collaboration, procurement and human capital management (HCM). So far with its HCM, SAP has offered core HR and payroll software, but it hasn't offered a cloud compelling employee performance software. While SAP has offered on-premise talent management software (as well as on-premise workforce analytics, and shared services delivery), SuccessFactors enriches that considerably with its focus on the cloud.

SuccessFactors actually comprises several offerings, including talent management, recruiting management, goal management, performance reviews and business execution. More significantly, picking up SuccessFactors will likely help SAP slow the rumored hemorrhaging of SAP customers to companies like SuccessFactors, Workday and SalesForce. Other SAP customers, including Siemens, had started using best-of-breed on-demand (cloud) talent management apps like SuccessFactors alongside their SAP core HCM product — causing a dangerous beachhead for them to start using other cloud products in other areas.

Filed under: cloud, deals, VentureBeat

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Skillville Games launches skill-based tournament gaming site

Posted: 05 Dec 2011 12:01 AM PST

Skillville Games is kicking off a new skill-based tournament gaming web site today. The goal is to bring tournament gaming into a modern world, where gamers can compete against each other for cool prizes.

On Skillville Games, players can play casual games from Solitaire to Break It, betting small amounts of money in matches against other players. Players sign up and play tournaments in an asynchronous fashion, or playing a round of a game when it suits their own schedules.

The company has had a beta site working for about 1.5 years under the SkillAddiction name. The metrics for the beta are good, with 80,000 registered users signed up. In November, players waged about $30,000 in their own money. About 10 percent of customers are converting to paying customers. About 65 percent of players are retained ona  monthly basis. The top 20 percent average revenue per paying user is about $170. Players stay on the site for an average of 30 minutes. The tagline is game better, win more.

Skillville Games was first conceived as SkillAddiction by two Syracuse University college students, Taylor Louie (pictured left) and Raymond Williams (pictured right). They had been playing on competing web sites for more than a year and had won $4,000 in prizes. They decided they could create a better skill-gaming experience, with less fraud and more fairness. Using their winnings and other funds, they set up a beta site 18 months ago. They got other hardcore skill-gaming players to contribute their knowledge. Then they relocated to Silicon Valley and went through the YetiZen accelerator program in San Francisco.

“We’ve had more than 1.5 million skill tournaments so far,” Williams, chief executive of Skillville Games, said in an interview. “We think this niche is under-served.”

They were part of the first graduating class in August. In the incubation program, YetiZen brings in gaming experts to help advise the startup and then gets a small percentage ownership in return.

Skillville has five full-time employees and as many as eight working on the project. Skillville Games is looking for a round of seed funding. The founders have already put $58,000 of their own money into it. The site has 35 games available.

Some of the rivals are big. They include King.com, Worldwinner.com, and Game Duell. Skillville hopes to outdo them with better service. The company has a dynamic ranking algorithm that ensures players are fairly matched and are never forced to leave because they have achieved a rank that is too high. The company also monitors security closely for any scams, bots, and cheaters. Skillville has a dual currency model and meta game that improves player engagement and monetization. For $5 a month, premium members get access to cash tournaments, premium free roll tournaments (no entry cost and a cash prize), and access to Skillville’s Scavenger Hut with more than 1,000 prizes.

Here’s a video of Skillville Games in action. The first 50 players who send an email to rewards at skillvillegames.com can get 50 free skill tokens when they register and get 50 percent off their initial deposit to become a premium member. Upon initial deposit, players can get 500 more skill tokens.

Filed under: games

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Microsoft upgrades Xbox Live with 40 entertainment services, live TV, and Kinect voice control

Posted: 04 Dec 2011 09:00 PM PST

Xbox Live isn’t just an online gaming service anymore. Microsoft is announcing today that the new version of its Xbox Live user interface will help transform entertainment on the television. The upgrade goes live on Tuesday.

Calling it the future of TV, Microsoft is unveiling a new user interface for the Xbox 360′s dashboard; it is also unveiling dozens of new options for watching movies and TV on the console. Microsoft has also improved the quality of using Kinect voice commands to move from one choice to another, or to search through all of the entertainment options at your disposal in an instant.

The update is one of the biggest in the past five years for the Xbox 360 because Microsoft is trying to improve the experience of watching entertainment. It also includes cloud-based access and storage for gamers to improve the basic gaming experience.

“We think you’re going to use one device for movies, music and games in the future,” said Ross Honey, general manager of Xbox Live entertainment and advertising, in an interview.  “We want to make the content accessible and enhance the actual experience. We think you will want to watch it on Xbox as it is more social and more personal.”

The update will be live on Tuesday for Xbox Live users, and it will greatly multiply the entertainment options that people have in their homes, providing access to on-demand TV, movies and user-generated videos. You can, for instance, get access to 26 TV channels from Verizon’s FiOS TV services, or the complete library of 10,000 On Demand movies from Comcast. You can download the new update in a matter of minutes.

“A lot of people have said they’re going to reinvent television,” Honey said. “I’m going to say it as well.”

When you say “Xbox,” the Microsoft Kinect motion-sensor and voice communication system springs to life. Then you can say “Bing” to activate the Bing search function across the entire console and ask it to find anything related to the word “X-Men.” Bing will show you X-Men movie, TV or game selections. Then you can choose an option, such as Zune or Netflix, to view the selection. The Kinect system generally works better than it did with voice controls last year.

The new visual user interface is borrowed from Metro, the square tiles and buttons from Microsoft’s user interface for Windows Phone 7 devices. The Windows 8 operating system arriving next year features the Metro interface in smartphones, tablets and PCs. The point is that you will be able to use the interface to get to the entertainment you want more quickly. And you won’t have to relearn different interfaces to access lots of content.

You can use your voice to find the games, movies, TV shows and music. The results come back and then you can choose the service that can best deliver the entertainment to you at the lowest cost. Bing search on Xbox with voice commands will be available at first in English in the U.S., Canada, and the United Kingdom. Text search works if you don’t have Kinect. Microsoft has sold more than 57 million Xbox 360s and it has more than 35 million Xbox Live members.

You can also use your Windows Phone 7 smartphone to cruise for shows, select the one you want to watch, and then see the movie appear on your screen as your Xbox 360 fetches the movie from the cloud and streams it to your TV set. All you have to do is get the Xbox Companion app for Windows Phone.

That leads us to one of the cool things about the Xbox Live update. Now you will be able to log into your gamertag identity on any Xbox 360. You can then play your saved games or watch your in-progress movies on any Xbox 360, thanks to cloud storage.

If you want to watch new release movies, you’ll have choices such as Zune, Epix, and others. Among the catalog of services available are Hulu Plus, Last.fm, Netflix, Zune music and video and ESPN. TV providers include AT&T U-verse TV in the U.S., Telus in Canada, BSkyB in the U.K., CANAL+ in France, Vodafone Portugal, VimpelCom in Russia, and Foxtel in Australia.

Microsoft has made a lot of progress on its original vision of turning the Xbox 360 into a gateway for all living room entertainment. The console was introduced as a game machine in 2005 with the cool Xbox Live online gaming service. The next year, Microsoft added the ability to download high-definition movies on demand to the console. In 2008, Microsoft added interactive TV services with BSkyB and Canal Plus. In 2009, the company added “the New Xbox Experience” with Netflix and other streaming movie services as well as social networks. Last year, it added Kinect voice controls for TV viewing, and this year, it added services such as Hulu Plus and enhanced ESPN. With the improved ESPN, which launched in August, you can see the status of friends and find out who they are expecting to win your favorite game.

On average, Xbox 360 users are watching 60 hours video entertainment per month, or two hours per day on the console. Now Xbox Live is adding 40 new entertainment platforms on a global basis.

Microsoft is rolling out the services slowly to make sure they work right. The new apps debuting on Dec. 6 are Epix in the U.S.; ESPN on Xbox Live in the U.S.; Hulu in Japan; Hulu Plus in the U.S.; Lovefilm in the United Kingdom; Premium Play by Mediaset in Italy; Netflix in the U.S.; Sky Go in Germany; and Telefónica España Movistar Imagenio in Spain.

Later in December, you’ll be able to use Xbox Live to watch 4 on Demand (C4) in the U.K.; ABC iView (Australian Broadcasting Corp.); AlloCiné. France (AlloCiné); Germany (Filmstarts); Spain (Sensacine); United Kingdom (Screenrush); Astral Media's Disney XD (Astral Media) in Canada; Blinkbox in the U.K.; Crackle (Sony Pictures) in  Australia, Canada, U.K. and the U.S.; Dailymotion in 32 countries; Demand 5 (Five) in the U.K.; iHeartRadio (Clear Channel) in the U.S.; Mediathek/ZDF (ZDF) in Germany; MSN om Canada, France, Germany, Italy, Mexico, and the U.K.; MSNBC.com in the U.S.; MUZU.TV in Denmark, Finland, France, Germany, Ireland, Italy, Netherlands, Norway, Spain, Sweden, and the U.K.; Ninemsn in Australia; Real Sports (Maple Leaf Sports) in Canada; Rogers On Demand Online (Rogers Media) in Canada; SBS On Demand in Australia; TMZ (Warner Bros.) in Canada and the U.S.; Today (MSNBC) in the U.S.; TVE (RTVE.es) in Spain; UFC on Xbox LIVE (UFC) in the U.S. and Canada; Verizon FiOS TV in the U.S.; Vevo; and Vudu; and YouTube in 24 countries.

In early 2012, the new services include Antena 3 (Antena 3 de Televisión); BBC (BBC); CinemaNow (Best Buy); DIGI+ (CANAL+) in Spain; GolTV (Mediapro) in Spain; HBO GO (HBO); MLB.TV (MLB Advanced Media); Telenovelas/Sports (Televisa); and Xfinity on Demand (Comcast).

Filed under: games, VentureBeat

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How TV and Entertainment have evolved (infographic)

Posted: 04 Dec 2011 09:00 PM PST

Microsoft is announcing today that the Xbox 360 game console will be able to deliver 40 different TV entertainment services, making it a able to deliver a full slate of games, movies, TV and music. Users will be able to control the system with voice commands via the Kinect motion-sensing system.

For Microsoft, this is the biggest advance with the Xbox Live entertainment service since 2009, when it added Netflix movie streaming. When you stop and think about it, TV and entertainment have come a long way. Here’s a look at how TV and entertainment have evolved over the years, courtesy of Microsoft.

Check out the infographic below.

Filed under: games, media

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Holiday e-commerce season gets off to a record start

Posted: 04 Dec 2011 08:23 PM PST

U.S. shoppers are spending a lot of money after a record-setting Cyber Monday, according to data after the first week of sales after the season kick-off.

Market research firm comScore said Sunday that shoppers spent $6 billion on Monday through Friday last week. Typically, about 40 percent of spending happens in the last two months of the year.

"Cyber Monday kicked the week off with a bang as consumers opened their wallets to the tune of $1.25 billion, but it was only the beginning of a very strong week of online holiday spending," said comScore chairman Gian Fulgoni in a statement. "As the deals from this week expire, it will be important to see the degree to which consumers return to the same retailers to continue their holiday shopping, thereby helping improve retailers' profit margins, or if we experience a pullback in consumer spending – which has occurred in previous years – before promotional offers and spending intensity pick back up in earnest around mid-December."

Cyber Monday sales were $1.25 billion, the biggest online shopping day in history. On Tuesday and Wednesday, online shopping sales also broke $1 billion each day (Tuesday Nov. 29 was $1.12 billion; Wednesday Nov. 30 was $1.03 billion). Heavy discounting and promotions, as well as free shipping, got shoppers in the holiday spirit. About 63 percent of sales had free shipping, compared to 52 percent a year ago.

"Consumers have come to expect free shipping during the holiday promotion periods, and retailers, in turn, have realized that they must offer this incentive," said Fulgoni.

Online sales are up 15 percent to $18.7 billion in November and the first two days of December, compared with the comparable period a year ago. Overall, online shopping accounts for 8 percent to 10 percent of holiday spending.

A year ago, Cyber Monday sales topped $1 billion for the first time. Black Friday sales were $816 million, up 26 percent fom a year ago. Cyber Monday was $1.25 billion, up 22 percent from a year ago. The week ending Dec. 2 was $5.9 billion, up 15 percent.

Filed under: VentureBeat

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