03 February, 2012



What the fudge? iTunes Match bug replaces explicit songs with censored versions

Posted: 03 Feb 2012 08:23 AM PST

Jay-ZSubscribers of Apple’s iTunes Match service are reporting that explicit songs in their library are getting swapped out for the censored “clean” versions.

iTunes Match , which Apple launched in November, is a music service that gives legal access to any songs currently in your iTunes music library. For $25 a year, subscribers can download their songs from Apple's cloud to any device running the iOS 5 mobile operating system, such as iPhones and iPads, for no additional cost. But due to a glitch in the iTunes Match programming, users can only download the non-explicit version of their songs.

Various tracks from Kanye West, Jay-Z, and Ice Cube have been confirmed as unintentionally “clean”, according to Cult of Mac. We’re reaching out to Apple for comment and will update the post with any new information.

My guess is that this particular glitch is likely to affect people with large collections of rap music the most, while everyone else will only be slightly annoyed. Still, the clean song bug underlines the fact that the Apple’s iTunes Match iCloud service is most definitely not a true cloud storage solution.

If your music library has become child-friendly due to iTunes Match, let us know in the comment section.

Filed under: cloud, media, VentureBeat

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European regulators want Google to delay new privacy policy

Posted: 03 Feb 2012 08:13 AM PST


European regulators have asked Google to delay the implementation of a new, controversial privacy policy change because they want more time to investigate how well user data will be protected.

Google announced last week that it would change its privacy policy by combining 60 policies into one, with the changes going into effect on March 1st. While simplification of hard-to-read policies is nice, Google has attracted criticism because it will now combine user data across all Google services, including search, Gmail, YouTube, Google+, and Google Docs. First the U.S. Congress voiced concerns about the changes and now it looks like Europe wants a go as well.

The Article 29 Working Party, an independent European body focused on data protection, said it wants Google to halt the new policy to give them more time to examine it.

“Given the wide range of services you offer, and the popularity of these services, changes in your privacy policy may affect many citizens in most or all of the EU member states,” the group wrote to Google CEO Larry Page on Feb. 2nd, according to Reuters. “We wish to check the possible consequences for the protection of the personal data of these citizens in a coordinated way. In light of the above, we call for a pause in the interests of ensuring that there can be no misunderstanding about Google’s commitments to information rights of their users and EU citizens, until we have completed our analysis.”

Google has defended the privacy changes by saying it is an effort to simplify, not take advantage of its users. "We're making things simpler and we're trying to be upfront about it. Period," said Google's policy manager Betsy Masiello in a recent blog post.

The European Commission and U.S. regulators have also had its eye on Google for antitrust concerns since at least June 2011. Then Google intensified those concerns it introduced Search Plus Your World, which combines Google+ social results to basic searches.

With or without regulator concern, Google’s big privacy change will likely take effect on March 1st. You can login to http://www.google.com/dashboard to see most of the data Google has accumulated on you. It does not include everything, however, such as server logs, cookies, and key advertising data.

Google privacy image: Google Privacy Policy Update video screenshot

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Apple temporarily removes iPhones, iPad from German online store after Motorola patent fight

Posted: 03 Feb 2012 07:21 AM PST

Not in Germany you won't

You would be hard pressed to find a smartphone manufacturer that is not suing, or being sued by, Apple over patent infringement. Today news broke that Apple will temporarily remove a number of its iPhones and iPads sold to German customers online, a move that FOSS Patents ties to a ruling handed down in December on a Motorola mobility patent.

On a related note, Motorola won a new injunction today against the push email feature of Apple’s iCloud. German customers using the service will now have to manually check for new email as opposed to having it pushed to them automatically.

Being an Apple customer in Germany just became a serious pain. Germans will now be forced to go to Apple retail stores to purchase older iPhone models, or purchase the 4S online (.

Luckily the iPhone 4s is still on sale, as it uses a baseband chip from Qualcomm, unlike the Infineon/Intel chip used in previous models.

The bigger question is whether or not Motorola is offering to license its technology to Apple on a fair, reasonable and non-discriminatory basis, a law known as FRAND in the EU. Apple says that it’s not. Samsung recently got in hot water when the European Commission announced an anti-trust investigation to determine if Samsung had violated FRAND rules.

It is disturbing that a patent on a decades old beeper is affecting how consumers in Germany can purchase and use the latest products. And it seems Apple thinks so as well. In a statement emailed to PaidContent, the company said, “Apple believes this old pager patent is invalid and we're appealing the courts decision.”

VB Mobile SummitVentureBeat is holding its second annual Mobile Summit this April 2-3 in Sausalito, Calif. The invitation-only event will debate the five key business and technology challenges facing the mobile industry today, and participants — 180 mobile executives, investors, and policymakers — will develop concrete, actionable solutions that will shape the future of the mobile industry. You can find out more at our Mobile Summit site.

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Microsoft now testing Skype for Windows Phone 7, could debut soon

Posted: 03 Feb 2012 07:06 AM PST

After a surprisingly long delay, Windows Phone owners may soon be able to get their hands on a Skype app of their very own.

Microsoft is currently testing a near-final version of Skype for Windows Phone 7, and the company may be planning to launch the app at Mobile World Congress in Barcelona later this month, reports Tom Warren at the Verge.

Microsoft has been dangling the promise of a Skype app for Windows Phone for some time. The app was originally targeted for a late 2011 launch, but it obviously missed that timeline. During CES, a Skype representative hinted that a Windows Phone app was “coming soon.”

According to Warren, the Skype app won’t offer any big surprises design-wise. But it’s expected to be heavily integrated in Windows Phone 8′s People Hub, which should make it easy to Skype your phone’s contacts.

If Microsoft handles the integration right, Skype on Windows Phone 8 could be even more useful and elegant than Apple’s FaceTime on the iPhone. And given that Microsoft spent $8.5 billion to acquire Skype, I’d imagine that the company would want to make the most of its investment.

VB Mobile SummitVentureBeat is holding its second annual Mobile Summit this April 2-3 in Sausalito, Calif. The invitation-only event will debate the five key business and technology challenges facing the mobile industry today, and participants — 180 mobile executives, investors, and policymakers — will develop concrete, actionable solutions that will shape the future of the mobile industry. You can find out more at our Mobile Summit site.

Filed under: mobile, VentureBeat

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LA-based telemarketing software startup raises $15M

Posted: 03 Feb 2012 06:05 AM PST

Telemarketing is a dirty business, but someone’s gotta do it — because somehow, it’s still profitable.

Also profitable is selling software to telemarketers that allows them to track the calls they make, the responses they get (or don’t get) from consumers, and the next follow-up actions they need to take to close a sale or get a meeting.

The Leads360 team has just closed a significant funding round for building exactly that kind of software.

It’s not a lead-gen company; rather, it makes tools that help telemarketers manage and convert the leads they get elsewhere. And it’s not a CRM product, either; its software is specifically for those tricky consumers who haven’t yet been converted into customers.

The company’s cash infusion of $15 million today will allow it to keep creating and selling that software to telemarketers and other salespeople in verticals like insurance sales, for-profit universities, mortgages and other loan products, and more.

Leads360 says its software is all about marketing automation combined with telephony. The company tells us it currently has more than 40 million prospects (potential customers) being managed by its software for more than 2,000 clients, some of them among the Fortune 1,000.

The most recent round of funding, which a team member describes as “validating,” comes from Boston-based Volition Capital with participation from existing investor Rustic Canyon Partners, a San Francisco VC firm.

As expected, the marketing startup will use the new funding to expand its software products and features, to gain new clients and other partners, and to grow its own sales and marketing efforts for the Leads360 software.

"The new funding validates Leads360's vision for a combined sales and telephony software platform focused entirely on companies that sell to consumers," said Leads360 chief executive Nick Hedges in a release today.

"Leads360 does a better job than CRM systems at driving an efficient, responsive and high-touch consumer sales process that many companies spend vast amounts of time and money trying to achieve through CRM customizations."

Image courtesy of Diego Cervo, Shutterstock

Filed under: deals

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How Camera+’s John Casasanta made millions off a $1 app

Posted: 03 Feb 2012 06:03 AM PST

Earlier this month, Tap Tap Tap reported that its Camera+ iPhone app had raked in $5.1 million since launching in June 2010. In this exclusive interview with Tap Tap Tap founder John Casasanta, we talk about the company’s run-ins with Apple, the secrets behind its record download numbers, and developers’ hopes for the iPhone 5.

VentureBeat: Camera+ has been out since June 2010 and has had its ups and downs (volume button shutter release, anyone?). Tell us a little about the app and Tap Tap Tap’s history.

John Casasanta: I’m one of the original founders of Tap Tap Tap. We started back when the App Store first opened and I headed-up the company. I came up with the original concept for Camera+ back in Summer of 2009 but it’s come a long, long way since then. Along the way, we’ve released a lot of updates with many new features and enhancements and grown the development team from just a few people to around 15. I currently serve as producer of the app, but turning the app into what it’s become has been a major effort by many very talented people.

The app was kicked-out of the App Store for around four months in 2010 but then returned in late December of that year as version 2 and spent most of 2011 toward the top of the charts. It was the top selling non-game app of the year. The thing that lead to us getting booted from the App Store was violating Apple’s guidelines by including a feature that enabled users to snap photos using the iPhone’s volume button. Yet in iOS 5, Apple adopted that very feature and tried to pass it off as their own. After more bureaucratic bullshit than I care to mention, we finally got the feature back in Camera+ with our latest update.

VB: Your blog post about the sales numbers is interesting in many regards. What I don’t see is a discussion of how price drops have played into the spikes or sales figures. Do you see temporary sales or price drops as a viable contributor to Camera+’s current success?

Casasanta: One funny thing about the App Store and pricing is that an app will tend to gross roughly the same amount no matter what the price of it is. If we double the price of an app, the sales will typically go down to around half the level they were for a net gain of around zero. There’s usually a short spike associated with putting an app on sale and the charting effect can work in your favor in some cases, but in general, longer sales generally have a negligible (and sometimes a negative) effect on grossing. One thing that lower pricing is useful for, though, is building-up your customer base if you’re shooting for bigger raw sales numbers.

Along those lines, we’ve just had our biggest month to date and have actually hit over 1 million sales for the past 30 days. It’s a pretty incredible milestone for us and it’s truly amazing to see how Camera+ has grown since its inception.

Camera+ Million in a Monthexclusive to venturebeat

VB: There are seven apps on Tap Tap Tap’s website. How have the sales of the other apps helped or hindered Camera+ development and sales? Do you have app-specific teams, or does your whole company work on an app at a time? Do you think diversifying is still an important activity for developers in the face of an overwhelming success like Camera+?

Casasanta: The various apps have little to no effect on one another. The development teams are distinct for each app (with some overlap here and there). Companies often try to build-up their brand but we’re just the opposite. Besides the actual Tap Tap Tap website, you’ll rarely see the Tap Tap Tap logo on the website for an individual app, except at the very bottom of the page. We work hard on building-up the brands of the individual apps versus the company brand. So there’s not much benefit that one of our apps will get from the existence of any of our others.

Over time, it’ll make more sense to focus on building the company brand, but we’re nowhere near that stage yet. It’s a common mistake for startup to swim against the grain and try and do that from day one versus focusing on what’s really important.

Diversifying is something we’re doing mainly because there are so many interesting things to create. We could put everything we’ve got into just Camera+ development, but that’d be boring because there’s so much more out there.

We’ve been very fortunate so far in that all of the apps we’ve launched to date have made it into the top 10. Each of them has had varying levels of success with Camera+ obviously being the most significant with over 6 million sales to date, but we’re now closing-in on our 10 millionth overall sale for all our apps. So the other apps play a big part in our success and we’re hoping that some of the things we have in the works will be even bigger successes than Camera+.

Camera+ IconVB: Your blog post mentions how the iPhone 4S release, with it’s many hardware camera improvements, helped drive sales of Camera+. Do you plan on capitalizing on the release of the iPhone 5? If so, how?

Casasanta: We were planning on capitalizing on the iPhone 5 back in June but they stuck us with this interim 4S thingamajig for now. But yeah, when an iPhone 5 really does [appear] and assuming that it has even more improved camera hardware, we’ll be doing what we can to take advantage of it.

But more than the camera hardware itself, I see some of the more significant improvements being done in software. Currently, the iOS SDK is fairly limiting regarding giving third-party developers low-level access to the camera hardware, and I definitely see that situation improving over time. When it does, we’ll be right there to do our best to add some cool things to Camera+.

VB: What’s next for the Tap Tap Tap team? Any plans for more in-app content for Camera+? Do you see in-app purchases and freemium app marketing strategies as the wave of the future or only the current fad?

Casasanta: We’ve been working very hard on Camera+ 3.0 since late Spring of 2011 and we’re finally close to getting it out the door. I don’t want to spoil the surprise and mention all the cool things that are in it, but I’ll throw you a teaser and say that one of the things that 3.0 will include is a very comprehensive API for third-parties to take advantage of. We’ve already seeded the beta of it to select developers so they’re already building it into their apps and we’ll have a bunch of great apps working with it for the launch.

As far as in-app purchases go, we’re being fairly cautious with that. Through in-app purchases, it’s become far to easy to turn an app into a nickel-and-dime-your-customers machine. One of our competitors, Hipstamatic, has greatly suffered because of that.

But this isn’t to say that we’re completely against it. For Camera+, we currently offer one add-on effects pack that sells for 99¢ and we get tons of requests to add more. So we plan to over time but were going to be very careful about the fine balance between adding value and bleeding customers.

The direction the industry is moving in this regard really does sicken me. The trend (mostly with games) is to have companies sitting around a big table brainstorming how to waste people’s time enough to the point where they pony-up some dough via virtual trinkets to prevent it. This is very unfortunate for society in general and companies like Zynga are the root of this evil in my opinion. Maybe I’m just old and crotchety but I recall a day when the primary goal of game designers was to create fun games. But I guess this new way is what we’re going to have to expect in this post-”appocalyptic,” 99¢ world where many of these entities can only be loosely called games.

And what saddens me about all this is the number of people who are OK with having their time wasted in this fashion. These are all the people who play these freemium games but don’t pay for the in-app purchases. From what I understand about the low percentage of people who actually pay, this number is pretty high. It kind of frightens me to think of what kind of society we’re becoming where the masses have built-up a tolerance to this kind of thing.

But worse, Apple is encouraging this behavior by featuring these apps. Apple used to set the standard for quality and one thing that the App Store has undoubtedly done is drop Apple back several notches in the quality department. I don’t think there’s anyone out there who’s been a fan of what Apple produces who looks at the App Store as a model of anything resembling quality overall. To put it bluntly, the App Store has been one big wart on Apple’s once fairly pristine ass. The good thing is there’s nowhere to go but up.

And again, I’m not trying to say that in-app purchases are inherently evil, even in games. One example of doing it (relatively) right is Rovio with their Mighty Eagle in-app purchases in the Angry Birds games. While I’m not a fan of the aspect of paying for it to more easily advance past levels, what it has done is added another dimension to the games themselves. Essentially, they’ve done it in such a way that you get a lot of replayability out of the games and it’s not done in the sleazy way that’s unfortunately becoming the norm for the so-called “games” these days.

For more info on the apps, including Serenity, Tap Tap Tap’s latest app offering, check out the company’s website, or its blog.

Top image via MacHeist

Filed under: mobile, VentureBeat

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Peek a boo! As it abandons U.S. devices, Peek raising $15M for Asian expansion (exclusive)

Posted: 03 Feb 2012 05:19 AM PST

The aspirational Android

Gadget blogs pounced on Peek yesterday when the company announced it was killing of service for its devices running on T-Mobile. What they missed was a $15 million fund raise from Peek, confirmed by chief executive Amol Sarva to VentureBeat, as it expands its business aggressively in Asia.

On January 30th users who had paid $299 for “lifelong service” on the companies bare bones email and Twitter devices were surprised to find that they no longer worked. CEO Sarva didn’t offer up much of an apology.

“Unfortunately we cannot maintain the network forever for a few users, so that end time has come. The networks are changing standards, protocols etc and the old units are now end of life,” he told Endgadget. “We have lots going with rapid adoption of our software by phone brands around the world, so Peek is flat out building for a number of platforms that our OEM customers are deploying like Android and Mediatek. We are not offering a Peek-made device to replace these old ones.”

Peek has pivoted from producing hardware to delivering a cloud platform that lets the explosion of mobile consumers in Asia run smart phones apps on relatively low end feature phones. “Demand for this is very high as India and other markets have huge numbers of people wanting to use their phones with email, chat, web, social network and other Internet services,” Sarva told VentureBeat by email. “Yet most cannot afford expensive devices. Using Peek’s cloud platform and software, we can bring this to simpler devices.”

The company is partnering with vendors like India’s Micromax, who’s ad campaigns encourage customers to believe that they deserve an iPhone, even if they can’t afford it. “The biggest trend for us now is our suite of services for Android on the lowest cost platforms. Android will be widely available on $20, 200 Mhz phones very soon –> but not in the form being designed in Mountain View and not with Google’s web services,” writes Sarva. “As more people can afford qwerty and touch screen phones, and as our partners install Android on these phones, our software makes it possible for high performance apps. Peek’s mail app is 10x smaller than Google’s Gmail app on Android.”

It’s not clear yet whether Peek’s American customers will demand to made whole for their “lifelong service”, but the news that the company is still very much in business and flush with capital is certain to irk Peek patrons who found their devices suddenly stopped working.

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Forget $100B! Facebook could soon be worth $200B

Posted: 02 Feb 2012 07:58 PM PST

This is a revised version of a story that appeared on CNET earlier today; it is republished with permission.

For all the naysaying about Facebook, that it’s a flash in the pan and such, there are very few that say that “social” is going away.

Facebook has defined the social era of computing — and the companies that defined the previous eras of computing each command market values of $200 billion or more.
Facebook should get there, too.

IBM kicked off the mainframe era of computing and to this day is the leader in big enterprise computers and services. Microsoft was an early leader in personal computer software and now dominates microprocessor based desktops and servers. And after joining the scrum at the tail end of the dotcom boom of the 1990s, Google emerged as the leader of the Internet era of computing, amassing huge market share and most of Internet advertising’s profits.

While many still think of Apple as a computer company, it’s not. It’s reinvented itself as the leader of the mobile era of computing. Three quarters of Apple’s revenues are now from the iPhone, iPad, and iPod, and it is in the process of re-creating the Mac as a mobile computer with the MacBook Air. Apple, as the leader of the mobile era of computing, is now valued at an astounding $400 billion plus.

Given the history of IBM, Microsoft, Google, and Apple, which led the mainframe/minicomputer, personal computer, Internet, and mobile eras of computing respectively, it is not that much of a stretch that Facebook, as the company that defines the social era of computing, will be right up there with them. Each of these eras has produced prodigious revenue and earnings, and as Facebook’s S1 filing shows, social is already well on its way to stellar revenue and earnings, making the bulk of its money the way Google does, through advertising.

The leaders of each era have managed to lock in a generation of users ranging from business datacenters, PC operating systems and applications, and the portal by which people search. Facebook’s social graph will be just as persistent. While other niche social networks will emerge, most of us aren’t going to switch.

Of course, Facebook’s current revenue and earnings do not justify such a valuation, but Facebook is still young and doubtless will figure out plenty of ways to make more money, including selling valuable new ad units such as sponsored stories against its increasing number of mobile users. As long as it continues on its existing trajectory, the leader of the social era of computing will join the $200 billion club.

Or — dare I suggest? — the $400 billion club.

Peter Yared is CTO of CBS Interactive and has founded four e-commerce and marketing infrastructure companies that were acquired by Sun, VMware, Webtrends and TigerLogic. You can follow him at@peteryared.

Photo credit: Peter Yared/CNET

Top image credit: Image credit: Jolie O'Dell/VentureBeat

Filed under: deals, social, VentureBeat

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Sorry Facebook, mobile users just want to text

Posted: 02 Feb 2012 06:29 PM PST

Mobile content usage spanning everything from downloading apps to browser and social network usage continues to escalate, but nothing is taking off quite like texting.

Nearly 75 percent of all U.S. mobile subscribers now send text messages, according to new data from analytics firm comScore.

The data, gathered from a monthly online survey of 30,000 mobile subscribers ages 13 and up, reflects an ongoing shift in the changing behaviors of the more than 234 million American mobile consumers. Mobile users continue to show an increased propensity to consume content, download apps, listen to music, and play games on their devices.

In December 2011, 74.3 percent of mobile consumers (an increase of 3.2 percent from September) used text messaging on their device, 47.6 percent (up 5.1 percent) used downloaded applications, and 4.6 percent more subscribers, or 47.5 percent of the total audience, used a mobile browser, according to comScore’s data.

Social networking is also on the up-and-up, though it’s still nowhere near as popular as texting. Thirty-five percent of mobile subscribers accessed social networking sites or blogs, an increase of 3.8 percent from September. So Facebook, which hasn’t figured out how to monetize mobile, may still have some time on its hands before the masses get acclimated to mobile social networking.

comScore, which also looked at mobile software and hardware market share, found that Samsung still reins as the top mobile handset maker. With 25.3 percent market share, Samsung kept its hold over LG and Motorola, which both lost around half a percent of share. Apple, meanwhile, was up 2.2 percent in the OEM market and closed out December with 12.4 percent share.

On the software side of things, Google’s Android operating system nabbed an additional 2.5 percent of the smartphone platform market to maintain its number one position with 47.3 percent share. Apple too added 2.2 percent share and is still the strong number two with 29.6 percent of the smartphone platform market. RIM, Microsoft and Symbian, in contrast, all lost share.

Photo credit: Shutterstock

VB Mobile SummitVentureBeat is holding its second annual Mobile Summit this April 2-3 in Sausalito, Calif. The invitation-only event will debate the five key business and technology challenges facing the mobile industry today, and participants — 180 mobile executives, investors, and policymakers — will develop concrete, actionable solutions that will shape the future of the mobile industry. You can find out more at our Mobile Summit site.

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LG’s scanning mouse now connects to Evernote, Dropbox, more (exclusive)

Posted: 02 Feb 2012 06:26 PM PST

Mouse Scanner LGYeah, I definitely drew this.

No need to jump on your chair for this mouse, LG‘s mouse scanner is friendly and going to bring a lot more productivity your way.

“Today many people don’t use a scanner because they have no easy access to digitizing the information,” said Dacuda chief executive Alexander Ilic, “The mouse market is really huge, so instead of buying old fashioned devices, we think it should have a new spin.”

This might not be the scanner with the highest resolution, or the best color stitching, but it is certainly the most fun to use. Dacuda licenses its mouse scanner technology out to LG, and unveiled its product to the US market during the Consumer Electronics Show this year. The company’s five new partners allow the scanning technology to be not only convenience, but functional for use in the cloud. As Ilic explained, using scanned information is cumbersome, and impractical. In essence, it uploads an image for you to decipher and translate to the rest of your applications. The LG mouse scanner, however, turns your text into text in your Word or other editor, lets you upload it to Dropbox or Evernote directly from the software and that’s just what it does with words.

lg mouse scanner software“We started [Dacuda] in 2008 with the crazy idea of having a device where you can wipe in any direction, any speed, and capture what’s on paper. We were sick of recreating our designs in PowerPoint,” said Ilic.

For Ilic, scanners have existed for some time, but they are yet another device that clutters our desk. He and Dacuda’s other three founders were frustrated when they realized how useless their scanner was in translating their written thoughts to the Web. The four considered themselves creative types and drew their ideas on paper, but their scanner was no use in digitizing those pictures. Instead, they were left to recreate them in PowerPoint, which Ilic describes as an arduous process.

So they created their first mouse-scanning prototype: a wooden box with a webcam inside. This led to the company’s overall vision: have fairly standard hardware like a cheap webcam inside a regular mouse, but exceptional software to take advantage of the images that come through. The new application partnerships help that software come to its full potential.

The partnership with Dropbox takes care of Dacuda’s original gripe: having to translate written images into Power Points. In this case, all you have to do is swipe the mouse scanner over your image, edit or crop as necessary and then upload to Dropbox where someone else can then access the image and add to it.

Dropping your scans into Evernote is also helpful for when someone passes you an interesting piece of paper that you want to remember, but it goes beyond that. Given the mouse’s mobility, you can scan t-shirts, DVD covers, logos and more and upload them straight into your account.

The next three partnerships work with a mouse pad that comes packaged with the scanning mouse. This mouse pad allows you to put various pieces of paper underneath the pad’s clear plastic overlay for easy scanning. This helps in particular for folded or curled up notes.

Expensify helps companies to organize their expense reports, and makes it easy for employees to file them. The mouse scanner’s Expensify app allows your to slip a receipt into the mouse pad, scan it and populate all the important data into an Expensify report. Rejoice, heads of finance, your employees don’t have an excuse to be late on expense reports anymore.

Mouse scannerThe partnership that I think will make the most waves with my peers is that of BizCard. With a BizCard account, you can put any business cards that you receive into the mouse pad and the scanner software will populate your BizCard contacts list with all of the information found on those cards. Dacuda is working on a feature that will let you line up and scan 10 or more cards at one time to your BizCard account.

Lastly, Lemon allows you to submit all your receipts to the service, which will then analyze your spending to help you financially plan. Similarly to Expensify, all you have to do is scan in your receipts using the mouse pad and let Lemon do the rest.

These types of partnerships and this kind of software really shows that while the hardware helps, it’s the connectivity that really makes the difference. Currently, the suggested retail price for this mouse is $129. Check back for videos on each of the partners and see how the mouse works in action.

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What Facebook isn’t telling you about its risky ad business

Posted: 02 Feb 2012 05:37 PM PST

Zuckerberg's desk

In its IPO filing Wednesday, Facebook identified mobile’s limited revenue potential, competition from other social networks, and the potential loss of advertisers as factors that could seriously harm its business. But was the social networking company, which relied on advertising for 85 percent of its revenue in 2011, forthcoming enough about the real risks associated with its primary money-maker?

“The issue of click-through rate was not mentioned as a risk in the S-1,” said Peter Adriaens, a professor of entrepreneurship at the University of Michigan's Zell Lurie Institute for Entrepreneurial Studies. That omission stood out for the Internet IPO expert because research suggests that the percentage of Facebook users who actually click on ads is quite low, and that means advertising dollars could eventually drop.

Facebook does not publish its average click-through rate (CTR), but independent analysis from Webtrends on more than 11,000 Facebook campaigns showed that the average CTR for Facebook ads in 2010 was 0.051 percent, which is about half the industry standard CTR of 0.1 percent. The rate, according to the Webtrends report, dropped from 0.063 percent in 2009, which points to a downward trend.

“Even though [Facebook] talked about … the fact that it has about 40 percent of all the online banner ads, that the cost per advertising paid to the company has gone up by 18 percent,” said Adriaens, “it didn’t take it all the way through to the next step and that is the click-through rate.”

Advertisers bid for ads on Facebook and are willing to pay a high premium because of the company’s targeting capabilities, Adriaens said. “The question then is,” he opined, “are advertisers going to continue to be willing to pay this premium to put ads on Facebook if the Facebook users don’t actually click on these ads?”

Facebook, for its part, partially alluded to this potential risk in the S-1, but didn’t do so in a way that provided full transparency to would-be investors, Adriaens argued.

Advertisers may view some of our products, such as sponsored stories and ads with social context, as experimental and unproven. Advertisers will not continue to do business with us, or they will reduce the prices they are willing to pay to advertise with us, if we do not deliver ads and other commercial content in an effective manner, or if they do not believe that their investment in advertising with us will generate a competitive return relative to other alternatives.

In Adriaens’ opinion, Facebook is leaving key pieces of information about the future health of its advertising business off the table by not mentioning CTR and its change over time.

Mindjet CMO Jascha Kaykas-Wolff disagrees. “Facebook doesn’t need to disclose this information,” he said.

Because of Facebook's rich targeting options, and an advertiser's ability to know that a campaign was seen by the exact audience intended, Kaykas-Wolff said that his company is willing to spend more on Facebook ads than it would elsewhere, sometimes bidding as much as $1 for CPC (cost per click) campaigns. "Facebook is one of the cornerstones of our media mix for the remainder of the year," he added.

The CTR is immaterial to Wolff’s primary objective, which is to place ads in front of specific audiences and get validation that people saw the ads. For now, Mindjet is happy with "likes" and shares on the sponsored ads it runs. "We're not trying to drive click-throughs, we're trying to drive activity," he said.

Having previously worked at Involver with brands on the platform side of Facebook’s business, Kaykas-Wolff strongly believes that he’s not alone in his bullish stance on the appeal of Facebook ads. More mid-market companies will test the waters and increase their Facebook ad spend in the years ahead, he predicted. Plus, he has full confidence that the social network has plenty left up its sleeve and will release even better targeting options and more types of ad units in the months and years ahead.

Of course, that logic presumes that Facebook will be able to continue to collect a slew of data on its members for targeting purposes, which is no longer a given in countries in the European Union.

“[Facebook] talked about the risk of privacy laws … but what was not mentioned is that the European Union issued a list of 35 requirements related to privacy that Facebook is going to have to adhere to,” Adriaens pointed out. “[Facebook] can’t automatically collect the data that it might be collecting in North America … so what I see going forward is this challenge … of having to deal with very fragmented privacy laws. Those privacy laws are directly going to affect the value of Facebook’s data to its advertisers.”

Photo credit: Mark Zuckerberg/Facebook

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Windows Phone 8 ‘Apollo’ may offer support for Skype, NFC, more

Posted: 02 Feb 2012 05:24 PM PST


Microsoft’s upcoming software for Windows Phone, dubbed “Apollo”, will offer integration with Skype and Windows 8, according to internal video uncovered by Pocketnow.

The Windows Phone OS will have a make-or-break year in 2012, and it’s already off to a good start by being featured in Nokia’s anticipated Lumia 900 smartphone and a few other powerful devices that were pushed by CEO Steve Ballmer (pictured) at CES 2012. Another big update to the phone’s software to support more features will likely help the platform attract more people.

The internal video from PocketNow covers new features that can be expected with Windows Phone 8 software, including multi-core processors, four different screen resolutions, microSD storage, and even Near Field Communication (NFC) support for mobile payments.

We’d previously heard that a Skype application for Windows Phone was coming soon, and that still appears to be the case with this leak. Skype, which was officially acquired by Microsoft as of October, still doesn’t have a Windows Phone app, but it will have very good one soon. It will be optional and not be directly integrated with the OS.

Other things that should be on the way include companion experiences with Windows 8, including sharing content and syncing across devices, Internet Explorer 10 Mobile, camera improvements, and business features. There should also be SkyDrive integration for better file management in the cloud.

Steve Ballmer and Ryan Seacrest photo: Sean Ludwig/VentureBeat

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Xbox co-creator Seamus Blackley launches mobile-game startup with Atari arcade veterans

Posted: 02 Feb 2012 04:55 PM PST

Seamus Blackley, the co-creator of the Xbox, passionately believes that gameplay will triumph in the game business. That is why he and his new startup are relying on a team of famous designers from Atari to make a series of games for the Apple iPhone and iPad.

The idea that he and his partner, chief executive Van Burnham, have dreamed up is to use the creators of the best arcade experiences from the golden age of Atari in the 1970s and 1980s to create games for the “new arcade” on iOS devices.

“We are looking at the new arcade, and 99 cents on the iPhone is the new quarter,” Blackley (pictured above), president of the startup Innovative Leisure, said in an exclusive interview with VentureBeat. “People are playing on all these new devices and are finding the joy of the arcade games.”

The “Jedi Council” team includes Ed Rotberg, creator of the classic Atari game Battlezone; Owen Rubin, creator of Major Havoc and Space Duel; Rich Adam, creator of Gravitar and co-developer of Missile Command; Ed Logg, co-creator of Asteroids and Centipede; Dennis Koble, creator of Touch Me and Shooting Gallery; Tim Skelly, the only non-Atari veteran arcade game designer who worked for Cinematronics and created games such as Rip-Off; and Bruce Merrit, creator of Black Widow.

“This is the dream team from Atari,” Blackley said.

All told, there are 11 arcade game creators who are banding together at Innovative Leisure. They are joined by young interns in their 20s who will work with the veterans to help design new apps. Altogether, Innovative Leisure has 30 employees — a big team for a fledgling startup. To finance the overhead, Blackley has invested his own money and raised funds from publisher THQ. Next week in Las Vegas, at the industry’s Dice Summit, Blackley and his team members will talk about their vision for “the new arcade.”


The startup has been a long time in the making. Some of the Atari veterans participated in a Time magazine cover story on video games in 1982; it was titled, “Gronk! Flash! Zap! Video games are blitzing the world.” But a couple of years after that, Atari changed ownership and the golden age of arcade games came to an end.

Burnham got to know many of the creators from Atari while writing her 2003 book, Supercade: A Visual History of the Videogame Age 1971-1984. She introduced them to Blackley. They realized that the small group of designers had a tight relationship, getting together on an annual basis for the Gonzo Invitational, a golf tournament for Atari alumni that began in 1998.

Blackley helped launch the Xbox in 2001 and left Microsoft in 2002. He worked at game-production startup Capital Entertainment Group before becoming an agent for game developers at Creative Artists Agency. There, he represented legendary designers such as Will Wright (The Sims) and Tim Schafer (Psychonauts), helping them get a bigger ownership stake in their companies and properties in negotiations with publishers.

Meanwhile, Burnham and Blackley began building their own arcade in a Los Angeles warehouse. Dubbed “Supercade,” it has tons of old machines that Blackley repaired and refurbished himself. It is a vast place with row upon row of machines with flashing lights and ringing bells. Walking down the aisles is a trip down memory lane: Every person who visits Supercade becomes a kid again as they find an arcade machine from their childhood days.

He and Burnham curated and hunted down machines that would best illustrate a history of gameplay. And when Blackley left CAA last summer after eight years, Supercade figured big in his plans for his next gig.

“We had that big collection of games, and we love the history of game design,” Blackley said. “I’m lucky because I love games and following that love has always done me well. Once we figured out the iPhone is the new arcade, that games from the old days fit this new audience and their on-the-go lifestyle, we knew what to do. There is already a group of people who know how to operate and innovate in this space. They had the longest string of hit games in history. And they wanted to get back together again.”

Getting the band back together

The idea, Burnham said, was to “get the band back together.” Many of these veterans went on to careers at Apple and other places outside of gaming, and most of them thought the arcade days were over. But they all considered their time at Atari to be the most rewarding in their careers and are reunited thanks to Blackley’s vision.

“I’m here because of Seamus,” said Rotberg (pictured right), who works remotely from Grass Valley and is excited to be working on games again. Like the other veterans, Rotberg is paired with an intern and are working on a new title together.

“These kids are thrilled to learn how to make games with the inventors of gameplay,” Blackley said.

The team came up with 30 game ideas and whittled them down to 10. They pitched them to THQ, which said that it wanted all of them. So far, seven of those titles are in the works. Most of them are already in prototype form.

“It’s been very easy to support Seamus and his team on Innovative Leisure because they are all super-smart dudes who care about games,” said Lenny Brown, vice president of creative and business development at THQ.

Blackley said that the creators of coin-operated games know how to do things like grab the attention of the gamer in the first few seconds and make him feel like he’s accomplished something in three or four minutes of play.

Coin-op games had to stand out in an arcade and generate money for weeks in order to be profitable, so the process of making them and refining them was very rigorous. And while the iPhone has far more computing power than the old machines did, it is constrained in terms of memory and processing resources compared to modern consoles. So designers have to know how to efficiently use the device’s resources.

While many other big companies have been accused of copying or making derivative titles, Blackley believes strongly in making original games.

“We are carrying on where Atari left off, focusing on innovation in gameplay,” Blackley said.

Blackley said the team can work together in the arcade warehouse and be inspired by the different games that are there. He says it is important that the group works in a collaborative way. They are divided into different projects, but, as at Atari, they are free to help — and offer criticism — on other projects.

“They have worked together before, and they have a development rapport that is magical,” Blackley said.

THQ has first right of refusal on the games, in exchange for financing. That’s a little risky, since THQ is on shaky financial ground. But Blackley said his team is low overhead, and it is a more efficient use of THQ’s money. And if THQ chooses not to publish a game, Innovative Leisure is free to take the games somewhere else. Indeed, companies like Atari itself might want to tap its former designers to make modern versions of its old games.

But Blackley says the focus will be on original games. He is knee-deep in the creative process. As a former game developer (and theoretical physicist) who created physics-based games such as Trespasser, Blackley likes to get technical. He feels at home writing code and talking about it with his team members.

“We have to create a quality experience, hone it, and tweak the crap out of it so that you get the same level of gameplay that people demanded in the arcade era,” Blackley said. “It’s scary as shit if you don’t understand gameplay.”

Blackley said his team of veterans had license in the old days to do “crazy stuff,” using a rapport to riff on each other and craft wonderfully creative games where you could shoot worms or missiles and play with roller-skating bears.

Filed under: games

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Tim Cook expresses pride over Apple’s philanthropy

Posted: 02 Feb 2012 04:43 PM PST

tim cookApple is not well known for its charitable contributions, but Apple chief executive Tim Cook wants to change that perception. During a company meeting last week, Cook talked about Apple’s contributions to local charities and its participation in global campaigns.

Cook told Apple employees that the company has donated $50 million to Stanford’s hospital, the Verge reported. In addition, Cook also talked at length about Apple’s participation in (Product) RED, a charity fighting against AIDS, tuberculosis, and malaria. According to Cook, another $50 million has been donated to (Product) RED, though it’s unclear if the money came solely from the sale of (Product) RED branded iPods and iPad Smart Covers or if Apple donated additional money as well.

Before former Apple CEO Steve Jobs passed away, many people brought up the fact that he hadn’t personally contributed any of his estimated $3.8 billion wealth to charity. A New York Times column also pointed out that Jobs declined to join Bill Gates and Warren Buffett in the Giving Pledge, a charity that encourages wealthy Americans to donate half of their wealth to charity. And, according to the the book “Inside Apple”, Jobs at one time mentioned to employees that giving away money was a waste of time.

It’s clear that in regards to giving money away, Cook takes the opposite stance. Shortly after Cook took over, he announced a new employee matching donation program, in which Apple matches up to $10,000 per year for the charitable contributions its employees make.

But Apple’s charity efforts fall short when you look at the $97.7 billion the company now has in cash. The reported $150 million that Apple has given away is a small drop in the bucket even compared to $46.33 billion, the revenue Apple made in the first quarter of 2012. In addition, the labor issues stemming from Foxconn, the company that manufacturers the iPhone and other Apple products, only hurts the company’s newly found charitable image.

Even with Cook’s plans to step up charity efforts, it’s still a mysterious part of the company. Do a search of Apple’s site and you’ll have a hard time finding any information about community outreach or company donations. Heck, search the web for “apple charity donations” and the only hit you’ll get from Apple is from its Australian website. If Apple does have an official charitable contribution policy, it sure does a good job of hiding it.

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Simply Hired fires a big part of its staff (exclusive)

Posted: 02 Feb 2012 04:08 PM PST


Updated at 5:03 p.m. PT with more info about which teams were let go.

VentureBeat has learned that job search startup Simply Hired has laid off approximately 20 percent of its staff, according a source close to the company.

After repeated queries, the company would neither confirm nor deny the percentage of staff that it had laid off. However, it did admit that it had “consolidated” and “expanded operations offshore,” which means the Sunnyvale, Calif.-based startup has let go of at least some U.S. staffers. We left the door open for more information from the company, but it would only give us the following statement:

"As part of its 2012 strategy, Simply Hired made some changes to its organization,” said Simply Hired CEO Gautam Godhwani via e-mail. “We consolidated Bay Area operations to our new headquarters in Sunnyvale and expanded operations offshore. These changes were implemented at the start of the year as part of our annual planning process. The company is profitable with continued growth in Q1."

Additionally, a second tipster has informed us that President/COO Dion Lim, VP of Sales Brian Corey, the QA team, and most of the sales team were let go in the layoffs.

Simply Hired competes with other job search sites like Monster, Indeed, LinkedIn, and Dice. In mid-2010, the company took a big step with Facebook integration that would let you look up jobs based on where your friends work. As of today, the company counts LinkedIn, Twitter, PCWorld, BusinessWeek, and CNNMoney.com as partner sites. The company wouldn’t confirm how many employees it has, but 92 people listed themselves as employees of SimplyHired in professional profiles on LinkedIn.

In a second case of irony, Simply Hired owns the website www.simplyfired.com. When you go to simplyfired.com, the site re-directs to simplyhired.com. With regard to the layoffs, that’s unfortunate.

Simply Hired has raised $22.3 million in funding to date. It last raised $4.6 million in fourth-round capital in August 2009 from IDG Ventures and Foundation Capital. The company also had prior investments from Fox Interactive Media, Garage Technology Ventures, Ron Conway, Dave McClure, Guy Kawasaki, James Hong, and others.

If you know any other details about the Simply Hired layoffs (or any other pressing news), please drop us a line at tips@venturebeat.com.

Unemployed worker photo: Lasse Kristensen/Shutterstock

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6waves Lolapps chief denies violating NDA in copyright dispute with Spry Fox (exclusive)

Posted: 02 Feb 2012 04:06 PM PST

Rex Ng, chief executive of 6waves Lolapps, denied allegations that his company violated a non-disclosure agreement in a case related to allegations of copying Spry Fox’s social game on Facebook.

Spry Fox, a small game developer in Seattle, said last Sunday it filed a copyright infringement lawsuit against 6waves Lolapps because 6waves’ Yeti Town mobile game copied the gameplay and look of its Triple Town Facebook game. The issue of copycat games has raised considerable discussion in the industry, including commentary from Zynga CEO Mark Pincus.

Included in the allegations: Spry Fox said that it had a non-disclosure agreement with 6waves Lolapps (also known as 6L).

“While it's not included in the lawsuit, the authors suggest that our business development team shared information with our game development team about Spry Fox's title,” Ng said. “I want to be very clear: this accusation is unjustified and plainly not true. We have not broken the NDA signed between 6L and Spry Fox.”

Ng noted that Triple Town was publicly available on the Amazon Kindle platform in October 2010. Yeti Town, which launched in December 2011, was developed “in isolation from 6L by a company we acquired in January 2012- a month after the game had launched,” Ng said.

6waves Lolapps was referring to its acquisition of Escalation. He noted that  6L was formed as a result of the merger between 6waves and Lolapps and continues to maintain two distinct teams: publishing and development.

“Our business development team is focused on growing, and promoting the developer ecosystem, which includes more than 50 independent developers we have partnered with,” Ng said.  “Our business is based on trust, which we earn and maintain by keeping the highest level of confidentiality.”

We’re seeking a comment from Spry Fox.

Filed under: games, mobile, social

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THQ CEO admits confidence was “misplaced” on children’s video games

Posted: 02 Feb 2012 03:41 PM PST

THQ chief executive Brian Farrell ate some major crow on his company’s analyst conference call today.

“We anticipated our third fiscal quarter would be the largest in our company’s history,” Farrell said. “Unfortunately, we were wrong.”

The weakness in the third fiscal quarter was due to poor sales of the uDraw tablet, a kid-oriented drawing tablet that was a hit last year on the Wii. But poor sales of uDraw dragged down the quarterly performance, even though the company had big hits with WWE ’12 (2 million units sold) and Saints Row the Third (3.6 million units sold).

In the call, the company detailed the disastrous uDraw tablet sales on high-definition platforms. The company shipped 1 million tablets into the market and sell-through was poor. Sales of the tablet turned out to be $100 million less than expected, while other casual/kids titles were $25 million below the target. One of the reasons is that the iPad and iPod Touch have taken the kids market by storm in the past year, since kids can get thousands of apps for free or at lost costs.

The company was confident from last year’s sales that the uDraw title would be a big seller, but Farrell said, “Our confidence was misplaced.” The failure prompted THQ to analyze its business from “top to bottom,” Farrell said.

Farrell’s straight talk is admirable, but it doesn’t seem to have pleased investors. In after-hours trading, THQ’s stock is down 26 percent to 56 cents a share. That gives the company a valuation of $51.9 million, barely above the $47 million in cash that the company has.

“We were looking at uDraw as a bridge to a digital revenue market,” Farrell said. “But that bridge turned out to be a plank we walked off of.”

THQ has had to heavily discount the uDraw tablets, resulting it $33 million in losses. Further production of uDraw hardware has been halted. A charge of $11 million against earnings will be taken in the fiscal fourth quarter ending March 31. About $8.5 million of that charge will be cash.

Farrell said THQ has canceled the Adidas My Coach game and it now expects to sell 1.5 million units (below a previous estimate) of UFC Undisputed in the fourth fiscal quarter ending March 31. THQ will now focus on its hardcore game properties. The various cutbacks, including layoffs of 240 employees, will result in $160 million in lower annual spending this year.

“Over the past two months we reviewed all aspects of our business,” Farrell said. “Our plan is to transform THQ into a smaller, more agile entertainment company.”

The company has been encouraged by feedback on the Darksiders II game and is doubling its expected marketing spending on the game, which will come out in June.

Last week, THQ launched its Margaritaville Online social game on Facebook. Regarding that, Farrell said the rate of monetization and engagement is higher than usual for such a game.

John Taylor, an analyst at Arcadia, noted on the call that THQ has been trying to restructure itself for a few years now and it hasn’t had success yet. He asked if there was a contingency plan if the current restructuring doesn’t work. Farrell said the company is confident it has adequate resources to execute on its current plan.

THQ’s five remaining studios include Volition (maker of Saints Row the Third), THQ Montreal (headed by Patrice Desilets, a former Ubisoft star developer), Vigil (maker of Darksiders II and Dark Milllennium Online), Relic, and a studio in San Diego. THQ is also working with outside studios such as Turtle Rock.

Obsidian is working on a South Park game for THQ. Metro: Last Light has been pushed back to the first quarter of 2013 so that it can be refined.

Farrell said the company would invest in hardcore games for the next-generation consoles coming in the next year or so.

THQ expects Saints Row the Third to ship more than 5 million or 6 million units over its life. Farrell said that the Saints Row the Third character creator has been used to create 10 million avatars in the game. The WWE ’12 title is up 29 percent over sales of the previous wrestling game. THQ believes it will end the fiscal year with $25 million in cash.

Farrell said the company is “being realistic about our resources” and is looking for a partner for the launch of Dark Millennium Online, a massively multiplayer online game now scheduled for fiscal 2014 and beyond.

Filed under: games, VentureBeat

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Two Facebook graphs Wall Street analysts and investors should ignore

Posted: 02 Feb 2012 03:07 PM PST

Wall Street likes data. Annual reports and quarterly reports move markets. If Wall Street could access daily data on the ins-and-outs of a company, it would. Hedge funds have been known to use analysis of satellite imagery of Wal-Mart parking lots to try to get a jump on the markets.

That micro level of analysis isn’t going to be very helpful in predicting Facebook’s future. For example, here are two of the types of charts that Wall Street analysts look at:

This chart plots average revenue per user (ARPU) for Facebook on a quarterly basis. This number jumps around a bit. I expect that in the short term, it will drop as Facebook growth focuses on users in markets where online advertising isn’t well established.

This chart shows Facebook’s sequential revenue growth per quarter for the last two years. Wall Street absolutely hates seeing zero growth, as happened in the first quarter of 2011. The best quarter the company saw in terms of revenue growth was a year ago, in December 2010.

Some companies will actively manage their numbers to present the picture that Wall Street expects. This can lead to really stupid product decisions. Facebook could track revenue on a daily basis and crank up ads if it looked like it needed more revenue for a quarter. Or the company could take off ads if it thought they were doing too well. It could also stop expanding into new markets that deflate ARPU.

These charts indicate that Facebook isn’t playing those games. The S-1 spells it out:

Our culture also prioritizes our user engagement over short-term financial results, and we frequently make product decisions that may reduce our short-term revenue or profitability if we believe that the decisions are consistent with our mission and benefit the aggregate user experience and will thereby improve our financial performance over the long term.

And with control of 57 percent the voting shares, Mark Zuckerberg can afford to ignore the graphs and build for the long term.

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

Filed under: social, VentureBeat

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Showyou 3.0: Now with better video discovery and sharing for the iPad

Posted: 02 Feb 2012 02:20 PM PST

After months of hard labor, Remixation, creator of the popular video discovery app Showyou, has released a new version of the app that works just as well for social media abstainers as it does for Facebook and Twitter users.

Showyou 3.0, available now for free on the iTunes Store, doesn’t look much different from past versions of the app on the surface, but dig a little deeper and you’ll find a richer and more rewarding way to discover and share videos.

As the video above shows, the new Showyou is still centered around a gorgeous grid of videos, but now you can easily swipe left to unveil a tray that offers up new functionality like the ability to explore video categories. You can also now tap user icons in Showyou to see all of the videos that person shared, as well as follow them as you would in any other social network.

Remixation CEO Mark Hall told VentureBeat in an interview last week that the company had noticed some interesting usage patterns with previous versions of Showyou. Users who linked up Showyou to their Twitter account ended up seeing far more videos than those who just linked up their Facebook accounts. The changes in Showyou 3.0 should now make it easier for those only on Facebook to find new and interesting web videos.

Other improvements in the app include a revamped search, which lets you instantly sift through the 30 million videos in Showyou’s database, as well as the ability to follow grids based on trending hashtags (similar to the way Twitter shows off trending topics).

Remixation spent about 4 to 5 months developing Showyou 3.0, which was almost as long as the company took to create the first Showyou app, Hall said.

Showyou is also available on the iPhone, iPod Touch, and Kindle Fire (those platforms won’t get the new features yet), but Hall said that the company wasn’t very interested in doing a full-fledged Android app. Similarly, he wasn’t too interested in Google TV until that platform starts to pick up steam. Instead, Hall said that he was more interested in potentially incorporating Showyou into Microsoft’s Xbox — though the company’s haven’t yet discussed doing so.

San Francisco, Calif.-based Remixation has raised an undisclosed amount of funding in a first round from True Ventures and other investors.

Filed under: mobile, VentureBeat

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Updated: Super Bowl Sting — Feds seize 307 domains in “Operation Fake Sweep”

Posted: 02 Feb 2012 02:18 PM PST


Updated: Official statement from the U.S. Immigration and Customs office has been added at the bottom of the post.

The U.S. Department of Justice has issued a new round of domain seizures today targeted at websites that provide access to illegal live sports streaming video.

The DOJ’s timing is likely related to this Sunday’s NFL Super Bowl championship football game, which has routinely become the most watched televised event of the year with over 100 million viewers. In December, television affiliate NBC and the NFL announced that the big game would stream for free online for the first time — meaning illegal sports streaming sites could hypothetically steal traffic away from NBC.

The seized domains, which aren’t limited to any particular sport, include Firstrowsports.tv, Firstrowsports.com, and Soccertvlive.net. However, more sites may be added over the course of the day. Visitors who navigate to any of the seized sites are met with the official takedown notice from the DOJ. The Justice Department has yet to issue a formal statement regarding the Super Bowl Sting operation.

This isn’t the first time the DOJ has seized domains on the basis of copyright violations. In November, the Justice Department shut down over 130 domains that were involved with streaming content illegally. Yet, this is the first time the government has managed to seize domains that feature the .tv extension. As TorrentFreak points out, the .tv extension belongs to the islands of Tuvalu, but it’s operated by U.S. security company Verisign. So apparently, the federal government has assumed the authority to not only shut down domains with extensions intended for the U.S. but also any domain extension that’s operated by a company within the U.S.

While I can appreciate the Justice Department’s desire to thwart websites that are making money illegally off of U.S. sports, I’m not sure this particular round of domain seizures will have any meaningful impact. First of all, NBC is streaming the Super Bowl live on its website for free, which easily makes it the most visible venue. Also, NBC is offering an experience that’s actually better than its television broadcast — by offering game highlights, multiple video angles, and more. None of the illegally streaming sites can compete with that.

It’s also worth mentioning that the head of digital for NBC Sports, Rick Cordella, has publicly commented that NBC isn’t worried that live streaming the Super Bowl will take viewership away from people who watch it on TV. So basically, streaming the game (anywhere) won’t even affect the regular business it’ll generate for the NFL and NBC.

We’ve contacted the DOJ about the domain seizures and will update this post with any new information.

Updated (2:13 p.m. PT): Below is the official statement from the U.S. Immigration and Customs office regarding “Operation Fake Sweep” — the oh so clever name given to the DOJ/ICE domain seizure initiative, which commenced Oct. 1, 2011 and will continue through Super Bowl weekend.

Furthering HSI efforts to combat counterfeiting and piracy online, special agents seized a total of 307 websites. Sixteen of the sites illegally streamed live sporting telecasts over the Internet, including NFL games. Two hundred ninety-one website domain names were illegally selling and distributing counterfeit merchandise…

The website seizures during Operation Fake Sweep represent the 10th phase of Operation In Our Sites, a sustained law enforcement initiative targeting counterfeiting and piracy on the Internet. The 307 websites are in the process of being seized by law enforcement, and will soon be in the custody of the federal government. Visitors to these websites will then find a seizure banner that notifies them that the domain name has been seized by federal authorities and educates them that willful copyright infringement is a federal crime.

American business is threatened by those who pirate copyrighted material and produce counterfeit trademarked goods. Criminals are attempting to steal American ideas and products and sell them over the Internet, in flea markets, in legitimate retail outlets and elsewhere. Intellectual property (IP) thieves undermine the U.S. economy and jeopardize public safety. American jobs are being lost, American innovation is being diluted and organized criminal enterprises are profiting from their increasing involvement in IP theft.

Since the launch of Operation In Our Sites in June 2010, the HSI-led National Intellectual Property Rights Coordination Center (IPR Center) has seized a total of 669 domain names.

Filed under: media, VentureBeat

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Earnings fall short of target for embattled game publisher THQ

Posted: 02 Feb 2012 02:09 PM PST

THQ‘s net income for the third fiscal quarter fell short of the number expected by analysts. The results show how tough the video game market has become for publishers that aren’t executing with a number of great hits.

THQ is one of the largest U.S. game publishers, and its financial struggles after more than two decades of making video games is a sign of big changes happening in the core video game industry.

THQ’s Saints Row the Third sold 3.6 million units in the quarter while WWE’12 wrestling title sold more than 2 million units.

But the profits from those games were offset by poor sales of its kid-oriented uDraw hardware and software, which reduced earnings by $33 million.

After hours, THQ’s stock has cratered, falling 24 percent to 58 cents a share. Before the earnings were released, the stock closed at 76 cents, up 40 cents, or 5.6 percent, in trading on the Nasdaq stock market on Thursday.

THQ said yesterday it has laid off 240 employees in an effort to conserve cash and focus on its core strategy of making high-end games for core gamers. THQ has now cut its kid division. THQ said it has now cut $160 million in costs from its annual expenses.

Non-GAAP Revenues were $404.4 million, up 25 percent from $323.1 million a year ago. Non-GAAP net income was $24 million, or 35 cents a share, compared with $28.5 million, or 42 cents a year ago. GAAP revenues were $305.4 million, down from $314.6 million a year ago. GAAP net loss was $55.9 million, or 82 cents a share, compared with a loss of $14.9 million, or 22 cents a share a year earlier.

Analysts estimated that revenues for the quarter would be $417 million and earnings per share would be 64 cents. That earnings consensus was set after THQ announced that its revenues would fall 25 percent of previous targets. THQ is also facing a possible Nasdaq delisting if it can't bring their share prices above $1 for ten consecutive days.

The publisher's stock has plunged in the last year, from $5.86 to 76 cents.

As we noted earlier, THQ doesn't have all the time in the world to turn things around. In the most recent second-fiscal quarter ended Sept. 30, THQ had non-GAAP revenues of $119.6 million and a net loss of $40.6 million. The company had cash and cash equivalents of $51.0 million on Sept. 30. Unless THQ can turn around the current rate of losses, it will be out of cash in a couple of quarters. The company might be able to borrow more money, but it already has long-term debt of $83.7 million and current liabilities of $275.3 million.

Wedbush Securities analyst Michael Pachter recently told VentureBeat that THQ will likely run out of cash by June, or even earlier, unless it takes steps to prevent it by possibly reducing overhead, canceling projects, selling assets, or raising capital. THQ said that it has $47.7 million in cash and has no borrowings on its $50 million credit facility.

THQ was the No. 5 game publisher in the U.S. with 5.4 percent market share. The company is working on South Park: The Game for release in the second half of 2012. Digital revenues for the third fiscal quarter were more than double the amount of a year ago.

Upcoming games include UFC Undisputed coming out on Feb. 14; Darksiders II coming in June; South Park: The Game coming in the third fiscal quarter of 2012 (fiscal year 2013); Metro: Last Light coming in the fourth fiscal quarter of FY 2013, or the first calendar quarter of 2013. Devil’s Third is also coming during that quarter. THQ’s Dark Millennium Online will be out in fiscal 2014. THQ has two uannounced titles for fiscal 2013 and an unnamed original title coming from Turtle Rock Studio in fiscal year 2014. An original title coming from Patrice Desilets and THQ’s Montreal studio will come out in fiscal year 2014.

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AOL to transform Huffington Post into an Internet TV network

Posted: 02 Feb 2012 01:59 PM PST

AOL is planning to launch a new streaming video network branded under its Huffington Post web news site, the company announced Thursday.

The new network will feature live streaming video content 12 hours a day during the week from 9 a.m to 9 p.m. ET, according to a THR report. Founding Huffington Post editor Roy Sekoff will head up the new network, which will be produced in AOL’s New York City and LA studios by a staff of 100 employees.

AOL said the new network will be available on a variety of streaming media platforms, such as Roku, Boxee, Google TV, Playstation, and others. The company also said its open to the possibility of launching a cable network further down the line, according to the THR report.

The target audience will extend from the main HuffPo website while catering to mobile devices. Sekoff described the content as "a never-ending talk show" that will "mirror the Internet experience." The network, which is expected to launch in early summer of 2012, aims to create 30,000 on-demand clips.

Given some of AOL Chief Executive Tim Armstrong’s bold statements about growing the company’s video presence during yesterday’s Q4 earnings call, the news about the new network isn’t very surprising. The choice to transform the Huffington Post into a video network also makes a lot of sense. Armstrong said 70 percent of Huffington Post articles contain embedded videos. So, by producing the bulk of those videos in-house, AOL will be able to gain more leverage on advertising.

Filed under: media, VentureBeat

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Upverter launches paid accounts for private hardware hacking

Posted: 02 Feb 2012 01:56 PM PST

Upverter, the fascinating open-source hardware hackers’ tool, has just launched paid accounts.

With these accounts, users can hack away at their designs away from the public eye. It works a lot like Github’s private offerings, where paying users can shield their code repositories from outside eyes, if they so choose.

Upverter won hearts as a DEMO Fall 2011 company; its blend of cloud-based collaboration and hardware-hacker focus hit the market at just the right time.

In fact, just a month before we met Upverter at DEMO, Facebook’s open source hardware lead Amir Michael told VentureBeat, “A lot of the tools [for open-source hardware design] aren't there yet. If someone wants to make a change to one of our circuit boards, it takes hundreds of thousands of dollars to get that package. The average hacker doesn't have that.”

So, Upverter entered the scene with simple tools for garage hackers to create a better motherboard or a more efficient server.

Today, in addition to hosting open-source projects, Upverter is introducing its subscription plans (and its business model).

Other subscription plans run from the $19 monthly Hobbyist package (with space for three private projects and public collaboration) to the $199 monthly Professional package (with hosting for up to 100 private projects and both private and public collaboration features).

Also, the Early Adopter $19-per-month plan is only going to be available this week. It allows for three private hardware projects with public and private collaboration.

The Upverter team has been working its way up to an enterprise-level offering since its inception.

To date, the site hosts 3,890 hardware design projects and a library of 4,325 user-created hardware components. On average, a hardware design session on Upverter lasts around one hour and 16 minutes, and the record for longest design session goes to a hacker who spent 18 solid hours working on a project.

“Students at MIT, Stanford, RIT, the University of Waterloo, the University of Toronto, and Oregon State University (to name a handful) are using Upverter to collaborate on labs and design projects,” said Upverter co-founder Zak Homuth in an email conversation today.

“The most complex designs are greater than $100 in bill-of-material cost [and are] rapidly approaching the cost and complexity of the average cellphone,” he concluded.

In an interview a few months ago, he told us, "Open-source hardware has the same potential that open-source software did.”

"If we can change the paradigms away from single, siloed designs and towards gluing shared building blocks together (kind of like the shift software made away from statically compiled and towards shared libraries) we would change the way hardware gets designed across the board.”

Filed under: dev

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Take-Two Interactive sees big drop in earnings thanks to Max Payne 3 game delay

Posted: 02 Feb 2012 01:51 PM PST

Take-Two Interactive Software reported a big drop in earnings due in large part because of the delay of its major video game, Max Payne 3. The earnings decline was in line with the expectations of analysts, who had been forewarned, but revenues fell short of expectations.

The New York-based company reported GAAP net income of $14.1 million, or 16 cents a share, compared with net income of $40.9 million, or 45 cents a share, a year earlier. On a non-GAAP basis, the company said it earned $29 million, or 27 cents a share, down from $49.5 million, or 52 cents a share, a year earlier. Analysts had been expecting non-GAAP earnings of 23 cents a share.

“We’re gratified with the quarter’s results and are very excited about our upcoming releases,” said Strauss Zelnick, chairman of Take-Two, said in an analyst conference call on Thursday.

Revenues were $236.3 million, down 29 percent from $334.3 million a year ago, when sales of the blockbuster Red Dead Redemption helped the company’s performance. Analysts had expected $249.2 million. The only big release for the quarter ended Dec. 31 was NBA 2K12, which was hurt in part because of the NBA player lockout earlier in the season. The game still sold more than 4 million units.

Take-Two Interactive lowered
its guidance on Jan. 17 for the fiscal year 2012 ended March 31, thanks to its decision to shift the Max Payne 3 game from the fourth fiscal quarter of fiscal year 2012 to the first fiscal quarter of FY 2013. Max Payne 3 is now set to debut on May 15.

Take-Two now expects revenues for the current fourth fiscal quarter, Take-Two expects revenue to in the range of $112 million to $162 million, with a loss at 50 cents to 65 cents a share. Analysts had previously expected a loss of 11 cents a share on revenue of $185 million.The current quarter includes the release of The Darkness II on Feb. 7, Major League Baseball 2K12 on March 6.

Digital game content in the third fiscal quarter accounted for 11 percent of revenue. That was driven by the release of Grand Theft Auto III — 10th Anniversary Edition, for iOS (iPhone, iPod Touch, and iPad) and Android smartphones.

“The goal is to meet consumer’s needs and find them and delight them where they are,” said Zelnick.

Zelnick said that Max Payne 3 from Rockstar Games is shaping up to be one of “our most exciting releases ever.”

The company will also have big titles coming in the new fiscal year including Borderlands 2, BioShock Infinite, Spec Ops: The Line, XCOM, and XCOM: Enemy Unknown. Grand Theft Auto V, the big title coming from Take-Two’s Rockstar Games label, hasn’t been scheduled yet.

During the year, Take-Two launched big games like L.A. Noire, which sold more than 5 million units since its launch in May 2011. Take-Two said it raised $250 million through a private offering of 1.75 percent convertible senior notes due 2016. Those proceeds will be used for general corporate purposes.

In the call, Zelnick said he is very bullish on sales of games on tablet computers in the years ahead. He said the company isn’t keen on making risky acquisitions that cost a lot of money. Take-Two has more than $453 million in cash.

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Bluetooth-accessory startup Mosoro gets $1.5M in funding

Posted: 02 Feb 2012 01:50 PM PST

Mosoro, a startup that makes Bluetooth hardware with complimentary smartphone apps, has raised $1.5 million in its first round of funding.

Mosoro creates "appcessories," or Bluetooth devices with dedicated companion apps for iOS and Android. The company has made two Bluetooth devices so far, 3-D Sport and Weather, and has two more in the works, Talk, and Bonsai. They all connect with smartphone apps to record motion, report weather conditions, play audio, stream video, and much more.

"We currently have apps in toys and entertainment, sports and business, and outdoor recreation. We're also planning on expanding into other markets in the near future," said chief executive Mike Stemple in a interview with VentureBeat.

Each device has several different sensors that record and relay information. For example, 3-D Sport is a lightweight device that can be tacked onto your golf club to record your swing and send data straight to your phone. Bonsai is a WiFi access point the size of a deck of cards with an embedded media server. It can stream video, audio, and applications directly to any WiFi enabled device.

Mosoro intends on using their new financing to expand merchandise development into multiple verticals, targeting products at the everyday consumer, rather than only gadget geeks.

Stemple is the founder of more than a dozen other startups including nReach, Skinit, and Original Wraps. Colorado-based Mosoro currently has five team members, but is planning on expanding dramatically in the coming weeks. This latest round of financing was led by Mike Beaudoin and Rodney Rice of ServiceMagic.com in addition to High Country Venture and Tango.

Filed under: deals, mobile

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Security! Android’s Bouncer to prevent malware from making it to the Market

Posted: 02 Feb 2012 01:15 PM PST

Whether accurate or exaggerated, claims of rampant malware apps have haunted the Android Market. Now, Google’s Android team is announcing Bouncer, a new security mechanism that should prevent bad apps from ever making it into the Market.

It’s a programmatic solution that’s allegedly good for both the goose (or users, in this case) and the gander (honest mobile developers who don’t want to wait through a lengthy application process à la the Apple App Store’s).

Bouncer, wrote Android engineering VP Hiroshi Lockheimer on the company blog, “provides automated scanning of Android Market for potentially malicious software without disrupting the user experience of Android Market or requiring developers to go through an application approval process.”

Lockheimer revealed that Bouncer has already been in use for a while and has led to a 40 percent drop in the number of malware downloads from the Market.

This kind of security, if it works and works well, could potentially have very positive effects for the Android Market itself and for the Android operating system’s PR issues — and yes, a lot of the FUD around Android malware is PR, not facts, generated by mobile anti-virus companies and the Apple camp.

Here’s how Bouncer works: The program analyzes new apps submitted to the Android Market as well as apps already in the Market. It also screens developer accounts. Bouncer recognizes malware, trojans, spyware, and a range of other red-flag-type behaviors.

“We actually run every application on Google's cloud infrastructure and simulate how it will run on an Android device to look for hidden, malicious behavior,” Lockheimer said.

And since Bouncer crawls developer accounts as well as individual applications, it can identify repeat offenders and prevent them from introducing more bad apps into the Market.

“No security approach is foolproof, and added scrutiny can often lead to important improvements,” Lockheimer concluded.

“Our systems are getting better at detecting and eliminating malware every day, and we continue to invite the community to work with us to keep Android safe.”

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Ticket aggregator TiqIQ raises $1.7M as it goes head to head with rival SeatGeek

Posted: 02 Feb 2012 12:34 PM PST

Two New York startups are vying for the title of top ticket aggregator. SeatGeek is better known, but TiqIQ announced a $1.7 million series A Thursday, giving it almost as much funding as its high-profile rival.

Both companies crunch mountains of data to forecast the price of tickets, helping fans decide on the best time to buy. Both work with publishers to power ticket sales on their sites. Up until now, only SeatGeek had a consumer facing site, which is why it was better known. But TiqIQ has now launched a destination site of its own.

“We were a white label platform for publishers, only nominally competing with consumer facing sites like SeatGeek,” founder Jesse Lawrence told VentureBeat. “But we had all the data, so it made sense to put in the extra effort and go after the consumer market.”

TiqIQ widget on the Washington Post

TiqIQ has some notable publishing partners: The Washington Post, New York Post, and perhaps most impressively, the fast growing sports blog network SB Nation, run by AOL vet-Jim Bankoff.

Lawrence and his co-founders are survivors of the dot.com bust. “We ran into 2000,” is how he put it.  After his time as an entrepreneur, he did a stint as a venture capitalist and then worked at the Programming Group for IAC, helping to start or acquire businesses like College Humor, Vimeo, and The Daily Beast. Lawrence runs TiqIQ’s New York office while his co-founders handle the development in Israel.

For a simple idea of how TiqIQ works, you can check out the widget they have embedded on the Washington Post Sport’s page showing the best deal on tonight’s Capitol’s game. The company also pushes tickets through social channels like the WashingtonPost’s Facebook page.

One of the things TiqIQ hopes will differentiate it is offering three options for buying tickets: Fixed Price, Auction, and Make an Offer. “We allow consumers to interact directly with the sellers by making the offer they think is fair,” Lawrence said. The goal is to give fans insight into the market they might not otherwise find. ”The SuperBowl is a great example because the highest price tickets are going down in price and the cheapest seats are going up. We expose that information for our users, then let them decide how best to buy.”

Filed under: VentureBeat

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Under new CEO, AMD will launch processors for tablets this year

Posted: 02 Feb 2012 12:00 PM PST

Advanced Micro Devices said at its analyst meeting today that it will ship its first chips designed to provide the processing and graphics power for tablet computers.

Rory Read (pictured), chief executive of Sunnyvale, Calif.-based AMD, was appointed the new boss of the company in August. In his first appearance before analysts, he said the company is now focused on where the market is going. AMD is a strategic company in the semiconductor industry, as it supplies an alternative to Intel for PC microprocessors. Now it is trying to reach beyond PCs to super-thin devices such as tablets.

“We have a huge opportunity in front of us,” Read said. “How the world is using processors is changing rapidly. This is about stepping out of the shadows and leading.”

In the past, AMD’s chips haven’t had the combination of low-power consumption and processing power. Instead, AMD created fast and brainy chips that could be used in everything from laptops to desktops and servers. But the chips ran too hot to be used in the tiny enclosures of tablet computers.

The first tablet chip coming this year is code-named Hondo. It will combine a microprocessor and graphics in the same chip in a solution that AMD calls an accelerated processing unit, or APU. The Hondo chip will be made with a 40-nanometer manufacturing process and will feature ultra-low-power consumption.

Read said that AMD is in the midst of rebuilding trust with customers and executing on its plan. Lisa Su, head of global products at AMD, said that Windows 8-based tablets will appear this year with AMD chips in them.

“We’re entering an inflection point in the market,” Read said. “We’ve got to see the opportunity in the market and execute on it. We have to build trust, change the architecture, and capture where the puck is going.”

AMD has been chasing Intel for a long time and now it faces competition from ARM-based rivals in tablets. But AMD is in a much healthier financial state than it has been in the past; the company has more than $2 billion in debt, but it generates more than $500 million in free cash flow,  so that it can continue to pay down that debt, said Thomas Seifert, chief financial officer.

AMD laid off 10 percent of its employees in the fall, but Read, who was previously the No. 2 executive at AMD customer Lenovo, said the company still has 10,000 employees, including 7,000 engineers. Those engineers will be key to ensuring that AMD does not get stuck between Intel at the high end of the market and the low-end ARM-based chips that are already entrenched in the smartphone and tablet market.

In the past, AMD focused on the PC, server, discrete graphics and the embedded (appliance) market.

“We’ve been in this model of an unhealthy duopoly (a reference to Intel) and we’ve been pulled along in the gravitational force,” he said.

AMD will also refresh the reset of its line-up with its code-named Brazos 2.0 chip with a faster TurboCore and universal serial bus 3.0 capability in a 40-nanometer solution. AMD will also launch Trinity, a second-generation APU built with a more-advanced 32-nanometer process. That will feature significant performance and power improvements. And AMD will also debut this year its Southern Islands stand-alone graphics chip, which has a next-generation graphics core and other cool features. It will be built with AMD’s most advanced 28-nanometer process.

Read and his team also revealed the company’s line-up for 2013. In 2013, AMD will launch Temash, a second-generation APU as a successor to the Hondo tablet chip. It will feature the new Jaguar processing core.

AMD is also creating Kabini, a chip for laptops with Jaguar cores and other low-power features. For the performance segment, it will launch Kaveri, a third-generation APU with Steamroller cores. And it will also launch in 2013 a new graphics chip, code-named Sea Islands.

The Trinity mobile chip coming this year will run at about 35 watts and have low-voltage capability at 17 watts to 25 watts. The chips will have two to four cores under the Piledriver code name and will feature a second-generation DX11 graphics core. Su said that thin low-power laptops will appear this year with Trinity chips. She said that Trinity-based products will be available in the market this summer.

For the desktop in 2012, AMD will launch Vishera, which will have four to eight Piledriver cores. It will also launch a version of Trinity for desktops.

In the mid-range mobile market, AMD will have its Brazos 2.0 chips with two Bobcat processor cores and DirectX 11 graphics. The same kind of chip will be used in desktops.

And for tablets, AMD will launch Hondo with one to two Bobcat cores. Hondo will run at 4.5 watts. In 2013, everything gets faster and better. Kaveri will have two to four Steamroller cores. Kabini will have two to four Jaguar cores. And Tamesh will have two Jaguar cores. All will also have next-generation graphics.

In servers, AMD will also have a series of chips ranging from four to 16 cores.

Filed under: VentureBeat

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Does former MySpace CEO think Facebook’s stock value will last?

Posted: 02 Feb 2012 11:48 AM PST

No one knows how hard the mighty can fall quite like Mike Jones. Jones was MySpace’s most recent CEO; his job was to assess a faltering social app and see if it was saveable.

Since Jones saw a once-powerful network through a period of layoffs, restructuring, and an eventual sale to an ad network, we wondered how he felt about the IPO of Facebook. After all, Facebook is the app that nailed shut MySpace’s coffin lid, proving that even strong apps can crumble quickly when faced with innovative competition.

But what Jones said surprised us.

“I’m super bullish on Facebook,” said Jones in a phone conversation with VentureBeat this morning. “I think it’s a long-term play… I literally couldn’t be more excited about it. Zuckerberg’s done a hell of a job.”

In looking at the social network’s IPO, Jones doesn’t only see the opportunity for day-traders to earn some short-term gains; he sees both Facebook and all its platform apps as “a monster” opportunity, even for longer-term investment.

Tech companies, even the high-profile ones, can come and go at a moment’s notice. Many of us observing from the sidelines can have difficulty picking a winning horse in such a confusing and complicated race.

“As far as long-term stocks go, Google has been an incredibly solid bet,” Jones pointed out. “I work with a slew of hedge funds, and they all love Google,” he continued, noting that hedge fund managers are also bullish about Facebook gaming powerhouse Zynga.

“I think they’re all going to feel the same way about Facebook.”

But why does Jones, who has ridden the ups and downs of the social rollercoaster firsthand, have so much faith in Facebook? In the end, he follows the money and sees more than enough opportunities for Facebook to cash in.

“It’s intriguing,” Jones said, “because Facebook’s risk is that they’re a single domain revenue source.” In other words, right now, all of Facebook’s revenue, including advertising and Facebook Credits, resides on Facebook.com — not Facebook-connected websites and not Facebook’s own mobile applications.

But Jones sees this changing. “Facebook is — I would assume — going to leverage their Connect infrastructure and distribute their ad and data platform offsite. When they do that, they’ll see the next stage of growth.” And at that point, the company will be competing more directly than ever before with Google, which has for the past couple of years been feeling the pressure of Facebook’s highly competitive ad products.

“They could also distribute games offsite,” said Jones, hitting on another highly profitable area for Facebook.

“When I look at Facebook, they’re not even monetizing mobile, and those are not small numbers,” said Jones, referring to the 425 million monthly active users that access the social network via their phones.

Another opportunity is Facebook Credits. The network’s virtual currency is still in its infancy, but the network gets a 30 percent cut of all Credits revenue from Facebook Platform games and apps. “If you think about the limitations that Apple has, you can’t sell physical goods through their payment system,” Jones pointed out. “But Facebook could open their currency to allow physical shopping, they could create credit cards.

“I’m just seeing waves and waves of options on how to build and scale their business beyond their current revenue … There’s a tree of billion-dollar revenue streams they’re sitting on,” he concluded.

At the end of the day, Jones pointed out, Facebook is already a household name with a huge following and fanbase.

“People will just want to own the stock,” he said. “When my kids were born, my dad bought them Disney shares, and we framed them and hung them up on the wall. They’re excited to know that they are a part of Disney…. People will log into E-Trade and buy Facebook stock because they love it and use it everyday.”

Jones is now CEO of Science, a Los Angeles-based technology incubator that is publicly launching its first startup in just a few days. VentureBeat will have the full story on that company, as well as Jones’ attempts to revitalize a post-MySpace LA tech community, next week, so stay tuned.

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In light of Facebook’s huge mobile risk, a “Facebook phone” looks like a smart solution

Posted: 02 Feb 2012 11:36 AM PST


One of the biggest risks Facebook listed in yesterday’s high-profile IPO filing was “mobile.” The company hasn’t quite figured out what to do with advertising on phones, so it could struggle to bring in the bank as more users choose phones over PCs.

But Chris Silva, mobile analyst for Altimeter Group, told VentureBeat that the company has a possible way to help solve this issue: the highly rumored “Facebook phone.”

“If they are taking this risk as seriously as they should, a mobile product with Facebook branding is a big way to mitigate that risk,” Silva said. “All they need is a hardware partner and to optimize the experience with Facebook features.”

Facebook indicated in its S-1 filing yesterday that 425 million monthly active users are mobile, so targeting those users on a Facebook-branded phone makes sense. In regards to risk, Facebook said:

Growth in use of Facebook through our mobile products, where we do not currently display ads, as a substitute for use on personal computers may negatively affect our revenue and financial results.

We had more than 425 million MAUs who used Facebook mobile products in December 2011. We anticipate that the rate of growth in mobile users will continue to exceed the growth rate of our overall MAUs for the foreseeable future, in part due to our focus on developing mobile products to encourage mobile usage of Facebook. Although the substantial majority of our mobile users also access and engage with Facebook on personal computers where we display advertising, our users could decide to increasingly access our products primarily through mobile devices. We do not currently directly generate any meaningful revenue from the use of Facebook mobile products, and our ability to do so successfully is unproven. Accordingly, if users continue to increasingly access Facebook mobile products as a substitute for access through personal computers, and if we are unable to successfully implement monetization strategies for our mobile users, our revenue and financial results may be negatively affected.

There is no guarantee that popular mobile devices will continue to feature Facebook, or that mobile device users will continue to use Facebook rather than competing products. We are dependent on the interoperability of Facebook with popular mobile operating systems that we do not control, such as Android and iOS, and any changes in such systems that degrade our products' functionality or give preferential treatment to competitive products could adversely affect Facebook usage on mobile devices. Additionally, in order to deliver high quality mobile products, it is important that our products work well with a range of mobile technologies, systems, networks, and standards that we do not control. We may not be successful in developing relationships with key participants in the mobile industry or in developing products that operate effectively with these technologies, systems, networks, or standards. In the event that it is more difficult for our users to access and use Facebook on their mobile devices, or if our users choose not to access or use Facebook on their mobile devices or use mobile products that do not offer access to Facebook, our user growth and user engagement could be harmed.

The rumors about the “Facebook phone” took on a new degree of certainty back in mid-November when AllThingsD ran a series of reports about the upcoming device. It said the phone, called “Buffy”, would launch within 18 months of that time and be manufactured by HTC. It also delved into background about how the phone started as a highly controversial project within Facebook's walls.

Silva agreed with the prior rumors about Taiwan’s HTC being a likely candidate, but he also said manufacturers like South Korea’s LG and China’s ZTE would be good choices as well.

“With Google and Motorola being so cozy, other Android phone manufacturers have to be looking at this as an option to differentiate themselves,” Silva said.

Features that the phone could include could simply be optimized Android software that emphasizes the Facebook experience. Or it could go further, with hardware-powered features such as NFC-enabled ability to “friend” someone you meet while out and about.

Facebook will have to be cautious about how it approaches the mobile handset market though, or else its phone will end up being yet another aspect of mobile weighing it down.

Facebook on Android phone photo: Johan Larsson/Flickr

Filed under: mobile, social, VentureBeat

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