Apparently not everyone appreciates my sense of humor.

Including a certain major investor in Facebook who is trying to bring an NBA team back to Seattle.

That would be Chris Hansen, the San Francisco hedge-fund manager orchestrating a deal to restore his beloved Seattle Sonics.

Hansen called last week after I wrote a blog post about how Facebook's upcoming IPO may help his basketball venture.

Hansen has a big stake in the outcome of the Facebook stock offering, expected at the end of this week. He's the managing partner of a San Francisco investment company, Valiant Capital, which scored a coup in 2010. It was able to buy 36,335,590 private shares of Facebook for less than $500 million.

If Facebook does well after public trading of its stock begins, Valiant may double its money. At the high end of Facebook's projected offering -- $35 per share -- Valiant's day one gain would be nearly $800 million. Its shares would then be worth $1.27 billion.

Who knows how the stock will fare. It's supposed to break IPO records, but some big investors were reserved last week after Chief Executive Mark Zuckerberg pitched the stock while wearing a hoodie, then disclosed that ad sales aren't growing as fast as site usage.

Maybe Facebook waited too long. Or maybe investors don't fully understand the complex machine that Zuckerberg built. Love it or hate it, Facebook seems to have all sorts of levers and dials to pull and twist and boost sales at will.

As they say, the rich get richer.

Then some of them decide to buy sports teams.

If they ask for public assistance -- especially from cities pleading poverty -- they become fair game for snarky blog posts.

My post joked that the Facebook windfall could enable Hansen to build two arenas without public financing, or refit KeyArena with heated massage chairs and a helicopter shuttle service.

Hansen didn't seem to mind the ribbing. He even read the flurry of online comments it generated.

But he wanted to make it clear that he personally won't pocket that $800 million.

"I would just want people to understand that Facebook is a position of my investment-management company, not a personal investment of Chris Hansen, and therefore the profits are the profits of the fund and the investors that it represents," he said.

As for his effort to build an arena for a Seattle NBA team, Hansen said it's going "great."

"I think we went into it knowing there would be some concerns, some constituencies that would be against it, that negotiations with the city and county wouldn't be easy," he said. "But I think there's very broad-based support, given the thoughtfulness and fairness of the transaction relative to the prior proposals in Seattle and other stadium transactions and arena transactions."

I'm not sure Seattle has decided yet whether it's fully invested in this offering. Yet Hansen, a Roosevelt High School graduate, is hoping his hometown ends up on his side.

"Hopefully people just trust -- really -- I'm trying to do what's right by the city," he said.

In the meantime, this should still be a pretty good week for Hansen, as long as Facebook doesn't face plant.

Firms like Valiant typically charge investors about 2 percent a year to manage their money and take 20 percent of fund profits.

So if Facebook stock does really well and Valiant's gain is $1 billion, the firm would net $200 million.

Most of the gain would go to investors in the fund, such as endowments and foundations. Hansen likely is personally invested in the fund, as well.

Hansen doesn't get all of the firm's profit. Valiant has eight or nine partners who share the firm's profits, although Hansen gets the largest share as managing partner.

This is business as usual, but it's become a sensitive topic for Hansen.

Especially since he asked the city of Seattle and King County to back a $200 million loan to help finance a $490 million arena south of Safeco Field.

Whether Hansen can pay for it all himself doesn't matter too much since local politicians are falling over each other to back the project. They did the same thing for Paul Allen, who is one of the richest men on earth. But it's a good opportunity to look at how these businesses work.

Facebook's the stock du jour, but Valiant invests in all sorts of companies in the U.S. and abroad. Its largest public holdings in the U.S. are $128.1 million worth of Apple stock, $78.6 million worth of Google and $71.2 million worth of cable company Liberty Global, according to a May 10 disclosure report.

I think there's enough there to say Hansen is continuing the Seattle tradition of using technology riches to fund pro sports teams.

Nintendo of America is the majority owner of the Mariners. Co-owners include veterans of Microsoft and RealNetworks.

Microsoft co-founder Allen owns the Seahawks and the Portland Trail Blazers. He's also part owner of the Sounders, whose general manager, Adrian Hanauer, was an early investor in Amazon.com and aQuantive and continues to be involved in Seattle startups.

Hansen hasn't yet disclosed the group of investors in his NBA venture but it's a safe bet that some made their fortunes in tech.

Nor is Hansen talking about his personal wealth, but he's otherwise adjusting to being a public figure.

"If I wasn't involved -- hadn't made a decision to come be involved bringing the Sonics back to Seattle -- I would have continued to enjoy my anonymity, continued to enjoy and value my anonymity," he said.

Hansen knew the spotlight was part of the deal.

"I have to be comfortable with it if I'm going to be successful," he said. "It comes with the territory."

Get ready, Chris. So do cheers and jeers from the cheap seats.

This time around, the prospectors in dungarees arrived in jets, instead of a steamship.

But they brought Seattle the same message: There's a ton of gold to be had in the new frontier, and the rush is on.

Instead of the Klondike, the big money now is in asteroids floating nearby, just waiting for adventurous miners who can get their hands on the right tools and transportation.

Planetary Resources -- the space-mining venture that surfaced Tuesday -- claims there are tens of billions of dollars' worth of precious material just waiting to be scooped up by swarms of robotic mining satellites it will assemble in Bellevue.

It's a fantastic and thrilling story, as inspiring today as the gold rush was in late 1890s, after a dreary recession and series of bank failures. And once again Seattle just happens to be the gateway to the gold fields.

That means that even if the prospectors return empty-handed -- which they admit is a real possibility -- this region still would be their outfitter and home port. It also builds on the cluster of bleeding-edge space ventures in Boeing's shadow funded by local tech billionaires.

Planetary Resources' president, former NASA Mars mission leader Chris Lewicki, said Seattle is turning into the "Silicon Valley of space."

Who knows where this will lead?

Charles Simonyi, the Medina software pioneer and two-time space traveler backing the company (below), said space-resource extraction is "an enabling technology" similar to the personal computer.

"Nobody could predict what it would be used for -- from entertainment to business, to science, to learning ... everything is transformed," he said.

So will Planetary Resources be the next IBM?

"This will be IBM 100 years from now, but the sizes we are talking about at that time will be truly astronomical," Simonyi said.

There may be opportunity for the commoners to join the handful of billionaire investors disclosed Tuesday. Co-founder Peter Diamandis told me that Planetary Resources may have a public offering of its shares eventually.

"Maybe, maybe," he said. "We're still early on -- we were not planning to announce the company in the first place but we decided we would ... to make it easier to find the best engineers in the world."

Word was also leaking out, and it's easier to line up partnerships "when you're out in the open," he said.

That helps explain the promotional air of Tuesday's news conference.

Whether or not the company offers stock, it will need broad public support.

Before it begins working on asteroids later in the decade -- scooping up platinum and extracting water with solar panels and perhaps nuclear reactors -- the company needs the United States to back its plan and policies supporting its business.

Diamandis said he went through the same thing in 1996, when he announced the Ansari X Prize to spur private spaceflight.

There were no guidelines for such things "so we had to work with the FAA and the White House to create the rule and regulations to offer private spaceflight," he said, adding that Planetary Resources will do the same thing.

"I think ultimately the rules will be very similar. If you start to perfect the resources, you'll be able to own them," he said.

"Does someone own a planet? No. Does someone own a rock they might take off a planet? Sure. Where's the in-between? We'll find out."

This is another similarity with the personal-computer industry.

The biggest winner in that gold rush was Microsoft because it did more than see the future and invest early in the technology.

It also shaped licensing rules and intellectual-property protections for software.

Perhaps these new prospectors came to Seattle to equip themselves with more than aerospace and engineering talent -- they need lawyers, as well.

Here are a few pictures of the Arkyd 100 Series prospecting satellite that a group of billionaire investors are sending to space, in search of valuable asteroids to mine.

This is actually the second satellite built in Bellevue by their venture, Planetary Resources; it was shown at the company's introductory press conference today:

Here's a company rendering of the craft in space:

After the exploratory satellites identify asteroids with valuable resources, a "swarm" of six robotic mining satellites will be sent on multiple spacecraft. They won't necessarily have headlamps and pickaxes - they'll be like snow blowers that scoop up loose material from the surface of the asteroids.

Here are a few quotes from Planetary Resources executives that I sent earlier via Twitter:

"Since my earliest teenage years I've wanted to be an Asteroid miner," Peter Diamandis, co-founder and co-chairman.

"Does NASA need gas stations on the way to Mars?" Eric Anderson, co-founder and co-chairman

"We're going to create propellant depots that open up the roadways to the rest of the solar system," Anderson

"This is smart money investing in one of the largest commercial opportunities ever," Diamandis.

Here's another rendering, courtesy of Atari:

Donning his global statesman hat, Bill Gates spent time discussing America's concerns about its future with Thomas Friedman of the New York Times.

Gates talked about paradoxes - such as polls showing that Americans see a bleaker future despite the huge amount of innovation in their country that will lead to advances in medicine, energy and other fields.

"There's more innovation taking place in this country still than the whole rest of the world put together," Gates said in a video of the chat. "Now over time that will shift and they'll carry their more fair share of the burden, but in all these fields, the most interesting work is still largely in the United States."

Gates also touched on concerns about the effect of polarization on U.S. government, a topic he raised during an October speech at the University of Washington that also highlighted opportunities being created by innovation.

Microsoft co-founder Paul Allen today is announcing plans to build the world's largest aircraft to start a new orbital cargo business, joining the ranks of billionaire investors blending their love of space and science fiction with the growing opportunity for private space ventures.

For Allen, the venture combines his lifelong interest in science fiction and technology with his entrepreneurial streak. The name of the company also hints at his love for rock music and guitars, such as the classic Stratocaster.

Building the largest aircraft of his generation will also draw comparisons to another mysterious tycoon - Howard Hughes, who spent heavily to build the world's largest flying boat in pursuit of a cargo business that never materialized. The Spruce Goose flew once, in 1947, and is now displayed in Oregon.

Allen's working with aircraft designer Bert Rutan, with whom Allen developed SpaceShipOne, the first privately built spacecraft to enter sub-orbital space in 2004.

For the new company, Stratolaunch Systems, Rutan (at left, with Allen) is building a giant cargo plane powered by six 747 engines and with a wingspan over 380 feet. It will be constructed in California at the Mojave Air and Space Port.

Work has already begun on the craft and it should be operating within a decade, Allen said at a press conference in his office near the Seahawks stadium south of downtown Seattle.

Allen said as a boy he built model rockets and he and his mother watched for the first astronaut's flight. Now he hopes to build something today's children will look for in the sky.

The craft will require a huge runway - 12,000 feet long - and will operate from a spaceport such as Kennedy Space Center.

Allen's team includes former NASA leaders and partner companies including aerospace engineering company Dynetics and PayPal veteran Elon Musk's Space Exploration Technologies, which will build a multi-stage booster for the aircraft.

The company hopes to fly people into low earth orbit eventually but it's going to start by delivering unmanned payloads.

A rendering of Allen's planned craft:

Fortune magazine is causing a little stir today by dropping a hint that Bill Gates may return to an active role leading Microsoft.

The story's based on a third-hand, anonymous source, but it taps into the vein of investor discontent with Microsoft's leadership that's always good for a burst of Web traffic and lively online comments.

Here's the relevant bit in the Fortune story:

One prominent chief executive told Fortune he'd heard from someone close to Gates that he might be considering such a move.

Gates directly and unequivocally denied this in a June interview with England's Daily Mail. He told the paper, "My full-time work for the rest of my life is this foundation."

The paper continued:

Will he ever return to helm Microsoft?

"No. I'm part-time involved. But this is my job now," he said, referring to the foundation.

He could change his mind so you never know. But it sounds like a long shot.

UPDATE: Impossibly long shot, according to a Gates spokesman, who said via email that there is no truth to the story.

Bill Gates really cut loose during the question and answer portion of his lecture at the University of Washington's Paul G. Allen Center.

Asked about economic disparity, how money is influencing politics and the challenge voters face making informed decisions, Gates said "the world at large is less inequitable today than at any time in history."

The number of people around the world in abject poverty has gone down, as has the mortality rate for young children, he said.

But there is clearly concentration of wealth, said the man who was the world's richest for many years.

"You're absolutely right. There's some big fortunes and society can't - it's not good to have a society where you don't have mobility in between different income levels. That is, if you're born in the bottom quartile, education ought to be good enough that you have a reasonable chance of getting into the first or second quartile."

Education is the key, he said.

"So if you really look at where we're letting people down in terms of the American dream, I wouldn't say - you can take this as self-serving - I wouldn't say it's because of a few people are very rich. I'd say it's because we haven't been doing a good job on education to give them an opportunity to move up into the top few percent."

As for the ultrarich, Gates noted that he and Warren Buffett have encouraged other billionaires to share more of their wealth.

"The rich should give away more of their wealth than they currently do, and we've certainly been willing to speak out about that. Warren's the only person who's ever had a tax named after him -- the Buffett tax."

Gates said he was just in Washington, D.C., trying to explain to members of Congress that it won't help the country to cut spending on science projects.

"You can be very frustrated with the political system -- I certainly am."

Gates said he doesn't know why politics are so fractured today.

"Maybe the system will realize the problems that it has there, but I don't think that just by getting rid of the wealthiest in the country that will solve all these problems," he said.

Then he reiterated that better education is key - and education costs should come down - to make society more equitable.

Gates said that "money politics" and political districts that enable extreme politicians to hold their seats are factors.

The media's also partly to blame, he said.

"Certainly, the media -- people do wonder if this polarization comes from the Fox News phenomenon, that you're just listening to the people who agree with you," he said. "I don't really know."

Another challenge is the complexity of topics such as taxes and healthcare reform.

"The U.S. tax code is so complex that you don't know where to be outraged and you don't have time to read it," he said.

Another student told Gates that growing up, she wanted to be the richest person in the world, and she wanted advice.

Gates gave a long and thoughtful response.

"I didn't start out with a dream of being superrich," he said, noting that after the Intel founders became billionaires, "I thought, wow, that must be strange ... It is.'

Here's his advice:

"Most people who have done well have just found something they're nuts about doing. Then they figure out a system to hire their friends to do it with them. If it's an area of great impact then sometimes you get financial independence."

Gates said crazy money isn't all that it's cracked up to be.

"Wealth above a certain level ... really it's a responsibility," he said, explaining that you're either going to have to leave it to your children or "be smart about giving it away."

"I can understand about having millions of dollars," he said. "There's meaningful freedom that comes with that, but once you get much beyond that I have to tell you, it's the same hamburger. Dick's has not raised their prices enough."

"But being ambitious is good. You just have to pick what you enjoy doing."

Seattle tech investor Rich Barton has another project, which he tested at his home in the Washington Park neighborhood.

Called Nextdoor, it's a new platform for creating neighborhood Web sites that function as bulletin boards, newsletters and notification systems. Neighborhoods can use Nextdoor sites - which it calls "private social networks" - to do things like post items for sale, look for a babysitter and organize events.

It's kind of like a neighborhood version of Microsoft's SharePoint collaboration suite.

Barton - a Microsoft veteran who led Expedia, co-founded Zillow and is now a venture capitalist - was prompted to try Nextdoor by its founders in San Francisco. They tried "quietly, but I didn't get it," Barton recalled.

Finally Barton and his wife, Sarah, tested the service in Washington Park, Barton was convinced and put his own money into the startup, one of five or six he's involved with now. Also investing in the company was Benchmark Capital, the Menlo Park, Calif., venture firm where he's a partner.

"Seeing it is the greatest way to get sucked into it," Barton said. "It is a truly useful as well as emotionally appealing way to connect with your neighbors."

In one test, Barton used the site to unload a MacBook Pro that he no longer needed after buying a new one. The site connected him with a neighbor who runs a yoga studio in Madrona. They worked out a deal - a year of yoga for the laptop - and they closed it over a glass of wine at his house.

Nextdoor is free to use. It plans to make money eventually by adding offers to the site, such as referrals to contractors or real estate agents.

It's among numerous Web ventures pursuing the market for hyperlocal services and advertising - a space that Zillow staked out with its real estate value and mapping services.

"Local, social and mobile are the three big vectors of innovation right now," Barton said. "Nextdoor really hits the local and the social well. Additionally it'll be used mobile-y as well but it's not primarily a mobile application."

One differentiator is the privacy controls that Nextdoor applies. Information shared on the neighborhood sites isn't broadcast or shared broadly, as on social networking sites - they're mini social networks accessible only to participating neighbors.

The privacy of the neighborhood sites is key to acceptance. Eventually they could be connected somehow to outside services such as Facebook or Craigslist.

"We've talked about it but there's no explicit plans for that right now," Barton said, adding that the company experimented with Facebook Connect but users wanted a separate registration system for their neighborhood sites.

Zillow seems like a natural partner, to add mapping and property information to the sites.

"We've certainly chatted with them about it," Barton said. "There certainly could be some interesting points of intersection going forward."

Barton said neighborhood penetration so far has been "pretty good" with around 25 to 30 percent of neighbors participating in the 150 or so neighborhoods in 25 states where the service was offered in a pilot program.

Today the service is opening up for anyone to use across the country. To start a neighborhood site, someone needs to become the "founding neighbor" and define the boundary. They need to invite at least 10 neighbors to get the site started.

Nextdoor was started in 2010 by tech startup veterans including Chief Executive Nirav Tolia, a Yahoo veteran who co-founded the epinions.com shopping site. It has about 15 employees in San Francisco and backing from Benchmark, Shasta Ventures and private investors. Barton said it's likely to seek another round of funding in about a year.

A few more screenshots:

An unmanned spacecraft that Amazon.com boss Jeff Bezos built in Kent and launched in Texas had a "major failure" during a test flight, according to a Wall Street Journal report.

Apparently the craft went out of control of ground personnel and crashed, raising concerns as the government is shifting spacecraft development to private ventures such as Bezos' venture in Kent, Blue Origin.

The report says parts were recovered on the ground and are being analyzed. It cites government and industry officials familiar with the ultra secretive project.

Blue Origin told the paper the craft was destroyed as a precaution after control was lost at 45,000 feet.

After the Journal story, Bezos posted a brief description of the event and photos of the craft on a previous, successful test and right before last week's failure. The statement:

Three months ago, we successfully flew our second test vehicle in a short hop mission, and then last week we lost the vehicle during a developmental test at Mach 1.2 and an altitude of 45,000 feet. A flight instability drove an angle of attack that triggered our range safety system to terminate thrust on the vehicle. Not the outcome any of us wanted, but we're signed up for this to be hard, and the Blue Origin team is doing an outstanding job. We're already working on our next development vehicle.

Blue Origin's first test flight, in 2006, was a success. Here's an image of that craft from its Web site:

Here's the craft lost last week, in an earlier test:

Here's another picture that Bezos posted, showing the craft at Mach 1.2 and 45,000 feet "right before the thrust termination system activated":

Medina software pioneer Charles Simonyi is backing a $100 million challenge grant to the Institute for Advanced Study at Princeton, the largest gift since the research center was founded in 1930.

The $100 million is expected to be matched by other grants over the next four years, giving a huge boost to the institute, which has supported the work of scientists such as Albert Einstein, Kurt Godel, J. Robert Oppenheimer and others.

The challenge grant was made by the Charles and Lisa Simonyi Fund for Arts and Sciences -- which has also given to the Seattle Symphony, Seattle Public Library and the Museum of Flight -- and the Simons Foundation.

"The institute's role in promoting and cultivating original scholarship in the sciences and humanities is unparalleled," Simonyi said in a release. "It is of utmost importance to sustain the work of this institution of international renown and reach where scholars have the freedom to pursue their research in an environment dedicated to the advancement of ideas that change our understanding of the world."

Simonyi, who helped create Microsoft's application software business, earlier supported the insititute's school of mathematics, endowed a theoretical physics professorship and started an endowment fund. In 2000, the math school's building was named Simonyi Hall.

At least one investor has faith that Clearwire's bet on ultrafast LTE technology will pay off.

That would be Executive Chairman John Stanton, who oversaw the company's shift toward LTE while serving as interim chief executive over the past five months. Stanton stepped aside on Aug. 11 when Erik Prusch was named chief executive of the Kirkland company.

Between Friday, Aug. 12, and Tuesday, Aug. 16, Stanton bought 2,755,000 shares, including 103,035 shares for his family trust. At today's closing price those shares are worth $6.4 million.

That brought his Clearwire stake to 3,431,352 shares as of Tuesday, according to a disclosure report filed that day. That's almost double his Clearwire stake disclosed by the company in April, when he had 1,796,685 shares.

The disclosure of Stanton's purchases boosted confidence in the stock, which soared 27 percent Wednesday, closing at $2.33, up 50 cents for the day. It was the second highest gaining stock, on a percentage basis, on Tuesday.

That nearly recouped the stock's loss since a big plunge Aug. 3, but it remains well below its $8.82 high for the year. Stanton paid between $1.78 and $1.89 for his recent buys.

The last plunge came after the company used its earnings report to announce plans for an "LTE Advanced" network that will provide wireless download speeds over 100 megabits per second. It was a turning point for a company built on WiMax, a different wireless broadband technology that's being eclipsed by LTE.

The catch -- that Clearwire needs to raise up to $900 million to pay for the LTE project -- overshadowed the company's recent growth in subscribers and progress towards profitability. The day after the earnings report, CLWR fell from $2.47 to $1.76.

Stanton must have confidence the company will find a way to pay for the LTE upgrade -- he and Clearwire founder Craig McCaw always seem to find ways to fund their wireless ventures -- but he declined to comment on the topic this afternoon.

Talk about biting the hand that fed you.

Bellevue-based Intellectual Ventures -- the patent licensing company led by former Microsoft CTO Nathan Myhrvold and backed by Bill Gates -- is suing two of the largest memory chip makers and most of the world's major PC companies.

Intellectual Ventures is seeking royalties from chipmakers Hynix and Elpida, plus computer retailers Best Buy and Wal-Mart. It's also going after PC and device makers, including Hewlett-Packard, Dell, Acer, Asustek, A-Data Technology, Kingston Technology, Pantech and Logitech.

Apparently licensing negotiations between the parties fell through.

The filing noted that Intellectual Ventures has bought more than 30,000 patents and collected nearly $2 billion in fees, but Hynix and Elpida "failed and refused to license Intellectual Ventures' patents on reasonable terms and continues to use those inventions without permission."

The spat is over whether the manufacturers should pay Intellectual Ventures a royalty on DDR2, DDR3 and GDDR4 memory products.

It said Intellectual Ventures first asked Hynix to obtain a patent license in 2008. Discussions continued through 2009 and 2010, with IV alleging that Hynix was using its inventions in its DRAM and Flash products, the suit said.

Similarly, IV contacted Elpida in 2009 and during 2010 attempted to negotiate a license.

"Despite repeated requests from Intellectual Ventures for a meeting, Elpida repeatedly delayed," the firm said in its complaint, filed in federal court in Seattle.

Patents at issue include one for "memory devices with selectable access type and methods using the same" that was issued in 1997, three years before Intellectual Ventures began. Another is for "embedded enhanced DRAM, and associated method" that was issued in 1999.

Intellectual Ventures is seeking treble damages and legal fees, plus the royalties. The suit was reported earlier today by Bloomberg.

Here's the filing from the U.S. District Court Western District of Washington:

IVvsHynixElpida.pdf

Kirkland satellite telecom company ICO Global Communications is reorganizing a bit, following its June 20 acquisition of IP services company Ovidian.

The company, backed by Craig McCaw, is changing its name to Pendrell Corp. later this month and adding new leadership. As part of the change, its ticker symbol on Nasdaq will change from ICOG to PCO.

Robert Mechaley Jr., a co-founder of Clearwire and former chief scientist at AT&T Wireless, is joining as chief scientist.

The company also named Timothy Dozois its corporate counsel and secretary and Mark Fanning as its "chief people officer." Fanning is a veteran of Clearwire, Nextel Partners, AT&T Wireless and McCaw Cellular.

ICO also announced that its chief executive, Ben Wolff, and Gerard Salemme, its chief strategy officer, resigned from their positions with McCaw's Eagle River investment company "in order to focus their full attention on the business of the company."

ICOG rose 2 cents today, to $3, after the changes were announced.

Michael Dell was the winning bidder in the auction of a Seattle TV station last week.

As I reported in June, Dell's personal investment company submitted the opening bid for bankrupt station KFFV TV, which broadcasts Spanish, Mandarin, Cantonese and Korean language shows on channel 44.

The station's biggest asset may be its spectrum, if the FCC buys the spectrum back and then auctions it to wireless broadband companies.

During the bankruptcy proceeding, Dell's OTA Broadcasting offered $3.45 million for the station. Another bidder, affiliated with a national broadcasting group, joined the auction and OTA ended up paying $5.05 million.

KFFV had debts of around $2 million and about six employees at an office south of downtown Seattle.

The station's future is unclear. A call to a spokesman for Dell's investment group wasn't immediately returned.

Now the transfer of ownership must be approved by the FCC, a process that could take up to 90 days, according to broker Frank Higney.

It was supposed to be off the record, but Facebook Chief Executive Mark Zuckerberg decided to share during a meeting with a few reporters Wednesday night and agreed to talk openly about the company's Seattle engineering office.

His extensive answers to a few questions also provided insights into the remarkably successful company's internal culture and hiring strategy.

Zuckerberg is making one of his periodic visits to the Seattle office - its first real satellite development center, which has grown to about 40 people since it opened last summer.

The office is an open space on the upper floor of a tower overlooking Elliott Bay. On Wednesday a bunch of desks were pushed aside and chairs set up to create a sort of meeting room, in which Zuckerberg was speaking to a group of potential employees.

But first he spent a half-hour with a handful of reporters, letting a slice of Pagliacci's Margherita pizza go cold on his plate, while we talked.

He declined to specify how much the Seattle office will grow but he said Facebook is growing its engineering team by about 60 percent a year.

It could grow faster but Zuckerberg doesn't want it to grow so fast that it overwhelms the company's culture.

Seattle's become an important development center for the company, which will be releasing several products developed here, including improvements to Facebook's mobile site.

"The office is going really well," he said.

Rather than focus on a particular project, the Seattle office is integrated with the broader development work at the Palo Alto headquarters, he explained.

"Now we're starting to get to the scale where we're attracting a lot of really good people and we're starting to lead a bunch of projects from out here," he said. "Most notably there's a lot of mobile development."

"There are so many good engineers up here - largely from Microsoft and Amazon traditionally and then Google a bit more recently and there's a good startup scene up here, so it's going really well."

Seattle is the only remote engineering office, aside from two people in Tokyo. "That's more of an apartment," he joked.

The office opened in part because Facebook was increasingly wanting to hire people from Seattle who couldn't or wouldn't move to Palo Alto for various reasons, explained Mike Schroepfer, vice president of engineering.

"It wasn't just a numbers game for us - it was like, these people are really good," Schroepfer said.

At the same time Facebook engineer Ari Steinberg had a "personal situation" that brought him to Seattle - his fiancee landed a teaching job at the University of Washington - and he could open the office and bring his knowledge of the company's culture.

Asked about the career path for employees in Seattle versus Palo Alto, particularly product managers, Zuckerberg replied by explaining how the company has tried to cultivate a culture where people with different skills can lead projects regardless of their title.

"The leaders of a specific project can come from a lot of different disciplines," he said, explaining that that's in contrast to companies that are more heirarchical or led by product managers.

"Here it just depends on the person - there are definitely projects where the engineering manager is leading and there are definitely projects where the PM is leading," he said. "We have as many where the tech lead on the project is leading ... there are even a bunch where a designer is leading. I think that's good, a good diversity."

Zuckerberg then talked about how the company encourages people to "move quickly."

"The saying internally is to move fast and break things - not trying to break things, but it's okay if sometimes you break things because if you don't then you're probably not moving fast enough."

Sometimes this goes a little too far at a company where there's far more work than engineers. A video circulating within the company jokes about an incident with an intern, Zuckerberg said.

"This intern committed a bug on photos, I guess, that made it so you couldn't view any photos on the site for 20 minutes," he said. "This video (says) of course it makes sense that we'd send someone with three weeks of industry experience to fix the biggest photo site ... probably not our best moment."

The point was that it still feels like a small company, which indirectly answered the question about career paths:

"But it is one of the things that's coolest about the culture though is that, we touch so many people using the product - hundreds of millions of people - but the team is small," he continued. "I think that's one of the things that really characterizes working here. That won't be true necessarily forever ... but for now I think that probably is the biggest thing that people feel working at the company, not necessarily the career path."

Asked about Facebook's growth plan for Seattle, Zuckerberg said the plan "is to try to hire really good people," then provided another glimpse into the workings of the company.

"In studying the industry it seems like a bunch of companies - Google, Amazon, Microsoft - had a lot of really quick growth years where they doubled in size, or some companies even tripled," he said. "I really just don't think a culture can sustain that and so we've tried to grow the engineering team around 60 percent. Which is still very fast - it requires a lot of work to be done well - but it's a lot less than 100 percent ... It's like the company has grown so quickly now in terms of revenue and users that 60 percent is actually pretty restrained."

This requires another kind of discipline.

"I think the way you do that is by making sure that every person that you hire is like, really good," he said, then joked about how every company says that kind of thing, but Facebook has a formula.

"One thing you find in engineering is a really good person is like 10 times as productive as pretty good person. I'm not talking about a bad person - I think bad people are negatively productive because of all the externalities of stuff that has to be cleaned up around them - but pretty good people, who would be the best engineer at a lot of companies."

The trick is to find the best of these pretty good people, he said.

"If you make it so your recruiting process is optimized for getting the top 5 or 10 percent of those then you can keep the company small. And I think that that actually is the strategy - it's like, how are you going to scale the company to be larger and still feel good? The best strategy is to not have to scale the company to be massive before you have to and we're doing pretty well on that, with the user base that we have and then the employee base that we have. Obviously we'll hire a lot of really good people here... that's more the plan."

Asked again if there's a particular target, Zuckerberg explained how Facebook does its internal budgeting.

"One of the things that I think that I think is different about how we run Facebook is we try to do our budgeting and all that stuff on like the 50th percentile estimate. A lot of companies when they're doing a board estimate or if you're public, a public estimate, you try to budget toward what you think you will certainly hit, right?

We actually try to build our plans around what we actually think will happen. Then about half the time we're wrong up and half the time we're wrong down."

Although Steinberg may have hiring projections for Seattle, they aren't firm goals and quality is more important than quantity, Zuckerberg said.

"If he doesn't hit it we're not going to be unhappy," he said. "We're going to be unhappy if we're working with (poor) engineers."

There may be some additional westbound traffic on Highway 520 this evening.

Facebook's hosting a special recruiting event at its Seattle office, which has bulked up with former Microsoft and Google engineers since it opened near Pike Place Market last year.

The company had scheduled a tech talk for tonight with its vice president of engineering, Mike Schroepfer, but that's changed.

Now the event has morphed into a recruiting event and the featured guest is Chief Executive Mark Zuckerberg, who will meet with potential recruits starting at 7. A spokesman said Zuckerberg visits the office periodically.

Xconomy noted that all of the free tickets for tonight's event were gone in 20 minutes.

Facebook's Seattle office currently has six engineering positions open and a spot for a technical recruiter, but the listings aren't definitive.

I wonder if Zuckerberg will also visit his pal Bill Gates while he's in town.

Facebook's among a series of California tech companies that opened Seattle offices over the last year to tap the area's talent pool. That contributed to Microsoft's decision in April to increase its pay in what Chief Executive Steve Ballmer called "the most significant investment in overall compensation we have ever made."

UPDATE: Facebook will webcast Zuckerberg's Seattle session here, at Facebook Live.

UPDATE 2: Facebook decided at the last minute not to webcast the event after all.

Mark Zuckerberg spent a bit of time with reporters before the event began, describing progress at the Seattle office.

"The office is going really well," he said.

Rather than focus on a particular project, it's integrated with the broader development work at the Palo Alto headquarters.

"Now we're starting to get to the scale where we're attracting a lot of really good people and we're starting to lead a bunch of projects from out here," he said. "Most notably there's a lot of mobile development."

Zuckerberg declined to project how much the Seattle office will grow. Currently it has about 40 employees in an office tower at First Avenue and Stewart Street.

Amazon.com hasn't confirmed speculation that it's going to start selling tablet computers later this year, but founder Jeff Bezos has tablets on his mind, judging from an interview with France's Les Echos.

(I found this link to the interview via a tweet from Amazon CTO Werner Vogels.)

A few excerpts that could be read as hints of what's to come:

"Historically, our business has been built on top of people buying from their desktop computer and their laptop computer, which you can only use in a couple of postures. And the tablets and the smartphones open up a completely new posture. The tablet for example means you can lay back on your sofa and shop on Amazon. I love that and I encourage you to do it!"

Talking about Amazon's "willingness to invent," Bezos talks about its new hardware capabilities:

When we did Kindle, I'm going back seven years now, we had to learn how to design hardware, how to manage a supply chain for hardware. A bunch of new skills. Now we're going to hire sophisticated people, but still, we need to learn new skills institutionally as well, and so we're bringing that skills set into practice. I think it's essential for companies to be incremental learners, but also to be willing every once in a while to pick up a whole new skill set that you weren't previously focused on.

Asked about areas of focus, Bezos mentions video and video games -- things that can sold and consumed on a tablet or phone but not on the current Kindles:

"Our focused areas are on electronics, apparels, some consumable items. And in media, we really focus on digital, and that's true for books but also for video, music, audio books, video games... So we sort of have our media business undergoing a digital transformation that we're working very hard on."

Computer tycoon Michael Dell may soon have another Seattle connection, besides being one of Microsoft's biggest customers.

Dell is the mystery buyer bidding on a Seattle TV station that will be auctioned through a bankruptcy proceeding on June 30.

A corporation linked to the investment company that handles the Dell family fortune submitted a "stalking horse" bid for Seattle's KFFV TV, offering $3.45 million for the 20-year-old station. That sets the opening price for the company, meaning others have to bid higher when the auction begins.

KFFV's main channel number is 44 and its primary content is Spanish language TV Azteca. It operates four digital channels that carry informercials and content in Mandarin, Cantonese and Korean. It has about six employees at an office south of downtown Seattle.

The station is owned by North Pacific International Television, a husband-and-wife company that filed for bankruptcy protection in January 2010. Since then the husband, Kenneth Casey, died and his wife, Charlene, decided to sell, according to her lawyer, Nate Riordan.

Meanwhile, Dell's investment company has been shopping for TV stations. Earlier this month its subsidiary, OTA Broadcasting, paid $8 million for San Francisco-area station KTLN. It had been owned by Christian Communications of Chicagoland, according to a report by trade publication RBR.com.

Riordan confirmed that OTA is the stalking horse bidder for KFFV. A spokesman for Dell's MSD Capital declined to comment.

Dell probably isn't trying to become a media mogul, or use stations to broadcast infomercials for Dell computers.

It's more likely that his investment team is making a real estate play. The stations have swaths of spectrum, which the FCC is planning to reclaim and auction off to companies developing wireless broadband networks.

Details aren't final and TV broadcasters aren't keen on the plan, but stations giving up spectrum would be compensated with proceeds from the auctions.

Depending on the deals offered to TV stations, their spectrum could be worth far more than the broadcasting business at small outfits like KFFV. Those businesses aren't hugely profitable and face the same advertising challenges affecting other media companies.

"Quite frankly, they get a lot of competition from cable,'' said Frank Higney, a Tuscon, Ariz., broker handling the KFFV sale.

Higney said the value of independent, local stations plummeted when the digital TV format was adopted. The stations used to be valuable to companies wanting to add additional channels in their local market. With the digital format, they can simply add additional subchannels -- such as 4.1 and 4.2.

"If this were 10 years ago my stalking horse wouldn't be $3.5 million, it would be $35 million," he said.

Higney suspects that OTA is "looking at a different business model." He knows of at least four companies making spectrum plays. Their plan is to "run the stations at a modest profit with the hope of something coming in the FCC spectrum auction."

"They're not buying this because they want to be independent television owners in Seattle," he said. "They're buying it because they recognize there's value in holding an FCC license and holding spectrum."

Dell may have pole position, but others have expressed interest in KFFV, Higney said.

"There are a lot of different entities, individuals showing interest, but whether they show up to bid is another question," he said.

If nobody else bids, someone's going to be telling Dell, "Dude, you've got a Seattle TV station."

Expect to hear more about the next version of Windows next week.

It was just announced that Steven Sinofsky, president of Microsoft's Windows and Windows Live group, will speak at the All Things D conference next week in the Los Angeles area.

Sinofsky [below] has a longtime relationship with conference co-host Walt Mossberg, the Wall Street Journal's personal technology columnist.

The timing is right for another peek at Windows 8 or whatever Microsoft decides to call the next version of its flagship operating system. It's expected to go on sale, along with a wave of new PCs, in early 2012.

At the Consumer Electronics Show In January, Sinofsky gave a technical preview of the software, showing that it runs on small mobile device hardware.

A fuller preview is expected at a Windows developer conference that Microsoft's holding in Anaheim in September.

Perhaps Sinofsky will stoke anticipation -- and further ties with Mossberg -- by using the D9 conference to reveal more details of Windows 8 such as its interface design.

Sinofsky is likely to be asked to clarify some of the details about Windows 8 that were released by Intel. A manager revealed there will be different versions of the software and different application compatibility for systems based on traditional x86 computers and those running mobile ARM processors.

Steve Ballmer gave him an opening, dropping a few tidbits at a developer conference in Tokyo today, Mary Jo Foley noted this afternoon. Ballmer said the new OS will be released in 2012 and he called it Windows 8, although that may not be the final name. From his speech:

We're obviously hard at work on the next version of Windows. Windows 7 PCs will sell over 350 million units this year. We've done a lot in Windows 7 to improve customer satisfaction. We have a brand new user interface. We've added touch, and ink, and speech. And yet, as we look forward to the next generation of Windows systems, which will come out next year, there's a whole lot more coming. As we progress through the year, you ought to expect to hear a lot about Windows 8. Windows 8 slates, tablets, PCs, a variety of different form factors.

D9 co-host Kara Swisher announced Sinofsky's appearance today, but held back on previewing whatever news he'll make next week. Swisher said Sinofsky "will talk about the future of Windows in the era of all kinds of new devices and the cloud."

Microsoft spokesman Lou Gellos had no details to provide, beyond confirming Sinofsky's appearance at the event.

The conference runs Tuesday through Thursday.

Other speakers include a raft of CEOs: Hewlett-Packard's Leo Apotheker, Twitter's Dick Costolo, AT&T Mobility's Ralph de la Vega, Disney's Robert Iger, Zynga's Mark Pincus and Reed Hastings of Netflix. Others include Google Chairman Eric Schmidt and Sinofsky's old co-worker, Nokia Chief Executive Stephen Elop.

Have we passed through a time warp?

On Wednesday San Francisco decided to use Microsoft's email system.

Now U.S. Attorney Eric Holder is leading a dedication ceremony this afternoon for the William H. Neukom Building at Stanford Law School.

I wonder if Stanford held back this event until the Microsoft antitrust decree expired.

Neukom was Microsoft's top lawyer from its early days through its antitrust battles with the U.S. Department of Justice. Holder was deputy attorney general under Janet Reno during the height of the Microsoft case.

Neukom grew up in the San Francisco area, graduated from Stanford Law in 1967 and then came to Seattle and worked with Bill Gates -- father of the Microsoft co-founder in Seattle. Gates asked Neukom to advise Microsoft in 1978, he joined the company in 1985 and retired as its general counsel in 2002.

In 2006 Neukom donated $20 million for the law school building and in 2008 he became managing general partner of the San Francisco Giants.

Here are a few pictures of the William H. Neukom Building, taken by Aislinn Weidele for Stanford:

Clearwire's restructuring took a radical turn this morning when the Kirkland wireless company announced that it's handing off engineering and support of its 4G network to Ericsson.

About 700 Clearwire employees will shift to Ericsson, which is taking over network engineering, operations and maintenance for at least the next seven years.

Clearwire still owns the network and will continue to handle relationships with consumers and business customers. The 700 employees are expected to start work at Ericsson soon, before "mid-year 2011."

"We're positioning this company to be able to be profitable and generate cash flow we're going to be able to reinvest back into the network," said Erik Prusch, Clearwire's chief operating officer.

Clearwire stock jumped about 5 percent on the news, to around $4.50 as of 10 a.m.

It's the second major reduction in employment at Clearwire in the last six months. Facing a cash crunch, the company in November laid off 630 and halted expansion of its retail network and growth into some new markets.

At the time it had 4,200 employees nationally and about 700 locally. As of April 1, it had 3,300 nationally and about 550 locally, of which about 100 will transfer to Ericsson.

With the Ericsson deal, the company's following the path of its corporate parent Sprint, which also offloaded network engineering and support to the Swedish telecommunications company.

Ericsson now works for Sprint in Redmond and has an office in Bellevue, but for the time being the Clearwire employees will continue working at its Bellevue office.

Prusch said the employees should receive benefits comparable to what they received at Clearwire.

"They're permanent employees, it is a long-term contract with Ericsson," he said. "One of our chief concerns was being able to continue to have the relationship with these employees."

Prusch continued:

"We really view this thing as a win-win which allows them continuity of employment, good or better benefits, or the same or better benefits than they've got, and most importantly retention of their institutional knowledge (and) the their ability to make an impact on our network."

Ericsson spokeswoman Kathy Egan said all 700 employees will be hired and will receive "comparable" benefits. They are spread across the country with the largest pockets in the Seattle area and Las Vegas, which also has about 100.

"I can tell you that everyone is coming over," she said. "We greatly value their WiMax expertise and we are very much looking forward to welcoming them to Ericsson."

Seniority will also transfer, she said: "Seniority will all be honored so the time that they had at Clearwire will transfer over with them to Ericsson."

As for employment beyond the seven-year contract with Clearwire, she said "I don't know that, I can't speculate beyond seven years."

Asked if the pruning positions Clearwire for a sale or merger, Prusch said he sees it doing the opposite, setting the company up to run profitably and fund its expansion with revenue.

"This is the next step in that evolutionary process, which is to make certain we're doing best practices across the business," he said.

Clearwire's expecting to be profitable within the next year to 18 months. Prusch wouldn't say how much the Ericsson deal changes that target but more details should be disclosed with the company's next earnings.

The Smithsonian's National Portrait Gallery today is unveiling its latest acquisition, a portrait of Bill and Melinda Gates painted by Jon Friedman.

There's no reference to Microsoft in the portrait, which emphasizes their stature as philanthropists. They're seated in front of a video monitor showing African girls and the motto of their charitable foundation, "All Lives Have Equal Value."

The gallery's advisory board chooses subjects "who are making a significant impact on American culture," a release explained. Its collection includes "poets and presidents, visionaries and villains, actors and activists whose lives tell the American story."

Friedman had only an hour with the Gateses, according to a New York Times editorial that said the artist took digital photos and them assembled the poses on a computer but captured the Gateses "as if he had worked with them for months. The result is quietly inspiring and suprisingly affecting."

The view in the background of the painting suggests Friedman met with the couple at the Kirkland offices that Bill Gates set up in 2008 after he retired from Microsoft. Beyond the monitor and the wall of windows are what appears to be Lake Washington, green ridges of Seattle and the Olympics.

The gallery, in Washington, D.C., began displaying the painting today and hosted a presentation by Friedman. It's an oil and collage on canvas measuring 50 1/8 by 46 1/8 inches and was paid for by the musuem's Marc Pachter Commissioning Fund.

"I am thrilled to accept this commissioned painting of Bill and Melinda Gates into our collection," Martin Sullivan, director of the museum, said in its announcement. "Jon Friedman created a compelling portrait that tells the story of their foundation's work."

Bill and Melinda Gates provided a statement, saying "It is an honor to have our portrait joining those of so many outstanding Americans in the National Portrait Gallery. Our thanks go to Jon Friedman for creating the portrait in so thoughtful a manner, and for calling out the work of our foundation so evocatively."

It may be time for Jeff Bezos to wander down the beach in Medina and ask his neighbor Bill Gates for some advice on damage control.

Perhaps Gates could tell him over a soda or two, as they watch the sun set over Seattle, that it's not worth being pushy or stubborn when you're on the hot seat and the nation's watching.

Amazon.com is facing a huge government battle that could approach the scale and long-lasting effect of Microsoft's epic antitrust challenge.

This fight is over whether Amazon -- the largest online retailer, by far -- should collect the same sales taxes as local retailers. Right now, it collects taxes in only five states, including Washington.

States have grumbled for years about people bypassing sales taxes by shopping at Amazon and other online stores. They're losing up to $12.6 billion a year this way, according to a University of Tennessee study.

Now the states are at a breaking point, struggling with huge deficits and declining revenues. On top of that, people are doing more shopping online, reducing local business activity and sales-tax receipts.

For their part, online stores claim they're exempt from collecting taxes in states where they have no physical presence. They're relying on a 1992 Supreme Court ruling, which favored a mail-order company that didn't want to collect sales taxes in North Dakota. That case built on a 1967 ruling in favor of another mail-order business.

Justices acknowledged the "physical presence" rule gave mail-order companies an advantage, but said it was important to clarify when and where states could collect taxes.

"Indeed, it is not unlikely that the mail-order industry's dramatic growth over the last quarter century is due in part to the bright line exemption from state taxation" created in the 1967 case, they wrote.

Since the nation began, there have been concerns about conflicting state tax laws interfering with interstate commerce. Clarity in this area helped keep the states united and prosperous.

But perhaps it's time for a more contemporary interpretation that takes into account the scale, effect and presence of online retail.

It seems reasonable to think of Amazon as establishing a storefront locally on your computer, where it uses the local infrastructure to conduct transactions and local roads to deliver merchandise.

It's silly nowadays to argue it's a burden for online companies to figure out the different tax rates.

It's a snap for Amazon to figure out how much tax each customer owes, based on their billing address. The company already calculates this in some states and on behalf of merchants that use its retail platform.

If Amazon can't figure this out, a Bainbridge Island company called Avalara offers software that does sales-tax calculations instantly for all sorts of companies.

The dissenting justices in the 1967 case said it best. Writing long before the PC arrived, they said fretting about the tax complexity facing interstate businesses "vastly underestimates the skill of contemporary man and his machines."

A coalition of 24 states, including Washington, is trying to take complexity out of the equation by streamlining and aligning their sales taxes. There's been talk in this group of pursuing a lawsuit to overturn the 1992 ruling, said Dan Schibley, a state-tax analyst at CCH, a publisher of tax research.

Some in Congress repeatedly have tried to introduce a federal rule setting a standard for collecting online-sales taxes. The latest was proposed last month by U.S. Sen. Dick Durbin, D-Ill., but he's yet to formally introduce his Main Street Fairness Act. His office said Friday the bill should be filed in a few days.

Amazon executives have said the company favors a nationwide approach. On Friday, spokeswoman Mary Osako reiterated this position with a statement: "We've long supported a truly simple, nationwide sales tax system, evenhandedly applied."

But this is kind of like saying you favor a blue moon. Amazon knows bills like Durbin's have a slim chance. Similar bills failed in the past five or six sessions of Congress, Schibley said.

"In Congress, the problem is that it's perceived as a tax increase, even though it's technically collecting a tax that's already owed," he said.

Amazon isn't acting like a company that's ready for progress on the tax front. It's fighting like a wolverine in states that have found ways to collect some taxes.

Six have passed laws to collect from local Amazon affiliates -- websites that get a commission for Amazon sales made through their sites. Amazon responded by cutting the affiliate program in Illinois and suing to block the legislation in New York.

At a conference last week, Bezos said the company will continue cutting affiliate programs in states where such laws are passed.

Amazon also is trying to get around the physical-presence rule in other states. In South Carolina, where Amazon was locating a distribution center, it demanded a special exemption from sales taxes. The company was given free land there for a center that would employ 1,249, but it abandoned the partly built facility after lawmakers voted against the tax exemption last month.

Earlier this year, Amazon decided to close a distribution center in Texas and drop plans for additional facilities there after the state tried to collect $269 million in unpaid sales taxes.

This seems like a million miles away from Washington state, where Amazon always has collected sales tax because it's based here. Washington is grateful for Amazon's presence and all the smart people it's bringing here.

Amazon is thriving in this climate, but I shudder to think what might happen if our state ever crosses its path.

Microsoft buying Skype is like Seattle buying Italian streetcars.

On the surface, it seems like an outrageously expensive indulgence.

But if you can ignore the insane amount of money being thrown around and focus only on how it will help a few businesses, it makes some sense.

Microsoft already has powerful and widely used software for making phone and video calls and communicating over the Internet. Its messaging systems are among its crown jewels and used by far more people than Skype.

Similarly, Seattle is served by a vast and reliable bus system and is building up a light rail network.

But it still decided to spend $60 million - not counting priceless right-of-way - on streetcars that duplicate several bus routes. Sound Transit's going to spend another $132 million more more streetcar service.

Some people think the streetcars are neat, and they add flair and freshness to the mix of infrastructure in Seattle. But they'll never carry as many passengers as Metro and they'll probably never pay for themselves.

The trolley is largely an amenity, increasing the appeal of commercial property mostly owned by Paul Allen.

City leaders who took flak for this quasi subsidy may now feel vindicated by Allen's success redeveloping South Lake Union. The area along the trolley route has transformed into a vibrant, active neighorborhood anchored by Amazon.com's new headquarters.

You can't say the area blossomed because of the trolley but it helped.

With Skype, Microsoft now has a groovier, Web-native service that complements its established, industrial-strength communication systems.

Skype and particularly its video calling capabilities will be a focal point for the bundle of online services Microsoft will offer to consumers and businesses. Having one killer app in the bundle is enough to get people to enter Microsoft's online realm, or at least prevent them from logging into a competing suite of online services.

My guess is that Skype and video messaging will also be a cornerstone of Windows 8 or whatever the next version of Microsoft's flagship operating system is called. It's designed to work well on portable devices running the tiny processors used in smartphones, where video calling is coming to be expected as a standard feature.

Apple and Google have already developed video calling services for mobile devices and PCs but they don't yet have the critical mass of Skype. Microsoft has struggled to build a critical mass in search and now it has a head start as the next phase of online messaging is developed on fast, new 4G wireless networks.

Meanwhile Microsoft's going to use Skype to boost the appeal and reach of its Xbox, phone, Web mail and communication software products.

In its release, Microsoft noted that Skype has acquired the intellectual property powering its network. Perhaps that's a signal that Microsoft will assert its ownership of the patents, which could limit what competitors can do in the space or require them to send royalties to Redmond.

Skeptics expect Microsoft to fumble Skype somehow. To avoid this, Microsoft took the unusual step of creating an entirely new, autonomous group for Skype, giving the relatively small business organizational stature comparable to that of the massive Xbox, Office and Windows groups. Skype Chief Executive Tony Bates will be president of the Microsoft Skype Division, reporting to Steve Ballmer.

Microsoft actually has done pretty well with its messaging acquisitions. Key elements of Outlook were acquired, and it's now the most widely used email system in the world and an essential tool for most business PC users.

Microsoft also spent crazy money buying Hotmail in 1997 for around $400 million, when it was competing with AOL and Yahoo and was building out its suite of dotcom-era online services.

Microsoft's anxiety about falling behind Apple and Google no doubt led the company to overpay for Skype. But if the team in Redmond can avoid crashing their new trolley and it helps deliver a few big hits, the cost won't matter in the long run.

There's something for almost everyone in Paul Allen's new memoir, "Idea Man."

There are chapters on the Seahawks, the Trail Blazers, space travel, billionaire vacations, brain research and Jimi Hendrix.

Woven throughout are anecdotes and sometimes catty asides about the amazing parade of people Allen met as he worked his way up and partly back down the list of the world's richest people.

This makes it the most revealing book yet about lifestyles of the software tycoons living along the east shore of Lake Washington.

But "Idea Man" provides only a partial view of the rise of Microsoft and the modern tech industry. Allen played an important role in the early days and clearly feels his contributions are underappreciated. That's fine, but the book's insistent portrayal of Allen as a visionary compromises its documentary value and pushes it toward the category of public relations.

The first third of the book describes how a geeky Wedgwood kid discovered computers, fell in with Bill Gates and eventually suggested they start a company making software for the first microcomputers.

Allen drops names left and right -- teachers at Lakeside, woolly programmers from the early days and celebrities he schmoozed with after joining the billionaire club.

As in a movie, some of the best lines were revealed in the previews. Excerpts published in March included most of the juicy bits, where Allen describes Gates' abrasive style and how Allen overheard Gates and Steve Ballmer "scheming to rip me off" by diluting Allen's Microsoft stake.

It turns out the book is less a vendetta than an effort to shape and polish the legacy of an unusual man whose technical skills and vision launched Microsoft at the dawn of personal computing. I'd put it on the same shelf as the $625, 2,400-page cookbook that former Microsoft Chief Technology Officer Nathan Myhrvold published last year and the authorized Steve Jobs biography that's being released in early 2012.

Allen's biggest business lately seems to be real-estate development. But he's put renewed effort into defining himself as a tech visionary after brushes with death in 2009, when he received a pacemaker and fought a recurrence of the cancer that precipitated his resignation from Microsoft in 1983.

While writing the book, Allen simultaneously sued Apple, Google, Facebook and other major tech companies. He alleged they were infringing on patents from a research lab he funded before the dot-com crash. The suits describe the lab as "one of the preeminent technology firms" and Allen as "one of the earliest pioneers of personal computer software."

Allen never says so directly, but the book leaves the impression he's resentful or jealous of Gates' fame, accolades and reputation. Several "told you so" passages drive this home.

When antitrust investigations of Microsoft were peaking in 1997, "I advised Bill to temper his stance," but Gates insisted he could bundle a browser or other features to his products, Allen wrote.

He also claims to have foreseen the importance of Google: "Years before Google became the goliath it is today, I repeatedly asked Bill how Microsoft was going to catch up in search, or whether the company might consider buying Google instead. Bill was unimpressed by his then much smaller rival. 'In six months we'll catch them,' he kept saying."

Allen also takes a few jabs at Jobs. He recalls being appalled by Jobs' berating an employee in a meeting, and another incident where Jobs rejected Allen's suggestion that a computer mouse would be better with two buttons, rather than the single mouse button Jobs planned for the Macintosh.

"In time I'd be vindicated," Allen wrote, noting Windows became the dominant PC platform, the second button helps millions of users and Apple began offering its multi-button Mighty Mouse in 2005.

Tech leaders aren't the only ones skewered. Allen gets in several digs at his former investment manager, executives at the cable company where Allen lost $8 billion, and Bob Whitsitt, the former Sonics manager Allen hired to lead the Blazers and the Seahawks.

The gentlest rebuke is given to his beloved mother, for selling Allen's childhood collection of science-fiction books 25 years after he had moved out of the family house. She proudly told him a man paid $75 for the lot.

"It was hard to forgive her for that, but an old photograph saved the day," Allen wrote. "After enlarging the picture, I was able to make out the titles on my old collection's spines. I had copies tracked down and retrieved almost all of them."

"Idea Man" is the recollection of one person and not a transcript of history, of course. It's not journalism, and some controversies are skipped over.

Prurient readers will be disappointed the book isn't as candid as promised on its front flap. There are no juicy stories from the $10 million parties the guitar-playing bachelor hosted on yachts and in exotic locales for friends and celebrities.

There's no mention of Allen's relationship in the late 1990s with tennis champion Monica Seles, who is half his age. Allen talks about his ill-fated investment in the DreamWorks movie studio, but he doesn't mention an earlier production company he bankrolled until the co-founder accused him of sexual harassment.

Also missing are details of Allen's reincarnation as a real-estate mogul.

It's still fun and enlightening to peek behind the curtain that Seattle's most colorful billionaire has pulled around his life. Even if you're only seeing a stage carefully filled with Allen's favorite things.

Bill Gates shared a few thoughts on Microsoft's deal with Yahoo during a Fox Business Network interview keyed to the Berkshire Hathaway shareholder meeting.

Gates was interviewed by Liz Claman along with Buffett and Susan Decker, former Yahoo president.

Gates and Decker both said the Yahoo merger was sensible, although other Microsoft shareholders were relieved that Yahoo rejected Microsoft's $44.6 billion offer before the economy dove in 2008.

Here are a few excerpts provided by the network.

Decker on whether Yahoo should have teamed up with Microsoft:

"Yes absolutely. I think it was a mistake that the merger was not effected for Yahoo shareholders."

Gates on the strategic partnership between Yahoo and Microsoft:

"The companies are doing a lot together. Google is a tough competitor, so combining some of the strengths of Yahoo and Microsoft clearly made sense; whether that was done through a merger or a key business deal where it ended up that gives that partnership a chance of competing with Google and making sure they don't get too lazy."

Gates on whether he advises Buffett to buy technology companies:

"I think he is very wise in sticking to businesses that have a more predictable future."

Gates, Buffeet and Berkshire Vice Chairman Charlie Munger all said the rich should pay more taxes -- and the Bush tax cuts shouldn't have been extended -- to help lower the deficit. The exchange:

Munger: "No. I would argue that we could stand a little higher taxes on people like me."

Buffett: "And me."

Munger: "And you, too."

Claman: "Bill?"

Gates: "Absolutely."

Claman: "Bill's a little quiet there."

Gates: "I'll pay if you pay."

(LAUGHTER)

Gates: "No, I pay more taxes than anyone so I'm -- and I'm glad to pay more."

The line was out the door Tuesday night at the new Seattle office of Zynga, the red hot San Francisco social games company.

About 175 engineers and game developers crammed into the space in the Washington Shoe Building in Pioneer Square.

Zynga called it a launch party, but it was really a recruiting event, the latest in a series of meet-and-greets hosted by California companies tapping into Seattle's deep reservoir of tech talent. Similar events were held earlier this year by Salesforce.com and Facebook, while Google, Amazon.com and Seattle startups have been talking up their hiring plans.

Tuesday's highlight was an appearance by Zynga founder Mark Pincus, who gave a quick speech and worked the room, shaking hands and getting his picture taken with fans.

Zynga has had amazing growth. Started in 2007, it now has around 250 million players for its games such as "FarmVille" and "CityVille." They're mostly played on Facebook, generating a staggering amount of information about players' activity that Zynga needs help sifting and analyzing.

Pincus, 45, told the crowd - including engineers from Cray, Amazon.com and RealNetworks - that Zynga is tracking 8 billion "neighbor connections" among between users, who generate 5 terabytes of click data per day, up 500 percent from the fall.

Managing this flood is a challenge but "what's more interesting is what you do with it," he said.

Also interesting to the audience is the chance to join Zynga before it goes public. Last month it was reportedly valued at $10 billion by investors and positioned for an IPO in 2012. It has raised more than $360 million and has nearly 2,000 employees.

In Seattle, Zynga set up enough room for 54 employees people initially. So far 10 seats are filled, mostly with early Amazon.com employees like Neil Roseman, who was hired last month as the vice president in charge of the office.

During an interview at the event, Pincus talked about Zynga's relationship with Facebook, its future and what he's looking for in Seattle. Here are edited excerpts:

Q: Why are you so interested in there so many Amazon.com employees here?

A: We are definitely not targeting Amazon or any other company.

It seems like there's a lot of affinity between the cultures of our companies. I have huge respect for Jeff Bezos and the way he builds his company - the idea that he took a simple concept like shopping and made it so much better, and created a vision that makes as much sense now as it did 10 years ago, and you know it will make as much sense in 10 years.

The way that company has built out, it's very technology-centric. It's about APIs and Web services. Really they were way ahead of their time in approaching e-commerce not as a compilation of Web pages, but as something with a much more powerful backend.
That's very similar to the approach that were taking to gaming. We want to have this very powerful backend that we've invested massively in, this real-time data store that may be the biggest in the game industry. I'm sure it's the biggest by the sheer quantity of data, and a culture inside the company that's very decentralized - everything is kind of an API service inside the company.

Q: Is your respect for Amazon why you're in Seattle?

A: No, we've been interested in Seattle for a long, long time. It really was more coincidental that Amazon's here and that we happen to have a bunch of former Amazon people.

It's more likely that the Microsoft influence on Seattle will impact us than Amazon in the sense that we're excited about the level of real hard-core engineering. When I think of the engineering horsepower here, I think in many ways it can be deeper than the Bay Area.

Q: The opening comments by you and Neil suggest Zynga is building a new foundation of services. Is that for running Zynga post-Facebook?

A: There are a couple of focuses where this talent pool will be really key for us. One is broadly in network products - consumer facing products that have value across all of our games - like Zynga message center, which is used by more than half of our players every day as a way to interact and be social with their friends. There's a whole layer that we're excited about, surfacing more social opportunities in any Zynga game.

Q: Independent of the platform?

A: Independent of the platform. That's one area of network products. Another area is game development. If we can find and recruit world-class game entrepreneurs from up here - they exist up here but we don't have them - we would love to build games here.
The third area is on mobile platforms -- going deeper on new technologies whether around HTML, whether it's rendering tools, development tools.

Q: Zynga has figured out ways to keep players around, offering them fresh content. That seems to make you voracious, acquiring talent so you keep getting new ideas.

A: Yeah, because we approach games as a service, it's more like a TV show - it's more like "Lost" or "Seinfeld." The users of those games have a voracious appetite for new content. The games are all about engagement - these are really some of the deepest engagement on the Internet.

If you think about your options to spend time on the Internet, you can look at a bunch of links and text pages or interact in a deeply rich, interactive environment like a game with your friends. Chances are the game is going to be a more compelling experience while you're engaged in it.

But in our kinds of games, as you go up the ladder, there's this always increasing appetite for new content - quests, in Farmville - decorations, new features. We're always trying to innovate around creating new ways for you to interact with your friends. Farmville just launched Farmville England. In Farmville England we came out with things like animal breeding, new kinds of buildings that matter. Cityville has every week or every other week, they just came out with new version of franchises, which is incredibly social.

Q: You also do a lot acquistions, to keep the machine going ...

A: Yeah, the acquisitions have been about bringing in new DNA. We like teams that have worked together for a long time. We love teams that have already brought products to market and have that battle hardened sense of what it takes really to get something out the door and take it to scale.

Q: Had you considered buying a Seattle company to get started here?

A: We've been interested in Seattle for a long time. It's surprising when you think that we're in 13 locations it's taken us this long to come to Seattle.

Q: What do you think about Seattle's Big Fish Games and PopCap?

A: I think they're great companies that are in slightly different businesses than we are. I have huge respect for both of them -- and I play and have been addicted to a bunch of PopCap's games.

Q: Where will you be in two years?

A: I hope that we have made many, many tens of millions of more people into daily social gamers. I hope that we've made "play" as big a verb on the Internet as "search" or "shop" or "share."

Q: What will happen to console networks like Xbox Live and PlayStation Network?

A: I probably have a counterintuitive or contrarian view on that. I actually think you're going to see a surprising upsurge in their business. I think that social gaming is teaching a lot more people about how fun games are and I think there will be people who graduate upwards. I think you'll see the two come closer together in the sense the console games probably will see the value in going more where the Nintendo Wii went or most recently Microsoft Kinect. I think you'll see them see the value in going more casual. It's kind of like movies versus TV - they'll always be in a position to deliver a much higher value, deeper, engaged experience than the web can.

Q: You're following Amazon, Google, Facebook, Salesforce.com and others that recently had big recruiting pushes and events in Seattle.

A: Is it inappropriate to ask if their CEO's came?

Q: No - they didn't.

A: So we're hungrier for Seattle talent.

Q: Is Seattle talent's hungrier for you, because Zynga is in position to go public?

A: I don't know about that but I hope that people wouldn't join us because they were hoping we'd go public. We want people to join us because they're excited about this mission. I think there's probably a great financial opportunity at all of these companies. I'm hopeful people are excited about games and they're excited about the kinds of products we want to build and the ways we want to innovate and they're excited about the kind of data that we're digging into and the kind of problems we're trying to solve. It's a very different environment and experience at our company than any of those companies, public or private.

Ours is more small teams that are more like startups that have their own missions and they're off doing them.

Q: Where will this office be in a few years?

A: I just don't know. If we're able to attract the game talent as well as engineering talent here, then Seattle could be one of our biggest if not second biggest location. It depends on how big social games gets and how big we get with it, but the remote studio model has been very successful for us.

Q: Your Facebook partnership expires in what, 2014 or 2015?

A: Gosh, we don't even think about that. I think the way that Mark [Zuckerberg] and I think about that is both of us hope that that is a partnership that lasts decades.

Q: I keep hearing that a huge amount of money generated on Facebook is by Zynga.

A: Neither company talks about it, but it's definitely a very important business relationship for both.

Q: How will your mix of global vs. U.S. players evolve? (Now 75 percent are outside of the U.S.)

A: I would assume it will eventually look more and more like the Internet. Our view in the future is there will be something like 4 billion devices connected to each other through a combination of the Internet and social networks on top of that, and that half of those people will engage in games.

Q: How many will be Zynga games?

A: Of course I hope the lion's share. We hope that we can be the Google or the Amazon -- what they are to their verbs, we want to be to "play."

Q: Who are your biggest competitors?

A: We don't think about it. We don't spend our time thinking about beating competition. For Google to build out search or Amazon to build out shop, they had to take it direct to the consumers and convince them this had value in their daily lives. So it's a much harder mission than just trying to take out a competitor or beat somebody else.
We have to innovate and prove to you that we're worthy of 15 minutes of your day every day, and we're a better way for you to play and relax and connect. It's probably like you're going to do that instead of TV or a conference call at work - or during a conference call.

I know in traditional media it's "what are you taking away from." Social gaming to me feels additive: I think people have these nooks and crannies of time that we haven't every been able to fill as a society before, and these mobile devices are starting to let us do that. We all want to multitask a little bit - we're really designing our games to fit in those nooks and crannies.

It's funny, we don't want them to be too engaging - they shouldn't compete for your attention too much. They should be just nice, in the background.

Paul Allen's trying awfully hard to be sure he's remembered as a technology visionary and not just a quirky billionaire.

But perhaps Allen's trying too hard to shape his legacy.

Building edifices such as the Experimental Music Project was just the start -- though it's now looking like an apt symbol of Allen's melting relationship with Bill Gates, whose new foundation headquarters has risen across the street.

Allen's aggressive new approach began last year, after he fought back a recurrence of cancer. In July he publicly pledged to give most of his fortune to charity. Then in August he sued Apple, Google, Facebook and other tech companies, arguing that they copied ideas hatched long ago by his research ventures.

Now Allen's releasing an autobiography -- "Idea Man" -- to tell his remarkable story.

But the reception to excerpts of the tell-all suggests his re-branding effort may backfire.

The excerpts reiterate that Allen made key contributions to Microsoft's genesis and ended up with a smaller share of the company than Gates, a story that's been told before.

What's newly revealed is the depth of Allen's resentment over his dealings with Gates.

It's so catty, Allen risks going down in history as the world's richest disgruntled employee -- the guy who stomped out of the building with $20 billion, thinking he deserved $25 billion.

I've followed Allen for more than a decade and talked to him a number of times. He's always been polite, except for the time his security guard shoved me aside, the night Washington voters agreed to fund a stadium for his Seahawks.

Whenever I asked about Gates, Allen talked up their friendship. Here's what he told me in June 2008:

"We have dinners regularly. We love to see movies together. The thing I always tell people about Bill that they may not know is, he's really a lot of fun to hang out with."

Allen continued:

"We used to go to movies a lot together. We would predict what's going to happen in the movie. If something funny happened, then we would just crack up. We still to this day have a lot of fun just hanging out and talking and brainstorming about future things."

Something must have changed. Maybe he was frustrated at being overshadowed by Gates all these years, or just had to get things off his chest. Still, nobody expected Allen to vent so publicly.

Gates was a brutal boss and a crafty negotiator. He's a ruthless businessman who once aspired to be a lawyer like his wealthy father, who helped set things up. Allen's an eclectic, music-loving son of a University of Washington librarian. Given these backgrounds, it's impressive that Allen ended up with 36 percent of their startup.

Another sore point is the cut Gates gave to Steve Ballmer, to convince his Harvard pal to join the company in 1980.

Allen, who attended Washington State University, writes that he and Gates decided to give Ballmer 5 percent of Microsoft. But when he left on a business trip, Gates gave Ballmer 8.75 percent, "considerably more than what I'd agreed to."

Allen wasn't the only one miffed by Ballmer's hiring package. It caused a "personnel disaster," according to "Gates," a 1993 biography by Paul Andrews and Stephen Manes. They didn't say much about Allen's feelings at the time, but said there was widespread resentment after Ballmer's offer was tacked onto the office bulletin board.

The ones to feel sorry for are Microsoft's early clerical workers, with whom "Gates had been tightfisted beyond the bounds of the law," Andrews and Manes wrote.

While Allen was grousing about dilution, the clerks had to file a complaint with the state to extract back pay for overtime that Gates owed them.

We'll have to see what the rest of Allen's book says, and whether people are as interested in his life before and after Microsoft. There's some irony in the book getting its initial burst of attention because of its candid view of Gates.

Hopefully "Idea Man" is more than a vendetta. That would be a shame because Allen's otherwise providing fascinating new details from his front-row perspective on the birth of the PC industry and a company that dramatically changed the Seattle area and the world.

For better or worse, Microsoft is like a natural element. Much of the world runs on its software, and it may be the most profitable business ever created anywhere.

Allen left Microsoft when it was really just getting started, more than a decade before Windows 95.

Early employees who thought they knew the man don't know what to make of his book.

"I'm taken aback," said Jon Shirley, who became Microsoft's president the year Allen left and served with him on its board.

Shirley said he's been getting calls from very early employees, talking about the excerpts.

"I think everybody's sort of in the same situation I am -- it's very hard to understand," he said.

Shirley said the book probably won't alter the general perception of Microsoft, which was more affected by antitrust cases.

"Microsoft is no longer Bill and Paul," he noted.

Gates and Allen have also changed, presumably.

"How the world wants to view the interchange of these two very young men -- when they were young men -- I don't know," he said. "You'll have to decide whether you accept this story or not. It's shocking to me -- it doesn't sound like Paul."

Or maybe there's a lot more to Allen than everybody realized.

In case you haven't seen it, here's the official White House picture of President Obama's dinner with Silicon Valley's most prominent tech leaders in Woodside, Calif., last night.

Steve Jobs was on Obama's left, Mark Zuckerberg was on his right and Larry Ellison was facing him across the table. Apparently it wasn't a necktie sort of event.

Microsoft wasn't represented, unless you count board member Reed Hastings, chief executive of Netflix, and partner Carol Bartz, chief executive of Yahoo.

Can you pick out the billionaires?

Other guests were Cisco's John Chambers, Twitter's Dick Costolo, Google's Eric Schmidt, Genentech's Art Levinson, Kleiner Perkins' John Doerr, Stanford President John Hennessy and Steve Westly of Westly Group. It took place at Doerr's house, according to the Mercury News.

Paul Allen's mobile phone productivity startup, Kiha Software, is going through a few changes.

Last week, Kiha laid off an undisclosed number of its employees and on Monday it ended a public beta test of its software for organizing contacts and other information on Android-based mobile phones.

Allen invested $20 million in the venture before its "Aro Mobile" application was unveiled at November's Web 2.0 conference in San Francisco. The software received attention from national media outlets.

Kiha's chief executive and co-founder, former Microsoft manager John Lazarus, stepped down later in November. Kiha's website now lists Chris Purcell -- vice president of technology at Allen's Vulcan umbrella company -- as its top executive.

Spokesman David Postman said Allen isn't folding the company. He wouldn't comment on whether the company has been shopped to potential buyers.

"We're going through an ongoing assessment of what the best way to deliver that product is," Postman said. "The company still operates. We've got dozens of people working there who are working hard to figure out the best way to get this in the hands of consumers."

A news release issued last fall announcing Aro's public debut said it was "was born out of Microsoft co-founder Paul Allen's vision for a more intelligent mobile experience and was developed by Kiha Software during nearly three years of work by a team of nearly sixty talented professionals in Seattle, Washington."

Mercer Island billionaire Paul Allen today renewed his effort to sue Apple, Google, Facebook, eBay, AOL and other companies for patent infringement.

Allen's case was rejected on Dec. 10 by a federal judge in Seattle who said it was too vague. U.S. District Court Judge Marsha Pechman told Allen he had until Dec. 28 to file an amended suit.

Just meeting the deadline, Allen filed an expanded version of the original suit with more details of how the companies allegedly infringed. The filing also includes 40 exhibits, many of which are screenshots of Web sites with modules highlighted.

Here's the filing: 2010-12-28 Interval First Amended Complaint for Patent Infringement (2).pdf

The companies being sued declined to comment on the allegations when the suit was first filed in late August.

Experts have said Allen's case is a longshot but the potential payoff is large - perhaps $500 million or more if he wins.

Defendants named in the suit are Apple, Google, Facebook, eBay, AOL, Netflix, Yahoo, Google's YouTube, OfficeMax, Office Depot and Staples.

Patents at issue in the case were generated by Interval Research, a Palo Alto, Calif.-based research venture that Allen, co-founder of Microsoft, and Xerox veteran David Liddle started in 1992. Allen closed it down in 2000.

Allen's suit alleges that his patents cover, among other things, systems that automatically call up and display related content. The approach is widely used by online retailers and other sites across the Web.

For instance, when viewing a product on Apple's iTunes store, the store automatically suggests related content that may be of interest. The suit filed today argues that this infringes on at least 20 claims made by a patent Allen holds.

Here's the exhibit submitted to illustrate the Apple violations:

Intellectual Ventures went after a bevy of big tech companies today for allegedly violating patents the company has acquired.

The suits, filed in Delaware, mark an aggressive new approach for the Bellevue company, which former Microsoft executives Nathan Myhrvold and Edward Jung formed in 2000 to amass and license patents. Investors in the venture include Microsoft Chairman Bill Gates.

It's the first time the company has sued for patent infringement, although Myhrvold has said all along that lawsuits were a possible way for the company to monetize its patent collection.

The company has bristled at being labeled a "patent troll" that only reaps profits from others' inventions. It's also tried to cultivate an image of being a think-tank were ideas are generated by in-house researchers who have generated their own patents.

But that image may be harder to sustain now that it's entering the courts.

At issue in the suits are patents covering major technologies in computing and software, including security software, DRAM and Flash memory. The actual inventions were done by others and the patents were acquired by Intellectual Ventures.

Intellectual Ventures said in a news release that it's suing companies with which it was unable to negotiate licensing deals.

"Over the years, Intellectual Ventures has successfully negotiated license agreements with some of the top technology companies in the world. However, some companies have chosen to ignore our requests for good faith negotiations and discussions," Melissa Finocchio, chief litigation counsel, said in the release. "Protecting our invention rights through these actions is the right choice for our investors, inventors and current licensees."

Companies being sued over security software patents include Check Point Software Technologies, McAfee, Symantec and Trend Micro.

Hynix Semiconductor and Elpida Memory are being sued over DRAM and Flash memory patents, and Altera, Lattice Semiconductor and Microsemi are being sued over field-programmable gate array technologies.

McAfee and Symantec declined to comment.

"McAfee just received notice of the lawsuit this morning, so we still need to review the details," McAfee spokesperson Tracy Ross said via email.

Potential damages weren't disclosed but Intellectual Ventures said in the court filings that it has earned nearly $2 billion charging royalties on more than 30,000 patents and patent applications it has amassed. It has also paid "hundreds of millions" to inventors and spent "millions" developing technology on its own.

The lawsuits may also give Intellectual Ventures more leverage negotiating deals with other companies.

Finocchio is a former Silicon Valley patent attorney who left Boise memory maker Micron Technology to join Intellectual Ventures seven months ago.

She said the lawsuits aren't so much a new direction for the company as "just another component of our business model that we're now executing on."

Asked whether Intellectual Ventures will use litigation more often going forward, she said:

"There are always going to be companies out there that won't engage with us from the outset or we just can't come to a mutually agreeable deal, so litigation will be a part of our model."

(Here's today's column, about why Microsoft should go private. I may have buried the news, that people in Microsoft's treasury group have run the numbers ...)

With interest rates at historic lows, maybe it's time for Microsoft to refinance.

Seriously, the company is unable to convince investors that its business is doing well. So why not say to hell with Wall Street and take the company private?

Microsoft has management challenges and seems less nimble and adventurous, but it's steadily grown the business through the downturn.

The company is now so big that its stock will never perform the way it did in the 1990s.

It's also getting harder to explain all the different things it's building, especially when analysts and the media are more interested in the gadget du jour. Executives seem tired of telling their story over and over, only to be asked about the iPad and mocked for the Kin.

With the stock stuck under $30, investors no longer have the patience to wait the decade or so it takes Microsoft to build humongous new businesses, as it did with servers and is doing with Xbox.

Breaking the company apart or raising the dividend further may give investors a quick hit, but they'd soon be begging for more.

They've already forgotten that last month Microsoft reported 51 percent profit growth, and that it gave shareholders more than $1 billion a month over the past year through dividends and stock buybacks.

Instead of throwing free cash into that black hole, Microsoft could use it to cover refinancing costs and share the rest with employees. It would be a better incentive than middling stock awards and could even start churning out Microsoft millionaires again.

Going private isn't that far-fetched. Dell's been thinking about this and will reportedly discuss it again during a board meeting next month.

Public offerings get all the attention, but 1,199 companies went private over the past decade, including 92 with a combined value of $60 billion so far this year, according to Thomson Reuters.

As of Friday, Microsoft's market cap was $219.8 billion.

To get your mind around this, pretend that's a mortgage (it's easier if you lop off six zeros).

First, deduct the $24 billion in equity still held by Steve Ballmer and Bill Gates.

Make it a cash-out refi - take out 15 percent to sweeten the deal for shareholders. Use the cash on hand if they need more.

You're looking to borrow about $225.5 billion.

If Microsoft refinances at 5 percent - roughly what it sold 30-year bonds for last year - its monthly payment would be about $1.21 billion. Last year the company had profit of about $2 billion a month before taxes.

It looks even better if Microsoft figures out a way to get the principal down. Perhaps a few big shareholders would be interested in a limited partnership that owned Microsoft outright.

Gates and Ballmer together own about 11 percent of the shares. About two-thirds of the rest is held by about 1,700 institutional investors and mutual funds.

To go private, Microsoft would have to reduce the number of shareholders below 300.

Maybe one could be the Gates Foundation. Imagine what it would do for the company's reputation and morale if people buying Windows knew a portion of the profits would directly benefit the world's poor?

Everyone would love that, except Apple and that person at last week's shareholders meeting who asked Gates to give more to investors and less to sick and impoverished children.

I'm not the only one thinking about taking Microsoft private.

The notion has crossed the minds of a few people in Microsoft's internal treasury department, according to Bill Koefoed, the company's general manager of investor relations.

"Sure, in the back of people's minds. We've thought about it," he said.

But it's apparently not something the chairman of the board is interested in pursuing.

For the deal to work, it would need the two largest shareholders - Chairman Gates and CEO Ballmer - to hang on to their stakes and go for it, and lately they've been selling millions of shares.

It won't be too many years before both billionaires move on, and who wants to refinance when they can taste retirement?

I wonder, though, if Microsoft's next generation of leaders will be as immune to Wall Street sirens.

Going private seems like an opportunity for Gates to develop another vaccine, to keep Microsoft's long-term vision clear and to protect it from infectious greed.

If he takes a little cash out from the refi, he could probably get one of those big TVs, as well.

Santa Ballmer's going to put a Windows tablet under your tree this year, according to a Reuters report on the Microsoft CEO's speech at the London School of Economics.

An excerpt:

"You'll see new slates with Windows on them. You'll see them this Christmas," he told an audience of students, staff and journalists at the London School of Economics.

"Certainly we have done work around the tablet as both a productivity device and a consumption device," he said.

The news follows the bombshell Goldman Sachs report lambasting Microsoft's response to the iPad.

But really the arrival of a Windows tablet this holiday seasons is right on schedule, following Steve Ballmer's unveiling of the Hewlett-Packard Slate at the Consumer Electronics Show last January. HP at the time said it would start selling the Windows 7 device in late 2010.

In recent weeks HP has been letting slip that it's going to be shipping a Windows tablet soon, before it releases one based on the Palm software it acquired.

Meanwhile, analysts are jostling to predict how many iPads Apple has sold so far, ahead of the company's Oct. 18 earnings report. Fortune mag has a roundup of the estimates, which range from 3.8 million to 6 million.

About 350 million PCs are expected to be sold this year globally.

For his new house in Woodside, Calif., Steve Jobs turned to the same architectural firm that worked on Bill Gates' waterfront mansion in Medina in the early 1990s.

After getting ribbed for decades about cribbing from Apple's graphical user interface back in the day, Gates might get a small chuckle out of the choice.

Jobs isn't exactly cribbing for his crib, though.

Since working for Gates, the Pennsylvania-based architecture firm -- Bohlin Cywinski Jackson -- worked for Jobs on Apple stores, notes Gizmodo, which posted renderings of the new Woodside house today:

Design of the Gates house was also done by James Cutler, working with Bohlin Cywinski Jackson.

After a long battle with preservationists, Jobs is replacing a huge, circa 1925 mansion on the site with the proposed five-bedroom place. It's smaller and groovier but at 4,910-square-foot it's still no Mac mini.

Bohlin Cywinski Jackson also designed Seattle's latest City Hall, by the way. Seattle residents are still waiting for its genius bar.

Microsoft co-founder turned entrepreneur and Seahawks owner Paul Allen is getting a bit more public.

He has started Twittering, with a post on Sept. 22 that offers a glimpse into the secret life of the Mercer Island billionaire:

"In Kona working on the book .... and Adriana has killer rellenos..."

Allen was presumably referring to his memoir, which is being published by Penguin Group, and Adriana's Mexican Food.

Today he posted an item about a symposium at the Allen Institute for Brain Science, and gave kudos to Seahawks fans and coach Pete Carroll:

"We couldn't have done it Sunday without the crowd. Chargers saw what the 12th Man is all about. Congrats coach."

Among the people Allen's following on the service are his old pal Bill Gates, Richard Branson, Al Gore, Peter Gabriel, Rufus Wainwright, Carroll and players on his teams: the Seahawks' Matt Hasselbeck and the Blazers' Greg Oden and Brandon Roy.

Here's a tribute video prepared for the Boy Scouts of America, which presented Bill Gates with its Silver Buffalo award today during a luncheon at the Fairmont Olympic Hotel in Seattle.

It's a nice bit of Gates and Seattle history, with images of Gates during his time in Troop 186 in the Sand Point neighborhood.

Gates was accompanied to the event by his father -- Bill Gates, an Eagle Scout -- and stepmother, Mimi Gardner Gates.

Among the audience were former scoutmasters who led Bill back in the day, William Christoffersen and Don Van Wierengen.

Bill Gates will collect his latest honor at an event in Seattle on Tuesday.

The Boy Scouts of America is presenting Gates with its Silver Buffalo honor for "his deep commitment to improving the lives of the world's most disadvantaged people," according to a release today.

Gates -- who became a Life Scout -- is receiving the award from the Chief Seattle Council during a Tuesday luncheon.

Silver Buffalo awards have been given since 1925 to civic-minded people for their contributions and service to youth. Gates is among 12 recipients this year; others include ExxonMobile Chief Executive Rex Tillerson, the release said.

Here's a new way to get a plum job in the software business: Fly a company founder to space and back, twice.

That's how Eric Anderson, co-founder and chairman of Virginia-based space tourism company Space Adventures, got to know software pioneer and Microsoft veteran Charles Simonyi.

Anderson's venture flew Simonyi to the International Space Station in 2007 and 2009.

Today Simonyi announced that he's hired Anderson (pictured) as president of Intentional Software, a Bellevue company that Simonyi started in 2002. Intentional is developing a new approach to developing software that presents the designer's intent in the code.

Intentional's release said Anderson, "who pioneered and was the first to monetize the business of human spaceflight, has responsibility for bringing Intentional's transformative technology to the worldwide marketplace."

Simonyi said in the release that Anderson is "one of very few who can take futuristic ideas and make them real." The rest of his quote:

"I founded Intentional Software with the idea of transforming the way software is built and knowledge is used, by allowing the true intentions of today's knowledge workers and business experts to be precisely expressed in the software they need. This remains an audacious goal, and the magnitude of its difficulty is exceeded only by its importance to the future. Software as we know it is the bottleneck in the digital horn of plenty. With Eric joining me in our business, I am confident that Intentional will unstop the bottleneck and change the world."

Anderson, 36, graduated magna cum laude from the University of Virginia with degrees in aerospace engineering and computer science. He was named a 2010 Ernst & Young "entrepreneur of the year."

He's moving from Virginia to the Seattle area, where he'll be leading about 20 employees at Intentional.

Today's column is my take on why Paul Allen's suing some of the biggest names in tech. The top:

Something's up with Paul Allen.

His bombshell Friday -- a lawsuit against Apple, Google, Facebook and others for patent infringement -- was just the latest symptom.

Microsoft co-founder Paul Allen today filed a lawsuit against many of the biggest names in tech, alleging they're infringing on patents obtained by Interval Research, a venture Allen and Xerox veteran David Liddle started in 1992.

Interval's research generated about 300 patents, four of which are the basis of the suit. The group operated in Palo Alto, growing to more than 100 researchers, until it was shuttered in 2000.

Named as defendents are Apple, Google, Facebook, eBay, AOL, Netflix, Yahoo, Google's YouTube, OfficeMax, Office Depot and Staples.

Most of the companies declined to comment, but Facebook said the suit's without merit and a Google spokesperson said it's part of an "unfortunate trend of people trying to compete in the courtroom instead of the marketplace."

If Allen is successful, he could go after additional companies, seeking royalties for Interval patents that touch on much of the current Web experience.

One of the patents in the suit lays claim to the concept of automatically showing related information on a website, so people viewing a news story online could be presented with related stories, for instance.

"The invention enables some or all of a body of information to be skimmed quickly, enabling a quick overview of the content of the body of information to be obtained," states a 2001 patent for "browser for use in navigating body of information." "The invention also enables quick identification of information that pertains to a particular subject."

Allen has already tried to make money with that concept, starting a company called Evri, which developed a widget that media sites could embed into their sites and generate clusters of related stories.

It's unclear at this point how Allen sought to license the technology. Asked whether the lawsuit follows attempts to negotiate licensing deals with the named companies, Allen's spokesman David Postman said, "The defendants were informed that we had patents of interest."

The belated pursuit of compensation for research conducted more than a decade ago puts Allen at risk of being labeled a patent troll. Postman characterized the move as "part of an ongoing process for years to monetize that portfolio."

"Other patents were licensed to other people," Postman said. "Now we're to the point of reviewing that portfolio and seeing at the same time if technology in the marketplace has caught up to where Interval was. It's clear that these patents cover a variety of key processes in search and e-commerce. We're to the point where litigation is the next step on that."

Within Allen's circle of billionaire Microsoft veterans is Nathan Myhrvold, who started a Bellevue company called Intellectual Ventures that collects patents and makes money charging licensing fees. Bill Gates is invested in the group and helping with its research.

Intellectual Ventures' rise contributed to the debate over reforming the U.S. patent system and raised questions about how much the system encourages innovation vs. enriching license holders.

But Postman said Allen's situation with Interval is different, partly because Interval was formed to be a research organization developing new technologies for the "wired world" Allen envisioned. Postman also denied that Allen is enforcing his patents at the suggestion of Myhrvold or others.

"Ever since Interval was operating he's known there was value in those patents," Postman said. "That's why he was able to sell some, spin some off and license others. It is not at all a case of someone influencing him to do this. This was driven by Paul's interest in protecting his interest in innovation."

Facebook, at least, is going to fight back hard. The company's statement, provided by spokesman Andrew Noyes:

"We believe this suit is completely without merit and we will fight it vigorously."

A spokeswoman for eBay provided a similar statement, saying "we are reviewing the complaint filed today. We intend to defend ourselves vigorously."

An Office Depot spokesman said the company doesn't comment on pending litigation. AOL also declined to comment.

Google's statement said, "This lawsuit against some of America's most innovative companies reflects an unfortunate trend of people trying to compete in the courtroom instead of the marketplace. Innovation -- not litigation -- is the way to bring to market the kinds of products and services that benefit millions of people around the world."

Microsoft is not named in the suit. The company has not obtained licenses to use the technology, according to Postman.

Postman declined to say why the lawsuit went after particular companies, but said more companies could be pursued later.

"The companies that were named today all were informed of the patents that we hold," he said.

The patents at issue involve navigating with a browser for information, capturing a computer user's attention and alerting users to information. They were filed starting in 1996 but some weren't approved until as late as 2004.

Specifically, the patents cover:

-- "Browser for Use in Navigating a Body of Information, With Particular Application to Browsing Information Represented By Audiovisual Data."

-- "Attention Manager for Occupying the Peripheral Attention of a Person in the Vicinity of a Display Device."

-- "Alerting Users to Items of Current Interest."

The lawsuit, filed in federal court in Seattle, also mentions that Interval was an early supporter of Google's founders.

For example, Interval Research served as an outside collaborator to and provided research funding for Sergey Brin and Lawrence Page's research that resulted in Google. Indeed, a Google screenshot dated September 27, 1998 entitled "About Google!" identifies Interval Research in the "Credits" section as one of two "Outside Collaborators" and one of four sources of "Research Funding" for Google. See Sept. 27, 1998 Website "About Google!" attached as Exhibit 1.

A former hedge fund manager offering free academic tutorials via YouTube has a pretty big fan in Medina.

Sal Khan produces the short, free tutorials on topics such as biology and calculus from a closet in his Silicon Valley home. He's reaching more than 200,000 viewers a month, including Bill Gates.

Gates has been watching the videos with his 11-year-old son, Rory, and is meeting soon with Khan, according to a Fortune magazine story.

Gates also called out Khan's teaching last month at the Aspen Ideas Festival.

Khan was already on his way to becoming a celebrity, at least among tech tycoons interested in online education.

The "Khan Academy" was featured on PBS NewsHour in February, and venture capitalist John Doerr and his wife have provided more than $100,000 to support Khan.

It's hard to focus when the sun's finally shining in Seattle, but we have to pay attention to the Mark Hurd story.

Hurd's the guy who grabbed a Perrier and leapt from Hewlett-Packard's cockpit, riding a golden parachute into history.

(The top of today's column on HP and the Mark Hurd debacle.)

In this age of thrift, Silicon Valley's chief executives are finding a new way to cut costs -- by handling public relations directly.

First we had Steve Jobs telling people to hold their iPhones differently.

Now Oracle's Larry Ellison is on the offensive, offering guidance to reporters writing about his pal Mark Hurd's debacle.

Ellison sent this fireball to Fortune's Philip Elmer-DeWitt today, with the subject line "Hey Jerk."

Adelyn Lee went to jail for a year for falsely accusing me of sexual harassment. Why did you leave that out of your story you scum bag? Let me guess ... your job is telling half-truths. Fortune Magazine must be very proud of you.

Who needs Fortune when you've got your own, right?

Hewlett-Packard Chief Executive Mark Hurd's stepping down after a sexual harassment investigation found he violated HP "standards of business conduct."

I wonder if the folks in Redmond saw it coming.

Hewlett-Packard was Microsoft's longtime partner. HP's website says their "partnership is one of the oldest of its kind in the industry."

But lately HP's been stepping out - first with the comely Finn, Linux, and then going all the way with its Silicon Valley neighbor, Palm.

I wonder if HP's search committee might still consider any Microsoft executives as a replacement for Hurd. Bob Muglia perhaps? Kevin Turner?

A riptide of snark continues after the crash of Google Wave this week and CEO Eric Schmidt saying "we celebrate our failures."

At Search Engine Watch, Danny Sullivan posted a greatest hits list of Google failures to celebrate, including Dodgeball, Print Ads and Answers.

Sullivan notes that Schmidt's celebrating didn't come through in Google's public statements about folded products.

Google's a company that's not afraid to take risks and does seem to embrace the idea that along the way, there will be failures. Maybe that's "celebrating" those failures. But in its statements to the world, Google rarely sounds like it's celebrating these missteps. It doesn't really document anything that was learned. It just seems to say as little as possible to move on.

He also listed a few cases where Google made lemonade, eventually turning a failed product into a success.

Schmidt and Steve Ballmer will have plenty to talk about someday in the retirement home for billionaires. Here's Ballmer on the same topic in 2004:

The biggest mistakes we've ever made as a company on the innovation front is when we abandon something that we started before everybody else in the market, we gave up on it and it got popular when somebody else went and worked on it. Our worst mistakes are not showing that kind of patience and persistence on the innovation and responsiveness boundary.

And I don't care whether it's you as a CEO thinking through the issues of your customers, or frankly some of the IT folks. If you're an IT folk, then you're supposed to also be pushing your company to try new ways to use technology. And sometimes you're going to get it wrong and you have to be able to listen, take that feedback, refine and make sure that the fundamental, core concept you're working on can really be applied in the right way.

Steve Jobs came out on the defensive during a press conference this morning responding to the iPhone 4 antenna problems, according to live blogs from the event at Apple headquarters in Cupertino.

Jobs acknowledged that there is a problem with his company's new phone but said it's only affecting a small number of users.

In response the company's giving free cases to iPhone 4 buyers through Sept. 30 and refunds to people who bought the $30 "Bumper" cases (the green accessory pictured here) from Apple already. The company can't make enough Bumpers for everyone right away so Apple will offer alternate cases. Buyers can apply for the cases and refunds on Apple's Web site next week.

Apple's also waiving restocking fees and providing full refunds within 30 days for people who want to return their phones.

The response is probably comparable to what Apple would have been forced to do if it lost in class action lawsuits filed over the phone's problem.

But the Sept. 30 deadline is curious and raises the question of what will happen to people buying the phone later. It may be a clue that Apple's working on a hardware fix that it hopes to have done by then.

Apparently investors aren't terribly worried about the moves, which will cost less than a recall of the phone. Apple stock (AAPL) is hovering a bit below its opening price of $253, trading recently at $251.

The company this week updated the iPhone software to fix its signal strength overstatement and a bug it had working with Microsoft's Exchange message system. Jobs said the company's also fixing a problem with the iPhone 4's proximity sensor and is finally going to start shipping white versions of the phone at the end of July.

Jobs was asked if Apple's going to do more to address the antenna situation and perhaps change the hardware. He said "I don't know" whether changing the design will help, according to Engadget's blog.

Jobs also denied Apple knew about the antenna problem before the phone was released.

Despite the antenna glitch, Apple sold more than 3 million of the phones since it launched three weeks ago.

Jobs said the company's been "working our butts off" to find a solution to the antenna problem, even though only 0.55 percent of users have called AppleCare about the problem. (So at least 16,500 people have contacted Apple about the problem.)

AT&T data shows the iPhone 4 drops a bit more calls than the iPhone 3GS, but it's still less than 1 percent more than the 3GS. Jobs provided the number of dropped calls in relation to Apple's earlier phone, but apparently didn't provide an overall percentage of calls dropped.

It has also been apparently working hard to find other phones that have a similar problem; Jobs asserted that the BlackBerry Bold 9700, Samsung Omnia II and HTC Droid Eris can have an antenna drop if held a certain way.

Jobs also talked about how much testing Apple does and how well the iPhone 4 has been received, even mentioning Consumer Reports on a slide describing the iPhone 4 as the "#1 Smartphone."

UPDATE: Nokia - which Jobs used as an example of another company with similar antenna issues - distributed a statement defending its antenna design. Nokia noted that it chooses phone materials carefully - a subtle dig at Apple for making the antenna part of the iPhone 4's stainless steel exterior band:

Antenna design is a complex subject and has been a core competence at Nokia for decades, across hundreds of phone models. Nokia was the pioneer in internal antennas; the Nokia 8810, launched in 1998, was the first commercial phone with this feature. Nokia has invested thousands of man hours in studying human behavior, including how people hold their phones for calls, music playing, web browsing and so on. As you would expect from a company focused on connecting people, we prioritize antenna performance over physical design if they are ever in conflict. In general, antenna performance of a mobile device/phone may be affected with a tight grip, depending on how the device is held. That's why Nokia designs our phones to ensure acceptable performance in all real life cases, for example when the phone is held in either hand. Nokia has invested thousands of man hours in studying how people hold their phones and allows for this in designs, for example by having antennas both at the top and bottom of the phone and by careful selection of materials and their use in the mechanical design.

"Just avoid holding it that way," Steve Jobs told a customer who complained that his new iPhone 4 loses reception when he touches the metal band framing the device.

That's according to an e-mail posted at Engadget.

Unbelievable. I hope other business leaders don't try to emulate Jobs this way. Especially the ones making cars and airplanes. Imagine this exchange:

"Hey Boeing, we've got some cracking in the tail of our new 787 and it looks like there's an assembly problem with the horizontal tail. Any plans to fix this?"

"Just avoid flying it that way."

RANCHO PALOS VERDES, Calif. -- Walt Mossberg is interviewing Microsoft Chief Executive Steve Ballmer and Chief Software Architect Ray Ozzie here at the All Things Digital conference. Mossberg started it off asking Ballmer about the economy, but the conversation heated up when they came around to competition with Apple and Google.

Mossberg also elicited a bit of news from Ozzie, who confirmed that Microsoft is considering letting other companies integrate applications into its Bing search engine.

"That's something we'd like to experiment with. We're doing it in maps right now," Ozzie said.

Facing a room full of iPad users who heard Steve Jobs on Tuesday predict a fading PC market, Ballmer said "the real question is, what's a PC?"

Is the iPad a PC? Mossberg asked.

"Sure, of course, it is. It's a different form factor of PC," Ballmer said.

The PC business will continue to grow but the design, size and weight of the devices will change, Ballmer said.

"I think people are going to be using PCs in greater and greater number for years to come," he said. "I think PCs are going to continue to shift in form factor .... They'll get smaller and lighter, some of them will have a keyboard, some of them won't have a keyboard."

Ballmer said the iPad is "a flat device where you can buy a docking station -- you can dock it and start turning it back into a PC," he said.

PCs can also be flat, he continued.

"Are these really separate categories? No these are one category where you've got a different cut at the form factor."

Looking ahead, Ballmer said the discussion "won't be about Mac and PC anymore. It will be about the thing that replaced the Mac."

It's not clear that there will be one general purpose computing device, Ballmer said. Nor does he think "the whole world will be able to afford five devices per person. Maybe in the bubble of Terranea," he said, referring to the swanky resort where the conference is taking place.

Ballmer also fired back at Jobs' characterization of PCs becoming the equivalent of trucks, saying Windows computers will continue to appeal to the masses.

"There may be a reason why they call them Mac trucks, but Windows machines are not going to be trucks," he said.

Asked about Google developing new operating systems, Ballmer said he's perplexed about Google's decision to create both the Android and Chrome operating systems simultaneously.

"The other guy's trying to start incoherent. Talk to them," he said.

Ballmer was candid about how Microsoft fumbled its strong position in the phone business, which he's now directly overseeing, saying it was the result of poor execution. He told Mossberg that Microsoft's phone business has been overhauled, similar to the way its Windows business was sorted after the Vista debacle, and is better positioned with the new version of the phone platform going on sale this fall.

"What do you mean about learning the value of excellent execution?" Mossberg said.

"We missed a whole cycle," Ballmer said.

"We had to do a little cleanup, change things around a little bit in big Windows," he explained. "We've done a little bit of the same in mobile. You can't just say innovation is all about going off into the ivory tower. It's also about good, consistent engineering."

Ballmer said Microsoft may benefit from the "dynamic" phone market, in which market leadership has shifted several times over the last five or six years.

Mossberg began the conversation by asking Ballmer about the state of the economy and Ozzie about cloud computing.

"I would say developed world, things have come off the lows for sure," Ballmer said. "I think our industry is even more revved up about how good the economy is than maybe some others but we've all been in a good product cycle." He added that "we've started to see some comeback in business spending."

Ozzie said the new environment, with sharing material online, connected devices and common standards for sharing, is prompting changes in the way products are developed at Microsoft. He's going to different product groups and asking them to "re-pivot around specifically what people are using that product for."

"In essence I think the real opportunity is for us to say for all the different solutions .... how do we re-pivot to the cloud and think about this centralized view to the solution," he said.

Although there is different rhetoric around cloud computing, Ballmer said companies are actually pursuing a pretty similar vision of computing with "smart" devices like PCs and phones still handling a lot of processing and storage.

"When people say 'I love HTML5 .... They're saying they actually like a pretty rich processing storage, graphics engine that runs down on the client," Ballmer said.

"At the end of the day, I think actually the worlds we're talking about is driven from the cloud out but it's smart cloud talking to mostly smart devices - phones, PCs, TVs - and apps that execute locally but are controlled and kind of seamlessly integrate with the cloud," he said.

RANCHO PALOS VERDES, Calif. -- Another interesting bit of tech history that surfaced at the D8 conference: AOL co-founder Steve Case said his company considered buying Apple and putting Steve Jobs in charge, to help sort out its troubled merger with Time Warner.

At the time Apple's market value was only about $1 billion.

It was during an AOL board meeting in 2002, where "one suggestion was we acquire Apple and put Steve in charge," Case said during an interview with co-host Kara Swisher.

"There wasn't a lot of support for the idea," he said, explaining that at the time people had different perceptions of Jobs' company.

"Apple was this Mac operating system company with a 2 percent market share."

RANCHO PALOS VERDES, Calif. -- They aren't scheduled to be on stage together, but Steve Jobs and Steve Ballmer are both appearing this week at the D8: All Things Digital conference, organized by the Wall Street Journal's Walt Mossberg and Kara Swisher.

I'll be blogging from the event starting with the Jobs appearance at 6 p.m. today. As if Jobs wasn't interesting enough, the session also includes News Corp. Chief Executive Rupert Murdoch.

Jobs could shake it up by demonstrating the upcoming version of the iPhone. I'll also keep an eye on barstools at the Terranea Resort just in case.

Microsoft's show begins Wednesday morning when Mossberg and Swisher will demonstrate the Project Natal controller that's coming to the Xbox this holiday season. It's a relatively public appearance for the motion/voice controller, which Microsoft's been showing behind closed doors for more than a year and will formally launch on June 13 and 14 at the E3 game conference up the road in Los Angeles.

The Natal demo follows appearances by Comcast President Steve Burke, DreamWorks CEO Jeffrey Katzenberg and Dow Jones CEO Les Hinton.

Others appearing Wednesday include FCC Chairman Julius Genachowski, Facebook founder Mark Zuckerberg, Qualcomm CEO Paul Jacobs and movie director James Cameron.

Ballmer is highlighting a session Thursday with Ray Ozzie, Microsoft's chief software architect, before sessions with Microsoft allies, HTC Chief Executive Peter Chou and Ford CEO Alan Mulally.

Also appearing at the event are the chief executives of eBay, NPR and AOL (plus AOL co-founder Steve Case).

Tech companies doing formal demos at the event include Kno, a company making a tablet computer for students; Dell, which is apparently going to show its upcoming Streak tablets that I saw in Belltown recently; OnLive, a new on-demand game service; and Wordnik, an online dictionary.

A few billionaire techies are putting money into Seattle's Qliance Medical Management, a company experimenting with direct-pay medical clinics that operate outside the usual medical insurance system.

The company is announcing that it raised $6 million from Amazon.com founder Jeff Bezos, computer baron Michael Dell and Drew Carey, the comedian, actor and co-owner of the Seattle Sounders.

Also pitching in are Second Avenue Partners, New Atlantic Ventures and Clear Fir Partners. The firms invested earlier in the 4-year-old company, which has now received $13.5 million and runs three clinics in the Seattle area.

Instead of accepting health insurance payments, Qliance charges patients monthly membership fees ranging from $44 to $84 to cover primary and preventive care such as checkups, vaccinations and minor fractures.

Chief Executive Norm Wu said the company wasn't looking for backers that are household names. It's in the process of raising a much larger amount to fund a national expansion, but Bezos, Dell and Carey heard through the grapevine about the company and wanted to get involved.

Wu said he used to work as a consultant for Dell in the late 1980s, and Bezos and Carey heard from other Qliance investors.

"This is a stepping stone,'' he said. "What we're particularly happy about is we've got people who've been very successful developing transformative business models who can immediately relate to what we're doing.''

Qliance plans to use the money to keep growing in Washington state, where Wu expects to double employment from its current 60 people over the next year, and to develop the company's technology platform. It operates clinics in Kent, Mercer Island and downtown Seattle and is considering new locations on the Eastside, in North Seattle and in Eastern Washington.

The national expansion should begin with a clinic in California next year. Wu said Qliance has been especially encouraged to expand by unions that are large purchasers of healthcare for their members.

UPDATE: I heard from a former Qliance subscriber concerned because she had been billed more than the $44 to $84 range the company provided in its press release. It turns out there's also a higher tier of services that costs up to $129 per month.

Here's an excerpt of the explanation I received from a spokeswoman today:

Qliance has two levels of service - Qliance Level I and Qliance Level II. The core service level (Qliance Level I) ranges from $44 to $84 a month.

The Level II service also includes bedside hospital coordination (your doctor will visit you and make regular rounds at the hospital if you're there for a short or extended stay) as well as after hours access to your specific provider (whereas the Qliance Level I after-hours access coverage is shared among all Qliance providers). Level II costs max out at $129/month for seniors.

A judge today rejected Paul Allen's move to block payments that two former investment managers were to receive under a profit-sharing deal.

A spokesman for Allen immediately said there will be an appeal.

Allen's Vulcan holding company has tried for more than a year to block the payment of more than $20 million to David Capobianco and Navin Thukkaram, managers who were fired in October 2008.

An arbitration panel sided with the former employees, starting with an initial decision last July.

On March 8, Vulcan appealed, arguing that Allen was denied a fair process because one of the arbitrators contacted the employees' attorneys before the arbitration began.

Today, King County Superior Court Judge Paris Kallas denied that appeal and upheld the arbitration decision in favor of the employees. The ruling denied Vulcan's motion to vacate the arbitration awards and granted the employees' motion to confirm the award.

Kallas wrote that "there is no evidence before the court of inappropriate conduct during the pre-appointment contact." She said the contact was justified considering the complexity, dollars involved and high profile of the case.

Capobianco, a former co-founder and co-head of Vulcan Capital's private equity team, said in a statement via a spokesman that he and Thukkaram are "relieved and very happy with the court's ruling."

"We are extremely proud of the more than $1.5 billion in profits we made for Vulcan and Mr. Allen," he said. "With this chapter now behind us, we look forward to employing our successful strategies for new investors and enterprises."

Allen spokesman David Postman said Vulcan will now take its case to the state Court of Appeals. Vulcan considers the questions it raised about conduct during arbitration to be unanswered.

"There's a lot of that we still don't know about this," Postman said. "We're disappointed obviously that the judge didn't see it this way. From the start the attorneys were saying this could be the outcome at Superior Court and we would have to get a panel of judges. We hope that a panel of judges at the Court of Appeals will uphold what we believe are important standards in alternative dispute that were transgressed in this case."

The dispute involves profit made in Vulcan's investment in an energy company, Plains All American. A lawyer for Capobianco and Thukkaram said Allen made $1 billion on the venture and then dismissed the entire investment staff before they received their full share, cutting off their profit-sharing plan.

Vulcan argued that the two managers weren't eligible for the last 20 percent of their share because there hadn't been an exit event at the time they left. But the panel of three arbitrators unanimously granted the award.

Vulcan challenged the panel's decision, contending the process was compromised because the arbitrator chosen by the claimants had met with them in late 2008, before being named to the panel. In today's decision, Judge Kallas rejected that claim.

Google's bold move in China seems like a carefully negotiated compromise more than the grand statement pulling completely out of China would have been.

Apparently the decision to partly pull out -- moving Google's search service to China's least restrictive territory, Hong Kong, while keeping some business operations in the mainland -- resulted from some haggling between the company and the country.

Google co-founder Sergey Brin shared some of the detail in a brief interview with Steve Lohr of the New York Times:

"The shift of its Chinese service to Hong Kong, Mr. Brin said, was not given a clear-cut stamp of approval by Beijing. But he said there was a 'back and forth' with the Chinese government on what to do. 'There was a sense that Hong Kong was the right step,' Mr. Brin said."

It's a milestone that calls more attention to Chinese censorship and Google's convictions.

But it looks like both sides get their way -- Google follows through on its pledge to provide uncensored search results while staying open for business in China, and China's information repression continues on the mainland.

It's like the promise of universal coverage vs. what we're getting from health care reform.

UPDATE: A Google spokeswoman disputed my characterization of Sergey's comments, saying it's unfair to describe them as evidence of a compromise. She said via email that "conversation isn't compromise."

It was a lovely day to walk down the street and poke around Amazon.com's new headquarters campus that it will begin to occupy next month.

Builders working for developer Paul Allen are putting finishing touches on the centerpiece, a cluster of buildings around an open amphitheater built into the historic Van Vorst building, which used to be a stable for the Frederick & Nelson delivery horses.

Approaching the facade from Boren:

A path to the amphitheater/courtyard:

Looking the other direction (eastward):

It's a big day for Seattle-based Evri. The Paul Allen-funded "semantic Web" media company relaunched today with new visual features, and it acquired San Francisco-based Radar Networks.

Evri was especially interested in Radar's Twine.com, another semantic Web company with more social and sharing features that complement Evri, which automatically compiles streams of Web material related to a broad set of topics. Media companies have added Evri's widget to their sites, where it presents links to related information about a story.

Twine's 10 employees will move into Evri's San Francisco offices. Terms of the deal weren't disclosed. A spokesman said Evri, which has about 30 employees, isn't planning to move its headquarters to San Francisco.

Evri Chief Executive Will Hunsinger's comment in the release:

"Evri's and Radar Network's combined talent and complementary technologies bring the industry closer to delivering on the promise of a truly intelligent, timely and intuitive way of finding the news and content that matters most to people. With this acquisition, Evri takes a significant leap forward toward delivering on the consumer promise of semantic search technologies - more meaningful, relevant results filtered from the ever-growing and increasingly cluttered fire hose of content on the web."

Radar Chief Executive Nova Spivack will remain with the company in an advisory role.

Microsoft co-founder Paul Allen is not only fighting cancer and the struggles of his biggest investment, Charter Communications, but he's also sparring with two former investment managers over their compensation.

Allen on Monday filed legal motions in King County Superior Court to dismiss an arbitration award granting at least $20 million to two investment managers he fired in October 2008.

David Capobianco and Navin Thukkarm were managers in the private equity group of Allen's Vulcan holding company.

Their compensation included a percentage of the profit they generated for Vulcan, which was paid out over time. A final 20 percent of the payout came when investments had an exit, such as a sale.

At issue in the case is their share of the profit made from Vulcan's investment in energy company Plains All American. Their lawyer said Allen made $1 billion on the venture and then dismissed the entire investment staff before they received their full share, cutting off their profit-sharing plan.

Vulcan is arguing, in part, that the two managers weren't eligible for the last 20 percent of their share because there hadn't been an exit at the time they left. But a panel of three arbitrators unanimously granted the award, starting with an initial decision last July.

Vulcan is challenging the panel's decision, arguing that the process was compromised because the arbitrator chosen by the claimants had met with them in late 2008, before being named to the panel.

"It's really inexplicable how those sorts of contacts with the claimants were not reported," Vulcan spokesman Dave Postman said.

The arbitrator in question, Art Harrigan, is a prominent Seattle lawyer who represented Craig McCaw in the formation of Nextel Partners, the Port of Seattle in airport noise battles, and King County when it sued to block the Seahawks from moving to California (before the team was owned by Allen).

Harrigan couldn't be reached for comment, but Richard Yarmuth, the lawyer for Capobianco and Thukkarm, said nothing untoward happened.

Vulcan's lawyers already tried and failed in making the same argument to an arbitration judge, Terry Lukens, Yarmuth said.

"Sometimes people don't accept losing very graciously," he said.

Lukens decided in January that Allen's motion to disqualify Harrigan "is based on an unproven supposition that something untoward must have happened during the pre-selection meetings with candidate Harrigan. There are no facts presented to support this supposition."

Lukens conclusion: "There is no evidence of bias or improper influence in the final, unanimous Award."

In Monday's filings, Vulcan's lawyers are asking the Superior Court to overrule Lukens and dismiss the award, arguing that their side was denied a fair process.

Yarmuth simultaneously filed a motion Monday asking the court to uphold the award, saying the arbitration panel concluded that Vulcan breached its profit-sharing agreement with the employees.

Vulcan's side is also challenging the arbitrators' decision that Vulcan improperly changed its compensation plan by firing the investment group staff and rehiring four of them.

It contends the employees were at-will workers who could be fired.

(Note: This post is updated to include the content of the story that ran in print)

Here's Steve Ballmer's speech at the UW this morning, in a video released by Microsoft. In addition to Ballmer, it has demos of new Bing maps features, a peek at a Windows Mobile 7 phone and a funny video joking about the term "cloud computing."

Cloud computing was the focus of Steve Ballmer's talk at the University of Washington today, but the Microsoft chief executive was also doing a little recruiting.

Ballmer told the packed house at the computer science department's Paul G. Allen Center that Microsoft is the area's biggest local employer and "we'd love to have you."

"Send me a resume if you want to test that proposition,'' he said.

Microsoft hires more than 100 UW graduates a hear, said Mark Emmert, the school's president. But it's not clear how many found work by e-mailing steveb@microsoft.com.

A few pictures I took at the event with my phone, including autographs:

And a fuel truck next to one of Ballmer's show-and-tells: a "cloud in a box" portable data center parked outside Allen Center. The fuel was going into a portable generator:

Apple's iPad is "nice" but it's nowhere near as great as the iPhone, Microsoft chairman and former chief tablet enthusiast Bill Gates told Bnet's Brent Schlender.

Part of his quote:

"So, it's not like I sit there and feel the same way I did with iPhone where I say, 'Oh my God, Microsoft didn't aim high enough.' It's a nice reader, but there's nothing on the iPad I look at and say, 'Oh, I wish Microsoft had done it.'"

Gates was more enthused about a demonstration of the Hayden Planetarium's Virtual Universe that he saw this week at the TED conference, calling it "very cool" in a Twitter post yesterday. Maybe if Apple could get the vritual universe on a pad ...

Here's a quick little gallery of some iPadalooza pics I sent earlier to Twitter. This will be my last iPad post for awhile, promise.

Steve Jobs perusing his new bookstore:

The MLB app for the iPad will stream live games to the device and display stats and other information. But will you be able to order beer like you can on the Nintendo DS?

Fake Steve Jobs - in red - finally getting his hands on an iPad:

Chasing Jobs, just like America:

Bellevue patent licensing and research outfit Intellectual Ventures is shuffling its management a bit, with co-founder Edward Jung passing management duties to a newcomer.

Jung, a former Microsoft chief architect who started Intellectual Ventures with ex Microsoft CTO Nathan Myhrvold, is resuming his role as chief technology officer for IV.

The company hired Adriane Brown as its new president and chief operating officer. Formerly vice president of energy strategy at Honeywell International. Brown was on Fortune magazine's Women to Watch list in 2006 and named one of the "100 Most Powerful Executives in Corporate America" last year by Black Enterprise.

Check out this graffiti on a signpost outside the CES show office and speaker ready room.

I don't know if that's Mulally's handwriting, but who else besides a former Boeing Commercial Airplanes boss signs his name with a little drawing of a jetliner? He spoke here Thursday.

Google's Nexus One phone isn't as revolutionary as the buzz would suggest. It's basically a really nice touchscreen device running a new processor that supports slick 3-D graphics and services.

But its debut today still ups the ante for Microsoft Chief Executive Steve Ballmer, who is delivering the opening keynote at the Consumer Electronics Show on Wednesday night.

Microsoft is close to releasing Windows Mobile 7, the latest version of its beleagured phone platform. It's supposed to be unveiled at a March developer conference.

Windows Mobile 7 may seem like a Hail Mary given the success of the iPhone and Android devices, but it could put upcoming Microsoft-powered phones on par with the Nexus at least.

Especially if wireless companies use Microsoft's software in conjunction with the new generation of processors that are giving the latest phones the computing power of Windows XP era laptops.

So what can Ballmer do to upstage Google's mobile news at this point?

His best chance may be to announce a 4G Windows Mobile 7 phone that will run on Clearwire and Sprint networks.

It could use the mobile broadband service to stream video (consumer content from Comcast and videoconferencing to justify enterprise sales) and play games across the Xbox Live network.

A nexus of 4G-ready Microsoft partners will be in Vegas this week -- including Sprint, Comcast, Samsung and Toshiba -- so it's not that farfetched.

Google's new online phone store will also have retailers like Best Buy prowling CES in search of devices that keep drawing people into their stores.

So why wait until March?

The Microsoft Alumni Foundation awarded its first "Integral Fellows" awards to three nonprofits started by company alumni.

Each receives a $25,000 grant "as well as access to the talents and skills of alumni to help support their ongoing efforts."

Winners include Patrick Awuah, founder of Ashesi University in Ghana; Trish Millines Dziko, founder of the Technology Access Foundation in Seattle and John Wood, founder of San Francisco-based Room to Read.

Bill and Melinda Gates recognized them and other nominees during the alumni group's Founders' Gala last night.

"It's really about helping Microsoft alumni maximize and leverage resources. The Foundation provides the framework to bring people, ideas and organizations together to help address our world's challenges," Jeff Raikes, chair of the Microsoft Alumni Foundation Board, said in the release. "These three award winners, along with all of our nominees, exemplify what it means to give back. Their work is deeply rooted in service and making a difference in people's lives."

Microsoft alumns have started more than 150 nonprofits, generating over $100 million dollars a year in more than 100 countries, the release said.

"The Integral Fellows, and all of the sixty-six nominees, remind us that the Gates Foundation is just one of the hundreds of nonprofits that grew out of the Microsoft experience. We are moved and humbled to be a part of this community," said Melinda French Gates said in the release.

High-profile judges included former President Jimmy Carter, Ashoka Chief Executive Bill Drayton, Bill Gates Sr., eBay founder Pierre Omidyar and Bridgespan Group co-foudner Thomas J. Tierney.

I wonder if all that exposure to Gates Foundation bosses and other notable philanthropists will lead to additional grants for the winning nonprofits.

Apparently $30 was a magic number for some Microsoft stock holders, including a few longtime executives who cashed in stock options that are finally in the money.

Senior Vice President Bob Muglia flipped 922,422 shares that have been exercisable since February 2006.

Muglia bought them for $25.14 and sold them today and Tuesday for $30, according to an SEC filing this afternoon.

Muglia's not fully divesting -- he and his wife and family foundation still have about 600,000 shares -- but an extra $4.48 million is nice for the holidays.

Chief Research and Strategy Officer Craig Mundie also pounced this week. He acquired 367,000 shares exercisable since February 2006 at $25.14 and sold them Tuesday for $30, clearing $1.78 million.

If they'd waited until Wednesday's close they could have netted another 11 cents per share.

But they timed it better than Bill Gates, whose regularly scheduled stock-sale plan unloaded 20 million shares in recent weeks in the $28 range.

Not because Amazon.com is getting into the grocery business, but because both are tied in a poll running through Thursday for MarketWatch's CEO of the Year.

It's a dead heat between Webmeister Bezos and Whole Foods Chief Executive John Mackey, who also knows his way around an online forum ...

You can't say "some people have all the luck" when you see Paul Allen's mansion on the shore of Mercer Island, his airplanes, superyachts and vast land holdings in Seattle.

The son of a Seattle librarian became one of the richest people in the world when he and childhood pal Bill Gates struck it rich after starting Microsoft in 1975.

But today Allen's sister disclosed that he's been diagnosed with non-Hodgkin's lymphoma, a cancer similar to the one he battled 25 years ago, a life-changing experience that prompted him to retire early from Microsoft.

The cancer follows a tough bout with heart disease that sidelined Allen, 56, earlier this year and led to a heart valve replacement. Details were largely secret until he confided in an Oregonian sports columnist who had seen Allen accompanied by a doctor to Blazers games.

"I'm fine, finally," Allen told John Canzano in September. "I'm much, much better. I hit a few bumps in the road."

Now he's hit another bump.

Allen's sister, Jody Allen, notified employees of his Seattle holding company that the cancer returned earlier this month.

"He received the diagnosis early this month and has begun chemotherapy. Doctors say he has diffuse large B-cell lymphoma, a relatively common form of lymphoma," she said in the e-mail, which was disclosed by Allen's spokesman.

"This is tough news for Paul and the family. But for those who know Paul's story, you know he beat Hodgkin's a little more than 25 years ago and he is optimistic he can beat this, too," she wrote.

"Paul is feeling OK and remains upbeat. He continues to work and he has no plans to change his role at Vulcan. His health comes first, though, and we'll be sure that nothing intrudes on that."

Allen and Patton were not available for interviews. Their spokesman, David Postman, said Allen's still active at Vulcan.

"He remains just as involved as always," he said.

Gates issued a statement of support.

"Melinda and I have Paul and his family in our thoughts and prayers," he said. "Paul is among my closest friends, and I know to him be a strong and resilient individual."

Lymphoma is a cancer that starts in cells called lymphocytes in the body's immune system, according to the American Cancer Society.

Non-Hodgkin's "is a fast growing lymphoma, but it often responds well to treatment with chemotherapy," the society's Web site says. "Overall, about 3 out of 4 people will have no signs of disease after initial treatment, and about half of all people with this lymphoma are cured with therapy."

Risk factors include a weakened immune system, which can result from drugs taken during a transplant procedure.

Allen's also been under considerable stress over the past year as his biggest investment, St. Louis-based Charter Communications, filed for bankruptcy with $21.7 billion in debt.

Maybe Digeo's Moxi DVR has a chance after all.

The Kirkland company on Tuesday is cutting the price of its high-end digital video recorder from $799 to $499 and adding a new model with three tuners.

A price cut was desperately needed for Moxi more competitive with TiVo and Windows Media Center PCs, but it only happened after Microsoft co-founder Paul Allen sold assets of the struggling company to industry giant Arris in September.

The dual-tuner model's cost is now less than most Media Center PCs and comparable to the cost of a $300 high-def TiVo when the TiVo's monthly fees are factored in (Moxi and Media Centers don't have a service fee).

The three-tuner model will cost $799, including one "Moxi Mate" device that streams content from the DVR to additional TVs in the home. Mates are now $299 instead of $499, and a software upgrade is enabling them to stream live video as well as recorded content.

Additionally, the company announced a new bundle with a three-tuner Moxi DVR and two Mates for $999.

Moxi systems are intended for cable subscribers with digital service. They use CableCard tuner devices, which are provided by cable companies in lieu of set-top boxes.

Mercer Island billionaire Paul Allen is asking for federal bankruptcy protection as he liquidates the remains of Digeo, a Kirkland set-top box company that was mostly sold off this fall.

Allen filed for Chapter 11 protection Monday for a holding company that encompasses the remains of Digeo. It has assets of less than $50,000 and debts of $10 million to $50 million, according to the filing.

Among the nine unsecured creditors include Comcast - owed $632.42 - and Datec Inc., a Tukwila IT vendor owed $48,206.27.

A spokesman for Allen said the filing does not indicate the Microsoft co-founder is in financial straits and unable to pay the debts of his startup.

"No, not at all, it's not about Paul's personal wealth,'' said David Postman, spokesman for Allen's investment company, Vulcan.

"That is the prudent forum for winding down a remaining business," Postman said. "That's not unusual and it's the method to do that, to take the last piece of this company and liquidate."

Allen sold Digeo's key assets - including its brands and technology for its "Moxi" advanced set-top box systems - in September to Arris, a Suwanee, Ga.-based company that's a major player in the cable hardware business.

Arris paid $20 million for the assets. Allen had invested more than $110 million in Digeo since it was started in 1999.

Digeo had reorganized several times before Allen, his sister and others on the Digeo board decided last spring that it was time to sell or find a strategic partner for the company.

That was around the time Allen's biggest investment, St Louis-based cable company Charter Communications, filed for bankruptcy with $21.7 billion in debt.

Steve Ballmer giving the Windows 7 pitch on Fox Business News this morning -- "better than magic," he said.

"You'll probably see some products next year in the United States that are family members with some of the things we started in China," Michael Dell said at FiRe today.

He discussed the mobile phones Dell's developed for China Mobile on a variant of the Google-backed Android operating system.

Host Mark Anderson pressed Dell - one of Microsoft's biggest customers - on what operating system his U.S.-bound phones will use.

"They'd be Android," Dell said.

Last week the Wall Street Journal, citing unnamed sources, reported Dell would release an Android phone in early 2010 for AT&T.

Michael was on the record, but he didn't specify the carrier.

Speaking at FiRe today, Michael Dell reiterated his recent comments about consumers' enchantment with netbooks being short-lived.

"There is some disenchantment that goes with the netbooks, and some user dissatisfaction. It goes something like this - you get a netbook and, you know, you look at it and you go, 'wow, this is great, it's so light, it's so small, it's so thin' blah blah blah. And after about 36 hours your screen's too small - 'give me my 14-inch screen back, give me my 15-inch screen back,'" he said. "So we found in business, if you give a user who is used to the larger screen that small screen, they're not very happy."

Dell said buyers will be even less enamored of the mini-laptops after using them with Windows 7 and Office 2010 - not necessarily because of performance but because the design and appearance of the new software will make users want computers with bigger screens.

"We've been getting pretty excited about Windows 7, Office 2010," he said. "If you look at those products - they kind of tell you you want more screen area, not less screen area. If you put that on a netbook, you won't be real happy with it."

Speaking at the FiRe conference in Seattle today, Michael Dell said he's particularly excited about the growth and opportunity in China.

"Every time I go I think things are so good here maybe I'll just stay," he said.

"China, you wouldn't really know there was even an economic problem. When you look at the depth of the opportunities and the change that's going on there it's very, very strong."

Seattle casual games leader PopCap Games today announced that it took its first funding round, raising $22.5 million from Meritech Capital Partners, Larry Bowman and John McCaw.

Bowman previously bought shares of the company from PopCap founders and McCaw has a few connections in the wireless phone business.

The funding is for "operational purposes, including working capital and potential acquisitions," the company said in the release.

"We're excited to have additional working capital that lets us be more aggressive with our expansion into social media and reaching new geographies," Chief Executive David Roberts said in the release.

PopCap was started in 2000 and now employs 240 at headquarters in Seattle and offices in San Francisco, Dublin, Shanghai, Chicago and Vancouver, B.C. The company says its games have been downloaded more than 1 billion times and its breakout hit "Bejeweled" sold more than 25 million copies.

The sale of Digeo to cable hardware provider Arris looks like a mixed bag for everyone except perhaps cable customers.

Paul Allen is taking a big loss selling the company for $20 million, after investing more than $110 million in Digeo since he started it in 1999.

Arris investors saw their stock fall 8.5 percent to $12.53 today on the news. Apparently they're not as enthused as Arris management about the Suwanee, Ga., company adding Digeo's set-top box technology to its portfolio of broadband modems and technology widely used in cable company networks.

There are also the approximately 10 employees -- including Chief Executive Greg Gudorf, a former Sony TV executive -- who are losing their jobs (we broke the layoff news here).

About 245 other people lost jobs as Digeo shrank from a high of about 320 employees in 2002 -- when Allen acquired Silicon Valley startup Moxi and merged it with Digeo -- to its current 75 positions.

Winners may turn out to be cable customers, who are now more likely to get Digeo's excellent Moxi software on their set-top boxes. The software includes a slick program guide and interface for Moxi-brand set-top boxes that function as both digital video recorders and gateways for digital content coming into a home via broadband.

Moxi is designed for cable subscribers, who connect the boxes via cable cards. It's a nice alternative to high-def cable boxes, especially since there's no rental fee.

The downside to Moxi has been the price -- $799 for the box, plus $399 for smaller units to wirelessly connect additional TVs. There's also a $999 bundle that includes one box and one extender, and the stuff is sold only via Moxi.com and Amazon.com. Below are the box and a screenshot of the Moxi interface from January.

But Arris has more leverage with component manufacturers, because of its scale, so should be able to quickly bring down the retail price of Moxi gear.

"I think they'll be able to bring the price down,'' said Gudorf, who is staying with the company until after the sale closes in October.

Gudorf wouldn't talk about the haircut Allen took on Digeo, but he did clarify the timeline of the Kirkland company's recent transformations and sale.

The big shifts began in late 2007 when Digeo began restructuring, leading to a move in January 2008 to cut its hardware and chip development efforts and focus on building (higher margin) software for industry-standard hardware.

That shift cut employment in half, to about 90 people, who were able to finally release a new version of the Moxi box for cable companies in late 2008 and a retail version in January 2009. Last month, the company released the extender device, and additional features are expected to be released later this year, Gudorf said.

Meanwhile Digeo's board -- which includes Gudorf, Allen and Allen's sister, Jody Patton -- met last spring and decided it was time to sell or find a strategic partner to get the software into more homes, Gudorf said.

This also came amid Allen's growing troubles with Charter, the bankrupt cable company in which he invested $8 billion as the centerpiece of his vision for a "wired world" of broadband services, a vision that also included Digeo.

The board's decision eventually led to the deal with Arris announced Tuesday afternoon.

Microsoft just issued its proxy, inviting shareholders to its annual meeting in November and disclosing what it's been paying top executives.

But shareholders aren't getting the full story yet. The proxy only lists the base salaries and stock awards, not the cash bonuses based on performance. Where the bonuses should be listed the report says "TBD" for to be determined.

Here's the compensation chart (click to enlarge):

Here are the execs' stock awards:

Steve Ballmer declined to accept stock awards -- he owns plenty already -- but is eligible to receive up to $1,997,499.

Today's filing leaves the total blank, however:

Mr. Ballmer's participation in the Incentive Plan for fiscal year 2009 was limited to 200% of his fiscal year 2009 base salary, consistent with our past practice of paying cash bonuses and his request that we not award him equity compensation. His maximum award was the lesser of 200% of his fiscal year 2009 base salary or the maximum pool percentage assigned to him; his target award was 100% of his fiscal year 2009 base salary; and the award was payable in cash following the end of fiscal year 2009. For fiscal year 2009, Mr. Ballmer's Incentive Plan award was $ , which is % of his base salary. This amount was recommended by the Compensation Committee based on his performance appraisal by the independent members of the Board and other information the Compensation Committee deemed relevant, including [to be provided]. The independent members of the Board of Directors considered the recommendation of the Compensation Committee and approved Mr. Ballmer's Incentive Plan award.

[Named executive officer individual performance discussion to be provided]

A spokesman said the blanks will be filled in a final version of the proxy that will be filed in about 10 days.

Other tidbits: Stephen Elop, business group president, received a $2 million signing bonus. The company said it also covered the haircut ($3 million?) he took when he sold his house in California, explaining why there's $5 million in extra compensation.

The shareholder meeting will be at 8 a.m. Nov. 19 at Meydenbauer Center.

Ever wonder which billionaire lives in which mansion, as you cruise around Lake Washington?

Mercer Islander David Dykstra wondered so much he published a book last month mapping more than 100 lakefront mansions, describing their owners and presenting photos of the homes taken from the water.

Many of the places featured in "Lake Washington: 130 Homes" are owned by tech veterans, including, of course, Bill Gates, Paul Allen and Charles Simonyi.

I asked Dykstra if he'd had any blowback from the property owners.

"So far the blowback has been those who did not make the cut and were not in it!" he replied via e-mail.

Bellevue toy and game startup Smith & Tinker is disclosing its venture funding today: a cool $29 million from a batch of big name tech and game investors.

They include Paul Allen's Vulcan Capital, Alsop Louie Partners, Foundry Group, Leo Capital Holdings and DCM, which led the round.

Alsop Louie provided the seed investment. Founding partner Gilman Louie is a former Wizards of the Coast board member and chairman of game company Spectrum Holobyte. He helped Smith & Tinker founder Jordan Weisman - a former Microsoft creative director - brainstorm ideas for the business that launched in 2007.

"It became evident very early on that the type of connected play pattern we wanted to create simply wasn't viable at any existing company," Louie said in the news release. "So we set out with Jordan and co-founder Joe Lawandus to create it ourselves."

Smith & Tinker disclosed plans for its Nanovor online-offline trading game a few weeks ago but it wasn't ready to talk about its money situation until today. It closed on the venture round in July and will begin selling handheld game players in October.

Bill Gates apparently has time to cruise the gadget blogs, now that he's largely retired from Microsoft.

Including Gizmodo, where Gates provided a long response to the site's smirky retrospective of circa 1979 technology, "a weeklong celebration of gadgets and geekdom 30 years ago, as the analog age gave way to the digital, and most of our favorite toys were just being born."

It struck a chord with Gates, whose little software company was just getting rolling, moving from Albuquerque, N.M., to Bellevue that year. An excerpt:

By the middle of 1979, BASIC was running on more than 200,000 Z-80 and 8080 machines and we were just releasing a new version for the 8086 16-bit microprocessor. As the numbers grew, we were starting to think beyond programming languages, too, and about the possibility of creating applications that would have real mass appeal to consumers. That led to the creation of the Consumer Products Division in 1979. One of our first consumer products was called Microsoft Adventure, which was a home version of the first mainframe adventure game. It didn't have all the bells and whistles of, say, Halo, but it was pretty interesting for its time.

A few random snapshots from my tour of the new Intellectual Ventures lab in Bellevue:

Billionaire Paul Allen has changed investment managers, his holding company, Vulcan, announced today.

Chris Temple, vice president of Vulcan Capital, is now president "responsible for overall management of Vulcan Capital's investment activities, which include direct investing in public and private securities as well as indirect investments in traditional and alternative asset classes,'' the release said.

Lance Conn, the former president, is stepping down after five years with Vulcan and moving to be closer to family in California.

Allen's spokesman said the changes have nothing to do with the $21 billion bankruptcy of Allen's biggest investment, Charter Communications. He noted that Conn will continue to serve on Charter's board.

Conn had been planning for some time to relocate and it was his decision to leave, spokesman David Postman said.

Temple joined Vulcan last September. He was formerly managing director of Tailwind Capital, a New York-based private equity firm.

Here's Allen's quote in the press release:

"I am very pleased with Chris' appointment as president of Vulcan Capital. Chris is an exceptional talent and has proven a valuable member of our team since joining us last summer. I appreciate Lance's significant contributions to Vulcan and respect his desire to relocate with his family and step back from his current role."

Writing for Time magazine, Bill Gates penned a glowing profile of the guy who lives a few mansions down in Medina, Jeff Bezos.

Gates wrote the piece for Time's listing of the 100 most influential people. (I found the link via Silicon Alley Insider).

Apparently Gates is pretty impressed with the Kindle. I hate to spoil the ending, but Gates said the device and its effect on books could put Bezos "in the same ranks as Johannes Gutenberg."

The Crescent City is fascinated by a ginormous yacht that Paul Allen docked at a downtown slip usually filled by cruise ships, according to a fun story in The New Orleans Times-Picayune.

Allen's 301-foot "Tatoosh" -- complete with helicopter -- parked Sunday near the Riverwalk shopping center where it's expected to remain for a few weeks, the article said.

The Mercer Island billionaire didn't comment, but the paper noted that he's a frequent visitor to the New Orleans Jazz and Heritage Festival that begins Friday. Or maybe he just wanted a beignet.

An except from the story, which has a great online photo gallery:

Steven Bowen, who works at the New Orleans Visitors Center in the Riverwalk mall, has made himself something of an expert, not only on swamp tours and streetcars, but also on the Tatoosh.

He dutifully recites statistics about the craft for the many mall patrons who inquire.

"It's unusual for a private yacht to dock here, " he said. "Usually, you just have the Carnival Fantasy dock here, or a Norwegian cruise ship."

Imagine what they'd think if Allen brought his big yacht to town.

His 414-foot "Octopus" was last spotted in Puerto Rico in early March, according to yachtspotter.com.

Actually it was politicians and Paul Allen's development team that did the ceremonial shovel thing this morning at Amazon's immense new headquarters.

Construction started a year ago on the 10-building, 1.7-million-square-foot campus just south of Lake Union. Amazon employees will move into the first buildings next May and the whole thing will be done by 2012.

"This is what a community is about, this is what this community is all about,'' Gov. Chris Gregoire said before she, Mayor Greg Nickels and City Councilwoman Jan Drago wielded the golden shovels in a sandbox erected just for the show.

The campus takes up about a third of the 5 million square feet of space Paul Allen has amassed in the formerly blue collar area between downtown and the lake. Allen and Jeff Bezos didn't make the event; maybe they were toasting each other on a boat somewhere.

Look how fast those politicians dig! Here they are in the parking lot on the upper left:

Another angle of the world's largest bookstore's new home, looking toward the lake:

Three months after launching its $799 Moxi set-top box, Kirkland-based Digeo is announcing a big upgrade of the system.

Whether this persuades people to buy Moxi devices remains to be seen. Digeo Chief Executive Greg Gudorf declined to comment on sales, but it's got to be tough launching premium hardware in a downturn.

Not to mention the fact that his bosses' biggest investment and Digeo's biggest customer, Charter Communications, is going through bankruptcy proceedings.

"We're satisfied with our start and we're looking forward to ever expanding our distribution and seeing our sales rise with it,'' he said.

So Jeff Bezos is filling in on Amazon.com's distribution line, which just sacked 210 employees.

He's spending a week checking the pulse at a shipping facility in Kentucky, where the newspaper asked if readers had seen the billionaire leprechaun.

I wonder if he carries a special "inspected by Jeff" rubber stamp.

Maybe it's time to start paying more attention to who is driving those Amazon Fresh trucks around town. I thought I saw Brian Valentine behind the wheel the other day.

Here's the NASA video of Charles Simonyi's launch today. It went fine, but looks terrifying.

Here's an AP story on the launch from Baikonur.

The New York Times ran a story about "Star Trek" fanatics who love the show so much, they've installed Captain Kirk chairs in their homes.

These are replicas of the captain's chair on the Starship Enterprise, which people are building themselves (or buying since they went on sale last fall).

An excerpt:

"The closet command-chair Trekkies have come out of the closet," said Keith Marshall, 45, an unemployed phlebotomist, emergency medical technician, corrections officer and firefighter whose uncompleted chair, currently sitting in his brother's garage, is slated for his own living room in Bonney Lake, Wash.

Marshall's not the only guy doing this in the Northwest. In fact it's striking how many of the Kirk chair builders live around here.

The story isn't a survey, but four of the six Kirk chair owners in the story are in this region.

Their geographic distribution: Washougal, Bonney Lake, Auburn and Cranbrook, B.C. Also quoted was a guy in Kentucky and another in San Francisco.

It didn't mention Mercer Island's Paul Allen, who has one of the originals in his Science Fiction Museum at Seattle Center.

Medina software pioneer Charles Simonyi today shared the "mission objectives" for his March 26 trip to the International Space Station, the first repeat trip for a private space tourist.

Also released were the Web sites where Simonyi will blog from space, share photos and communicate with students and others following his 12-day adventure.

"I'm honored to return to the ISS and excited to conduct scientific experiments for the European Space Agency and for other national space organizations. I also hope my mission inspires young people all over the world to pursue science and engineering careers,'' he said in the release, issued by trip organizer Space Adventures.

Simonyi will travel on a Soyuz TMA-14 spacecraft launched from the Baikonur Cosmodrome in Kazakhstan with a crew including Commander Gennady Padalka of the Russian space agency and NASA Flight Engineer Michael Barratt, a UW graduate from Vancouver, Wash.

(At left: Simonyi at the end of his 2007 trip, in an AFP/Getty Images photo by Sergie Ilnitsky)

Simonyi will use TERC's Windows on Earth software to help take pictures of earth. (A natural choice for the former Microsoft chief software architect ...)

From earth, people can view earth from Simonyi's perspective via the Windows on Earth site.

Simonyi will again communicate with students via HAM radio with help from the Amateur Radio on the ISS organization.

He'll also be posting updates to Charlesinspace.com, the educational Web site developed for his 2007 trip. He'll blog from space, answer questions submitted to the site and share audio recordings from space and live video from NASA TV.

When he's not chatting with students or enjoying the view, Simonyi will do a series of experiments.

Working with European Space Agency researchers, Simonyi will participate in a study of the physical impact of spaceflight on cosmonauts and astronauts through early detection of osteoporosis in space. He'll also work wtih ESA on a study of the occurrence and development of low back pain during spaceflight.

Working the Hungarian Space Office and the Federal Space Agency of the Russian Federation, he'll measure and monitor radiation on the ISS using a dosimeter, called PILLE-MKS, the release said. He participated in the same research into the long-term health effects of galactic and solar cosmic radiation during his 2007 trip to the station.

This is part of a project generating a map of the station's radiation enviroment, which will help design better spacecraft shielding.

Continuing pace of announcing upgrades about once a month, Kirkland mobile video startup 1Cast today said it's lined up more business content providers.

Joining the video news distribution service are the Wall Street Journal and Bloomberg. They're joining Reuters, AP, CNBC and others.

Last month the Craig McCaw-backed venture announced a version for the Android platform, in addition to the iPhone version that debuted in December.

Perhaps next month they'll announce a Windows Mobile version.

The Kindle iPhone application that Amazon.com released last night is just the start.

Amazon plans to extend its digital book software -- especially the Kindle's "Whispersync" technology -- to all sorts of phones and computers, according to Chief Executive Jeff Bezos.

It's more evidence that the Kindle was built not just for reading, but for buying books. It's part of a broader effort to extend Amazon's core franchise to mobile devices.

The iPhone application makes more sense when you think of it as an extension of the Kindle bookselling platform, as well as a bargain way for iPhone owners to get a barebones version of Amazon's reading device.

But it's still a neat application and the timing -- just a week after the Kindle 2 launch -- shows how aggressively Amazon is pushing ahead.

Bezos previewed the strategy -- and the vision for Kindle on the iPhone and other devices -- in this interview at the Kindle 2 launch event last month. He said the plan was to get the Kindle digital bookstore on "just about every device."

An excerpt:

In Monday's Kindle 2 review, I said the device isn't so great for reading newspapers.

Here's another perspective, from Amazon.com founder Jeff Bezos.

This is from a video I took of him at the Feb. 9 Kindle 2 launch event, showing how to read a paper on the device.

"This is a really dramatic improvement in newspaper navigation,'' he said at one point.

Love to have him drop by this paper on Thursday evening, when we'll have a Kindle 2 available for anyone come by and try in our auditorium starting at 5:30 p.m.

A revelation by Melinda Gates that Apple gadgets are banned from the Medina mansion is getting some attention online today.

Gates made the comment to Vogue, which is running a profile of the most famous female Microsoft alum in its March issue.

An excerpt from the excerpt that Vogue's running online:

It turns out that Medina billionaire Charles Simonyi won't be the only Washingtonian aboard the March 26 rocket expedition to the International Space Station.

During a break in his training regimen today, Charles Simonyi called from Russia and gave an update on his next flight to space, married life and plans to remodel his Medina mansion.

(This photo is courtesy of Simonyi and Space Adventures)

Evri, a Pioneer Square Web startup backed by Paul Allen, found a pretty good launch customer for its dynamic content widget.

The Washington Post will begin adding Evri-powered "content recommendation" widgets to its online news stories starting today. Evri widgets compile and display information about a particular subject area, so people reading a story can get more context on the topic.

Evri was designed to automatically compile related material from across the Web, but in the Post's case, it's been tuned to include information from the Post as well as the broader Web.

A public beta of Evri's service debuted online in September.

Neil Roseman, Evri's chief executive, said the tiny startup had help lining up the Post deal from former MSNBC.com editor and RealNetworks executive Merrill Brown, who worked for the Post earlier in his career.

NEW YORK - Here's a fuller, edited version of today's interview with Jeff Bezos during the Kindle 2.0 lauch event.

We talked in an ornate old parlor at the Morgan Library, built by industrialist J.P. Morgan and an appropriate setting for this century's e-commerce mogul.

Q: What's it going to take for this to really take off - lower price?

A: It is taking off. [laughs]. No, I mean it very sincerely. We have twice been sold out during the holiday season, which is a darn good plan, and it was not our plan. In both cases, we had made way more devices than we thought we would need a need we still sold out.

Q: Maybe I should rephrase that. When will it become a mainstream device?

A: Well, if you're a reader, it's a purpose-built reading device. So is it for everybody? Maybe not. Will it ever be for everybody? Maybe not.

But if you like to read - newspapers, books, magazines - this is a great device to have. If you're that person, I would say it is mainstream already for the right audience.

Q: I didn't want to bring up the iPod comparison, but I noticed the brushed metal back and curved edges. Do you guys have a little iPod envy?

A: Are you talking about the industrial design? Our view on this is - have you held it yet? It's beautiful. I can take no credit for it since I had nothing to do with it [laughs] but I can be a proud father [laughs again]. But the engineering team did a remarkable job on this device.

As you can see it's very, very thin - for a 3G wireless device. This is a difficult technical achievement. Our customers are the beneficiaries.

Q: Did you think about using touchscreen at all?

A: Touchscreen technology, it's not yet there for electronic ink. You can do it, but it significantly degrades the contrast and the visibility of the screen. The current touchscreen technologies are a layer that go on top. It's a thin, transparent layer that goes on top. Of course, it's not completely transparent. And with the reflective display like this, the light bounces through that transparent layer twice - once to get in and once to get out, back into your eye, and so you get significantly light degradation. Plus, it puts a reflective layer on top.

One of the reasons this screen is so pleasurable to look at, and doesn't create eye strain, is becauase the ink is almost right on the surface of the screen. It doesn't have any depth to it.

So there are touchscreen technologies that are starting to become available that go under the display and that might be something that someday could work. But right now it's still in the laboratory, it's still a bit of a science project. But someday, a number of years from now, you could imagine that.

Right now, you don't want a touchscreen on your reading device [if] the primary purpose of the device is reading.

Q: E-Ink plans to have some color displays out by the end of the year.

A: I've seen those in the laboratory and probably for volume production, they're still years away. But it's exciting technology.

Q: Will color be in Kindle 3.0 then?

A: I think it's actually multiple years away.

Q: Will you take the software you have on a Kindle and put it onto something like a netbook?

A: That's what Whispersync is about. We want to make Kindle a bookstore - the largest e-bookstore in the world, with 230,000 titles and growing. We want to make those titles also available on a bunch of different devices and then synchronize them with Kindle.

If you're in line at the grocery store and you want to read a few pages on your phone, you can go right where you left off, and then when you get back home, maybe you pick up your Kindle and keep reading there.

The best analogy I can give you would be a digital camera on your cellphone. I love having a digital camera on my cellphone because I always have my cellphone with me. but occasionally I want a real camera. If I'm going to take pictures of my kids or whatever, I want a real camera. If I want to read for two hours, I want my Kindle. If I'm going to read for a few minutes, then a bunch of options open up.

Q: It seems like there's a big opportunity for you if you don't require people to buy a Kindle to use the software and services.

A: The two things are separate. The Kindle e-book library will be available if you do want a device that's purpose-built for reading. You want to be able to synchronize it, that's what Whispersync is about. It's not a requirement.

Q: With the volume so big on netbooks and the devices having long battery life, I wonder if you'll develop some sort of Kindle reading application for them?

A: The way you should think about it is we're excited about making that library available on just about every device.

Q: So there will be a whole range of things that can use the Kindle software, and I'm guessing the Kindle will be the premium experience?

A: I think what you're going to find is that anybody who reads is going to want a Kindle because it's so much better for reading, but it's not either/or: Either people are going to read on their cellphones, or they're going to read on Kindle, and I don't think that's right. Just like I don't have to decide, am I going to have a real camera or am I going to have a cellphone camera?

The fact is I want both. In fact I have three cameras - I have a cellphone camera, I have a compact camera that's lightweight, if I go for a hike or something, And then I have an SLR camera that I mostly keep at home to take pictures of the kids because I want the highest quality I can get.

Q: Will you get to the point where you can read Kindle editions on other e-Books? People might be getting confused by the different devices and formats that are emerging. This might slow mainstream adoption of e-books. Will there be interoperability between them all?

A: We certainly haven't seen that.

Q: How can you overcome that confusion?

A: I wouldn't want to speculate on that.

Q: The device is nice but to me what's really interesting are the business innovations.

A: 3G wireless, bundling (wireless service fees) into the cost, making the books cost less.

I agree with you. A lot of this is about business innovation and a lot of it is about technology innovation. It's really bringing those two things together. You know when we started - now more than four years ago - only at that time could we see that the technologies were shortly going to be in place to make this possible: the combination of the electronic paper technology and fast 3G wireless being distributed, being in enough cities so it's basically everywhere today.

It's the combination of those technologies and the busienss model innovation that's making this.

I should add a third thing - which is the 230,000 titles. The best electronic reading device is useless without the books you want to read.

Q: What are you doing now to get more adoption with publishers?

A: It's been accelerating over the past 14 months. The past three months we added more than 40,000 titles to the selection so not only are we going to keep growing [it], we're going to keep accelerating the rate at which we're growing the selection. The vision is every book, ever printed, in any language, all available within 60 seconds. That's a big, long, multi=year vision to get every book ever printed, but it is possible and we will eventually do it. We'll just have to be relentless [laughs].

Q: What are you doing to make publishers speed up?

A: Publishers are excited about this - like us, they watched e=book sales go nowhere for 10 years. We kept trying to sell e-books and nobody bought them. You needed an electron microscope to find the sales.

Fourteen months ago, with the launch of Kindle 1, that changed. So I think publishers are as excited as we are about the future of e-books.

Q: Is there pressure on Amazon from publishers to price the Kindle at, say, $199 to increase the platform's reach?

A: We can't offer this for $199. If you look at the cost of this device - it has a sophisticated EVDO radio, it has the latest electronic display - if we could make this device cheaper we would. But we can't. There's a lot of technology pushed into this little tiny package. It is what it is.

When you buy a 3G phone, by the way, you're signing up for a two-year contract with a $60-a-month bill. They're subsidizing the cost of the hardware with the $60 a month or whatever it is you're paying.

[The Kindle] is sold with no annual contract and no monthly bill. You buy this device and whatever you buy -a newspaper subscription, you pay for that. You buy a book, you pay for that.

We're not asking people to sign up for a two-year contract.

Q: Will we see Kindle hardware subsidized through subscription deals, like, say, a book of the month club or a newspaper subscription?

A: Anything's possible. I think there is reason for optimism about newspapers on Kindle because if you look at the printing cost of newspapers, these are dramatically large expenses. There is an argument to be made that over time - and it will take some time - that printing infrastructure doesn't make as much sense as everybody having a device like this.

Q: How about the developer story - are you going to open this up more to outside software developers to write applications and load things on there?

A: I don't want to speculate on the future on that. You'll just have to stay tuned.

Q: So we might hear more about that?

A: It's possible. I don't want to foreshadow anything so you'll just have to stay tuned.

Q: Would the same go for the Kindle's browser?

A: The browser is very basic. It doesn't do Flash, for example. It's nice to have but it's not the primary reason, it's not the purpose of the device. The device is for reading. It does have a Web browser - people like the Web browser - but it's very basic functionality.

Q: How about a little more transparency with the sale numbers - are we going to start hearing how many units have been sold?

A: We're going to continue with our practice of not sharing those numbers.

Q: Wouldn't more disclosure help you sell the Kindle platform to publishers?

A: Publishers get to, at this piont, they get to see - we're sending them checks. The most important thing if you're a publisher is, are the books selling? You don't really care if the device is selling, and the books are selling.

Kindle books already are selling. If you take the 230,000 titles where we have Kindle editions - Kindle unit sales are already more than 10 percent of all our sales. For that to happen in 14 months is very surprising. It took us 14 years to build up our physical book business. Now when a title becomes available in Kindle format, it's immediately worth 10 percent of our unit sales on Kindle. That's pretty surprising.

Q: When we think about Amazon's phases of growth - first the bookstore, then the platformization of the store, then the multi-platform business with new services - where should we put the Kindle? Should we think of hardware as a new stack here, or is it an extension of the store?

A: It's a new skill. We've been working on it for four years. When you look at the engineering that is incorporated in this incredibly thin package, the team has acquired that ability.

Q: But it's more an extension of the Amazon store as opposed to an entirely new business, right?

A: The device is one thing; that's the new skill we had to learn. But the device is only a part of Kindle the service. So Kindle the service includes the largest e-bookstore in the world. Kindle as a service includes all the servers used to wirelessly deliver this content. We had all the skills that we needed to do those things. We had a lot of the pieces in place based on our 14 years of history but the one thing we needed to add to our skillset was the engineering for the hardware device itself. I'm just incredibly proud of that team.

Q: Did you have to build something like this to maintain Amazon's position as a bookseller?

A: To get this whole ecosystem to work, we had to build an integrated, seamless reading experience. Keep in mind we had tried the unintegrated, unseamless approach because we've been electronic books for years and it didn't work, nobody cared. So it's the seamlessness, of putting the whole thing together and making it really easy and clean for people, that's making it work.

Q: Did you think you had to have the hardware or somebody else would - and take from your book business?

A: We love being pioneers. We are always focused on looking down new alleys. Most of the alleys we look down turn out to be blind alleys, but every once in a while we go down one that turns into a big broad avenue. You can pursue the competitor strategy of close following - you don't have to spend all this money on those blind alleys. When you see somebody do something successful, you jump on it and copy it as quickly as possible. There's nothing wrong - that's a valid business strategy. It happens to not be ours.

We've been very customer focused for our history and we like inventing new things. The kind of people we've attracted over the years like to invent new things so for us this all about the future and all about optimism.

Q: It seems like your company's on a roll, especially after this last quarter.

A: Well, thank you.

Q: Is Amazon going to be the "it" company of 2009?

A: I've been asked by several people, what did you do special in Q4? The fact of the matter is we did nothing special in Q4. We did the same things that we've been doing for 14 years, which is working on lowering prices, increasing selection, speeding delivery. The accumulation of those things perhaps you saw in Q4.

Bill Gates' mosquito-release stunt at TED yesterday was amazing.

After decades of mellow, academic keynotes, could he get radical in his quest to raise awareness of social and health issues?

What will he do next?

A few ideas:

- Throw pies at Big Pharma executives who aren't doing enough for global health.

- Have Nordstrom outfit a few people lined up at the unemployment office, then add them to the mix of suits at the Microsoft CEO Summit in May.

- Hire The Stranger's Dan "the Doorknob" Savage as an outreach consultant/congressional liaison.

Bill Gates will be back in the news on Jan. 26, when he's scheduled to present his "first Annual Letter" in his new role as co-chairman of the Bill & Melinda Gates Foundation.

The letter's going to explain his new role at the foundation and prioirities for 2009 and beyond, a foundation announcement said:

"In his Annual Letter, he will talk about his expanded role at the foundation and its efforts and priorities for the future. In the face of the global financial crisis, Gates will also explain why he remains optimistic about the ability of government, business, nonprofit organizations, and individuals to help reduce child mortality, address hunger and poverty, and improve education in the U.S."

It sounds a little bit like the periodic call-to-arms/priority-setting memos that Gates used to send periodically at Microsoft, although this one doesn't make any pretense of being an internal communication: He's presenting the letter during a press conference on the 26th.

The letter is also available to the public. Anyone can sign up to receive it electronically on the 26th - the foundation has created a special sign up page here.

After word came out today about Apple boss Steve Jobs and his worsening health situation, Microsoft co-founder Paul Allen issued a public statement:

"I wish Steve a speedy recovery from his medical issues. He has made extraordinary contributions to the personal computer industry, and I really enjoyed working with him in the early days of the Macintosh."

Like Jobs, Allen fought back cancer. Allen left Microsoft in 1983 after being diagnosed with Hodgkin's lymphoma and chose to pursue other opportunities.

Maybe it's Jobs' turn to buy a huge boat and start exploring the South Pacific and Mediterranean film festivals.

If Medina seemed a little empty this weekend, it was because a few of the billionaires were in Sweden for the wedding of Charles Simonyi and Lisa Persdotter, a 28-year-old socialite and investment manager.

Bill Gates created a stir when he flew in Friday to usher the wedding of Hungarian-born computing genius and "the father of Microsoft Word," according to a juicy report in The Local, a Swedish newspaper, that was called out by The Huffington Post.

Other guests included Mick Jagger and Ulf Ekberg of Ace of Bass.

The events began Friday with a reception at Gothenburg's art museum, according to the story, which mentioned that "Gates was accompanied by a bevy of beefy Danish bodyguards as he passed through Copenhagen's Kastrup airport en route to the glitzy wedding to be held at the German church in Sweden's second city."

Also disclosed were more details of the bride Simonyi fell for last fall, after a longtime relationship with Martha Stewart.

Apparently he fell for the girl next door: Persdotter's parents have a place next to his vacation home in St. Tropez.

I'm still feeling the tingle after zooming around an empty parking lot in the dark gray Tesla Roadster that arrived in Bellevue this morning for marketing and customer events.

It wasn't a full-blown road test -- journalists were driven around a former Kmart parking lot at high speed, with a Tesla representative behind the wheel, then given a chance to take a few laps.

A few quick impressions: The torque really is amazing and doesn't let up, just as Tom Saxton described in Monday's story about the Roadster's Seattle debut. Also surprising is the feel of the motor's regenerative braking -- even before you tap the brake, the motor slows as soon as you lift the throttle.

Almost as good as the torque was the whine the Tesla made at high RPMs -- it's not silent, like a Prius, but it doesn't growl like a sports car, either. It has a high-pitched racy sound at speed, though.

The test course was roughly a big circle with a straightaway that ended in a T with a busy street. The factory drivers would get it up to 60 mph or so and then slam on the brakes just before cones where the parking lot exited to the street.

Two Bellevue motorcycle cops showed up while I was driving, but they were just watching and one gave a thumbs up as I was heading toward 50 in the parking lot.

The car had been driven all night from California and then zipped around all morning before I got in. The brakes and the car didn't feel tired, but I was still a little nervous about testing the limits of the steering and the ABS brakes.

In addition to a bunch of onlookers, the Tesla attracted a potential mate -- a matching gray Ford GT40 that was low enough to drive right under the rope barrier and rumble over to the roadster.

Tesla customer service rep Zak Edson (in the blue shirt in the video) declined to engage in a race, but said he could take the Ford, depending on who was driving.

That's one take in a great profile of the Microsoft co-founder turned Seattle real estate mogul that's running in the latest edition of Sports Illustrated.

It retells the lucky billionaire story familiar to many around here -- local sports, space and rock fan met fellow geek Bill Gates at Lakeside, went to Washington State University, co-founded Microsoft, left early after a cancer-induced change of priorities, then had mixed luck with startups and sports franchises.

But the magazine does a great job exploring the character of the only person to solely own teams in two of America's top three pro sports leagues. It also offers a fun courtside perspective of Allen, the sports nut and junkfood enthusiast.

One morsel, from a Blazer's game ...

He was flanked by his new buddy Kevin and his old college roommate Bert. Even as they conversed, the fan didn't divert his strikingly blue eyes from the action on the court ... When a courtside waitress approached during a timeout, he requested a burger and a Coke. Let the Brahmins in the corporate suites order salmon cakes and bottled water. The fan chomped on his junk food and absentmindedly fiddled with the straw in his soda. He wasn't above swiping some fries off Bert's cardboard tray when Bert wasn't looking.

Another, on Allen buying the Seahawks:

Paul Allen is not Bill Gates. Long ago he resigned himself to this reality: He was destined to be known as Garfunkel to Gates's Simon, particularly in Seattle. As Gates was becoming the world's richest man and launching the world's largest charitable foundation and seeking to conquer famine and genocide and improve world health, Allen was, inevitably, "the other Microsoft founder." That was fine by him. But in 1997 he had the opportunity to do something for Seattle and boost his image, if not his profile, in the process.

Allen's a great subject. For a while, he was also competing with Sports Illustrated, after he bought The Sporting News in 2000. I wonder if SI waited to do the Allen story until he sold his magazine last year.

Perhaps it wanted to spare Seattle employees from the hyper-aggressive parking patrols that have turned up in South Lake Union since Paul Allen began developing condos and office buildings in the area.

Like this guy, who parked in the restricted loading space next to a handicapped parking spot on private property. Do as I say, not as I do? Grrrr.

I'm just catching up on my French gossip and found out that a former Microsoft VP owns the New Hampshire lakefront estate where French President Nicolas Sarkozy is vacationing (and blowing his top over the paparazzi ...)

Sarkozy is staying in Wolfeboro at a 62-acre retreat owned by Michael Appe, a former Microsoft vice president of reseller and end-user sales.

I'm guessing it's the same Michael Appe who asked the Justice Department here to quickly settle its antitrust case against the software company.

Here's a paparazzi gallery with a few shots of Appe's place, in case you're looking for a rental next summer.

The Boston Globe did a nice job writing about the scene last week.

Appe rents his pad for $30,000 a week, according to this AFP report.

Here's a video tour that Appe gave a local TV station, before Sarkozy began chasing away reporters:

Bill Gates annually hosts a dinner for Microsoft interns, some of whom end up describing his Medina mansion in blogs.

Here's an excerpt from the blog of Robert Smith, an intern in the Windows Embedded team, whose writing was called out by Gearlog:

Going down Bill's driveway is like arriving at Jurassic Park. The driveway is long, windy, goes steeply down, and is just covered in plant life. We passed a 15-20 car garage on the way down. I'm not sure if it was Bill's private one or not as I didn't see any really cool cars in it. At the end of the driveway stands the entrance to Bill's house.

We got off the bus, grabbed our nametags, and headed in. We headed down this 5-ish story staircase to the main reception area outside. While walking down, we all took in as much of the house as we could. It's really just crazy. The whole house is built out of this beautiful orangey wood. We passed his movie theater (complete with Now Showing posters) and a room that looked to be completely filled with couches and pillows. It's all really nice.

We finally made it outside, and took in his back yard. The landscaping is just insane. There's grass that looks like someone went at it with scissors and there are tons of plants arranged and taken care of perfectly. We were pretty much given free roam of the place, so we checked out his dock, his beach (with sand imported from Hawaii), hot tub, and boat. He's also got this area of his house where a stream runs down from under the house into Lake Washington. One of the employees said it's probably man-made, but it's really cool. We also saw the indoor / outdoor pool that has an underwater grate that allows you to swim between the two sections.

Russian computers on the International Space Station are having what appears to be a software problem.

Maybe it's time for Charles to suit up for a return trip to help fix the problem.

AFP / Getty Images

Can Simonyi provide the necessary tech support for this problem?

CARLSBAD, Calif. -- I forgot to bring toothpaste, so I headed down to buy a tube before breakfast.

Waiting to board the elevator with me was Vinod Khosla, the Sun Microsystems founder turned venture capitalist.

Khosla, whose latest focus is biofuels, was talking on a Bluetooth headset about energy legislation all the way into the lobby. Forget the potential federal subsidies, that saved him from talking to a reporter with awful morning breath.

CARLSBAD, Calif. -- I'm fighting the paparazzi impulse here at the WSJ's D Conference, but I've got to share a few tidbits.

After some tense policy talk, John McCain and host Kara Swisher cracked up the audience with the obligatory Microsoft joke.

McCain had been saying that if he were president, he'd fill key positions with the smartest people in the country, instead of appointing cronies and political hacks.

Asked for examples, he mentioned Cisco Chief Executive John Chambers, who was sitting in the front row, and FedEx founder Fred Smith. Smith could help sort out the defense acquisition system, McCain said.

Then he said Steve Ballmer is another person he'd like to hire to help run the country.

Swisher chimed in:

"I'm curious, Steve Ballmer's secretary of state, right?"

McCain caught the wave of laughter with a comeback:

"How about ambassador to China?"

They schmoozed backstage, according to the D blog, which has a photo.

I wish I'd known about McCain's offer when I saw Ballmer earlier during the pre-dinner cocktail reception.

Ballmer was talking to some investor types and mentioning that his busy summer schedule includes a Harvard reunion. I butted in and asked if he'll still have time to buy Yahoo! He smiled and said he wouldn't comment on that topic, but I think he was smiling to be polite and not to send any kind of message about a deal. What he really wanted to talk about was the Detroit Pistons.

On the way to the evening events, I rode the elevator down with uber investor Roger McNamee, who was questioning the way Washington, D.C., media have been covering McCain.

Just as he got rolling, the elevator door opened and there was Don Graham, chairman and chief executive of The Washington Post Co.

Graham was in a crowd and carrying bags up to his room. We sort of mumbled and glanced toward him as we passed, but the freakish timing of the appearance basically ended the conversation and we wandered off toward the registration desk.

As I said, I don't want to go paparazzi, but every time I write about Charles Simonyi I get a bunch of questions about his friendship with Martha Stewart. Yes, I saw them together tonight at the reception, looking pretty snazzy, at one point talking to Rob Glaser. I thought about asking about the menu she created for his spaceflight last month but held off.

Even though this is a conference hosted by journalists, I felt like I'd be about as welcome in their conversation cluster as a fly in the champagne. I left them alone by the cupcake and fondue line and headed back to blog central, my room with a view of the parking lot, where I'm working through the tin of Swedish fish candy that Glaser's RealNetworks put in the goodie bags. (The tin's lid says "Real it in!").

Greg Gilbert / The Seattle Times

Charles Simonyi speaks presents Museum of Flight director Bonnie Dunbar a glove he wore and part of one of the parachutes used to slow the space capsule he rode.

The shiny space station module that's part of Museum of Flight's upcoming space exhibition is nothing like the real space station, according to Charles Simonyi, who lived there for 11 days last month.

"It was nothing like this sterile area, especially the Russian segment,'' he said. "Everything [there] is covered with velcro. It bears the stains of many lunches and dinners beforehand."

That didn't detract from the experience, though, and actually made him feel safer knowing how long the station had been functioning.

I asked Simonyi to show me around the module during an interview after his welcome home ceremony today at the Museum of Flight. I was the first in line for a series of one-on-one interviews but other reporters liked my choice of venue and shoved into the station as well.

No wonder Simonyi said press conferences were one of the few times he was nervous during his space adventure.

Simonyi was polite and candid with reporters, but he was more enthusiastic talking to the Cub Scouts and high school students from Redmond who attended the ceremony and politely took turns asking him questions.

Among the students was Thomas Spencer, a Redmond senior who spoke to Simonyi via radio during the space trip and then in person at the museum. I asked if he wants to visit space as well.

"I'm sure everyone wants to go into space,'' Spencer replied.

Here's an edited sample of Simonyi's question and answer session with the scouts, students and reporters:

Q: How was the rehabilitation and what exercises did you do?

A: I had two problems, one with the vestibular system. I was walking funny, maybe falling over. Swimming was a good exercise because if you are swimming you can't fall over and injure yourself.

Another problem was orthostatic tolerance; blood tends to go to the feet and deprives the brain of much needed exercise.

Doctors say you have to be rehabilitated for as long a period as you were in space. I was in space two weeks. Imagine the people who were up there for six months. They have much greater needs than I did.

Q: How high could you jump in the space station?

A: You can jump as high as you want. If you push yourself, you will continue going, nothing will stop you. You have to be careful about not pushing yourself too fast because whatever speed you push yourself, that's the speed with which you're going to arrive at the other end. Also, you stop yourself with your arms, and your arms are not as strong as your legs so you have to be really careful.

Q: What was the best part of going to space?

A: Going up was very exciting, staying on the space station was very exicitng, coming back was very exicting. This whole experience just as a whole was great.

Q: How was training before you went into space?

A: Training was very hard. It took six months. During the training they prepare you for the worst case. You were doing it in the gravity of the Earth.

Q: I know there's a disease you can get from coming back to earth, the shock of having gravity?

A: It's really not a disease. What happens is that when you go to space you get a shock because you're in a new environment; you don't have gravity. The fluids in your body shift. You come back to Earth, you have to get used to the Earth again so it's just the same thing -- a space sickness but in reverse. It's called a sickness but it really isn't, it's just a matter of adaptation.

Q: How long do you have to study to become an astronaut?

A: It depends on whether you want to be a professional or a space flight participant, otherwise known as a toursist. To be a professional, 10 years.

For me it was a little bit more than six moths, but I had to do it day and night. I was living there and that was the focus of my life.

Q: How was it when you were sleeping in space?

A: It was very pleasant. We were sleeping in sleeping bags. We string them up like a hammock, fly into them and zip ourselves up and it's very cozy and very pleasant.

Q: Did you sense the fragility of Earth from up there?

A: I don't think going to space is the the way to see that. You see Earth in its totality. It's so quiet and so majestic, it's hard to see the fragility. Maybe if you had a very big telescope.

In space the Earth looks as big as the sky looks from here -- essentialy it's the same color. It's this beautiful blue with the clouds on it.

Q: Was the food different on the space station?

A. No. We had chicken and an omelet -- that was my first breakfast, apple juice from a carton. The food is really the same and tastes the same as on Earth. The food that we got, that was mostly mashed potatos and a kind of stew, meat stews and gelatin. They were just like on Earth.

Q: Did you eat a lot of Russian food?

A: Absolutely, food such as dehydrated borscht, which I like very much.

Q: What was your most nervous moment?

A: There were a couple of nervous moments and they all had to do with the preparation -- when I was plugged into a machine telling how nervous I was and press conferences.

Who is Ed?

Is he the reason Bill Gates opted not to run for president?

Gates and fellow billionaire Eli Broad are pouring $60 million into the "Ed in '08" political campaign.

The Ed in '08 Web site has a guy's picture, but it belongs to Roy, a former Los Angeles school superintendent chairing the campaign.

Actually Ed is short for education, a topic that Gates and Broad want to be emphasized in the 2008 presidential election.

"Ed in 08" is the slogan for their political group, Strong American Schools.

A sample Gates quote, from his foundation's announcement today:

"Each year more than 1 million students drop out of high school. That's one child every 29 seconds. We all must demand that candidates and our leaders share their opinions and policies on how our country will offer all young people Strong American Schools."

What does the International Space Station look like at sunset, as you approach in a Soyuz?

That's one of the things Charles Simonyi talked about when he called this morning from Star City, where he's going through post-space rehabilitation. We've posted a Q&A and photo slideshow of Simonyi's space adventure.

AP

Charles Simonyi, before he headed into space. He is scheduled to return to Earth on Saturday.

Charles Simonyi's been busy in space doing experiments -- and searching for room in the International Space Station to store the books he brought up.

There may not be enough space (pardon the pun) to start the extraterrestrial library he envisioned, judging from a chat he had today with Tim Garrigan, the Seattle marketing consultant running the Charlesinspace.com Web site.

Simonyi's comment:

This is a sore point, it's not quite done yet. But it's not positive, but it's not negative. I still have to discuss with the Russian segment. There is no room in the American segment.'

Otherwise the trip has been a big success, Simonyi said. He believes he's raised awareness of science and space travel, judging from the millions of visitors to his Web site and conversations he's had with students online and via ham radio.

I think that was probably the most successful part of this mission. It's really beyond anything I would have imagined, the success of the Web site and the enthusiasm of the feedback through the radio. I'm really grateful to the ham community for facilitating these exchanges.'

The experiments Simonyi conducted for various agencies were simple but successful, he said, adding that that's good because he was able to free up the astronauts and cosmonauts to do more complicated tasks.

Asked by Garrigan if he'd like to make another trip to space, Simonyi said he didn't think that would be possible, even though he'd like to take more advantage of his spaceflight training. One reason is he has to get back to his Bellevue software business.

"You know it takes a lot of time, not to mention the expense, and I have many other things to do now, with the company, Intentional Software corporation. We'll have to work on that, redouble our efforts,'' he said.

He's scheduled to land Saturday.

The public is invited to watch NASA's live feed of Charles Simonyi's spaceflight launch, at an event Saturday at the Museum of Flight.

Bonnie Dunbar, the museum president and a former astronaut, will provide commentary before and after the launch.

Dunbar's welcoming speech begins at 10 a.m., the NASA feed begins at 10:25 and the launch takes place at 10:31.

It will probably be a media circus, but it's a lot closer than Kazakhstan, where the launch is taking place.

Students at Redmond High School will have a chance to ask Charles Simonyi question via ham radio as he circles the earth on the International Space Station next month.

The question-and-answer sessions will be recorded and posted at an educational Web site tracking his adventure. He ought to let people download the recordings -- making them the first podcasts from space.

Other schools participating include Fairborn High School in Fairborn, Ohio, and Cedar Point Elementary School in Bristow, Va., near Washington, D.C.

Simonyi will also be contacting students from the Technical University of Budapest, and he'll be using his technical expertise and interest in amateur radio to maintain ham radios on the space station.

Tour organizer Space Adventures said this "work will include testing one radio set to isolate an antenna problem with the equipment and reprogramming the default settings on a second unit to correct a configuration problem."

How many people would be willing to provide a little tech support during their $20 million vacation?

Confirming one of my big scoops last year, Space Adventures today said Martha Stewart will be involved in the creation of a special meal that Charles Simonyi will personally deliver to the International Space Station on April 7.

From the space tourism company's press release today:

As a personal gesture to his fellow crew members, and the astronauts and cosmonauts already aboard the ISS, Dr. Simonyi has chosen a special gourmet meal to be shared by the group during his mission. The menu for the meal, which was prepared by Alain Ducasse's consulting and training center, ADF, was selected by Dr. Simonyi's friend Martha Stewart.

It won't be the first time fancy French food has been served at the station. The country's space agency has used ADF to provide "special event meals" in the past for "exceptional assignments such as crew relief missions or extra-vehicular activity." Talk about plein air dining.

So what's the billionaire dabbawala serving?

Six courses, including quail roasted in Madrian wine, duck breast "confit" with capers, shredded chicken parmentier, apple fondant pieces, rice pudding with candied fruit, and semolina cake with dried apricots.

Simonyi -- whose blog said he's doing a "full-up simulation of launch, rendezvous, and return" today -- had a quote in the release:

"I am really looking forward to sharing this dinner with my crewmates on the station. Although the food is very good there, it is somewhat basic, and after a couple of weeks, everything starts tasting the same. I am certain a little variation will be surely welcome."

It was fun while it lasted, but Dilbert cartoonist Scott Adams and others in the ragtag Bill Gates for President campaign have given up.

The campaign started last November, when Adams mused about the possiblity on his blog and a group separately created the Billgatesforpresident.net Web site. They announced their decision yesterday via an e-mail that was posted at NetworkWorld and flagged by Slashdot:

We've tried.... We really have! We wanted to evoke political debate and to a certain extend we succeeded to do just that. On the other hand, we failed miserably to draw enough attention our way. Bill Gates probably noticed and read the website and our arguments, but he probably didn't feel the drive needed to go for that presidential candidacy

Bill told me last summer that he wasn't interested in being a politician, but you never know. Here's a Gates for President post from November with all the links.

UW/ekagon

Women in South India's Madurai region using Parikh's technology, developed at the UW, to record the day's transactions on a mobile phone.

The University of Washington today called out an interesting project by doctoral student Tapan Parikh, who developed technology to use cellphones as simple, low-cost accounting computers.

He's already started a company in India, called ekgaon, that's providing phones to more than 700 microfinance cooperatives through a contract with CARE India.

Microfinance groups typically use paper ledgers, and it's been difficult to shift their accounting to computers because they typically don't have the space, electricity or expertise to run them, the UW news release said.

Using open-source software, Parikh customized Nokia phones so they can be used for accounting. Here's how the release described the technology:

"The phone's camera first takes a picture of a bookkeeping form to identify the document. Then the phone prompts the user in the local language, Tamil, to enter the relevant numbers. Once the last keystroke is entered the information is sent by text message to a central server in India."

Rural farmers in India began using the phones in January. Parikh said in the release:

"Broadly speaking, what I'm trying to do is look at ways that information technology can have an impact on important social, political and economic issues."

Parikh's research was funded by Microsoft Reseach, Ricoh and Intel, and he was advised by Ed Lazowska, the Bill & Melinda Gates Endowed Professor of Computer Science.

The project also highlights the UW's new emphasis on global health and technology for developing countries, influenced by the Gates Foundation and its expanding relationship with the school.

Charles Simonyi has updated Charles in Space, the Web site tracking his space adventure.

He's answered some provocative questions from children around the world (from a 7-year-old in China: "Are you afraid to be dead when the machine goes wrong?") and posted a great tidbit about the cool Tectrix flight simulator/exercycle he trains with at home in Medina.