04 April, 2012



Twitter opens ad sales office in Detroit

Posted: 04 Apr 2012 09:32 AM PDT

The Motor City is welcoming an import to town.

Information network Twitter has taken up residence in downtown Detroit to push its Promoted Products ad suite to the nation’s recovering automative companies.

Twitter’s new Detroit office, located in the coworking and startup space known as M@dison Building, will house just a handful of ad sales employees who will work closely with the area’s marketers and ad agencies. The office will be led by Greg Myrick, an advertising executive who landed at Twitter after a five year ride in ad sales at Yahoo.

“Detroit’s emerging mix of automotive and digital cultures made it a natural location for Twitter’s newest office,” Twitter president of global revenue Adam Bain said in a statement. “We’re excited to work face-to-face with the city’s most established brands and happy to play a role in downtown Detroit’s digital renaissance.”

The new base is just one of many satellite offices Twitter has opened in the past year as it seeks to more aggressively make big name brands and advertisers aware of the potential of its social ad space. The company, which already counts Detroit’s General Motors as a Promoted Products client, has also recently opened smaller regional offices in Washington D.C., Cincinnati, Austin, and Atlanta.

Photo credit: ifmuth/Flickr

Filed under: social

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Flickr launches photo editor powered by Aviary

Posted: 04 Apr 2012 09:00 AM PDT

Yahoo-owned photo-sharing site Flickr, the property involved in a patent spat between Yahoo and Facebook, is providing its users with new editing tools and filters courtesy of photo-editing specialist Aviary.

The Flickr photo editor, rolling out to users starting Thursday, replaces former functionality provided by the soon-to-be defunct Picnik with Aviary’s sophisticated tools for adding filters, correcting blemishes, cropping, drawing, adjusting, and otherwise enhancing images. Future updates will also support photo straightening and zooming.

The editor, which works on the web and iPad, has been optimized for speed and simplicity, Yahoo said. “Aviary has built a lot of custom integration technology for Flickr allowing for seamless embedding on the site,” a Yahoo spokesperson told VentureBeat.

We should note that while Aviary’s photo-editing features will make for a pleasant addition to the Flickr experience, they’re not unique to Yahoo’s photographer community. In fact, back in January, Aviary gave Facebook users similar tools to enhance and edit their photos hosted inside the social network. Aviary also makes it tools accessible to developers for integration into their web and mobile apps.

Partner Aviary, founded in 2007, is based in New York City and has raised a total of $11 million in funding from Spark Capitol, Jeff Bezos, and Reid Hoffman.

Yahoo will gradually dole out the new photo editor to members on a rolling basis over the next few weeks.

Filed under: social

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Dylan’s Desk: Frustration and fragmentation rule the mobile industry — for now

Posted: 04 Apr 2012 08:00 AM PDT

Photo of Golden Gate Bridge from Sausalito, Calif.


That’s the dominant note sounded by commenters at this week’s Mobile Summit, an invitation-only conclave of mobile-industry executives and investors sponsored by VentureBeat.

It’s polite frustration, to be sure. But again and again, I’ve heard on-stage speakers or members of the audience in various discussions allude to their difficulties working with carriers, with Apple, with Google, or with the vast profusion of platforms out there.

One hundred and eighty executives and investors came to the Mobile Summit at scenic Cavallo Point, just across the Golden Gate Bridge from San Francisco, for a one-and-a-half-day discussion of the biggest themes facing the mobile industry. Judging from various show-of-hands questions, I’d say about half the audience represented startups making apps of one kind or another. There was a smaller but very influential segment of carrier and infrastructure providers, including Verizon, AT&T, and Cisco. Larger corporations, many offering enterprise services, were also in attendance, including Google, Salesforce, Box, Intuit, and more. A swath of venture capitalists looking for opportunities rounded out the crowd.

Many of the conversations were tinged with annoyance at the lack of infrastructure in certain key areas, such as geolocation services. In other cases, such as mobile payments, there’s such a wide diversity of options that it’s hard to know which horse to bet on. And one recurring theme was the high cost of customer acquisition and the difficulty of retaining customers, especially for apps.

As I’ve written before, the mobile industry is still highly fragmented, and it’s about to get worse. A lot has happened in the past five years, since the debut of the iOS and Android platforms. The playbooks that worked before were torn up, and new ones have not yet been written.

To take just one example, carriers used to control virtually every aspect of the mobile ecosystem, from the devices you could buy to the software you could run on them. Now they no longer control the operating systems or the apps. In some cases they don’t even control which devices can access their networks. Carriers have had to embrace innovation and openness to a far higher degree than before; Verizon, AT&T, and Sprint all now have innovation hubs aimed at making it easier for companies to create apps and devices that work on their networks.

Despite their efforts, carriers are still not moving fast enough, said Amber Case, founder of GeoLoqi, a geolocation toolkit provider, at the Mobile Summit. (Speaking from the crowd, AT&T’s senior executive VP of technology, John Donovan, took exception to that statement, and pointed out the many ways AT&T has embraced innovation and is trying to enable faster development and deployment on its network.)

But frustration is a signal of opportunity to savvy entrepreneurs and smart corporations, which is why the other big theme of this summit is entrepreneurial hunger.

In other words, the mobile industry presents a perfect entrepreneurial combination of chaos and uncertainty.

Smartphone usage has rocketed. Since 2008, an app economy has emerged that didn’t exist before, opening never-before-seen opportunities for even the tiniest of companies to reach out to mobile customers directly. Enterprises are struggling with a flood of portable devices they can’t control as easily or as completely as they could with Windows PCs.

And, thanks to the wide variety of platforms, devices, and carriers out there, just getting things to work in a predictable way is often a huge challenge, particularly for smaller companies and startups with limited resources.

Here are just a few of the areas where mobile infrastructure is lacking or fragmented, and where there are potentially huge opportunities for companies that can solve these problems:

Executives networking at VentureBeat's Mobile Summit 2012 at Cavallo Point in Sausalito, Calif.
Source: Heather Kelly/VentureBeat

Executives networking at VentureBeat's Mobile Summit 2012 at Cavallo Point in Sausalito, Calif.

Geolocation: GPS and other location-tracking technologies are now built into every smartphone, making it possible, in theory, to build amazing new apps that take advantage of your location. But there are still difficulties with accuracy and speed, as well as the reliability of getting a GPS signal. Plus, there’s no real ecosystem around location-based services: Every app has to build its own set of location services and use location in its own way.

Mobile payments: There are literally dozens of mobile payment providers, including mobile point-of-sale devices, mobile wallets. Many of these are not widely accepted yet, and are implemented inconsistently between devices (only a minority of phones in the U.S. yet support NFC, for instance). That makes it a challenge for anyone who wants to take or make payments via phone.

Car interfaces: Mercedes showed off a very slick SLS AMG (a $200,000 sports car) with a built-in, Android-based dashboard display. Ford has long had its own Sync system (powered by Microsoft) that integrates with many smartphones. GM has its OnStar network, which can be used by third parties to offer additional services (for example, RelayRides, a peer-to-peer car rental service, takes advantage of OnStar to let renters unlock and start a car via their phones). The problem is all of these systems are incompatible. If you want to make a car-oriented app for a smartphone or tablet, you need to customize it for each car maker, and in some cases for specific models.

Identity management: Smartphones and tablets are increasingly becoming the primary computing devices used by employees. In some cases, IT departments issue tablets to new employees instead of PCs. The difficulty is that with these devices, most of the data resides in the cloud, not on the device itself, creating new security and management issues for IT. In a way, this turns the old security issue (locking down individual PCs) into an identity management issue (making sure that people are who they say they are, and giving them access to cloud data and apps accordingly). Solving this problem could also create new consumer opportunities, by turning phones into authentication devices that help you identify yourself in a wide variety of contexts (your home, your office, your car, etc.).

Enterprise device management: As enterprises deploy tablets and smartphones to their employees, they also need a way to manage those devices appropriately. The challenge is you can’t just impose total control on these devices, as you could with PCs — particularly if the employees are bringing their own devices. A smartphone is simply a more personal thing, and people want the option to use Instagram or Facebook alongside the official apps, VPN, or CRM tool. How do you manage phones in such a way that allows for personal use while still keeping the enterprise apps under control?

User acquisition: This was one of the biggest topics of the Mobile Summit. Both Apple’s App Store and the Android Market have become victims of their own success. As they’ve filled up with apps, it has become harder and harder for customers to find the apps they want, and more difficult for app makers to find the customers they crave. Brian Higgins, the vice president of product innovation for Verizon Wireless, who I interviewed on Monday, had a key point: He said that one of the most important things companies hoping to work with Verizon’s innovation centers can do is figure out what channel model they plan to use. It’s no longer enough to create an awesome app and hope that customers will find you: You need to figure out distribution, too. In a fragmented world that’s controlled by the likes of Apple, Amazon, and Google, that’s not an easy question to answer.

What opportunities do you think are the most enticing to mobile entrepreneurs?

Photos by Heather Kelly/VentureBeat.

Filed under: VentureBeat

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Mobile news aggregator Zite adds publisher sections for CNN, Bleacher Report, & others

Posted: 04 Apr 2012 08:00 AM PDT


Mobile news aggregator Zite is giving popular web publishers their own sections within its digital magazine apps, the company announced today.

Zite lets you build a custom digital magazine by pulling in shared links from bookmarking and social sites, such as Twitter, Google Reader, Delicious and Read It Later. It then builds a personalized selection of articles based on activity from your social profiles. Unlike most of its competitors, Zite learns your reading habits by giving you voting buttons for each piece of content. The idea is to give you more of what you actually want to see without having to disregard all the boring and/or uninteresting stuff.

Unlike Zite competitor Pulse News, the new publisher-specific sections aren’t just a bland RSS feed that dumps content into the app in real-time. Instead, the publisher sections will essentially function like regular topic-based sections (Technology, Politics, Science, etc.). The only real difference is that all the content comes from one source rather than several.

Initially, the Zite Publisher Program will add sections for a handful of news partners, including Bleacher Report, CNN, The Daily Beast, FOX Sports, HLNtv, Motley Fool, The Huffington Post, The Next Web, and yes, VentureBeat. Zite said the program will  be mutually beneficial to both itself and publishers.

“A publication like CNN publishes hundreds of posts everyday across (a wide range of) categories ,” said Zite CEO Mark Johnson in an interview with VentureBeat. That can be overwhelming for tablet users trying to find only the articles they care about. “With Zite, we’re able to aggregate a collection of only the posts that interest you within an algorithmically-curated section.”

Navigating through a content-heavy publisher’s website from a tablet’s native web browser is frustrating. You could easily spend more time searching for news than actually reading it. And since time is valuable, there’s definitely an advantage to having do the Zite curation for large news sites with a wide range of news coverage.

But news organizations with fewer daily posts and a specific range of news coverage (like VentureBeat or Bleacher Report) can also benefit from the Zite Publisher Program, the company said. In addition to an algorithmically-curated section within the app, publishers also gain an attractive digital magazine-style user interface that’s optimized for mobile devices and social sharing. It’s also worth noting that most publishers don’t have the resources (or desire) to create and maintain an app with the same functionality of Zite.

That said, Zite’s publisher sections could actually end up boosting readership for its news partners. As part of the new program, Zite will send its news partners regular analytics reports to better understand how their sections are performing. Additionally, each news partner has the option of placing two house ads within their section. The ads, which are entirely optional, can plug official iOS or Android apps, subscription deals, premium memberships, and other forms of self-promotion. That definitely gives publishers an incentive, while encouraging people to stop using Zite’s app in favor of a preferred news source.

Zite’s Johnson said, however, that company isn’t concerned with people fleeing because Zite provides something individual news publishers can’t: quality news aggregation.

“People aren’t going to stop using aggregators, even if the majority of their news comes from one place,” Johnson told VentureBeat. After comparing Zite to some other popular news aggregators, I’m inclined to agree with his logic, too.

For example, a large chunk of links submitted to community news sharing site Reddit come from image sharing service Imgur. But surfing Imgur directly produces a fraction of quality results compared to Reddit’s user-generated news aggregation. Clearly, people value a good aggregator nearly as much as the news itself. The same is true for Zite when it comes to aggregating news on mobile devices.

The company said it will be adding several new partners to its Zite Publisher Program in the coming months. Founded in March 2011, the San Francisco-based company was acquired in August 2011 by broadcast news organization CNN for over $20 million. Zite faces a growing number of competitors, including Flipboard, Editions by AOL, Pulse News, and Google Currents. Zite’s app is available for free on the iPad, iPhone, and iPod Touch as well as Android- and WebOS-powered devices.

Screenshots of Zite’s new publisher sections via Zite

Filed under: media, mobile, VentureBeat

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Yahoo gives the axe to 2,000 employees (or 14 percent of its workforce)

Posted: 04 Apr 2012 07:46 AM PDT

Yahoo Layoffs

It’s raining pink slips at Yahoo today, as the iconic tech company announced it was laying off  2,000 employees — or 17 percent of its total workforce — as part of a massive restructuring effort.

Yahoo has suffered a great deal of turmoil over the past few years. Board members fired long-time CEO Carol Bartz in September 2011 as punishment for failing to increasing revenues as well as significantly losing advertising share from Facebook and Google. During her tenure (and perhaps just prior to it), Yahoo’s products grew stagnant and failed to keep pace with innovation from competitors. Overall the company suffered from a lack of leadership, which is something new CEO Scott Thompson was charged with fixing after assuming his post in January.

“Today’s actions are an important next step toward a bold, new Yahoo! — smaller, nimbler, more profitable and better equipped to innovate as fast as our customers and our industry require,” Thompson said in a statement about the layoffs.

Yahoo estimates that it will save $375 million once all the layoffs have been completed, with an expected $125 to $145 million in a pretax cash charge relating to employee severance packages. The company declined to give a more thorough analysis of the layoffs until after its first quarter financial results on April 17.

Sources with knowledge of the matter previously indicated that the layoffs will touch all units of the company, with Yahoo’s product division getting hit the hardest, according to AllThingsD’s Kara Swisher, who first reported the news last night. Deep cuts are also expected for Yahoo’s Local Businesses, marketing, and research divisions, while Yahoo’s media division suffers the least.

The report also speculates that Yahoo could end up laying off even more employees in the next few months as it continues to trim the fat on its new business strategy. Yahoo is still contemplating what it wants to do with its advertising technology businesses (Right Media and APT) as well as its search business — both of which employ thousands of workers.

Full statement from Yahoo below:

Yahoo! today confirmed that it is taking important next steps to reshape the company for the future.

“Today’s actions are an important next step toward a bold, new Yahoo! — smaller, nimbler, more profitable and better equipped to innovate as fast as our customers and our industry require. We are intensifying our efforts on our core businesses and redeploying resources to our most urgent priorities. Our goal is to get back to our core purpose — putting our users and advertisers first — and we are moving aggressively to achieve that goal,” said Scott Thompson, CEO of Yahoo!. “Unfortunately, reaching that goal requires the tough decision to eliminate positions. We deeply value our people and all they’ve contributed to Yahoo!.”

Yahoo! has a solid foundation — nearly 700 million users and thousands of advertisers that engage with Yahoo! properties regularly and trust the company with their data and their business. Through its restructuring efforts, Yahoo! intends to grow by responding more quickly to customer needs and competing more effectively in areas where it can win. Yahoo! has identified key parts of the business — a select group of core businesses, the platforms that support those core businesses, and the data that drives deep personalization for users and ROI for advertisers — where the company will intensify efforts and redeploy resources globally, all focused on increasing shareholder value. With a clear focus on profitability and growth, the company will be disciplined in its investments and radically simplify how it builds, launches and maintains many of its properties and products.

Today, the company will begin the process of informing employees about these changes. As part of that effort, approximately 2,000 people will be notified of job elimination or phased transition.

Yahoo! expects to realize approximately $375 million of annualized savings upon completion of all employee transitions. The company currently expects to recognize the majority of an estimated $125 to $145 million pretax cash charge relating to employee severance in its second quarter financial results. The company may incur additional charges in connection with this action. More information will be provided about Yahoo!’s future direction in conjunction with the release of its first quarter financial results on April 17, 2012.

Pink slips image via Eric Von Seggern/Shutterstock

Filed under: deals, media, VentureBeat

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Feel like flying? Brooklyn’s Bitbanger Labs brings lucid dreaming to the masses with the Remee

Posted: 04 Apr 2012 07:23 AM PDT

About the only time in life when I’m away from technology is while I’m asleep, but I would be willing to change that if I thought that it was possible to control my dreams and have experiences constrained only by my imagination. Duncan Frazier and Steve McGuigan from Brooklyn’s Bitbanger Labs have designed a high tech sleeping mask, the Remee, which helps users to achieve lucid dreaming. The project has achieved its funding goal on Kickstarter, raising over $40,000.

The pair was interested in lucid dreaming, but found that the products on the market were bulky, uncomfortable and cost hundreds of dollars. They hacked together their own prototype, completely compatible with Arduino open source hardware. It looks like a regular sleep mask, but features six red light on the inside. Users program the amount of time they plan to sleep, and Remee targets the periods when they are most likely to be in a deep REM or dreaming state. Then it flashes those six lights.

The lights aren’t bright enough to wake you up, but they do appear as anomalies inside the dream. This alerts the sleeper to the fact that they are dreaming, which is the first step in taking control and turning the experience into a lucid state where you can control the action around you.

The choice of six red lights was no accident. As the creators explain:

By having six lights we make it possible to create much more unique signals that can strobe, sweep and blink in ways that are not only recognizable, but that stimulate your visual field in a more tangible way. In addition, red light penetrates skin much more readily than other wavelengths. Remember when you were a kid and you put a flashlight in your mouth to make your cheeks glow red? That happens because red light is able to pass through your skin, and in the case of Remee, your eyelids, much more easily. On a side note, red LEDs also use much less power than other colors so we were able to keep you from strapping a 9v battery to your head.

Be sure to check out the Kickstarter and let us know what you would like to experience if you could control your own dreams in the comments (and let’s keep it PG-13 please.)

Filed under: dev, offBeat

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DraftDay raises $875K round for daily fantasy sports web site

Posted: 04 Apr 2012 05:00 AM PDT

Fantasy sports leagues require a big investment of time. You pick your fantasy team and watch your results unfold over the course of a season. If you aren’t lucky, it could be a very long season.

That’s why DraftDay is offering something different: a fantasy sports game that lasts for just a day and then starts over. That idea, in turn, has enabled the company to raise an $875,000 round of investment from Lightbank, the tech investment fund created by Groupon co-founders Eric Leftkosky and Brad Keywell. DraftDay is applying some form of the daily deal Groupon business model to fantasy sports.

Chicago-based DraftDay launched its site in September with the game DraftDay Perfect Lineup, which had a $1 million prize. It provides fantasy competitions for basketball, football, baseball and hockey. Players build a fantasy team based on the salary of every player in real life and then compete for one day only. Winners get cash prizes.

"We are very pleased to invest in DraftDay and foresee substantial long-term growth for the company's unique daily fantasy model," said Paul Lee, partner at Lightbank.

The company has had more than 10,000 registrations. Users can play for free or place bets when they compete against a pool of other players. Taylor Caby and Andrew Wiggins founded the company in 2011. Both are serial entrepreneurs and former professional poker players. They previous created CardRunners, a dorm-room business that generated millions of dollars per year.

"DraftDay is transforming fantasy sports into a daily event,” said Caby. “We understand that not everyone wants to manage a fantasy team for months at a time, especially since one unlucky injury can ruin a season.”

The company has nine employees. Rivals include Fanduel and Draftstreet. FanDuel says it has already paid out more than $20 million in prizes and is on track to pay out $50 million this year. Lesley Eccles and her husband set the business up in Scotland in 2009 and now FanDuel has 25 employees. It has raised $7 million in capital.

DraftDay evidently knows who its audience is: the male sports fan. The video below has a couple of sexist remarks about women, so the company doesn’t seem to be trying to recruit them as players. “Go on, play the field,” it says. “Whatever happens, it all starts over tomorrow.”

Filed under: games, VentureBeat

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Open-source customer relationship management service SugarCRM raises $33M

Posted: 04 Apr 2012 03:00 AM PDT

Salesforce competitor SugarCRM has raised $33 million in funding. The eight-year-old company provides customer relationship management (CRM) software-as-a-service for companies to manage their sales leads.

There are several heavy hitters in the CRM world, including Microsoft Dynamic, Zoho, Salesforce, and SugarCRM. All provide a place for sales and marketing people to keep customer contacts, track leads, and manage sales. SugarCRM believes its unique open-source approach, which encourages others to modify the software to suit different needs, sets it apart from its rivals.

“The open source software offers control and flexibility and is about changing the connection with our customers, which is big reason why we win deals,” said Larry Augustin, chief executive of SugarCRM in an interview with VentureBeat, “We let our customers work the way they want to work, instead of telling them how they should work.”

Instead of maintaining its own servers and data centers, Sugar CRM hosts its services on Rackspace, Amazon Web Service, and IBM. Augustin tells me this is done to keeps costs low and to keep the company focused on the product, not worrying about how it will be delivered. “We’re not in the business of building data centers,” he said.

“Historically, our business has been more mid-market focused, and in the past year we’ve gotten into bigger enterprise deals. We’ll continue to invest in the sales resources on that side,” he said. “We are also hiring like mad. We have 260 employees and are expecting to grow to 300 plus by the end of year.”

Of the $33 million, $14 million was equity and the other $19 million was for debt financing. This new round brings the company’s total equity funding to $60 million.

SugarCRM was founded in 2004 and is based in Cupertino, Calif. The company is backed by New Enterprise Associates, Silicon Valley Bank, Gold Hill Capital, Draper Fisher Jurvetson, and Walden International.

Filed under: deals, VentureBeat

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Deutsche Telekom invests $2.63M in Germany’s Flaregames (exclusive)

Posted: 04 Apr 2012 12:00 AM PDT

Germany’s Flaregames, a mobile game startup headed by Gameforge founder Klaas Kersting, has raised $2.63 million (2 million euros) from Deutsche Telekom’s investment arm.

T-Venture Investment will take a stake in Karlsruhe, Germany-based Flaregames, which is making free-to-play games for a variety of mobile platforms. The deal comes on the heels of a $7.9 million investment from Accel Partners. It shows that Kersting has an ability to cut deals and that mobile gaming is still hot.

Flaregames and Deutsche Telekom have also signed a broad marketing cooperation agreement where they will work together to promote and market mobile games. The first games will be released in April in five languages, and eight games are currently planned for release this year.

“We had just closed a round of financing and are actually comfortably financed, but were open to T-Venture's approach, as we consider it  a unique strategic opportunity," said Klaas Kersting, CEO and founder of Flaregames. "T-Venture's position as a catalyst between ourselves and Deutsche Telekom opens up numerous opportunities for successful collaboration and access to the customer base of the leading European carrier."

Christian Illek, marketing director of Telekom Deutschland, said that Flaregames impressed his company with a clear vision for growth, great product pipeline, and a motivated team. Kersting previously built Gameforge into a big online game company with 500 employees and more than $260 million in annual revenue.

Filed under: games, mobile

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Panel: Many battles yet to be fought in the mobile platform wars

Posted: 03 Apr 2012 08:01 PM PDT


Among iOS, Android, BlackBerry, and Windows Phone, a mobile platform war is raging. At the VentureBeat Mobile Summit today, three key mobile representatives discussed the current battles and where they might go tomorrow.

On stage, moderator Robert Goldberg of Crossroads Ventures sat down with Wallace Pai, the VP for Motorola Mobility; Sundeep Madra, the co-founder of Xtreme Labs; and Aleksandar Mitrovic, SVP for Technology and Platforms for Deutsche Telekom.

The session humorously began with Goldberg asking the audience to split themselves by platform: Android to right, iOS to the left, and “everyone else in the back.” It might not surprise you, but the majority of this highly select group of executives mostly carried iOS devices.

But as much as the panel started on a biting note about division, the panelists shied away from bashing anyone throughout their discussion. Pai of Motorola could have easily made some potshots at iOS, but instead he played the civil cheerleader.

“Speaking from our own experience, we were the first one to bet on the Android system,” Pai said. “There wasn’t an ecosystem. but we knew a horizontal platform could take off. From that point of view, we clearly made the right choice.”

The only real platform bashing came in the form of silence about other platforms. The conversation mostly focused on iOS and Android, and only at the end of the discussion was Windows Phone briefly mentioned. BlackBerry wasn’t taken seriously for a minute.

Deutsche Telekom’s Mitrovic admitted that the platform wars were a good thing since his business’ customers would only be helped by healthy competition and giving them devices they want. One point he stressed was that Android tablets aren’t a joke in Europe like they are in America, where the iPad dominates store shelves. “In Germany, the Android tablets are next to iPad, not delegated to the back of the store,” Mitrovic said.

Xtreme Labs’ Madra, who works with all kinds of mobile companies on strategy, made a point of cheerleading for both Google and Apple. He said Apple had a 10-year lead with iTunes and Google had done a great job of catching up to that with its own offering. But he said Apple was the clear winner in the tablet space.

“If the iOS and Android tablets are similarly priced and have similar features, nine times out of 10 consumers choose the iPad,” Madra said.

At the end of the panel, all three participants shied away from naming a winner in the mobile platform wars. But no doubt they will rage on. Frankly, I can’t wait to see how Windows Phone begins to disrupt the market; hopefully we’ll hear more about it at the next Mobile Summit.

“By 2020, there will be 100 billion connected devices,” Madra said. “There’s a lot of room for many platforms.”

Mobile Summit photo: Heather Kelly/VentureBeat

Filed under: mobile, VentureBeat

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EMI terminates its music licensing contract with Grooveshark

Posted: 03 Apr 2012 07:43 PM PDT


Grooveshark is undoubtedly playing a sad song today, but it’s definitely not from an artist licensed by major music company EMI.

EMI, one of the largest music publishers in the world, has terminated its contract with the streaming music service. EMI was the only company that had an official contract with Grooveshark, which entailed that the startup pay royalty fees based on song playback activity of its users. In January, EMI filed a lawsuit against Grooveshark for allegedly not paying any licensing fees since the licensing agreement was signed in 2009.

“Grooveshark was recently forced to make the difficult decision to part ways with EMI due to EMI’s currently unsustainable streaming rates and EMI’s pending merger with Universal Music Group, which we consider monopolistic and in violation of antitrust laws,” Grooveshark said in a statement to Cnet. “To date, Grooveshark has paid over $2.6 million to EMI, but we have yet to find sustainable streaming rates. In spite of this, Grooveshark’s dedication to artists and rights holders remains the same.”

Grooveshark is different from other prominent streaming music services like Spotify, MOG, and Rdio because it doesn't have broad licensing agreements to play the majority of its music. It depends on its users to upload songs that can be enjoyed by the community. If a user uploads a file that he or she doesn't own and it gets a DMCA complaint, Grooveshark takes the file down. With Grooveshark’s EMI contract terminated, any music licensed by EMI will need to be removed if found online. To date, Universal Music Group, Sony Music, and the Warner Music Group have filed a lawsuit against Grooveshark for allegedly pirating thousands of songs through its streaming service.

Basically, this means Grooveshark can’t use the majority of licensed music, and major music publishers aren’t interested in changing that anytime soon.

Gainesville, Fla.-based Grooveshark has over 30 million active monthly users who stream more than 15 billion songs per year, according to the company. In November, it rolled out a new design of its online music player that includes a social layer.

Jaws image via Universal Studios

Filed under: media, VentureBeat

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Next Issue Media launches with all-you-can-read pricing model

Posted: 03 Apr 2012 06:43 PM PDT

Though digital magazine circulation has increased significantly in recent months, it remains a mere one percent of overall circulation, Ad Age reported last week. A group of five major publishers is hoping Next Issue Media, a company launching its full-feature product tomorrow, can change that.

In a rare move, these five publishers have collaborated to sell multiple titles from a single digital newsstand. Hearst, Conde Nast, Time Inc., Meredith, and News Corp. have all invested in Next Issue, which first launched in beta last May.

Since then, the company has expanded its digital newsstand app to 32 titles, including such household names as People, Real Simple, and Esquire. The startup, which has offices in both New York City and Palo Alto, is currently focused on "the titles that everyone reads," according to CEO Morgan Guenther, a former president of TiVo.

Next Issue is predicting that consumers want to access all titles in one place, similar to the way they watch television and movies on Hulu and Netflix. And the company designed its new pricing structure with this prediction in mind. In addition to selling single magazine issues and subscriptions, Next Issue will offer two unlimited monthly packages. Unlimited Basic will sell all monthly and bi-weekly titles for $9.99 per month, while Unlimited Premium will also include weekly titles for an additional $5. Guenther expects these monthly packages to appeal to magazine enthusiasts and families.

Today, Next Issue has tens of thousands of customers who read an average of two magazine titles through the app. The company does allow customers to access content for free if they already have a print subscription. Though Guenther declined to say what percentage of customers are authenticating their print subscriptions, he did say that this option is a "big hit, people love it.”

Next Issue's potential audience is currently limited, since the app is only available on tablets running Android version 3.0 or later, but the company hopes that will soon change. It plans to submit to the Apple App Store in the coming weeks and expects to be available for the iPad later this year.

Next Issue is not the only instance of collaboration between major publishers. Ongo, a company that aggregates and curates news content for a fee, has raised funding from publishers including The New York Times, Washington Post, and Gannett. Free digital newsreaders abound as well. Yet despite the popularity of free apps such as Flipboard and Pulse, Guenther firmly believes consumers will pay for Next Issue. "We're focused on premium content," he said, "content that's not available for free on the web."

Next Issue launched in 2009 and has raised an undisclosed amount of funding to date.

Filed under: media, VentureBeat

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Funding daily: online video ads, retail catalogs for the iPad, and cloud networking

Posted: 03 Apr 2012 06:10 PM PDT

ipad retail catalogAt VentureBeat, we come across a lot of funding news every day. In order to bring you the most information possible, we're rounding up the quick-and-dirty details about the funding deals of the day and serving them up here in our new "Funding daily" column.

HIRO Media grabs $5 million

Online video advertising service HIRO Media raised $5 million dollars from undisclosed investors Tuesday. The six-year-old company uses TV ad tactics to create high-grossing ads and offers analytics to track their performance.

Real Valuable Corporation raises $2.5 million

Store catalog app maker Real Valuable Corporation closed a first-round $2.5 million in funding. The company’s iPad app, CoffeeTable, lets you browse store catalogs without an Internet connection. Shoppers can also make offline purchases of items they see in each catalog without leaving the app to go to another site. Print company RR Donnelley led the round.

Pertino Networks snatches up $8.8 million in cash

Cloud networking service Pertino Networks raised $8.8 million. Its still-in-beta service will offer cloud networking for enterprise IT. Norwest Venture Partners and Lightspeed Venture Partners led the first institutional round for the company.

Cloud-based video production company Aframe gets funding

Aframe announced its first funding round Tuesday, for $7 million. Octopus Investments and Eden Ventures led the round, with participation from existing investor Northstar Ventures. Aframe offers cloud-based video production software, so videographers can do work on the go.

BigDoor raises $5M for gamification platform

BigDoor has raised $5 million in new funding from the Foundry Group. The platform allows non-game online publishers to "gamify" their web sites by adding game mechanics that improve user interaction and engagement.

The Minerva Project raises $25 million

Attempting to build an elite university, The Minerva Project just announced it has raised $25 million dollars in seed funding from Benchmark Capital, the largest seed round the venture capital firm has ever invested. The company is building a new kind of university for students around the world.

Small business community Manta grabs $44M

Tuesday, small business community Manta raised $44 million. The company helps small businesses gain visibility and attract new customers, as well as create a community of small business owners. Norwest Venture Partners led the round.

Skout raises $22M for mobile flirting app

Five year-old Skout has raised $22 million in funding from Andreessen Horowitz. The company has produced a location-centric iPhone dating app to connect busy young singles.

Nitro nabs funding for PDFs

Australian-founded Nitro raised $3.5 million for its PDF editing and signing software. Starfish Ventures led the round for the seven-year-old Adobe competitor.

If you’ve got any funding news to send out way, email tips@venturebeat.com. 

Filed under: deals

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Nokia’s Lumia 900 is the best $100 smartphone yet (review)

Posted: 03 Apr 2012 06:00 PM PDT

Who would have thought that a Windows Phone — and one from Nokia, no less — would be one of the best alternatives to Apple’s iPhone that we’ve ever seen. And at $100, it’s a downright steal.

Before Nokia announced the Lumia 900 at the Consumer Electronics Show in January, I wrote that the Lumia 800, its smaller European counterpart announced last Fall, would be a bigger deal than most think. Now it’s clear that’s even more the case with the Lumia 900, which sports a bigger screen, faster 4G LTE speeds, and the combined marketing muscle of AT&T, Nokia, and Microsoft.

In many ways, the Lumia 900 is the last stand for both Windows Phone and Nokia. Microsoft needs a compelling flagship mobile device to build on its sagging market share, and Nokia needs to prove that its partnership with Microsoft can pay off with a popular device.

If this phone flops, there’s little on the immediate horizon to save Windows Phone, and Nokia will likely shift its focus to its popular low-end devices.

The good: iPhone-like polish

nokia-lumia-900-handNokia is no stranger to creating gorgeous phones, and the Lumia 900 is no exception. The company employed the same unibody polycarbonate design it first showed off in the N9 MeeGo phone, which means it doesn’t have that cheap plastic feel of so many Android phones. It also feels totally distinct from the countless look-alike smartphones on the market — just like you can never mistake the iPhone for anything else, the Lumia 900 feels like it’s in a class of its own.

The phone sports two major upgrades over the Lumia 800: a bigger 4.3-inch screen to satisfy display addicts, and LTE 4G connectivity on AT&T’s network. While Verizon has a much bigger LTE rollout by this point, I found AT&T’s 4G speeds to be comparable in New York City, with downloads clocking in between 12 and 15 megabits per second, and uploads around 3 to 5 Mbps.

The Lumia 900 runs an updated version of Windows Phone Mango (7.5) that includes support for LTE. Mango was the biggest update for Windows Phone yet, and on the Lumia 900 it runs like a dream. I’ve tested a few Windows Phone handsets, and while I’ve been impressed with the platform overall, there was always a lingering disconnect between Microsoft’s polished software and the fairly unexciting hardware. Not so with the Lumia 900.

Perhaps because it’s the first Windows Phone not to feel like a rejected Android handset, the Lumia 900 feels perfectly in harmony with Microsoft’s slick Metro interface.

At $100, the Lumia 900 also blows away most similarly-priced smartphones. Numerous Android devices are available for $100 and under, but in my experience the cheaper you go with Android devices, the more hellish the experience. Apple’s $100 8 gigabyte iPhone 4 is the strongest competitor to the Lumia 900, but for those consumers who avoid Apple products at all costs, Nokia’s new flagship is one of the few worthwhile mid-range smartphones.

The bad: Windows Phone still feels limiting

Despite its great hardware and the overall slickness of Windows Phone, the platform still has some drawbacks. Windows Phone recently passed the 70,000 app milestone, but that still doesn’t compare to the hundreds of thousands of apps both iOS and Android offer. Notably, some big-name apps like Pandora still aren’t officially available on the platform.

And despite the Lumia 900′s slick hardware, Windows Phone’s immaturity is hard to ignore. The OS only received multitasking support (the ability to run more than one app) last fall, and it’s still not as robust as multitasking on the iPhone or Android. This may not be a problem for most potential Windows Phone users, but for techies it’ll be a major annoyance.

Not surprisingly, Microsoft continues to cater to Windows users with its mobile platform, which makes it less tempting for Mac users to adopt Windows Phone. (Then again, Microsoft has likely written Apple users off as faithful iPhone fans.) For example, Microsoft offers a small app to synchronize Windows Phones on Macs, whereas PC users get to use the robust Zune software.

The takeaway: Windows Phone’s first killer device

The Lumia 900 is the best Windows Phone yet, and it’s the first phone I’ve seen to truly unleash the potential of the platform. If you’ve been at all interested in adopting Windows Phone, it’s the only option worth considering at this point.

But while it’s nice to finally see a true flagship Windows Phone, the platform still needs plenty of marketing and carrier support to stand a chance. AT&T, which seems eager to help make the Lumia 900 a success, has promised to step up employee training and will be pushing the device through ads and in-store displays. From my conversations with AT&T executives, the Lumia 900′s April 8 launch appears to be the biggest for the carrier since the initial iPhone release.

There’s definitely a sense of enthusiasm surrounding the Lumia 900 that was missing from the initial Windows Phone launch. Perhaps because there’s so much at stake for all the companies involved, it feels as if the Lumia 900 is the first true Windows Phone. And I think for many consumers, that’ll likely be the case.

Photos via Sean Ludwig/VentureBeat

Filed under: mobile, VentureBeat

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Nokia innovation exec on Windows Phone: “We’re playing to win.”

Posted: 03 Apr 2012 04:52 PM PDT


At VentureBeat’s Mobile Summit event today, very few panelists mentioned the impact that Windows Phone was having in the mobile world. But that clearly changed the minute Nokia exec Hans-Peter Brøndmo got on stage to chat about the future of the company and its crazy 41-megapixel camera-phone.

Nokia bet the company on Microsoft’s Windows Phone OS back in February 2011 and begrudgingly gave up on its Symbian OS. A year later, Nokia is now the top manufacturer of Windows Phones and is working heavily with Microsoft and carriers to get units in the hands of consumers. Its quite-good Lumia 900 phone will land on AT&T on Sunday for just $99 with some features the iPhone 4S doesn’t have, including 4G LTE connectivity.

Brøndmo, Nokia’s “head of concepting and innovation”, who is based in San Francisco, first talked about the 808 PureView device that has a 41-megapixel camera. That phone does not include the Windows Phone OS, but it is stunning that a phone can pack in so much photographic power, and that tech will no doubt move to Windows Phone in the near future. For an example, Brøndmo showed photos taken on plane over Greenland and you could see marvelous levels of detail on the mountains below.

“We’re trying to get [the PureView] to market as fast as possible,” Brøndmo said. “We want people to use it. I was just talking with a famous photographer … and he is seeing this as a game changer. He even bought Nokia stock.”

The conversation quickly turned to the future of the company and Windows Phone. Brøndmo said Nokia and Microsoft have a deep partnership and are doing everything they can think of to create a “third ecosystem” outside of iOS and Android.

“This industry is changing very fast and as noted earlier, Google and Apple would not be mentioned here four years ago,” Brøndmo said. “We can’t flaunt a half million apps yet, but there is nothing I can’t find on this phone that I need today.”

With AT&T pushing the Lumia 900 smartphone here in the U.S. and tons of other carriers pushing the new Windows Phones around the world, Brøndmo said the company would make a huge comeback.

“We’re playing to win,” Brøndmo said. “This a global market and a global stage. We have a good mix of cultural perspectives and an incredible opportunity to come back. We’ll have a great competitive marketplace.”

Filed under: mobile

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Facebook app promotes energy conservation with peer pressure

Posted: 03 Apr 2012 04:39 PM PDT

If simple common sense can’t curb energy usage, perhaps a little peer pressure from Facebook friends will do the trick.

Facebook has joined forces with energy efficiency startup Opower and the National Resources Defense Council to release a social energy application that encourages people to track, and ultimately reduce, energy use in the home.

The simple application invites Facebook members to log in and automatically track monthly energy use by connecting the app to their utility account. The friendly, non-threatening conservation-themed app encourages competition, highlights rankings among friends and groups, provides national benchmarks, and offers energy-saving tips.

“People can connect their utility account directly to the app to track progress and share energy saving accomplishments with friends,” Facebook said in a memo on the news.

The social network estimates that it can reach 20 million households at launch, although not all utility providers (SDG&E, for one) are supported.

Facebook’s app partner, Opower, has been in the business of consumerizing energy use data since 2007. The Arlington, VA-based company has raised upwards of $65 million in venture funding, including a $50 million round from Accel and Kleiner Perkins Caufield & Byers.

We appreciate the gesture, but we’re not yet sold on the idea of Facebook and gamification tactics making a sizable dent in energy use. We’re open to being proven wrong, of course. What say you, Dear Reader?

Photo credit: Jake Mates/Flickr

Filed under: green, social

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Mercedes-Benz R&D CEO explains how in-car systems are changing rapidly (video)

Posted: 03 Apr 2012 03:47 PM PDT


In-car technology is making a major splash this year, with more car makers than ever focusing widely on tech. One of the cutting-edge car companies in this bunch is Mercedes-Benz, which has its R&D sister company set up in Palo Alto to be around tech innovators.

Johann Jungwirth, President & CEO, Mercedes-Benz R&D, sat down to talk at VentureBeat’s Mobile Summit 2012 event today and present his ideas about what makes Mercedes’ Android-based AMG Performance Media system a standout among other car companies’ systems.

“A few things have changed recently within the company and the automotive community,” Jungwirth said. “We’re starting to offer customers [the option] to use their smartphones as the core solution. We have a seven-year development cycle for the car and now we can build on top of the 12-month-cycle of smartphones.”

On stage, Jungwirth stressed that the system, which gives users access to music apps, Google Maps, 3G connectivity, and more, has seen great support from Google and Android head Andy Rubin. He also said the Mercedes-Benz App Store will launch later this month to give drivers a better selection of applications and give developers another platform to get app exposure.

I had a chance to speak with Jungwirth, nicknamed “JJ” for short, on video to talk a little more about his company’s new car system. We’re standing in front of the new SLS AMG model, a stylish car with the AMG Performance Media system inside. Take a look:

Filed under: mobile

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Microsoft’s Windows Phone lead Terry Myerson takes our Top Mobile Mover prize

Posted: 03 Apr 2012 03:22 PM PDT

Terry Myerson of Microsoft

VentureBeat is pleased to announce the winner of the first-ever Top Mobile Mover award: Terry Myerson, corporate vice president at Microsoft in charge of the company’s Windows Phone efforts.

We’re making the announcement today at the Mobile Summit, our invitation-only get-together for 180 mobile execs, entrepreneurs, and investors, in Sausalito, Calif.

Myerson has been overseeing the strategy and development of Microsoft's Windows Phone platform since 2011 and has been a key player in the business since its inception in 2008, when he became the engineering lead for Microsoft's mobile group. Noted for his no-nonsense approach, Myerson helped lead the charge for Microsoft's momentous "reset," when the company essentially threw out everything it had been doing with Windows Mobile and reinvented its mobile operating system from the ground up.

The gamble was a big one, and it's still too soon to tell whether it will pay off. Microsoft is coming from far behind both iOS and Android in the smartphone market and has far to go before it can even catch the flailing BlackBerry. Make no mistake: Windows Phone is a long shot. But if anything has the potential to be a spoiler in the mobile platform wars, it's Windows Phone. Microsoft's partnership with heavyweight phone maker Nokia gives it even more clout, and combined with its desktop OS-based strategy on the tablet front, Microsoft might just drive a strategic wedge between iOS and Android.

Myerson is now charged with leading the Windows Phone business, improving Windows Phone's marketing efforts, managing relationships with wireless carriers, implementing new software features in recent Windows Phone updates, and most notably, navigating Microsoft's strategic partnership with Nokia. That partnership has already produced one impressive product: the Nokia Lumia line of smartphones, coming this month to the U.S. in the form of the Lumia 900 on AT&T Wireless.

Windows Phone is early in its lifecycle, but it's an attractive, responsive operating system that's getting a lot of notice. You can count on it to make big waves in the mobile market this year. That’s why we’ve named Myerson our Top Mobile Mover for 2012.

For the runners-up, see our list of the top 10 Mobile Movers finalists. And check out the popular votes there, too: Ehud Shabtai of Waze led the popular vote, with 2,523 votes as of this writing. Dr. Paul E. Jacobs of Qualcomm took second place in the popular voting, with 1,473 votes, and Nokia’s Mary T. McDowell took third, with 952 votes.

Filed under: VentureBeat

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Twitter updates iPhone app, restores mentions and interactions

Posted: 03 Apr 2012 03:15 PM PDT

A mysterious bug that disabled mentions and interactions in Twitter’s mobile applications has finally been fixed.

The Twitter for iPhone application, as of Sunday afternoon, stopped updating to display replies (otherwise known as mentions), retweets, favorites, and other activity in the “@ Connect” tab for some members.

With the release of version 4.1.3, out now, Twitter has remedied the problem, returning the oddly absent activity back to iPhone users.

When VentureBeat inquired about the bug Monday, a Twitter spokesperson directed us to a help page that acknowledged the issue and instructed users to delete and re-add a Twitter account to solve the issue, but did not offer further explanation of the issue.

The Twitter for Android application was also affected with the same malfunction and has since been updated.

Photo credit: wharman/Flickr

Filed under: mobile, social, VentureBeat

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PlayStation one-ups Xbox with new Amazon Instant Video app

Posted: 03 Apr 2012 12:50 PM PDT

Amazon, PS3

Online retail giant Amazon has launched a new streaming video app for Sony’s Playstation 3 game console, the company announced today.

As part of the agreement between Sony and Amazon, the Amazon Instant Video App will be prominently featured on all consoles in the U.S. It also makes the PS3 the sole gaming console to integrate with Amazon’s streaming video service, which includes over 17,000 TV shows and movies available for free to Amazon Prime members.

An Amazon Prime membership will run you $79 per year but also offers you free two-day shipping through Amazon’s website and access to the Kindle e-book lending library. To celebrate the launch of its PS3 app, Amazon is offering the first episode of more than 100 TV shows for free to both Prime and non-Prime customers. (And of course, you can always buy or rent tons of movies and TV shows.)

This is a big win for the PS3 and one that was definitely needed to compete with the Xbox. Last week, the Xbox debuted a handful of new apps, including MLB.tv, Comcast’s Xfinity TV, and HBO Go.

Below are some additional details about the new Amazon PS3 app from the press release:

  • Instant streaming of nearly 25,000 high-definition movies and TV shows that start and resume in just seconds.
  • New smart lists such as Recently Watched, Next Episode and Personal Recommendations. These lists appear on the home screen of the PS3 system app and update dynamically based on what customers watch and buy. They make it easy for customers to find the next thing they want to watch. They can start watching an episode where they left off or watch the next episode in a series. It introduces them to new TV shows and movies that they will love.
  • Whispersync lets customers seamlessly switch from one device to another. Start streaming a movie on Kindle Fire, then pick up right where you left off on your PS3 system — avoid the frustration of having to find your spot.
  • Your Video Library gives customers access to purchases from Amazon Instant Video on the PlayStation 3 system or any of the hundreds of other devices enabled for Amazon Instant Video.

Filed under: games, media, VentureBeat

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Mobile shopping execs to retailers: look beyond the price battle to survive

Posted: 03 Apr 2012 12:34 PM PDT

Physical retailers need to stop being afraid of the mobile shopping revolution and play to their strengths instead, a panel of executives told the audience at VentureBeat’s Mobile Summit today.

VentureBeat brought together Google’s head of mobile Jason Spero, PayPal’s mobile head Hill Ferguson, and the founder of NeuAer Dave Mathews to discuss the current state of mobile shopping. The big takeaway for brick and mortar retailers? You may not be able to beat online stores when it comes to price, but there’s a lot more that you can offer with a physical presence.

The panelists pointed to high-end retail store experiences like the Apple Store, which offers knowledgeable sales people, the chance to try out products, and (more recently) the ability to check out directly from your phone. Google’s Jason Spero pointed out how a local store could offer additional services to make its consumers overlook higher prices, such as installation for complicated products like grills.

“I think that the definition of a retailer has to change,” Spero said.

But while bigger retailers quake in their boots over the concept of mobile shopping, the execs pointed out how smaller businesses can take advantage of newer payments technologies.

“We’re starting to see small businesses get access to technology and capabilities that are a whole generation ahead of bigger companies,” PayPal’s Hill Ferguson said.

Ferguson pointed out how mobile payments can help to attract sales in commodity products like gas. A new deal between PayPal and the gas station chain Cumberland Farms, for example, will allow customers to pay for gas from their phone. That could be a bonus for consumers during cold winter months.

Filed under: mobile, VentureBeat

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Flickr fingered in Facebook counterclaim

Posted: 03 Apr 2012 12:34 PM PDT


facebook, flickr

Yahoo’s popular photo-sharing community Flickr has been called out as one of the primary properties infringing on Facebook patents in the social network’s counterclaim, which it filed Tuesday.

Facebook responded to a March patent suit brought against it by one-time-Valley-friend Yahoo with a counterclaim alleging violation of 10 patents. The social network claims that Yahoo’s homepage and content optimization engine infringe on Facebook patents. Yahoo News, Sports, Games, Finance, Autos, Movies, Shopping, and Travel properties also infringe on Facebook patents in the way they serve advertisements to visitors, Facebook argues.

Flickr, however, was given the star treatment, and fingered in particular for its violation of two patents (embedded below) around feed personalization and content tagging.

Patent 7,827,208, or the ’208 patent as its referred to in the suit, is the “Generating a Feed of Stories Personalized for Members of a Social Network.” Facebook argues that the Flickr Photostream, Recent Activity, and Groups Activity features all infringe on this particular patent.

On the tagging front, Facebook owns the patent for Tagging Digital Media (patent 7,945,653) and claims that Flickr’s People in Photos, a tagging feature similar to Facebook’s offering, infringes on its intellectual property.

In all instances, Facebook calls for a cease and desist verdict.

“Facebook has been irreparably harmed by Yahoo!'s infringement, for which there is no adequate remedy at law, and such harm will continue unless Yahoo! is enjoined by this Court,” the social network said in the suit.

Angry finger pointing photo via Vlue/Shutterstock

Filed under: social

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Analyst downgrades Netflix’s stock over emerging competition

Posted: 03 Apr 2012 12:18 PM PDT


Video rental service Neflix may soon see a dip in its stock value thanks to a downgrade by Barclays Capital analyst Anthony DiClemente.

Netflix had a particularly rocky 2011, with a 60 percent price hike on combined streaming-and-DVD rental plans and a failed plan of splitting Netflix into two companies. The company was punished with a loss of more than half of its stock price. The stock appeared to have rebounded slightly in the last quarter with a better-than-expected subscriber growth boost.

DiClemente cited rising costs and a number of emerging competitors as the main reasons for its lower stock rating.

“Amazon Prime’s [streaming video on demand] offering could eventually be carved out as a stand-alone product that would compete more directly with Netflix for subscribers. Likewise, Comcast’s recently announced Streampix service could eventually be offered … as another direct competitor to Netflix,” he wrote in a report published today.

It’s very unlikely that Amazon will ever spin off its streaming service into a standalone product, as VentureBeat has previously outlined. And DiClemente’s suggestion that Comcast’s Streampix could become a direct competitor would be more accurate if the service wasn’t tethered to an expensive monthly cable subscription. But, as he suggests, that could change over time.

In terms of rising costs, Netflix went from spending 12 percent of its total revenue on streaming content in 2010, to spending nearly 50 percent in 2012, DiClemente cites. If you factor in that the company is spending money on streaming licenses in two new markets (Latin America and the U.K./Ireland) in addition to its domestic and Canadian service, those costs aren’t really that big of a deal. I’d imagine if Netflix decided to launch its DVD-by-mail service in new markets, that percentage would be quite a bit lower.

“While rising digital content costs are not surprising given Netflix’s shift to a streaming-only company,” DiClemente said, “we believe Netflix’s mounting off-balance-sheet obligations add a greater level of risk to future earnings and liquidity in 2013 and beyond, which will have to be supported through continued subscriber growth.”

Another big risk for Netflix, DiClemente said, is in the company’s expansion into international markets. The company can’t afford to fail in either of its two new international markets without seeing serious repercussions on its business as a whole. Also, both the U.K. and Latin American markets already have Amazon-owned LoveFilm, which will make success even harder to achieve for Netflix.


Filed under: media, VentureBeat

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On the offensive: How to take control of the BYOD trend

Posted: 03 Apr 2012 12:11 PM PDT

A well-equipped mobile worker is no longer a "nice to have" or a luxury. It's a business necessity.

In an economic climate where success or failure is based on the productivity and efficiency of employees, BYOD (that stands for “bring your own device”) programs are flourishing. In fact, the latest CDW IT Monitor survey found 76 percent of organizations now allow the use of personal mobile devices for work-related tasks.

At the same time, IT Monitor also found that one third of IT decision-makers are not confident or only somewhat confident in their BYOD security measures. One in five organizations are not implementing IT security measures or protocols to manage the risks.

To properly implement a BYOD program that offers flexibility while simultaneously addressing inherent security risks, organizations need to look at these devices as assets, not merely as liabilities. IT leaders need to take an objective look at how mobile technology can be used efficiently and effectively, what functionality is required, and where boundaries need to be established.

On the surface, creating a sound BYOD program can seem like a daunting task. It is feasible however, when dissected into three distinct parts: mastering mobile device management, ensuring a sound IT infrastructure, and establishing end-user protocols.

Managing the mobile workforce

On the device-management side, the objective is quite clear: Create an environment in which an organization can manage data in the event a device is lost, stolen or operating in an unsecure environment. To properly manage employee devices, organizations should focus on:

  • Providing a choice. One of the primary choices of BYOD is to enhance real productivity. With this in mind, it is important to let people use the device they want to, while ensuring that a reasonable level of safety is provided for the device they choose.
  • Maintaining an appropriate level of control. Having the ability to access devices remotely means that companies are better equipped to conduct remote wipes. If a device is lost or stolen, remote wipes can protect sensitive data or documents by quickly removing the information from the device.
  • Preparing for uncertain environments. Similar to remote wipes, encryption also helps protect sensitive information if a device is lost or stolen.

Once you build it, the work isn’t over

Implementation does not stop once employees have selected their devices. Organizations need to revisit their IT infrastructure and examine how a BYOD program will impact it. A few areas to focus on are:

  • Delivering on your technology promises. An organization's wireless network needs to be capable of supporting a large number of different mobile devices. BYOD ladders up to meeting business goals, but if a network cannot support all the devices, productivity is lost and employee morale could plummet.
  • Offering appropriate network access. Beyond bandwidth, IT leaders need to determine what type of information is truly needed by an end user. For example, access to next year's strategic planning documents is not necessarily appropriate for a sales meeting. The goal is to quickly and efficiently provide each user with relevant information without granting unnecessary access.
  • Creating a desktop experience away from the desktop. Web services, email and calendars are typically easy to access from mobile devices. Some organizations are taking BYOD to the next level by providing virtual desktop infrastructure (VDI). Using this technology, organizations can offer secure methods of guiding mobile devices to a virtual desktop, which allows them to do more while away from the office.

It takes a village

In order for a BYOD program to be safe and successful, there must be rules. When establishing protocols, organizations must look beyond their IT departments. To develop effective protocols, companies should:

  • Assemble a multi-disciplinary team. While BYOD security protocols may be created by an organization's IT leader, input from other departments must be sought. Ideally, protocols should be developed with the involvement of an organization's HR, IT, finance/accounting, and compliance departments.
  • Keep employees in the know. Once the appropriate protocols are in place, they should be reviewed with employees at least annually. The bottom line is that while the actual device is owned by the coworker, an organization has control over the data.
  • No one under the radar. Developing an effective BYOD initiative should support and enable the user in a way that gives them no reason to go "under the radar." Sufficient device choice and the practical protocols will help ensure compliance.

The road to BYOD implementation will vary for each organization. Remember: Although BYOD programs can introduce additional security risks into an organization, allowing employees to use the mobile devices of their choice for work related tasks provides flexibility and drives productivity. In the end, it is a win-win for organizations and their employees.

Doug Eckrote is senior vice president of Strategic Solutions and Services for CDW, a leading provider of technology solutions to business, government, education, and healthcare. Eckrote is responsible for CDW’s complex technology services including assessment, planning and design, business continuity, virtualization, collaboration, security, mobility, data center optimization, and cloud computing.

Image courtesy of David Hammonds, Shutterstock

Filed under: enterprise, mobile

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Technology: Helping you get a useless education faster!

Posted: 03 Apr 2012 11:55 AM PDT

In a classic episode of The Simpsons, Homer changes his name to "Max Power" and declares to Bart and Lisa, "Kids, there’s three ways to do thingsT the right way, the wrong way and the Max Power way!" Bart asks, "Isn’t that the wrong way?" And Homer replies, "Yeah, but faster!"

The belief that using the Internet to teach the same old college material will magically fix higher education is the equivalent of believing in the Max Power way — “Let's keep doing education wrong, but faster!”

Heavyweights Peter Thiel and Vivek Wadhwa are still debating the importance of college for young people, with Theil encouraging youngsters to drop out and Wadhwa insisting the successful college dropout entrepreneur is a myth. But the underlying flaw of higher education has largely been ignored. And until this problem is addressed, adding a layer of technology simply streamlines the delivery of a flawed product.

College has two customers, the students and the labor market (employers). For the vast majority of students, the number one reason for attending college is to improve their career prospects. While top schools such as Stanford and Harvard still succeed in serving this purpose, the ability of lower-tier schools to deliver a better career drops precipitously.

When college evolved from the "ivory tower" model that was designed for the upper crust of society, it failed to adapt to the needs of the populace who were less interested in intellectual conversation and more interested in getting a job.

Today we have hundreds of thousands of students spending several years and tens of thousands of dollars they can't afford graduating from low-tier and mid-tier schools, but those institutions actually do little to help their alumni’s prospects.

For example, many years ago, I was on a porn set (I was not performing) and struck up a conversation with one of the actresses (I lead an interesting life). I was somewhat horrified but not entirely surprised to find out that she had graduated from the same university and with the exact same degree that I had. Clearly, our college had grossly failed to improve either of our careers.

For students, this inability to deliver significantly better income after graduation can only be seen as a complete failure. Customer Number One has not been well served.

The second group of customers that colleges must serve has essentially the same goal as the students. Employers want to hire qualified people as much as graduates want those jobs.

But instead of producing graduates with the skills employers need, the American college model tends toward encouraging an almost random education that has little bearing on the demands of the labor market. This disconnect has resulted in a credibility gap between what a degree is supposed to provide and what employers feel it's actually worth.

Simply applying technology to this system or offering unaccredited classes online isn't enough. It is imperative that any alternative to the current structure earn the trust and respect of employers.

This is where online learning typically falls short. While it may be cheaper and faster than a regular university, private employers often give even less credit to the value of these credentials.

Meanwhile, four-year colleges continue to believe that their role is to grant seemingly generic degrees that most companies couldn't care less about while they teach curricula that are often designed in total isolation from employer feedback.

This misalignment has resulted in thousands of well paying jobs going unfulfilled and talent wars over qualified workers — and all the while, colleges are cranking out a labor force with few applicable skills. Clearly, Customer Number Two has also not been well served.

Until universities put the needs of their customers above their dogmatic devotion to what constitutes a "proper" education, no amount of technological streamlining or making classes available online will significantly improve the shortcomings of our current system.

And any technology that doesn't address these core failings will provide only marginal improvement, perhaps making things a bit cheaper but not much more effective. Any proper disruption of higher education would involve changing these entrenched beliefs and implementing a system that focuses on colleges' true customers by giving students and employers the results that they want: credibility in the labor market.

Solutions that don't address this by earning the respect of employers are mostly doing things the "Max Power way” — delivering the wrong education faster.

Francisco Dao is the founder of 50Kings, a private community for technology and media innovators. He is a former leadership columnist for Inc.com, a lifelong entrepreneur, author and former stand-up comic.

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Filed under: VentureBeat

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The Minerva Project raises largest-ever seed funding from Benchmark for elite university

Posted: 03 Apr 2012 11:41 AM PDT

smart childThe Minerva Project, a new “elite university,” just announced it has raised $25 million dollars in seed funding from Benchmark Capital, the largest seed round the venture capital firm has ever invested.

“The demand for higher education has outstripped the supply. If you can identify the smartest kids in the whole world and reward them with great education, you can meet market demand and do good in the world,” said the Minerva Project’s chief executive Ben Nelson in an interview with VentureBeat.

The San Francisco-based company is out to reinvent American higher education with an intensely strong focus on academics and intelligence. The admissions process doesn’t consider your lineage, your citizenship, your ability to throw a football, or how much money your family can donate, and hopes to weed out the students whose athletic abilities or monetary status would otherwise help them get into college. In addition, the university plans to offer only “the most rigorous, analytical courses that synthesize such knowledge to prepare students to thrive in the real world,” which we can only assume means students won’t be taking random elective courses like “History of Rock and Roll,” that you may remember from your college days.

“We are in a world where knowledge is becoming more ubiquitous and free, so you’ll never seen a Spanish 101 or Economics 101 course at Minerva because it’s ridiculous for students to pay us money to learn stuff that they can go online and learn for free,” said Nelson.

Classes start in the fall of 2014 and you can bet the inaugural graduating class will be super-exclusive. The Minerva Project won’t have a physical campus; instead students will be based all over the world and connect via the Internet. Students will also be clustered together in metropolitan areas, living in private dorm-style apartments so they can get together for socializing and studying. Once a student graduates, The Minerva Project claims it will funnel resources into finding them a career, publicizing their talents, and will give students ongoing academic support.

The whole premise of the school does come off as a bit pretentious, but, it’s hard to disagree that the higher education system in America doesn’t always do the best job to prepare students for the real world. Having just graduated from college myself, I can attest that state-funded universities struggle to offer high quality courses to students, and that unless you have real-world skills you’ve obtained on your own, you’ll likely struggle to be relevant into today’s competitive job marketplace. A university such as The Minerva Project might produce better-prepared students than a typical university could.

Interestingly, while the school has an exclusive air about it, tuition is only $20,000 a year — lower than Ivy Leagues Yale and Harvard, which both charge about $38,000 per year.

The $25 million seed funding will be used to gain accreditation and hire faculty members. Of all things, Nelson is the former CEO of photo-sharing site Snapfish, but clearly Benchmark sees the value in his idea of an elite university, hence the substantial seed investment.

Genius child image via Shutterstock

Filed under: deals, VentureBeat

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Facebook fights fire with fire, counters Yahoo with patent suit

Posted: 03 Apr 2012 11:30 AM PDT

Not one to be bullied by Sunnyvale sourpuss Yahoo, Facebook is fighting fire with fire.

The social network, valued at $104 billion in a recent private auction, filed counterclaims to a Yahoo patent lawsuit Tuesday, alleging that its Valley foe is actually infringing on 10 Facebook patents.

“From the outset, we said we would defend ourselves vigorously against Yahoo's lawsuit, and today we filed our answer as well as counter-claims against Yahoo for infringing ten of Facebook's patents,” Facebook general counsel Ted Ullyot said in a statement. “While we are asserting patent claims of our own, we do so in response to Yahoo's short-sighted decision to attack one of its partners and prioritize litigation over innovation.”

In March, Yahoo filed suit against Facebook citing infringement on 10 Yahoo patents. The predatory move, unknown to Facebook until the media caught wind of it, drew the ire of the internet community, with many labeling it a desperate attack by a company lacking in innovation.

Facebook has responded aggressively. In the counterclaim, embedded below, Facebook demands a jury trial, denies many of Yahoo claims, and asserts that Yahoo properties, including the homepage and Flickr, infringe on Facebook patents related to content personalization and advertising.

“Yahoo! infringes the Facebook patents-in-suit through, by way of example and not limitation, the Yahoo! Home Page, Yahoo!'s Content Optimization and Relevance Engine ("C.O.R.E."), the Yahoo! Flickr photo sharing service, and advertisements displayed throughout Yahoo! including on My Yahoo!, Yahoo! Finance, Yahoo! Sports, Yahoo! News, Yahoo! Games, Yahoo! Movies, Yahoo! Shopping, Yahoo! Travel, Yahoo! Autos, and Flickr,” Facebook said in the counterclaim.

“We have only just received Facebook's answer and counterclaims, but on their face we believe they are without merit and nothing more than a cynical attempt to distract from the weakness of its defense,” Yahoo said in an email statement to VentureBeat. “As we have made clear from the outset, the unauthorized use of our patented technology is unacceptable and must be resolved appropriately. Other leading companies license these technologies, and Facebook must do the same or change the way it operates. We have proposed that Facebook join us in discussions to resolve the matter, but our overtures have been rejected. As a result, we are prepared to continue to seek redress through the courts.”

The gloves may be appear to be off, but this is all business as usual in patent litigations, Patrick Moorhead, president and principal analyst of Moor Insights and Strategy, told VentureBeat.

“In these kinds of patent litigations, you can count on a countersuit 95 percent of the time, particularly between two large companies,” he said. “The end goal for both companies is an out of court settlement.”

The companies, Moorhead argued, are both in a position of weakness, but Yahoo may want to win at any cost.

“Facebook’s back is against the wall driving to close an IPO without liabilities, one of which is now the lawsuit,” he explained. “Yahoo has fallen heavily from grace to the point of upcoming mass layoffs. Both parties would like a quick resolution, but I see Yahoo digging in for the long haul because they have less to lose and more to gain in a protracted lawsuit.”

Filed under: social

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You — yes, you — are using Linux, and you probably don’t even know it

Posted: 03 Apr 2012 10:57 AM PDT

Linux is everywhere. You might not see it, and you probably don’t know it yet, but it’s powering the web services you use, the phone in your hand, and the ATM at your bank.

The following video, just released by the Linux Foundation, is all about the places and apps where Linux is lurking unseen by the average consumer. It also goes into some detail about how Linux, a free and open-source operating system, is built collaboratively by a global army of volunteer developers. Altogether, around six patches get applied to the Linux kernel every hour. Crazy, innit?

“Linux is the most dominant OS in supercomputing,” said Amanda McPherson, vice president of marketing and developer programs at the Linux Foundation, in an email exchange with VentureBeat. “As for mobile and embedded [devices,] every Android has Linux in it.”

McPherson noted that Linux is making some interesting moves in the automotive space, as well.

“Toyota joined the Linux Foundation not long ago, and we now host an annual event, Automotive Linux Summit, due to increasing demand from our members and industry to use Linux in next-generation cars,” she said. “Maintaining the software needed for an auto today is a huge job and not one carmakers want to depend on one vendor to handle. Carmakers have to maintain their device (the car) for five to 10 years. With Linux, they have a full community supporting and updating the software. They don’t need to worry about it.”

While the Foundation stresses that the worldwide group of Linux contributors is a truly global community, McPherson said that particularly active hotspots have blossomed in North America, Japan, Europe, and Brazil.

Filed under: dev

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March Madness sparked 2M tweets (infographic)

Posted: 03 Apr 2012 10:32 AM PDT

As men everywhere lament the end of spring’s most electric sports competition, now is the time to reflect and make sense of March Madness — in terms of tweets, that is.

The college basketball tourney, which came to a close last night with Kentucky’s eight point win over Kansas, served as the catalyst for 2,065,060 tournament-related tweets between March 15 and April 2, according to email marketing company ExactTarget.

“Final Four” was the top trending word with 466,492 tweets, and ESPN’s SportsCenter Twitter account had the most popular tweet of the tourney. SportsCenter’s tweet about two perfect brackets remaining after Norfolk State’s win over Mizzou generated 6,972 retweets.

And, according to Twitter’s official calculations, people sent more than 30,000 tweets per minute after the championship game was in the books. Before the finale, conversation peaked on March 25 when Kentucky and Kansas advanced to the Final Four, feats that caused an influx of one million tournament-related tweets for the day, Twitter said.

Did your team register in all the Twitter insanity? Have a look at the infographic below.

Photo credit: iDream_in_Infrared/Flickr

Filed under: social

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In a commitment to the mobile web, Facebook open-sources Ringmark

Posted: 03 Apr 2012 10:28 AM PDT

Today, Facebook has open-sourced Ringmark, its new test suite for mobile device manufacturers.

Ringmark, which was announced just a few weeks ago at Mobile World Congress in Barcelona, is designed to run “tests of core functionality that web developers need in order to build their apps.” Ringmark is all about increasing the capabilites of the mobile web across devices and platforms.

“Ultimately, we believe that web technologies are important to the future of mobile and that we can help to make HTML5 a well-supported platform for mobile developers to build upon,” Facebook engineer Matt Kelly wrote today on the Facebook developer blog.

“For those that are building with the web today, it’s a major hurdle to learn native technologies like Objective-C and Java, and we hope that an improved mobile web can unlock a large contingency of developers that could, and will, be developing for mobile.”

A slew of powerful web companies, including Mozilla and Yahoo, have taken approximately the same stance and are focusing on technologies that make the open, mobile web — not just single-platform technology stacks like Android and iOS — a fruitful environment for mobile developers.

"Forget being in love with the open web and all that touchy-feely stuff,” Mozilla VP Jay Sullivan told VentureBeat in a recent interview. "If you want to have a variety of mobile apps, it gets expensive,” he said, referring to the need to build multiple apps for all the various mobile platforms.

With technologies like Node.js and Ringmark, however, the focus is shifting from developing one-off apps for siloed platforms to ensuring that mobile web apps run and run well everywhere, including fast and reliable performance as well as beautiful user experiences.

“The mobile web has great potential but still needs a lot of work,” Kelly said. “One of the most frustrating problems was that of fragmentation in mobile browser capabilities and of understanding what’s possible on any given mobile browser.”

Ringmark is designed to increase that understanding for everyone in the mobile web app supply chain, from device manufacturers to mobile browser makers to app developers. Facebook wants it to be “the canonical testing suite” for the mobile web, allowing developers to see at a glance what works, what doesn’t work, and why — all to bring normal Joes and Janes better mobile web apps to rival the native ones designed just for their mobile OS.

Interested would-be contributors to the Ringmark suite can check out the W3C Core Mobile Web Platform Community Group as well as the Ringmark repository on GitHub.

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Filed under: dev, mobile

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