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May 31, 2006

WSA: The winners circle

Posted by Tricia Duryee at 4:42 PM

OK, after writing extensively about the WSA Investment Forum last week, here most likely are the final thoughts of the one-day event linking startups with investors and potential customers.

The winner that grabbed the "Best & Brightest" award was
SNAPin, a company developing software that helps people figure out how to use their mobile phone without having to call customer service.

A couple of the panelists, including Adrian Smith of Ignition Partners and Tom Huseby of SeaPoint Ventures, raved about the company and thought it was the right time for such a product. The company was compared to how the ATM helped people bank without the support of a worker.

Here are other winners in the four categories of digital media, health IT, Web services and wireless:


Best Funding Pitch: thePlatform and Melodeo


Best Funding Pitch: Teranode

Best Sales Pitch: Genelex


Best Demo: PayScale

Best Funding Pitch: HyperQuality


Best Funding Pitch: Ontela

Best Sales Pitch: SNAPin

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Classmates ahead of the class

Posted by Tricia Duryee at 4:24 PM

Adweek reported today that new social network giants such as MySpace and Facebook could find ad models by looking to the old kid on the block, Renton-based

We questioned recently whether Classmates was hot anymore.

Apparently, it has a few tricks up its sleeve. Adweek said that the "decade-old site, which has been a social network before it was cool, is about to relaunch with a cleaner look and novel twist on contextual advertising."

It's doing that by creating a new "My Favorites" page that will let its 40 million members create a profile to list their music, movies, books and travel interests. The technology automatically turns those lists into advertiser links, which direct users to merchant sites.

Classmates is leaning heavily on local companies to make this work. For instance, RealNetworks' Rhapsody, one of the sponsors, could give a visitor the option of buying a song or subscribing to its music service. is also one of the advertisers.

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Ballmer and the list of 70 things

Posted by Kim Peterson at 11:07 AM

Why is Microsoft's spending increasing at the expense of higher profits? Chief Executive Steve Ballmer shed more light on the issue today at a conference organized by Sanford Bernstein.

When the company set out to choose the technologies it would focus on, senior executive Ray Ozzie came back with a list of about 70 items. According to a transcript of his speech, Ballmer responded by saying, "Dude, you can't have a list of 70 things." But Ozzie wouldn't pare the list down. So that's what the company went with. With a research and development budget approaching $7 billion, Ballmer said, Microsoft can probably afford to take those on.

One example of what's on that list? Digital reading and writing. Pencil and paper will be replaced by digital technology, he said.

Ballmer also said that while it's easier for Microsoft to recruit now than it has been in a long time, Google is making things more interesting.

"We have got one big competitor who is good at recruiting talent," he said. "We haven't had one for years, but we have got one now.... But hey, we compete well with those guys, and that's good."

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Vinegar and search engines

Posted by Kim Peterson at 10:49 AM

A team from the University of Washington is one of 12 winners of cash grants from Microsoft of between $35,000 and $50,000. Microsoft received more than 180 applications for its project, which funded academic research to improve technology in Internet search and data mining.

The winners, announced today, included Eytan Adar, Brian Bershad, Steven Gribble and Daniel Weld from the UW. The researchers called their entry "Vinegar: Leading Indicators in Query Logs." The concept is that when you slice and dice the vast number of queries coming into search engines, you can get a pretty good idea of the "collective consciousness" of Internet users. And that, in turn, can help predict future events.

How does vinegar relate to this? Months before SARS hit mainstream news, the researchers said, people in the Guandong province in China began buying out supplies of white vinegar, a local folk remedy.

The other winners included teams from the Rutgers University, New York University, Lehigh University, IIT Bombay and the universities of Michigan, Illinois, Massachusetts, Cambridge, Melbourne and Kassel.

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Microsoft, OneCare and NASCAR

Posted by Kim Peterson at 10:23 AM

Microsoft's new Windows Live OneCare product will be in stores tomorrow. The subscription service costs $50 a year for up to three computers, and includes anti-virus and anti-spyware features, the ability to back up photos and other files, regular "PC tune-ups" and phone support.

Offering free phone support with the service could be a pretty pricey proposition. After all, it can take a good chunk of an hour sometimes to work through tough spyware and virus issues on the phone. But one analyst I talked to yesterday, Gartner's John Pescatore, said this is an investment on Microsoft's part to sell more copies of its operating systems.

"If you're Microsoft, the way you make money is you sell more Windows and you remove the fear of Windows that might cause more people to try out a Macintosh," he said. This article has more details about the service.

Will One Care catch on faster than a car can make it around a NASCAR oval?.

To promote the launch, one of the retailers selling OneCare, Best Buy, has added the OneCare logo to a stock car sponsors. The car will be in the Neighborhood Excellence 400 race on Sunday at the Dover International Speedway.

With the service, Microsoft is directly competing with PC security giants Symantec and McAfee, who are working on their own versions of OneCare due out later this year. Today, Symantec said that its service, previously code-named "Genesis," will now be called "Norton 360." Did Symantec take a page from Microsoft's naming playbook?

Norton 360 will be out in public beta this summer, which customers can preregister for here. No word on pricing or an exact launch date, however.

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Cool cars and new fuels to run them

Posted by Kristi Heim at 6:48 AM

Technologies focused on transportation and alternative energy are getting a lot of attention this week. Today, a two-day conference co-sponsored by Microsoft and the Discovery Institute's Cascadia Center for Regional Development gets started with a curious mix of people and topics, including border security, hybrid cars and biodiesel fuel. Speakers include Martin Tobias, former CIA director R. James Woolsey, Slade Gorton, Maria Cantwell and Adam Smith.

Today is also the day Issaquah-based Green Power is set to demonstrate a mobile plant that it says can convert solid and liquid waste to diesel fuel. That demo is happening all the way in Wyoming, so we can't watch.

A car from Western Washington University's Vehicle Research Institute gave a new definition to domestically produced power, running on biomethane gas made from local manure to win honors at the Tour de Sol car show this month. VRI also won a nice little $10,000 check from BP's Cherry Point Refinery for alternative fuel research.

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May 30, 2006

Microsoft cooking up a gaming handheld?

Posted by Kim Peterson at 5:39 PM

Dallas research firm The Diffusion Group is predicting that Microsoft will debut a portable game console late next year or in early 2008. Microsoft is expected to combine a portable multimedia player with a handheld gaming device, similar to what Sony has done with its PSP, according to the firm.

The company is struggling with whether to license an Xbox operating system to hardware makers or to produce its own device, according to Diffusion.

There's very little doubt that Microsoft is mulling this kind of device, and the company may already have several prototypes in hand. But where will it fit -- or how would it stand out -- in a universe of iPods, PSPs and Nintendo devices?

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Posted by Kim Peterson at 11:30 AM bought the Internet Movie Database eight years ago and has pretty much let the entertainment enthusiast site develop on its own. But that could all change as Amazon begins to roll out its own movie download service, according to The New York Times:

Even so, Imdb's convergence moment may soon be at hand, say studio executives who have worked with Amazon on developing a download service that could let people burn DVD's on their desktops. Though Amazon and Mr. Needham decline to talk about plans, Imdb could play a more prominent role in the retailer's media strategy. Paramount Pictures, Universal Studios and Warner Brothers are all involved in the project, executives close to the project have said.

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Another standards clash on the horizon?

Posted by Kristi Heim at 11:13 AM

The fight over tech standards seems to be heating up again in China, as its wireless standards group has accused a U.S. engineering institute of conspiring to preserve Intel's domination of wireless encryption.

China is appealing the ISO's rejection of its WAPI encryption standard in favor of the 802.11i encryption standard developed by the Institute of Electrical and Electronics Engineers, based in the U.S. It accused the IEEE of violating ISO rules to mislead the ISO's voting committee.

China has the world's largest mobile phone market and is trying to promote its home grown standards for mobile technology and encryption. Last year China dropped demands that companies operating there adopt its WAPI standard, but the issue is resurfacing with a new intensity.

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Marchex acquires Open List

Posted by Kim Peterson at 10:34 AM

Seattle-based online advertising company Marchex said today it has acquired the assets of Open List for $6 million in cash and $7 million in stock. Open List basically has created a technology that collects content from the Web and aggregates it into a focused Web site that can sell advertising. For an example, see its Web site on Mexican restaurants in Seattle.

Marchex has bought up all kinds of domain names over the years and now owns a vast amount of real estate on the Web. It's banking on the idea that if you're searching for a camcorder, for example, you'll just point your browser to Then it can sell you advertising from there. But there's a problem with this strategy: not all of Marchex's 200,000 Web sites are filled with enough content to draw users.

That's where Open List comes in. Marchex unveiled today some Web sites where it has integrated Open List's technology, including and

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The down side of pay-as-you-go

Posted by Kim Peterson at 10:28 AM

Pay-as-you-go computing, a concept proposed by Microsoft to sell more computers in poorer countries, could hit a stumbling block in India, where there are forced power outages each day, according to This type of computing proposes to sell computers at a very low cost and have the user pay to use the machines on a per-minute basis.

The outages, deliberately exercised by the Indian electricity department to avoid overloading of the powerlines, make power generators and UPS systems a common necessity in homes and offices across the country.

Microsoft, which claims to make the PCs available to first-time consumers for as little as $278 (roughly 12,700 Indian rupees), forgot that buyers would have to shell out an additional amount (about INR 2000 upwards) to buy the UPS separately as well.

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Ballmer making nice with Wall Street

Posted by Kim Peterson at 10:16 AM

Last week, Ballmer, above, was at the Information Reference meeting in Seoul. This week he's in New York and Boston.

Steve Ballmer is headed to Wall Street this week to smooth over relations with investors. In what is being described as a first, Ballmer is scheduled to host events in New York on Wednesday and in Boston on Thursday. Perhaps he's working on an "investors, investors, investors!" pep talk.

Microsoft's stock is the third-worst performer in the Dow Jones Industrial Average this year, according to Bloomberg, and several prominent shareholders have demanded the company spend as much as $100 billion buying back shares. Click here for a current stock quote.

Michael Holland, who oversees $4 billion as chairman of Holland & Co. and has owned Microsoft shares since he founded the firm in 1995, is quoted in Bloomberg:

He's not spending enough time listening to people in the capital markets. What I want to hear is how much he listens. I want to see how well he does not being defensive and adversarial but being interested in hearing people.

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May 26, 2006

But, hey, "Web 2.1" might still be available

Posted by Kim Peterson at 2:30 PM

Quoted: "It's a pretty standard business practice." - Sara Winge, vice president of corporate communications at O'Reilly, on the company's request to register the term "Web 2.0" as a trademark when it relates to conferences.

O'Reilly has caused a small uproar by sending a letter demanding that IT@Cork, a non-profit networking group, not use the term in the title for a future conference.

Winge goes on: "While we stand by the principle that we need to protect our 'Web 2.0' mark from unauthorized use in the context of conferences, we apologize for the way we initially handled the issue with IT@Cork."

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More on F5 Networks and nationwide SEC probe

Posted by Kristi Heim at 12:52 PM

Today's story on federal investigations of F5 Networks and more than 20 other companies concerning the timing of stock option awards was picked up by McAdams Wright Ragen's Tim Bueneman.

He reiterated today that F5's management had strongly denied any backdating in a conversation with him last Thursday, prior to F5's announcements that the company received a grand jury subpoena from U.S. District Court in New York and was under investigation by the Securities and Exchange Commission. In his note to investors Monday, Bueneman said he had spoken with F5 Chief Accounting Officer John Rodriguez on May 18, who was explicit in saying "F5 has not back-dated any options."

May 18 is the same day F5 received the grand jury subpeona and a notice from the SEC of the inquiry, though F5 didn't announce those events publicly until Monday. F5 says it is cooperating with the grand jury and the SEC investigations, and that its board has authorized a review of the company's stock options grants, to be conducted with the help of outside independent legal counsel and independent accounting experts.

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25 worst tech products of all time

Posted by Kim Peterson at 11:21 AM

Because it's Friday and Fridays were made for silly lists like this: names the 25 worst tech products of all time. Puget Sound has some fine contributions to this Hall of Shame, including:

RealNetworks' RealPlayer -- 1999 (Ranked No. 2)

A frustrating inability to play media files -- due in part to constantly changing file formats -- was only part of Real's problem. RealPlayer also had a disturbing way of making itself a little too much at home on your PC--installing itself as the default media player, taking liberties with your Windows Registry, popping up annoying "messages" that were really just advertisements, and so on.

Microsoft Windows Millennium -- 2000 (Ranked No. 4)

Windows Millennium Edition (aka Me, or the Mistake Edition) was Microsoft's follow-up to Windows 98 SE for home users. Shortly after Me appeared in late 2000, users reported problems installing it, getting it to run, getting it to work with other hardware or software, and getting it to stop running.

Microsoft Bob -- 1995 (Ranked No. 7)

No list of the worst of the worst would be complete without Windows' idiot cousin, Bob. Designed as a "social" interface for Windows 3.1, Bob featured a living room filled with clickable objects, and a series of cartoon "helpers" like Chaos the Cat and Scuzz the Rat that walked you through a small suite of applications.

Microsoft Internet Explorer 6 -- 2001 (Ranked No. 8)

Full of features, easy to use, and a virtual engraved invitation to hackers and other digital delinquents, Internet Explorer 6.x might be the least secure software on the planet.

MusicNet -- 2002 (Tied with Pressplay for No. 9 ranking)
Note: MusicNet is headquartered in New York, but has offices in Seattle.

In 2002, two online services backed by music industry giants proposed giving consumers a legitimate alternative to illegal file sharing. But the services' stunningly brain-dead features showed that the record companies still didn't get it.... MusicNet cost $10 per month for 100 streamed songs and 100 downloads, but each downloaded audio file expired after only 30 days, and every time you renewed the song it counted against your allotment.

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Northwest entrepreneur of the year

Posted by Kristi Heim at 11:20 AM

Ernst & Young announced 24 finalists for its Entrepreneur of the Year 2006 award, and the list has quite a few up- and-coming tech leaders we've written about, including Impinj President Bill Colleran, Unitus President Geoff Davis, Junxion President David Hsiao, Jobster CEO Jason Goldberg, and a whole crew from PopCap Games: CTO Brian Fiete, Chief Creative Officer Jason Kapalka, and Director John Vechey.

We'll find out who gets the award June 23 at the Westin Bellevue. The awards are given to those who excel at innovation, financial performance and personal commitment to their businesses and communities.

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Recognition the UW won't brag about

Posted by Kim Peterson at 11:10 AM

An alternative world makes frequent appearances at the UW.

This shouldn't be a surprise to gamers in Seattle, where you can hear random conversations about "World of Warcraft" on the sidewalks, but the University of Washington is the top WoW school in the country.

At least, that's the guess of MapWoW, a site so dedicated to the game it uses Google Maps technology to re-create the regions in the game. MapWow came up with that guess based on the number of visitors to its site from universities.

So what's this game all the youngsters are playing? Click here for a writeup I did on it earlier this month.

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May 25, 2006

MSN Search: When will the bleeding stop?

Posted by Kim Peterson at 4:34 PM

Nielsen//NetRatings brings us news that, once again, Microsoft is losing market share in the Web search business while Google continues to gain.

For the month of April, Google accounted for 50 percent of all searches, according to the research group. That's up from a 47 percent share in April 2005.

Yahoo! Search remained flat from year to year, with a 22 percent market share. MSN Search dropped by one point from 12 percent to 11 percent.

All three had double-digit growth in the number of searches performed, however. Google Search grew by 34 percent to 2.7 billion, Yahoo! Search grew by 27 percent to 1.2 billion and MSN Search was up by 10 percent to 570 million.

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Mehdi: Hotmail, it's not so hot

Posted by Kim Peterson at 3:25 PM

Yusuf Mehdi, head of MSN

Microsoft's MSN group hasn't done as good a job as it could have on e-mail, MSN honcho Yusuf Mehdi said Wednesday in an interview with analysts at the Goldman Sachs Internet Conference. A snippet of the conversation, according to a transcript:

We've not done a great job on mail. We've lost some share on that. We have not turned Hotmail into a primary mail brand yet. It's still -- I think it's still probably the most popular mail product out there, but it's mostly a secondary mail account and it's really explosively growing outside the U.S., but in the U.S., where we can monetize it, we need to turn the corner. We need to make it a primary mail.

One way Microsoft is trying to do that, Mehdi said, is through the new Windows Live Mail service launching this summer. The service will have more storage, better usability and faster performance, he said.

Mehdi also said Microsoft is embarking on a "dual portal strategy" with, which it's beefing up, and, the portal for Windows Live. The idea is for MSN to evolve as a content brand and Windows Live to become a software brand for Microsoft's Internet services.

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WSA: Sales pitch

Posted by Tricia Duryee at 2:06 PM

Cequint, a Seattle company, had the opportunity to pitch its business to a panel of professionals from Cingular Wireless, Microsoft and Alltel.

The company is building a new caller ID product for cellular phones. The biggest feature of the software provides the city and state for phone numbers on a user's incoming call.

CEO Rick Hennessey said there are more than 350 area codes today, and more than 75 percent of people get calls from area codes they don't recognize. Hennessey is the former CEO of Dwango Wireless.

The company wants carriers to sell the service to users for $1.99 to $2.99 a month. The product is expected to launch in August with Alltel, the fifth largest carrier in the country.

An example of the panel's response:

1. Philip Osman, who left Cingular in 2005 after he helped integrate it with AT&T WIreless: If I'm in Omaha, but have a 425, what does it tell the recipient of the call?
Hennessey: It says Bellevue, or Issaquah, or Renton, wherever you are from.

2. Deanna Garcia of Cingular: What prohibits the carrier from building an application just like this?
Hennessey: We've done a lot of work, and the technology is patented.

3. Raghu Murthi of MSN's Windows Live: Does this work off your server?
Hennessey: No, all of it sits on the device and it's very easy to manage with over-the-air updates.

4. Osman: Would you consider partnering with the handset manufacturer so you don't have to share revenue with the carrier?
Hennessey: Right now, we want to be preloaded on to the phone, which can be purchased by the user after it's trialed. We don't want to be on the deck because we think it will be lost unless we can get good deck placement.

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BusinessWeek: Charter's a disaster

Posted by Kim Peterson at 1:52 PM

Charter Communications is one of the "ugliest" U.S. companies around and has "the financial soundness of a banana republic," according to a stinging writeup in BusinessWeek. The magazine places nearly all of the blame for the disaster on Chairman Paul Allen.

BusinessWeek said it normally forbids reporters from writing about companies in which they hold stock. The magazine made an exception for this article, though the Web version at least doesn't say who the author is. An excerpt:

I bought some shares a few months after the IPO. I figured I'd be getting in on the deal of a lifetime: Cable companies were the toll collectors to the broadband gold rush. Plus, if anything were to go wrong, Allen's billions represented the ultimate safety cushion.

What I ended up getting was an absentee father of an owner; book-cooking; Royal Tenenbaums-like dysfunction in the executive suite; and the kind of corporate governance that would get a company booted from Zimbabwe's stock exchange.

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WSA: The little guy

Posted by Tricia Duryee at 1:51 PM

In addition to the companies presenting today, there's also the little guys who are wading through the crowd to find investors and customers.

James Wen left about two weeks ago to pay full attention to his new startup, Positive Motion.

His company puts the concept of flash cards used by students onto the mobile phone. That way users have the flash cards wherever they have their phone. When the class is over, and they no longer need the content, they can be uploaded to the company's Web site for sale. Wen's company takes a percentage of the profits.

The software also has quizzes and multiple choice questions, and as you learn the items and decide to knock them off, your confidence level goes up on a color-coded meter.

Does it require a high-end phone or 3G? Wen said no; he wants to make it as easy as possible so people will use it.

"I got this phone for free," Wen said. "I don't even know what that [3G] is."

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WSA: The upswing

Posted by Tricia Duryee at 1:36 PM

The Investment Forum is trying out a new business model of its own.

The event is attempting to jazz things up a bit by creating an "ecosystem" in which entrepreneurs and investors get conversation flowing that may plant seeds for new ideas. After all, if you are a good VC, you should probably know of all the companies presenting today.

Brian Vincent, an investor at Vulcan Capital who helped plan today's event, said the organization is trying to revamp the program to get more interest in it.

Vincent said $100 million of venture capital has already been raised among the 25 companies making presentations; more than $13 billion is under management among the VCs in attendance; and more than $142 billion in revenues is distributed among companies represented by industry professionals there..

In all, about 300 people are in attendence.

"The three things together provide opportunity and credibility," he said.

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Nintendo: Executive promotions

Posted by Kim Peterson at 1:08 PM

Nintendo of America's new president, Reggie Fils-Aime.

More news out of Redmond-based Nintendo of America today. Reggie Fils-Aime, previously the executive vice president of sales and marketing, has been promoted to president and chief operating officer. It's obviously a big move for Fils-Aime, who has been on the rising star track ever since he joined NoA in December 2003.

He made a big splash at Nintendo's press briefing at the 2004 Electronics Entertainment Expo when he came on stage and said, "My name is Reggie. I'm about kicking ass, I'm about taking names, and we're about making games."

Those comments set the stage for a supercharged press briefing unlike any other in recent memory. Nintendo's briefings since then have had a similarly electrified tone. Fils-Aime has been called the "Reggie-lution," "Regident Evil" and the "Regg-Hammer."

As president, he replaces Tatsumi Kimishima, who will become chairman and chief executive. Also, Mike Fukuda is moving from senior vice president of business development to executive vice president of business development.

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WSA: Razr's dirty secret

Posted by Tricia Duryee at 12:18 PM

The Motorola Razr has been a stylish hip and cool mobile phone for at least a year. But what people don't realize is it's not special.

As your mom might have said, don't judge a book by its cover -- the Razr is not a special phone in any metric, Mark Lowenstein said during his keynote.

"The Razr is not a leading, or best- in-class device in any category but its thinness," he said.

Compare it with other phones in battery life, screen resolution or speed, and it doesn't match up.

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WSA: Wireless keynote

Posted by Tricia Duryee at 12:15 PM

Mark Lowenstien, the managing director of Mobile Ecosystem, is presenting the noon keynote focused on wireless -- one of the hot topics today at the WSA Investment Forum.

Lowenstein is making many industry observations, including why data usage on wireless phones has taken off in other geographic regions before the U.S.

He said it comes down to price. In the U.S., we spend about 7 cents a minute for an average voice call with virtually no roaming charges. In Europe, a voice minute costs about 15 to 20 cents a minute and there frequently are roaming charges.

In comparing the U.S.with Europe, Lowenstein makes a further, newer observation. He said the U.S. has leap-frogged Europe when it comes to data usage. Although a larger percentage of revenue may come from data there (about 25 percent), if you take out text messaging, the U.S. far exceeds Europe when it comes to downloading games, ringtones and wallpapers and other content.

"In the download business, we are well ahead of Western Europe," he said.

We are also ahead in network technology, he said. Verizon Wireless and Sprint Nextel have rolled out signifcant 3G networks, which provide broadband speeds, and Cingular Wireless has rolled out an even faster technology than what's available widely in Europe.

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WSA: Ontela prepares for pitch

Posted by Tricia Duryee at 12:08 PM

Seattle-based Ontela is here today to get the attention of investors.

Ontela, a three-person company in Pioneer Square, is developing a technology that allows photo applications, traditionally on PCs, to work with cel phones.

Brian Schultz gives a demonstration: He takes a picture of Britney Spears' CD album cover. The data is uploaded to a network, which pushes down an application that allows you to find prices of the album, buy related ringtones or watch a video. Schultz decides to buy a ringtone and it starts playing on the phone.

That application is possible through a partnership Ontela has with ActiveSymbols, a Seattle subsidiary of Logicalis.

Ontela's technology is the connector that helps ActiveSymbol's recognition technology work on a mobile phone. Ontela helps software that would otherwise run only on a high-end $500 smartphone.

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Nintendo announces Wii pricing, shipment details

Posted by Kim Peterson at 12:01 PM

Redmond-based Nintendo of America said the price of its upcoming next-generation system, called the Wii, will not "exceed" $250 in America. What's up with the vague wording here? If it's going to cost $250, just say it. Perhaps the company hasn't finalized its pricing yet.

Still no specific launch date, either. But Nintendo did say it plans to ship 6 million Wiis to stores worldwide between its launch in the fourth quarter of this year and the end of March 31, 2007. The company expects to sell 17 million Wii games during that period.

The ambitious shipment plans nearly mirror Sony's, which is launching its PlayStation 3 on Nov. 17 and said it expects to ship 6 million between then and the end of March. The PS3 will cost $600, or $500 for fewer bells and whistles.

Microsoft, by the way, launched its Xbox 360 console on Nov. 22, 2005, and said it expects to sell between 4.5 million and 5.5 million units by the end of next month.

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WSA: Digital Media panel

Posted by Tricia Duryee at 11:59 AM

During a panel discussion on digital media, Steve Lidberg, a research analyst at Pacific Crest Securities, made an observation about the content market for computers and mobile phones.

People today can pay and download a lot of content, whether it's video, music or games. But Lidberg said consumers only have so much pocket change; a subscription model will become the preferred business model over selling items one-by-one.

That's where Real Networks has been an innovator, Lidberg said. Today, it offers a music subscription model. He said Apple Computer's iTunes service could even flirt with the idea of a subscription model.

"We will see more subscription offerings," he said. "A consumer's wallet is only so thick."

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WSA: Intelligent picture frames

Posted by Tricia Duryee at 10:51 AM

A Living Picture, which is developing "intelligen"t picture frames, is one of the companies at the WSA Investment Forum to meet investors and raise money.

The Seattle company couldn't have better timing. It is still coming down from its high of being mentioned during Bill Gates' keynote presentation at earlier this week at WinHEC, the hardware engineering conferece, said Jesse Grindeland, A Living Picture's president and chief operating officer.

A Living PIcture is working with Microsoft to enable WIndows slideshow capabilities on photo frames for the launch of Windows Vista.

At the investment forum, being held at Bell Harbor, the company showed off digital picture frames that connect to computers and flip through a number of photos on your harddrive. The frame also shows other information, such as the current weather forecast or caller ID when a phone call comes in.

Grindeland said his product passes the mom test. He sent his mother one and he controls it from his house by sending new photos of the grandchildren to it whenever he wants.

The frame is surprisingly smart. It comes with Windows CE operating system that connects to the computer using Bluetooth, Wi-Fi, infrared or USB. It also can be connected directly to a camera and supports seven types of memory cards.

The funding the company is seeking today is for supporting orders, which Grindeland says are already in place in Europe, Canada and the U.S. He said the product will launch in October through partnerships with unnamed retailers, digital camera manufactuers and PC manufacturers.

A 5 x 7-in. picture frame costs $150 and a 6 x 9 in. costs $250.

A Living Picture will present today between 1:30 and 2:45 p.m. to Paul Bialek of Frazier Technology Ventures and Shawn Carolan of Menlo Ventures. Bill McAleer of Voyager Capital will moderate.

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WSA: Digital Lifestyle panel III: Final thoughts

Posted by Tricia Duryee at 9:57 AM

Peter Daley, an analyst from Rutberg & Co. who was moderating the panel, asked one final question -- who would be successful in the digital lifestyle? The options were content owners, distributors or those building consumer tehcnology.

David Britts of ComVentures said that he thinks it will be the underlying tehcnology builders. He said the content owners would be No 2, but that it was "a hits parade," where those who succeed would need to release new and better continually.. "It's a great time to be an entrepreneur -- there's a lot of money out there for a company that can make it dead simple."

Tim Dowling agreed: "There's a tremendous amount of money out there looking for deals in the digital home." His bet would also be on the enabling technology.

Seth Shapiro, principal at New Amsterdam Media, said he was more idealistic -- that all parties need to be successful for things to be accomplished. "I think that all have to happen in order for it to work. There's room for everyone."

Mike Fidler, CEO of Digeo, which has a television set-top box for the living room, said he likes where his company is. "I think the interface where you manage and receive all content is a critical part of the digital lifestyle."

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WSA: Digital Lifestyle panel II

Posted by Tricia Duryee at 9:38 AM

The advice to startups coming from the panel of four executives was to keep things simple.

David Britts, general partner at ComVentures, said that you can tell that there's a lot of complexity in technology by the size of Best Buy's Geek Squad -- the people who make house calls to fix computer problems.

Tim Dowling, who has direct experience at trying to make technology eaiser to use at Pure Networks (now Network Magic), said the Geek Squad has two vehicles in the Seattle area and the No. 1 problem it responds to involves getting two computers networked together in a home. He said the squae charges $150 for the service.

Remedying the disconnect between the technology and people's ability to use it, the panel agreed, requires a lot of work. It requires not making two versions of a product, but six renditions over time.

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WSA: Digital Lifestyle panel I

Posted by Tricia Duryee at 9:36 AM

During the introduction for the Digital Lifestyle panel this morning, Tim Dowling said he had been working at Pure Networks, a Seattle company that builds software to help people set up home computer networks.

He said he is now an independent consultant and working on finding a new startup opportunity.

One more change: Pure Networks is now known as Network Magic.

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WSA: Investment Forum kicks off

Posted by Tricia Duryee at 9:33 AM

The 2006 WSA Investment Forum kicked off this morning at Bell Harbor International Comference Center with a semi-crowded room and people dressed to impress.

The day is expected to be wide-rangings. About 27 companies are set eitherfor fund-raising pitches to venture capitalists or sales pitches to representatives of relevant companies. There are also panel discussions looking at a variety of subjects and a demonstration room where presenting companies will be able to show off their products.

The main topics of include digital media, helath IT and Web services.

Some of the companies in attendence include: A Living Picture, Melodeo, gamerZunion, Pluggd, thePlatform, Red Llama, Teranode, TouchNetworks, Farecast, HyperQuality, Mpire, PayScale, Cequint, GoGoMo, Movaya Wireless, SNAPin, Sotto Wireless, and Telecom Transport Management.

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May 24, 2006

AT&T Wireless still the largest IPO

Posted by Tricia Duryee at 3:25 PM

Bank of China raised $9.73 billion today in the world's biggest initial public offering in six years, according to Bloomberg.

The IPO still doesn't beat Redmond-based AT&T Wireless when it went public in 2000 for $10.6 billion.

Bloomberg said the Bank of China IPO could swell to more than $11 billion should the arrangers exercise an option to sell more stock to meet demand.

AT&T Wireless was founded by Craig McCaw. His most recent venture, Clearwire, filed for an IPO earlier this month. If it raises $400 million, as planned, it will be the state's largest in six years, or since AT&T Wireless went public.

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The Mechanical Turk

Posted by Monica Soto at 3:05 PM has made significant investments in technology and free-shipping promotions. At the company's annual meeting Wednesday, Jeff Bezos chose to display one of the company's more obscure examples:

The Mechanical Turk.

The beta site is so named after the Hungarian nobleman Wolfgang von Kempelen. In 1769, this enterprising fellow built a mechanical chess-playing machine that apparently beat the powdered wigs off even the most astute chess players, including Bonaparte and Benjamin Franklin. Turns out, hiding beneath the machine's intricate innards was a very small (and very brilliant) chess player.

Now, the company is asking those to try their luck on "artificial artificial intelligence" -- its own version of the Mechanical Turk. The site pays small sums for humans to perform simple tasks that computers still find hard to do.

For $0.01, for instance, you can rank your three "best mashed potatoes in Seattle."

Someone, please pass the salt?

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Infinium: Name change proposed

Posted by Kim Peterson at 2:31 PM

Let's face it, Infinium Labs doesn't have the best reputation out there in video game land, what with its chairman being charged by the Securities and Exchange Commission and all.

So it's no wonder that the Seattle company is proposing to change its name to Phantom Entertainment. The new name "better reflects the long-term growth strategy of the company," Infinium said in a regulatory filing today.

The proposal will be discussed at the company's shareholder's meeting in Tampa, Fla., in July.

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Google Fremont

Posted by Kim Peterson at 1:58 PM

Google moves its sales office 1.9 miles and the media is there to cover it. I'm guilty as well, with this short story in today's paper. It's still a little surprising to me how much attention this company (and perhaps Apple Computer) gets for moves that, with any other company, the media would nary blink an eye at.

Chalk it up to the Google financial phenomenon, its potential threat to established tech giants like Microsoft, and the company's own policies of keeping facts close to its vest. Google is much more open about the operations at its sales office than at its Kirkland engineering site, which it opened in November of 2004. The Kirkland office, by the way, is up to 150 people now, compared with 10 when it opened.

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Northstar shares turn south

Posted by Mark Watanabe at 1:49 PM

From Deputy Business Editor Rami Grunbaum:

Northstar Neuroscience, which went public with a bang in early May, slid sharply today to close below its offering price for the first time.

With demand evidently strong, the Seattle medical device company priced its offering May 5 at $15, a dollar above its $12 to $14 expected range, and sold 1.1 million more shares than originally planned. The stock traded up nearly 10 percent its first day, and has been as high as $17.75.

But Wednesday, it dropped 13 percent, or $2.02, closing at $13.48.

Qualifying as a so-called 'broken IPO' is never good. On the other hand, Northstar held up better than Internet phone company Vonage, which began trading today and promptly fell more than 12 percent below its offering price.

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Demonstrators in HazMat suits at WinHEC

Posted by Kim Peterson at 10:49 AM

Boing Boing is just a little off in reporting that demonstrators disrupted Bill Gates' keynote Tuesday at Microsoft's WinHEC conference at the convention center. There was no sign of a protest during Gates' keynote; in fact, I don't think most attendees even knew that this was going on.

It looks from the photos on this page that the demonstrators didn't make it very far into the convention center.

According to Boing Boing, the group was related to the Free Software Foundation's Defective by Design campaign, and it was up in arms about the digital rights management restrictions in Microsoft's upcoming Windows Vista operating system.

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NPD Reports: Kids, devices and games

Posted by Kim Peterson at 10:22 AM

There are a couple of interesting studies out today by the NPD Group, a research firm in Port Washington, N.Y.

In one, researchers found that children ages 4 to 14 are using consumer electronics devices six months earlier than they were a year ago. And more than twice the number of children personally own digital music players and digital cameras this year than a year ago. Cellphone ownership is up by 50 percent.

In the second study, NPD found that U.S. consumer spending on PC games hit $1.4 billion in 2005.

It's interesting that online subscriptions to PC games and gaming Web sites were about $344 million of this total. Subscriptions to specific games, such as current 800-pound gorilla "World of Warcraft," were $292 million last year with 1.4 million paying subscribers. I wrote about this phenomenon earlier this month.

Paid casual gaming sites -- the ones that offer simpler "Tetris"-like games online -- had sales of about $52 million last year with 1.05 million paid subscribers.

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Ballmer: Vista release date flexible

Posted by Benjamin J. Romano at 9:30 AM

A day after Microsoft Chairman Bill Gates announced the beta 2 version of Windows Vista -- interpreted by many to be a signal that the company is on schedule -- CEO Steve Ballmer acknowledged some wiggle room in the January 2006 release date.

"We think we are on track for shipping early in the year. We've talked about the month, but we get a chance to critically assess all of the feedback we'll get from this beta release then confirm or move [the launch date] a few weeks," Ballmer said at a news conference in Tokyo, according to this IDG News Service story.

Much will depend on what the company's hardware partners want.

"The other thing, frankly, which we are discussing with NEC and other hardware partners is when would they really like it -- early January, late January, February -- so it depends on when the next rollover, the next turn of the machine cycle will be and that would be the best time to ship it based on beta feedback," Ballmer said.

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May 23, 2006

Vonage's IPO trumps Clearwire's

Posted by Tricia Duryee at 3:37 PM

Vonage, which provides telephone services over broadband, said it has priced its initial public offering at $17 a share.

It is offering 31.25 million shares, meaning it will potentially raise more than $530 million. If it taps into additional shares being set aside for over-allotments, it could raise up to $610 million.

Shares of Vonage common stock will trade on the New York Stock Exchange under the symbol VG. The offering is being led by Citigroup, Deutsche Bank Securities, and UBS Investment Bank, acting as joint book-running managers, and Bear, Stearns, Piper Jaffray, and Thomas Weisel Partners, acting as co-managers.

The amount of money is somewhat startling given Kirkland-based Clearwire's recent IPO filing. Clearwire, which is building out a wireless broadband network, said it will attempt to raise $400 million through a public offering. It has not said how many shares it intends to sell, or whether any will be set aside for over-allotments.

Analysts have compared the two companies with each other before. Both are attempting to take business away from existing telecom carriers, and both are trying to build well-recognized national brands.

Those two things definitely take a lot of bucks. But still, at least for now, it seems Vonage is mostly providing a service, whereas Clearwire also has to build costly infrastructure that resembles a cellphone carrier.

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Sotheby's taps wireless expertise

Posted by Tricia Duryee at 3:29 PM

Dennis Weibling, who is on the board of Nextel Partners and has served on the boards of Nextel Communications, XO Communications and Teledesic, has been elected to board of the parent company of Sotheby's worldwide auction businesses.

Weibling, who today is the managing director of Kirkland-based Rally Capital, currently serves as "a trustee of trusts" of Keith McCaw's estate. He also serves on various non-profit boards, including Seattle Pacific University, Bellevue Christian School and the Institute for Business Technology and Ethics.

"Mr. Weibling has all the qualities we are seeking in our next director, including sophisticated financial expertise, extensive business knowledge and proven judgment. We very much look forward to drawing on his background and experience," said Michael Sovern, chairman of Sotheby's Holdings.

Weibling said: "I am very pleased to be joining the board of Sotheby's. I have been impressed with management and members of the board and believe the company is well positioned to take advantage of its growing worldwide opportunities. I look forward to playing a future role in this exciting business."

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Gates: Betting the company around Web services

Posted by Benjamin J. Romano at 11:52 AM

Microsoft Chairman Bill Gates released "beta 2" versions of his company's "three most important" products today: Windows Vista, Office 2007 and Windows Server.

In his speech to some 3,000 people at the Windows Hardware Engineering Conference in Seattle, he also described opportunities for developers to add-on to these products through initiatives that have been big bets for Microsoft:

"Every one of these products has things that bring their extensibiltiy to a whole new level, a lot of it around the theme of the XML and Web-service type extensibility that we've been betting our company around and driving through standard processes all the way back to the year 2000 when we announced our .NET initiative," he said.

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Loudeye: Reverse stock split

Posted by Kim Peterson at 11:23 AM

Struggling Seattle digital music company Loudeye announced a one-for-10 reverse stock split in a regulatory filing today. In other words, people who held 10 shares of Loudeye common stock now hold one share. Although a reverse split had been expected, it's still a big ouch for some shareholders, who were venting today on Yahoo's Loudeye message board.

Loudeye's stock began trading this morning on the split-adjusted basis, and will have the symbol LOUDD for 20 trading days.

The move immediately brought Loudeye's share price back above the $1 mark -- which, if this continues, will clear the company from the danger of being delisted by Nasdaq. Loudeye's share price was $2.80 at 11:30 a.m., compared with closing at 35 cents yesterday.

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Entrepreneurial immigrants

Posted by Tricia Duryee at 11:12 AM

Immigrants far outpaced native-born Americans when it came to starting companies last year, according to a national assessment of entrepreneurial activity by the Ewing Marion Kauffman Foundation.

Furthermore, the study found, the only major ethnic or racial group to experience a year-to-year increase in the rate of entrepreneurship was African Americans.

Kauffman Index found that about 350 out of 100,000 immigrants started a business every month in 2005, compared with 280 out of 100,000 native-born Americans. That means that about a total of 85,000 immigrants and 379,000 native-born individuals created new businesses each month last year.

While the overall entrepreneurial activity declined slightly from 2004 to 2005, the rate of African Americans starting businesses grew from 0.21 percent to 0.24 percent. In all, 46,700 African Americans started a new business every month in 2005, compared with 40,200 in 2004..

Click here for more information on entrepreneurial activity broken down by race, age, region and geographic area. The Ewing Marion Kauffman Foundation, based in Kansas City, is a private, nonpartisan organization that works with partners to advance entrepreneurship in America and improve education.

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Getty: Buying back shares, dropping office space

Posted by Kim Peterson at 11:09 AM

Seattle digital images company Getty Images said its going to increase its share repurchase program by $100 million to $250 million. At the end of April, the company had about 62.4 million shares of stock outstanding.

Because it's going to be spending more money on buying back shares, Getty said it's going to get rid of some money-losing investments that it had previously intended to hold on to. The company has been subleasing some of its office space in New York City, but is going to permanently get out of the space once its sublease expires in February. It's going to take a $19 million hit with this move, because there are eight years left on its original lease agreement.

Investors weren't too worried about the announcements; the company's share price was even up a bit this morning.

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Start a queue for the Moto Q

Posted by Tricia Duryee at 10:44 AM

The Q makes its debut.

Motorola and Verizon Wireless said Monday that the Moto Q, loaded with Microsoft's Window Mobile operating system, will be available starting May 31. The Q is viewed as a direct competitive threat to the very popular Blackberry offered by Research in Motion.

The Motorola Q will be available exclusively through Verizon Wireless. Customers can purchase it online through Verizon Wireless Web site on May 31 or at any Verizon Wireless store on June 5. It's priced at $199.99 after a $100 instant credit when purchased with a certain Verizon Wireless voice and data plan and two-year customer agreement.

In a Chicago Tribune story today, analysts said the Q has two particular strengths:

First, there is its Razr-inspired styling. "I think Q is visually the most innovative looking product to come to [the smart phone] market and that should drive use of the product," said Ben Bollin, a stock analyst at FTN Midwest Securities.
Second, the Q's $200 price (after an instant rebate) is very competitive. "I think it has a very attractive price point for the type of phone that is," said Brant Thompson, a stock analyst at Goldman Sachs.

The Moto Q is cheaper than the Palm Treo 700w, which also has the Windows operating system, and came out about a year ago. The Treo is now selling for $400 on Verizon Wireless's Web site, after discounts.

In a Boston Globe story, Motorola Chief Executive Ed Zander said he expects the phone will be popular enough to justify a whole family of devices following the Q.

"We think this is a genre for a new platform," Zander said. He would not give more details beyond saying that by year's end Motorola would have a phone based on WCDMA technology, which means it would also soon be made available for GSM phones. Verizon Wireless follows a different technology track.

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Software piracy down in emerging markets

Posted by Kristi Heim at 10:38 AM

China, Russia and India, usually given the dubious distinction as the world's biggest markets for pirated software, today topped the list of countries with the most progress on reducing software piracy last year, according to the Business Software Allilance. In both Russia and China, piracy rates dropped 4 percent, while the rate declined 2 percent in India. Ukraine and Morocco were also included in the group with the biggest reductions in piracy.

About 35 percent of software on the world's PCs last year was still illegal, according to the BSA, amounting to $34 billion in losses. But the progress in emerging markets was a positive sign. The BSA credited education, enforcement and policy efforts for the change.

Seems to me the progress has a lot to do with the development of homegrown software industries in those countries, and the government's desire to protect a nascent asset.

Even with the lowest rate of software piracy, the amount of damage was highest in the United States, where piracy was blamed for $6.9 billion in losses. Read the report here.

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May 22, 2006

Help wanted: broadband builder

Posted by Kristi Heim at 3:23 PM

The city of Seattle is looking for private partners to help build a broadband network to deliver high-speed Internet access to every home, and it should find out which players, if any, are interested by July 7, the deadline for responding to today's Request for Interest.

Seattle is aiming for a network that uses fiber optic to the premises, or FTTP, rather than Wi-Fi wireless technology chosen by cities like San Francisco and Philadelphia. A volunteer task force concluded that fiber optic is a better long-term solution, though it's also more expensive.

Check out this report for a comparison of various approaches to citywide Internet access.

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Ballmer's thoughts on "Don't be evil"

Posted by Kim Peterson at 10:40 AM

Some amusing moments from Steve Ballmer's interview Sunday in the San Francisco Chronicle:

Q: This is an old question, but it always comes up: What do you think of the "Don't be evil" mantra as a corporate culture?

A: Who are we talking about?

Q: Google.

A: Do they follow it? (Laughs.)

Q: What do you think of that?

A: I don't have any comment. I'll ask you. I mean, it's one thing to have a mantra and it's another thing to follow it. Dude, you've got to ask yourself that question.


Q: What were you like as a kid?

A: A little hyperactive.

Q: A little?

A: I was a little hyperactive. My mom tried Ritalin out on me once, but it knocked me out too much. It knocked me out so much, she took me off it after one day.

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May 19, 2006

Bsquare's Baxter at it again

Posted by Tricia Duryee at 5:04 PM

On June 20, the WSA is hosting a evening event looking at digital media. And one of the presenters is Bill Baxter, who co-founded Bellevue-based Bsquare.

Baxter, who has been lying relatively low since leaving Bsquare in 2004, is listed as the CEO and co-founder of Snaptune. According to its Web site, the Bellevue-based company is developing software for the radio.

"Simply pick a radio station, or select a show to record, and it does the rest," the Web site says. "You get a detailed list of all the programs you asked it to record and, after a short 'learning period', it also highlights the individual songs that were played during those programs. You can click on any song to listen to, learn more about, and purchase."

The service works by connecting your radio to your PC using a cable, decide what stations and shows you want to monitor "and let Snaptune do the rest."

Other participants in the WSA event are from InfoSpace, SmileBox, JupiterResearch and Real Networks.

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Infinium Labs: More details

Posted by Kim Peterson at 3:13 PM

Infinium Labs, a Seattle-based company developing a video game system called the Phantom Lapboard, released some details about the company's operations in a government filing today. Infinium was in the news this week when its chairman was charged by the Securities and Exchange Commission.

From the filing:

With enough financing, Infinium could start selling the Lapboard this year through its own Web site.

The Lapboard is a wireless keyboard with an integrated mousepad. The company is targeting the machine to children, teenagers and young adults.

Infinium has five full-time employees, one in research and development and four on the general and administrative side.

The company burns through $300,000 a month, and will need to raise $3.6 million over the next year to keep going.

This week, Infinium's auditors have expressed doubt about the company's ability to continue as a going concern based on its 2005 financial statements.

The company has been sued nine times in the past two years.

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Best of E3: the verdicts are in

Posted by Kim Peterson at 2:25 PM

Video game Web sites are starting to tick off the "winners" of the Electronics Entertainment Expo, the video game convention held earlier this month. Here's a wrapup of the early buzz out there: -- Game of the show: Spore. Most original game: Wii Sports. Best action game: Lost Planet. Best adventure game: Zelda: Twilight Princess. Best shooting game: Quake Wars.
-- Top 5 of the top 20 playable games at E3: Children of Mana, Pirates of the Caribbean: Dead Man's Chest, Lost Planet, Guitar Hero 2, Heavenly Sword.

PC World
-- Best of show: New controllers from Sony and Nintendo. Biggest coup: Microsoft snagging "Grand Theft Auto 4" for same-day release on the Xbox 360 and the PlayStation 3. Sony has had the exclusive sales window for the popular series.

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Some Northwest links in Milberg Weiss indictment

Posted by Mark Watanabe at 1:51 PM

From Deputy Business Editor Rami Grunbaum:

The law firm that corporate executives love to hate, Milberg Weiss Bershad & Schulman, was indicted Thursday along with two of its name partners on a litany of charges centering on alleged illegal kickbacks to plaintiffs who picked the firm to litigate their class-action securities lawsuits.

Microsoft, Infospace, Sonus Pharmaceuticals, Avenue A, Willamette Industries and most recently Boeing -- these and other local companies have felt the sting of lawsuits by Milberg Weiss (or a predecessor firm, which was not indicted). It's been the nation's leading practitioner of the securities class-action suit.

All told, according to the indictment, the firm collected more than $200 million for its work in more than 150 class-action and shareholder derivative-action lawsuits. It directed more than $11.3 million in illegal kickbacks to three "paid plaintiffs" who helped Milberg Weiss secure the coveted position of lead law firm in the suits, prosecutors said.

Did any of the alleged kickbacks to plaintiffs involve Northwest companies? The 102-page indictment identifies two for which the law firm allegedly made specific payments to a plaintiff.

-- For a suit against Heart Technology, a Redmond company that made artery-cleaning medical hardware, an unnamed co-conspirator was paid $19,859 in 1997, according to the indictment.

-- In a lawsuit against Oregon biotech company Epitope, $3,849 was paid in 1993 to one of the paid plaintiffs who was indicted earlier.

All plaintiffs in a class action are supposed to be treated equally, so such undisclosed payments for steering business to a law firm would be illegal.

Milberg Weiss has denied the allegations. A statement from the company also said it "is particularly incensed that the prosecutors decided to indict the firm itself. The firm has 125 attorneys and another 240 employees who, even according to the government, did not participate in or know anything about the matters at issue. But they will inevitably suffer serious personal and professional harm as a result of the government's actions."

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What should phone companies do with your data?

Posted by Kristi Heim at 12:04 PM

In the aftermath of a report that several major U.S. telephone companies gave customer phone records to the National Security Agency, the ACLU of Washington state has started an e-mail campaign asking people to call their phone companies and find out if their records were turned over to the NSA.

The report said AT&T, Verizon and BellSouth were participating (Verizon and BellSouth later denied they had provided records to the NSA), but that Qwest had refused the NSA's request. The ACLU e-mail campaign also urged Qwest customers to thank the company for its "principled stand." Qwest, better known by some for its poor customer service record, has been both praised and condemned for its stance.

I couldn't help thinking about the recent debate over Internet companies refusing or complying with government requests for customer information. I wonder whether this issue will have any long-term effect on Google or Qwest or the others involved.

What do you think companies should do when asked to turn over such data?

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You shall not pass?

Posted by Monica Soto at 10:37 AM

The U.S. Patent and Trademark Office decided to re-examine's "1-Click" check-out system patent after a New Zealand actor raised "compelling" concerns.

This isn't the first time the patent has landed Amazon in court. A month after its 1-Click patent was granted in Sept. 1999, Amazon sued for using a similar feature. The companies settled the lawsuit in March 2002.

In an odd twist, the patent's validity is being challenged by Peter Calveley -- among a dozen actors to provide motions for "The Lord of the Ring's" computer-generated elves and orcs.

We're sure Amazon wants to send the lawsuit into the firey chasms whence it came.

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Retired General joins Impinj board

Posted by Kristi Heim at 9:48 AM

Albert Yu

Ronald Fogleman

Seattle chip developer Impinj is shifting its market strategy into high gear. At a time when government agencies such as the Department of Defense are taking a keen interest in its RFID solutions, Impinj has snagged a retired general and former Presidential adviser for its board of directors.

General Ronald Fogleman, who served as U.S. Air Force chief of staff and commander of the U.S. Transportation Command, has joined its board, Impinj plans to announce Monday. Impinj is also announcing the appointment of semiconductor industry veteran Albert Y.C. Yu to its board. Yu, who is retired, led Intel's microprocessor development and worked closely with Impinj co-founder Carver Mead.

Impinj has taken the lead recently in supplying state-of-the art chips for RFID tags used in the retail industry. The U.S. government is also interested in using the wireless identification technology in high-tech passports, airline baggage tags and border security checkpoints.

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May 18, 2006

Temporarily, blissfully, unwired

Posted by Kristi Heim at 6:20 PM

Even hard-core Internet addicts have to disconnect sometimes. I recently returned from a trip to Africa, where I lived in a bush camp with no TV, no phone, no electricity and you guessed it ... no Internet.

Before leaving home, I had to slap my hand down when, out of some alien reflex, it tried packing the dreaded little communications device named after fruit. This device has helped me send e-mails and blog posts from far corners of the Earth, like on a train in China.

Not that it would have worked at all in the middle of the Kalahari. But even it if did, somehow the creatures just wouldn't approve. When an elephant saunters past your tent at night, it wants your full attention.

So the big news of the day, the impala got away from the lion, didn't get posted in real time. Oh well. I can live with that. But guess how I'm keeping in touch with my new friends in Botswana? You've got it, e-mail.

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Embarqing on a new mission

Posted by Tricia Duryee at 4:54 PM

Embarq announced its has officially spun out from Sprint Nextel today and started trading on the New York Stock Exchange as an independent, public company.

Embarq consists of Sprint's wireline division and is led by Dan Hesse, who has spent 27 years in telecommunications, including three years as president and CEO of Redmond-based AT&T Wireless (now part of Cingular Wireless).

We talked to Hesse right after he was appointed the position of CEO of the wireline division a year ago.

He said today that he has learned a lot since then.

"The first thing is, as much as I loved Seattle, I find that Kansas City is truly a find -- a fantastic place to live, where the people are great. We live in Kansas City and we walk to all the great shops ... the kids can walk to school. For urban living, it is the poster child."

On the business side, he said: "I've applied a lot I've learned in the wireless world to this business. When we launched, we offered a full suite of communications products, including voice, data, Internet, wireless and entertainment via satellite TV."

Specifically, he said Embarq will offer two new wireless services starting June 5.

People who have an Embarq cellphone and Embarq local phone service, will have one voice mail box. No matter where someone leaves a message -- on the landline or on the cell -- it will end up in the same box, which will also be available online.

The other wireless service will be for cellphones themselves. They will have the ability to jump seamlessly from the cellphone network to a Wi-Fi network when the user walks into her home or office.

Hesse would not say what type of technology Embarq would be using to provide this hand-off. It sounds an awful like UMA, which T-Mobile USA is also working on. Embarq resells cellular service provided by Sprint Nextel.

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Apple's new NYC store opens Friday

Posted by Kim Peterson at 4:07 PM

There's an interesting article in the Wall Street Journal about Apple's strategy in opening its own retail stores across America. (We ran the story in today's business section). The move was certainly met with some skepticism, but now no one can argue with the numbers: revenue from the stores made up 17 percent of Apple's total sales in 2005.

The story credited Apple chief executive Steve Jobs for much of the success, given that Jobs - a notorious micromanager -- was deeply involved in the initiative. Tomorrow, Apple will open a store on New York City's Fifth Avenue. The store will be underground except for its entrance: a three-story high glass cube.

Mr. Jobs, a major stickler for design details, has been intimately involved in helping to turn the stores into hip, visually memorable shopping destinations. Mr. Jobs is one of the named inventors on a patent Apple secured several years ago for the design of a signature glass staircase featured in many Apple stores. A person familiar with the matter says Mr. Jobs himself was involved in the design of the glass cube atop the new Fifth Avenue store.

In a recent interview, Mr. Jobs admitted that at one point he ordered workers to replace the metal bolts holding together the glass panels that make up the cube over the company's Fifth Avenue store. "We spent a lot of time designing the store, and it deserves to be built perfectly," Mr. Jobs said.

Note: The store will be open 24 hours, according to Curbed, which has photos from the press preview today. (It's rather odd that a store opening has its own press preview, isn't it? Chalk it up to Apple's savvy marketing.)

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Ballmer to lay out seven priorities

Posted by Benjamin J. Romano at 2:58 PM

Just got a peak at some screenshots from Microsoft's internal newsletter shedding some light on what Steve Ballmer and other top execs are telling employees in Redmond.

In a posting Monday, Ballmer invited employees to a meeting today during which Lisa Brummel, Microsoft's senior vice president of human resources, is to give details of the company's "plan to further solidify Microsoft as one of the world's best companies to work for." The new plan, Ballmer wrote, will include "new investments we are making to ensure that Microsoft employees are consistently recognized and rewarded for their passion, dedication, creativity and accomplishments." It will also emphasize "building and rewarding great leaders."

Microsoft's performance-review system has been of particular concern to many employees, who debate the topic endlessly at the Mini-Microsoft blog.

In the posting, Ballmer said Microsoft must focus on seven priorities in the next decade.

Quests and innovation: He defined quests as "big, bold visions that will guide our decisions as we drive to create the innovations that will change the world and shape our opportunities." A technical leadership team is now "working hard to finalize our Quests," he wrote, adding more news will come on this in late summer.

Live: Ballmer wrote that Microsoft "must lead the industry through the critical paradigm shift to software-based Internet services." Live is the name the company has given to a series of Internet-delivered software services.

Growth: Including financial growth "that benefits employees and shareholders."

The other priorities are agility, winning and satisfying customers, employees and leadership.

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A Whale of a deal

Posted by Benjamin J. Romano at 12:35 PM

Well, we actually don't know how big it is because Microsoft, as usual, isn't saying what it paid for Whale Communications, a Fort Lee, N.J.,-based provider of products that allow secure access to business applications like e-mail and CRM.

Microsoft announced the acquisition this morning. Company representatives said Whale's technologies will be integrated into Microsoft's broader platforms that provide secure access to business networks from personal computers, mobile devices and Internet kiosks, for example.

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It is a small world afterall

Posted by Tricia Duryee at 11:53 AM

Kristiina Helenius, press secretary at the Embassy of Finland in Washington D.C., called me this morning.

She just happened to be in Seattle over the weekend, so she caught the two-story package about how wireless technology is used around the world and what Nokia's vision is for the future of wireless technology.

In particular, what stood out to her was the 41-year-old woman who sent more than 100 text messages a day. Although she said she is very fond of text messaging herself, she said not everyone in Finland is not that much of a hyper-communicator.

Helenius said she's in town to launch of the embassy's service on the West Coast. She said many schools on the East Coast use it to learn about the environment, social change and global connection.

Check out the Nokia and Finland stories.

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Microsoft Town Hall today

Posted by Benjamin J. Romano at 11:39 AM

There's quite a buzz about an all-employee meeting at Microsoft today, and Mini-Microsoft, the blogging authority on workplace issues at the company, is hoping for big changes.

An anonymous post on the widely followed Mini blog said earlier this week CEO Steve Ballmer told employees at the company's Silicon Valley Campus that Microsoft "will announce substantial changes to the employee review system on May 18."

Microsoft's PR folks confirmed that there will be an all-employee town hall meeting today beginning at 2 p.m., but they couldn't talk about what's on the agenda.

Mini wrote today:

I'd love Microsoft to start its big internal defrag today, shrugging off the past of dysfunctional competitive reviews unattached to team success. I'd love Microsofties to stop focusing on succeeding by gaming the system and to start justly succeeding by producing great customer-focused results. ... I'd love our review and compensation system to be so straightforward and fair that it just fades into the background of everyday worklife.

Stay tuned.

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Xbox Live: 24 million downloads

Posted by Kim Peterson at 10:46 AM

Microsoft said that content on its Xbox Live online service has been downloaded 24 million times since the launch of the Xbox 360 gaming machine last November. Users are downloading things like trailers for movies and for the the upcoming "Halo 3" and "Gears of War" video games, music videos and additional features for already-released games.

I suspect that most of what's being downloaded is available free, although Microsoft does charge for certain games and game-related features. It's too early to say if these downloads are going to directly affect the bottom line for the Xbox group, but Microsoft is certainly laying the foundation for an active digital content store.

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Change on Getty's board

Posted by Kim Peterson at 10:23 AM

Getty Images, the Seattle-based image provider, said today that David Landau has resigned from its board. Landau had been on the board since 2003, and is chairman of Saffron Hill Ventures, a London-based venture capital company focused on technology and media.

Getty replaced Landau on Tuesday with another venture capitalist: Alan Spoon, a managing general partner at Polaris Venture Partners. Spoon has not yet been named to any of Getty's board committees. Although Polaris has an office in Seattle, it looks like Spoon is based out of its larger office in Waltham, Mass.

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May 17, 2006

aQuantive makes a buy

Posted by Kim Peterson at 3:36 PM

Seattle-based digital marketing company aQuantive has acquired Franchise Gator, a small company in Roswell, Ga., with 10 employees and $8 million in expected net revenue for this year. The purchase price was $21.5 million in cash.

Franchise Gator gives people information about franchise opportunities in about 100 industries. It also can handle marketing for those franchises.

I asked aQuantive if Franchise Gator was at all related to that other Gator, the company now named Claria that was once widely vilified for its online advertising-slash-borderline-spyware products. There is no connection, aQuantive said.

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Codie Awards - the local winners

Posted by Kim Peterson at 12:38 PM

The Software & Information Industry Association (SIIA) recognized two Puget Sound companies last night in San Francisco at its annual Codie Awards event, which honors "leaders and innovators" across technology. The awards received 1,026 nominations -- the most in the awards' 20-year history.

The list of winners includes in the best Web services solution category. Onvia won two awards for best online directory and business leads service and best online government information service.

Microsoft was not among the winners, but some of its competitors were. The big winner may have been, which took home three awards including the corporate achievement award.

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CEO Summit: Nearly half of Xbox 360 connected to HD TVs

Posted by Benjamin J. Romano at 11:12 AM

The video game console is looking like a bigger and bigger part of the war over the next-generation DVD format. Microsoft is backing the HD-DVD format and rival console-maker Sony is building a Blu-ray DVD player into the PlayStation 3 it's introducing in the fall..

Gates talked about how Microsoft's Xbox 360 is helping drive greater adoption of high-definition televisions, which are coming down in price, he said. Almost half of Xbox 360 users are connecting their systems to HD TVs, Gates said.

"So between that and the movies and the PC experience being projected onto that screen, we think the HD-DVD volumes are going to go up very rapidly," he said. The Xbox 360 does not come with a built in HD-DVD player.

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CEO Summit: Gates brandishes 'incredible devices'

Posted by Benjamin J. Romano at 10:41 AM

Bill Gates talked up the "incredible devices" of the digital lifestyle. In particular he showed off a portable media player "that iRiver is coming out with; it's a 199 device," Gates said, though I'm not sure if that referred to a price or a model number (couldn't find an iRiver 199 on a quick Web search).

"You can see how small and nice these things have gotten, storing thousands of songs and photos and things like that," Gates said, showing off the iPod-sized unit to his audience of 100-plus CEOs gathered in Redmond.

He also brandished the new smart phone from Motorola, whose CEO, Ed Zander, was scheduled to be in the audience. (No way to know for sure because members of the media are kept in a separate room from where Gates and the CEOs do their mind-meld.)

Gates said Microsoft is partnering with Motorola on the new phone, called the Q, due out "in the near future." In fact, Motorola is planning to roll out the phone next week, Zander told analysts in San Francisco, according to this Network World story.

Motorola says it will run Windows Mobile 5.0 and be 50 percent thinner than competitors like the Treo 700w.

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CEO Summit: Tablet PC not yet mainstream

Posted by Benjamin J. Romano at 10:36 AM

Gates on adoption of the Tablet PC, which the company took another run at recently with its viral Origami marketing campaign: "it's a phenomenon that's not as mainstrem yet as we expect it will be."

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CEO Summit: "The last mile of productivity"

Posted by Benjamin J. Romano at 8:10 AM

Bill Gates gave a wide-ranging talk to the hundred-plus CEOs gathered this morning for Microsoft's annual CEO summit.

He described the challenge of bridging "the last mile of productivity" -- a term Gates said he came up with in just the last few days -- as an impediment to maximizing the huge advancements in computer speed and storage achieved over the last decade.

"Today in a company, the idea that you basically record every meeting and you have all your training information online and that it's easy for people to access that anywhere, it's common sense. The actual cost of doing that storage is almost a rounding error," Gates said.

For some companies, "getting information into systems feels like that's the whole thing, you just get it to be digital and the magic will happen," he said. "... but unless the very user interface, the standard way that people [access] the information is very obvious to them and very well accepted into their work practice, you don't get the benefits. ... Not digging the ditch for that last mile can really block that entire dream."

Of course, Microsoft is digging the ditch. The company announced new features in its collaboration software today to improve the way information is sought and shared within a business.

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May 16, 2006

Hands-On getting thumbs

Posted by Tricia Duryee at 3:31 PM

Hands-On Mobile, the company formerly known as Mforma (and which used to be headquartered in Bellevue), has purchased Thumbspeed, a Bellevue-based company.

Hank Skorny, Thumbspeed's CEO, shared the news in a widely distributed e-mail today.

"We have some very exciting news to share," he said. "Thumbspeed has been acquired by HandsOn Mobile, previously Mforma."

Hands-On Mobile, now based in San Francisco, publishes games and other products for mobile phones. Skorny said Thumbspeed has had dramatic growth since it was founded two years ago and that it will be ehanced by the acqusition. Thumbspeed will operate Hands-On's messaging and communications group within the company. The company's 30 employees will all join Hands-On, including Skorny, who will be general manager and vice president.

Skorny said the company will offer new and innovative messaging and social applications and business models on mobile.

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Nextel Partners CEO giving back

Posted by Tricia Duryee at 2:16 PM

John Chapple, chairman and CEO of Kirkland-based Nextel Partners.

Kirkland-based Nextel Partners Chairman and CEO John Chapple, who is set to make a bundle off the upcoming sale of his company to Sprint Nextel, is making a $1.5 million gift to The Maxwell School of Syracuse University.

The gift will establish and endow the Chapple Family Professor of Citizenship and Democracy in the Department of Political Science. Chapple, who attended Syracuse, serves on the Maxwell Advisory Board and the Syracuse University Board of Trustees.

He said, in a release: "I have always been interested in politics and government, and, after graduating from SU, I discovered the vital connection that exists between the public and private sectors. George Maxwell was right when he said 'we all need to be involved in the process, if only just by staying active on the sidelines.' I hope that this gift to Maxwell will help future generations gain the awareness and understanding of that truth."

Maxwell political science professor, Robert D. McClure, has been named the Chapple Family Professor. McClure joined the Maxwell faculty in 1969, and served 13 years as Associate or Senior Associate Dean. The Chapple Family Professor will teach political science courses in the broad area of citizenship and democracy to undergraduate and graduate students.

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May 15, 2006

Amber Alerts through MSN

Posted by Kim Peterson at 4:25 PM

Microsoft said today that it will offer Amber Alerts through its MSN Alerts system, which means messages about missing children can show up on MSN's mobile, Hotmail and instant messaging products.

Wireless carriers already offer these alerts on cellphones. MSN is going to be a "secondary distributor," and, oddly enough, it will roll out the system with Digonex Technologies, an Indianapolis-based online music and auction-tracking company with operations in Seattle. Digonex will provide the hosting environment for the alerts, Microsoft said.

Microsoft is also partnering with Avanade, its joint venture with Accenture, and Digonex on the technical integration.

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Clarisonic maker wins startup award

Posted by Kim Peterson at 3:23 PM

The Alliance of Angels, a local angel investment group, gave its "Startup of the Year" award today to Pacific Bioscience Laboratories. You're probably more likely to know that company by its Clarisonic Skin Care Brush.

Finalists for the award included Escapia, which makes Web-based vacation rental software; OnRequest Images, an image company; Redfin, an online real estate broker; ScaleOut Software, which makes data storage software; and SNAPin, which makes mobile device software.

The alliance said that to become finalists companies have to receive angel or venture funding, make progress based on that funding and present its business plan to the alliance's membership in the past three years.

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Internet TV in Hungary

Posted by Benjamin J. Romano at 12:40 PM

Microsoft carved another notch on its remote control today with news that a Hungarian Internet service provider will use Microsoft TV software for an Internet Protocol television (IPTV) pilot project.

T-Online Hungary, a Deutsche Telekom subsidiary, said it picked Paris-based Alcatel and Microsoft to roll out a series of trial runs with the service, culminating in a public-market trial this summer.

Microsoft's software for delivering television over the Internet is designed to allow features such as instant channel change, on-demand video, recording and picture-in-picture. The company has been working on this effort for more than a decade, as detailed in this story from last fall.

T-Online becomes one of 15 service providers using Microsoft's IPTV software.

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Cheap gas -- on the go

Posted by Tricia Duryee at 12:21 PM

People often tell me that all they want their cellphone to do is to make phone calls.

But what about saving money?

Verizon Wireless said today that certain customers can download an application that can help them find the cheapest gas. With rising gas prices, Verizon Wireless obviously wanted to talk about it now; the service has been available since October.

The application, called MobileGates' FuelFinder, is available to Verizon Wireless customers who have "Mobile Web 2.0" service.

It lets you search for the best deal by Zip code, city or recent search, and it retrieves information on more than 110,000 stations in the country. The data is updated every two hours.

The small print: FuelFinder is available on Mobile Web 2.0-capable phones for $1.99 a month. Mobile Web 2.0 is available for $5 a month.

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Skype is free in U.S. and Canada

Posted by Tricia Duryee at 11:05 AM

Skype, the company providing voice calling over the Internet, said today that U.S. and Canadian-based customers can now make free calls to traditional landline and mobile phones in the U.S. and Canada.

Previously, Skype users in both countries were required to pay for Skype calls from their computers to conventional telephones. Free so-called "SkypeOut" calls to the U.S. or Canada will be available to until the end of the year.

The new cost structure is an obvious threat to other voice over Internet Protocol providers such as Vonage.

"Millions of consumers around the world are flocking to Skype every month, and we believe free SkypeOut calling will rapidly accelerate Skype adoption in the US and Canada," said Henry Gomez, general manager of Skype North America.

Skype said on May 1, after more than two-and-a-half years, Skype has registered 100 million users worldwide. Vonage said, as of April 1, it has more than 1.6 million subscribers.

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May 12, 2006

Peanuts, Cracker Jacks, software

Posted by Benjamin J. Romano at 10:34 AM

Microsoft is taking a baseball road trip this summer to show off its statistics-tracking software, which is apparently suited to baseball and business.

The company will demonstrate Microsoft Office Business Scorecard Manager 2005 in hosted skybox events at Major League ballparks across the country. The Web-based software, launched last fall, tracks business goals, intelligence and performance indicators.

Microsoft has built a baseball scorecard that tracks pitching and batting performance, which it demonstrates to business executives invited to the games.

The company's news release had a link to a schedule of the events, but I couldn't find it this morning. I wonder if they'd be able to get any execs to come to a Mariners game.

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May 11, 2006

Ballmer hints at Office, Vista prices

Posted by Benjamin J. Romano at 2:31 PM

Microsoft CEO Steve Ballmer, speaking at the Churchill Club in Santa Clara, Calif., said the forthcoming version of Office for consumers will be priced lower than the current version, according to a Dow Jones dispatch from the event.

No word on whether the lower-cost Office Ballmer referred to would include Outlook. Microsoft announced prices for Office 2007 in February. A $149 version for students and home users will not including Outlook, the e-mail and calendar program.

Likewise, the Vista operating system -- due out for consumers in January -- will not cost more than the version on the market now. "If you want to do the same things, you'll pay about the same" for Vista, he said, according to Dow Jones.

He also said Microsoft aims to become the leader in online advertising, but it won't happen overnight. It should be viewed as a five-year goal for the company, which trails Google and Yahoo!.

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Cell Therapeutics still under scrutiny

Posted by Mark Watanabe at 2:29 PM

A report from Deputy Business Editor Rami Grunbaum:

Cell Therapeutics shed a little more light today on the investigation into its business practices by the U.S. Attorney's Office.

In its quarterly SEC filing, the company reports it is providing documents and holding periodic meetings with the U.S. Attorney's Office, and still "cannot predict whether [the government] will bring formal criminal enforcement proceedings."

The investigation has been under way since last year, and centers on the company's promotional practices relating to Trisenox, a drug approved for one cancer but used by doctors "largely for uses not approved by the FDA," according to the company. In March, Cell Therapeutics for the first time disclosed that the investigation stemmed from a whistleblower lawsuit, also called a "qui tam' suit, filed under seal by a private person on behalf of the government.

Today's filing adds that "based on information currently available to the company, we believe that the [U.S. Attorney] may recommend to the Department of Justice that the government intervene in the qui tam action, as is its right, and assume the conduct of this lawsuit."

It continues: "One of the primary claims that might be pursued would be that CTI violated the Federal False Claims Act by receiving reimbursement from Medicare for improper off-label use of Trisenox or otherwise ineligible sales of Trisenox."

The company says it's not clear what portion of its Trisenox sales might be challenged under this legal theory, so it can't estimate any potential damages. But it notes that under the False Claims Act, "damages can be trebled and separate fines imposed for each violation."

Trisenox brought the company sales of about $40 million from January 2004 through July 2005, when it sold the drug rights to another company.

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T-Mobile USA adds 1 million in Q1

Posted by Tricia Duryee at 11:00 AM

T-Mobile USA released some financial information today based on parent Deutsche Telekom's full release very early this morning.

In the first quarter, T-Mobile USA said it added 1.04 million new customers, up from 957,000 in the period a year ago, but slightly down from the 1.39 million added in the fourth quarter. The carrier, the fourth largest in the U.S., has 22.7 million total subscribers.

Postpay churn, which calculates only those subscribers with contracts, fell to a record low 2.1 percent in the first quarter, the company said. When pre-paid subscribers are included in the percentage of customers leaving, it rises to 2.7 percent.

The company said results are being driven by network improvements. In the past 12 months, it has added 3,700 new cell sites.

"We started the year strong, adding over one million high quality new customers," said T-Mobile USA President and CEO Robert Dotson. "T-Mobile customer loyalty also continues to increase, resulting in record low churn aided by the benefits of ever increasing network quality improvements -- while continuing to reap the benefits of a 56 percent expansion in our coverage footprint last year."

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Clearwire files $400 IPO

Posted by Tricia Duryee at 10:53 AM

Wireless magnate Craig McCaw is taking Kirkland-based Clearwire public with a planned $400 million initial public offering, according to a filing with the Securities and Exchange Commission today.

Clearwire, a wireless broadband provider operating in 27 U.S. markets and in Europe, would trade on the Nasdaq under the ticker symbol CLWR.

The prospectus filed today did not indicate how many shares the company plans to offer or at what price. Clearwire intends to use proceeds from the offering to expand its network and to acquire additional broadband spectrum, and for other general working capital purposes. The company declined to comment further on the filing.

For more, see today's Web story.

The two most recent stories we've written on Clearwire deal with two partnerships: one with AOL to resell its WiMax-like service; and one with Bell Canada to roll out voice over Internet Protocol to its 27 markets.

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E3: Now taking your questions

Posted by Kim Peterson at 10:10 AM

Got a burning question about video games? Or just want to vent about where the industry is headed? I'll be answering your questions live tomorrow at noon from the Los Angeles Convention Center.

Click here to send in a question ahead of time. The best question wins, uh, my grudging respect.

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E3: PS3 high-def called into question

Posted by Kim Peterson at 7:29 AM

The lower-priced, $499 version of Sony's PlayStation 3 lacks support for HDMI, which has led to questions about whether that version will be able to play true high-definition, Blu-ray movies. HDMI is basically the high-definition connection between an audio or video source and a monitor or television.

In an interview with BBC News, Sony executive Phil Harrison said that the "technical method of extracting audio and video" from the devices is slightly different.

Justin Finnegan, a Sony spokesman, explained it to me this way yesterday: The $599 version of the PS3 will have one cord that handles audio and video and connects the machine to a television. The lower-priced version will have separate cords for audio and video. Both machines will be able to play high-definition video in the Blu-ray format.

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E3: "Booth babe" report

Posted by Kim Peterson at 7:00 AM

A silly side issue has been playing out at the E3 conference. This year, the show's organizers have asked that the models hired by companies -- the so-called "booth babes" -- tone down the skimpy outfits. In previous years, some companies have gone so far as to re-create a bikini beach volleyball game in front of the appreciative and mostly male crowd.

The models are showing less skin this year, for sure, but the clothes are just as tight. And companies are getting creative: bikinis have been replaced by nurses' outfits, for example. One company even hired some girls to stage a fake protest to the new rule outside the Los Angeles Convention Center.

Here are some photos of the models on the Myspace page of a guy who seems to have done nothing else yesterday except get his picture taken with them.

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Seven digits are enough for now

Posted by Tricia Duryee at 6:14 AM

Although telecom is constantly pushing so many new technological boundaries these days, we still have to pay attention to some low-tech things, like area codes.

The Washington Utilities and Transportation Commission (UTC) said Wednesday that after taking many conservative messures, the state will not have to add a new area code until 2010, or three years later than expected.

It said there are enough unused numbers available in the "360" area code region to last until 2010. Once those numbers run out, new customers would be assigned a new area code, no matter where they lived in Western Washington. This means that, for now, customers won't have to dial 10 digits if they're dialing in the same area code.

Typically, new area codes have gone to designated geographic areas, but this time, a new code will be "overlaid" across all of Western Washington -- forcing customers to dial 10 digits even if they're calling a number in the same area code.

"Every time a new area code is added, there are disruptions and potential costs to businesses and citizens, so we want to push that date out as far as possible," said UTC Chairman Mark Sidran. "Our staff and the companies have worked diligently to conserve the existing stock of 360 numbers, and their hard work has paid off well for Washington telephone customers."

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May 10, 2006

Fierce 15 Winners

Posted by Tricia Duryee at 3:37 PM

FierceWireless, an online publication, announced its Fierce 15 emerging companies in the wireless industry for 2006.

As Fierce says, it's an exciting time to be in the industry -- subscribers continue to sign up for wireless services, operator have healthy financial statements and competition is robust.

But none of this excitement is coming out of the Northwest.

The winners include: Apertio of Bristol, U.K., Beceem of New Delhi, India, ClairMail of Novato, Calif., Digital Chocolate of San Mateo, Calif., go2 of Irvine, Calif., Helio of Westwood, Calif., IPWireless of San Bruno, Calif., mBlox of Sunnyvale, Calif., MobiTV of Emergyville, Calif., mPortal of Vienna, Vir., RedKnee of Toronto, Ruckus of Mountain View, Calif., SkyPilot of Santa Clara, Calif. and SlingMedia of San Mateo, Calif.

The companies mentioned fall into several categories spanning from WiMax equipment to portal services for wireless carriers to back-end billing infrastructure and social networking.

If at least one Seattle startup should have made the list, what do you think it should have been?

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E3: Nintendo Wii hands-on

Posted by Kim Peterson at 8:49 AM

I got an advance look at Nintendo's next-generation Wii console on Monday, and got to play several games slated to be released in the Wii's launch window. Most of my time was spent just getting used to the new controller, which is a complete departure from the past and unprecedented in its innovation.

You aren't hearing much about this, but the Wii requires that you attach a sensor bar to your television. Nintendo hasn't quite figured out how to attach the bar, which is thin and several inches long, to the TV yet. Adhesive seems messy, but I can't think of a better alternative.

Anyway, once the bar is attached, it works very well with the accelerometers in the Wii's remote controllers. There are two parts to the "nunchuck" controller, connected with a wire. You can just use one part for certain games, like "Wii Sports: Tennis" and it looks pretty much like a wireless remote control. It has a speaker embedded in it -- a very cool feature. The second part can be attached for more complex games, such as "The Legend of Zelda: Twilight Princess."

The controller is very sensitive to motion. You just need to flick your wrist and it will respond, though the first impulse is to wildly swing it around. It will take some time for gamers to get used to just how different the controller is, but the design could lead to new kinds of games not possible on consoles before.

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E3: Microsoft's kidney punch to Sony

Posted by Kim Peterson at 8:28 AM

I think one of the most significant announcements to come out of E3 was that Sony has lost its exclusive lock on Rockstar Games' "Grand Theft Auto" series.

Since the game's original debut in 1998, GTA has been synonymous with the PlayStation and the PlayStation 2. The game didn't hit blockbuster status until "Grand Theft Auto 3" in 2001, which was much improved over its predecessors with an open-ended, non-linear playing structure. It generated instant controversy for its high levels of violence and became a cult hit. That game, and its several sequels, were released first on the PlayStation 2 and only came to the Xbox several months later. A version for Sony's PlayStation Portable came out last year, and did so well that Sony will release the same game for the PS2 this year.

Yesterday, Microsoft announced that it will have a seat at the table next to Sony for "Grand Theft Auto 4," due to be released in October 2007. The game will come out for the Xbox 360 and the PlayStation 3 on the same day. To celebrate the announcement, Xbox head Peter Moore sported a fake "Grand Theft Auto IV" tattoo on his left bicep.

Just as an aside, the influence of "Grand Theft Auto" is evidenced by this skit that appeared on Dave Chappelle's show on the Comedy Central network. It's instantly recognizable to anyone who has played the game.

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May 9, 2006

E3: Microsoft's announcements

Posted by Kim Peterson at 3:40 PM

Four main pieces of news from Microsoft's E3 briefing today.

1. Microsoft is unveiling a "Live Anywhere" platform with the launch of Vista that will integrate Xbox Live with the Windows and Windows Mobile operating systems.

2. The company is aiming to sell 10 million Xbox 360 consoles before the first new system from Sony or Nintendo hits store shelves.

3. There will be 160 Xbox 360 games out by the end of this year

4. There are currently 3 million Xbox Live members, and that number is projected to double by this time next year

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E3: Nintendo wrap-up

Posted by Kim Peterson at 11:05 AM

Best you're-not-getting-any-news-today line: "Our purpose this week is not to fill your left brain with information but to fill your right brain with inspiration." -- Reggie Fils-Aime, executive vice president for sales and marketing at Nintendo of America.

And that's how the Nintendo press briefing began. There was a small amount of news: the company's next-generation console, named the Wii, will be out sometime in the fourth quarter. But there were no specifics on launch date or pricing.

Nintendo executives spent much of the briefing demonstrating how to use the Wii's novel controller in different types of game settings. In an upcoming tennis game, for example, a player would treat the controller like a tennis racket -- swinging a forehand or backhand to hit a virtual ball. For many in the audience, it was a first look at the new controller and the decision to make most of the briefing a giant demonstration was a smart one.

Fils-Aime also poked some fun at the largely negative reaction to the choice of "Wii" as a name for the console, which was code-named "Revolution."

"We want to thank everyone who wrote good things about it the first time you heard it," he said. "Both of you."

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E3: Reactions to Sony's news

Posted by Kim Peterson at 8:20 AM

Sony said it will begin selling the PlayStation 3 in the U.S. on Nov. 17 at two price levels. A system with a 20-gigabyte hard-drive will cost $499, and a 60-gigabyte version will cost $100 more. See this story for more from the company's E3 press briefing yesterday.

Reaction to the high price has been predictably harsh. Here are some other opinions on the news:

Several blogs are pointing to a chart in the PlayStation 3 press release that suggests the lower-priced, $499 model will not have built-in Wi-Fi or SDMI and memory-card support.

With the PS3's graphical prowess on display at E3 looking sadly analogous to the 360's rendering abilities and the Wii likely to price at less than half of what a jacked PS3 costs, not to mention that there will only be a million consoles available worldwide in November, it certainly appears that Sony is doing absolutely everything to foul up this launch. -- Kotaku

Joystiq wonders about the loud rumbling at Sony's briefing after it announced a motion-sensitive controller:

The source of the noise was undoubtedly the countless gamers rolling their eyes in unison at a new '"innovation" that, if you're at all interestied in gaming, is unlikely to have struck you as very innovative at all.

Gamespot's E3 blog:

I can only imagine what Microsoft and Nintendo are thinking at this moment. I just can't believe anyone could think that was a slam dunk for Sony. Compared to the sheer excitement from last year's conference, the reaction this time around was a lot more subdued.

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May 8, 2006

E3: Buildup to Sony's announcements

Posted by Kim Peterson at 3:44 PM

CULVER CITY, Calif. -- There's a large crowd here at the reception before Sony's press briefing begins at the Sony Pictures campus. There are tables with mini hamburgers, cheese sticks, fried ravioli, nachos and corn dogs. Bartenders are serving child-size cups of soda or full-size bottles of beer, and from the looks of it the beer is the more popular offering.

There are also tables with ice cream, popcorn and giant packs of KitKat, M&Ms and other candies. Sony told all attendees to bring their PSP handheld players, and so lots of people are sitting on sofas playing them. Press briefing starts at 4 pm.

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Report: Vista security good for users, not for vendors

Posted by Benjamin J. Romano at 2:29 PM

A new analysis of security features on the forthcoming Windows Vista operating system has good news for users and bad news for some third-party vendors.

"Windows Vista will bundle many security features into its operating system that had previously been sold as separate products," the Yankee Group said in a report out today. "The cumulative effect of Microsoft's changes means that security features that Vista will enable by default ... will make it easier for users to protect themselves from everyday security threats."

The Windows security aftermarket is worth a cumulative $3.65 billion, but some segments will face greater competition from Vista's built-in features than others, according to the report.

Anti-spyware vendors could see a high impact to their $440 million market. "We believe Vista's built-in anti-spyware capabilities will be more than sufficient for the vast majority of enterprises," the Yankee Group wrote. That could leave companies including Symantec, McAfee, and particularly stand-alone vendors Lavasoft and Webroot, in the lurch.

Anti-virus vendors, who do the vast majority of business in the Windows security aftermarket ($2.6 billion), will face relatively low impact from Vista, Yankee Group said.

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Pay-what-you-will model nets entrepreneur award

Posted by Benjamin J. Romano at 1:50 PM

Brian Livingston, Seattle-based editor of the Windows Secrets newsletter and author of numerous computer books, won an award for the unusual way he charges subscribers to his twice-monthly e-mails.

Pay what ever you want, Livingston tells subscribers, and 17,000 out of approximately 140,000 have done so. Their contributions range from $5 to $100 apiece.

That model caught the attention of MarketingSherpa, a research firm that named Livingston "Entrepreneur of the Year" at its New York City conference on Internet content subscription sales today.

In a news release announcing the award, Livingston said the contributions from more affluent readers of his newsletter -- described as a survival guide for Windows users -- "subsidize those who may be on unemployment but still need to keep up their Windows skills."

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E3: L.A. without the traffic

Posted by Kim Peterson at 11:33 AM

LOS ANGELES -- The streets here are eerily empty this morning. I've never seen such light traffic here. Two taxicab drivers I spoke with said it's because of high gas prices. Commuters are being forced to look for other means of transportation. Taxis no longer cruise the streets downtown, looking for customers, said one. Now, they just wait at hotels so they can save gas.

L.A. without traffic? Are pigs going to fly here next? And, if so, can commuters hitch a ride?

Here are some E3-related links to kick off the week:

Predictions from Wired's gaming blog:

Microsoft will take advantage of the fact that people have piled into their conference to hear about "Halo 3" by spending 45 minutes talking about Windows Vista. We're all basically doomed -- we know that Vista is a major focus of Microsoft's conference, and I am assuming that I will have to do something to keep myself awake.

Kotaku: Sony's E3 ad campaign hits the streets.

Next Generation: The 50 games you need to see at E3.

An L.A. Convention Center security guard gives sage advice to the writers of Joystiq: "Watch out for nerds."

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EA clear leader in mobile

Posted by Tricia Duryee at 11:04 AM

Although Kim Peterson is reporting from E3 beginning today, I thought I'd share this survey regarding games for the mobile market.

Seattle's M:Metrics said today that EA Mobile is the clear leader -- 28.8 percent of mobile games being downloaded are coming from EA's mobile game house.

Following EA Mobile, is Glu Mobile with 9.9 percent market share, Gameloft at 9.1 percent and Hands On Mobile at 7.2 percent. Hands On Mobile was formerly called Mforma and was based in Bellevue until it relocated to San Francisco. Chairman Dan Kranzler is still in Bellevue.

Seamus McAteer, chief product architect and senior analyst, M:Metric, said: "For the first time, we can offer a clear perspective on the mobile games market. This data finally puts an end to the vast amount of speculation about how the mobile games market stacks up."

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May 5, 2006

Loudeye's sublease deal

Posted by Kim Peterson at 2:41 PM

Seattle-based digital music company Loudeye has sold its U.S. operations to entertainment directory provider Muze for $11 million and, though it will continue as a publicly traded company, with a handful of executives here, about 40 employees are heading to Muze.

Today, Loudeye said in a regulatory filing that Muze is going to sublease 42,000 square feet at Loudeye's offices on Rainier Avenue South in Seattle, and will pay half the rent, or $39,000 a month. Muze is going to sublease half of each office, server room, storage and common space.

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May 4, 2006

SAS: Microsoft officially acquires Massive

Posted by Kim Peterson at 3:04 PM

Robbie Bach, the president of Microsoft's Entertainment and Devices Division, announced today at the Strategic Account Summit the acquisition of Massive, the New-York based company that's creating ways to place advertising in video games. Expect to see more product placement in Xbox 360 games, such as on billboards in car-racing games.

Financial terms of the deal were not announced. Microsoft said Massive employees will stay in their current offices in New York, London, Los Angeles, Chicago, San Francisco, Paris, Sydney, Cologne and Toronto.

Here's our story on the possible deal, written in late April when rumors of the acquisition had surfaced.

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InfoSpace's biggest challenge

Posted by Tricia Duryee at 3:01 PM

InfoSpace's CEO Jim Voelker spoke to a roomful of business folks at the Bellevue Courtyard by Marriott this afternoon as part of a Bellevue Chamber of Commerce event.

After his presentation, he fielded questions from the crowd. A couple of them evoked thoughtful answers from the Bellevue company's leader.

One question was on how Bellevue's economy affected the company. He said the company's biggest challenge when it came to the local economy was recruiting talent to the area.

"As wonderful of a place as the area is, it's hard to get people to move from Silicon Valley to here," he said.

He listed the area's relatively small technology community and rising real estate costs as two of the difficulties.

Another person asked Voelker, whose company sells both content online and on mobile phones, about the likelihood of Microsoft and Yahoo! creating a partnership together.

"Who thinks that will work? Why would 100 smart people from one side and 300 smart people from the other side be smarter than Google?" he wondered. "It is clear that Google has those guys on the run."

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Mossberg doesn't heart the UMPC

Posted by Kim Peterson at 10:45 AM

Walt Mossberg, the Wall Street Journal's influential personal technology columnist, gives no love to the Ultra-Mobile PC. You might recognize this new Windows computer by its code name, Origami. Samsung is selling the first of these computers next week.

Unfortunately, the Samsung Q1 is so deeply flawed in key respects that it amounts to little more than a toy for techies. For everyone else, it's impractical and frustrating. Unless the UMPC can evolve significantly beyond this first effort, it may wind up as a footnote in the history of personal computers, rather than an exciting new category.

The review comes just as Apple debuts new commercials touting another Mossberg review, one in which he says the iMac G5 is the finest desktop PC on the market at any price.

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Microsoft and Qualcomm

Posted by Tricia Duryee at 10:25 AM

In another partnership involving well known names (see item below), Microsoft announced today that it will work with Qualcomm, the maker of wireless chipsets, to build a more affordable device that will take less time to get to market.

The announcement, although very technical, is significant for Microsoft, which is trying to become more competitive in the wireless space.

Microsoft and Qualcomm will integrate the Windows Mobile operating system into Qualcomm's dual-core architecture chips. By integrating the two and testing it ahead of time, it will remove some of the custom development that it previously took to build a chipset.

Dual-core means that both the phone functions and the PC-like functions in a device will reside on the same chipset, which also makes it cheaper to produce the phone. The chipsets are for 3G technology, which provide broadband speeds. Qualcomm makes chipsets for CDMA technologies provided by carriers such as Verizon Wireless and Sprint.

Microsoft and Qualcomm expect to begin offering support for the Windows Mobile chipsets in the second half of this year. The phones are forecasted to be available in 2007.

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Clearwire and AOL

Posted by Tricia Duryee at 10:13 AM

Clearwire, the Kirkland-based company led by Craig McCaw, said today that it was partnering with America Online to offer AOL customers a wireless broadband service.

The service, to be called "AOL High Speed -- Powered by Clearwire," will be initially be available in Daytona Beach and Jacksonville, Fla., as well as Stockton and Modesto, Calif.

The announcement is Clearwire's first major reseller partnership. Currently, the service can be purchased in company-owned stores and kiosks and through Best Buy in markets where it's available.

The service, which uses a WiMax-like technology and requires a modem, will be available for as low as $25.90 a month, the two companies said.

"Clearwire's wireless high-speed service brings a differentiated offering to AOL members moving to broadband," said Joe Redling, president of AOL's Access Business. "This innovative approach to broadband access offers consumers additional levels of freedom and flexibility in how and where they experience AOL's content and services -- and stands to be a promising feature for new consumer segments."

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May 3, 2006

Google Seattle to open this month

Posted by Kim Peterson at 6:16 PM

Google is opening a "huge new office" in Seattle at the end of this month, according to a spokeswoman. This will likely be in Fremont, an area that is home to an increasing number of tech companies.

Google has been working out of offices in Kirkland and has been looking for more space to expand. The company likes to snap up University of Washington graduates and employees from a certain software company in Redmond, and a Seattle office would be welcome news to those who aren't completely enthralled with the Eastside.

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SAS: The world's richest man

Posted by Kim Peterson at 4:25 PM

Bill Gates doesn't really want to be on the top of one particular list.

When Donny Deutsch asked him about his financial status, Gates said he wished he wasn't the world's richest man.

"There's nothing good that comes out of that," he said.

When Deutsch suggested, however, that Gates wouldn't want to be No. 2 on the list, Gates disagreed.

"No," he said. "You get more visibility as a result of that."

At the end of the interview, Deutsch asked why Gates wouldn't consider running for president.

"For every reason," he said. "I wouldn't like it, I wouldn't be elected, I'm better at what i'm doing. That's a very unusual job, and the work I can do, whether it's time spent on Microsoft or the [Bill and Melinda Gates] Foundation, all my learnings have built up to be able to operate in that way and so I'm going to stick to what I know."

Gates also said that he doesn't have an iPod and that he doesn't carry a wallet around that often. I suppose that's how someone stays on top of the richest man list.

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SAS: Being Bill Gates

Posted by Kim Peterson at 4:05 PM

In his interview, Donny Deutsch observed that Gates is the person that the president of China visited first before heading to the White House.

"We gave him a dinner," Gates joked.

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SAS: Lavender shirts are the new hotness

Posted by Kim Peterson at 3:41 PM

Donnie Deutsch is interviewing Bill Gates onstage at the SAS event. They're both wearing lavender shirts, which looks fairly odd.

"I see the audience didn't get the lavender shirt memo," Deutsch joked to the audience.

It took a few seconds for Gates to catch what was said, and then he looked down at his shirt and smiled.

"I didn't know what I was wearing," he said.

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Dvorak: 8 signs Microsoft is DIW

Posted by Kim Peterson at 3:09 PM

DIW is "dead in the water," as John Dvorak describes it in his column today. Here's the short roundup of the signs:

1. Vista OS now missing holiday season.
2. Lack of anything new in Office 2007.
3. MSN entering advertising selling business.
4. MSN search engine lacks innovation.
5. Shortage in Xbox 360 supply.
6. Tablet-based computing hasn't hit mainstream.
7. .Net framework under threat from open source.
8. Preoccupation with Google

He writes:

This only scratches the surface of the Microsoft malaise. Now if the investment community sees light at the end of this tunnel good for them. I sure don't see it. I see a company that has settled in and has become big, profitable, and unexciting, lacking real focus or spirit.

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Analyst calls ADIC purchase smart

Posted by Tricia Duryee at 2:39 PM

Following the $770 million acquisition of Redmond-based ADIC by Quantum yesterday, an analyst group released a report looking at how the data storage industry is shifting.

The 451 Group said it believes enterprise data is undergoing significant structural changes because of software technologies currently under development. The change presents opportunities for young startups and vendors to maintain their marketplace position and defend against large and small competitors, the report said.

The report, written by Simon Robinson, head of Storage research at The 451 Group, was released today. Simon also said these new technologies will lead to a flurry of merger and acquisition activity.

Yesterday's announcement of Quantum's intention to acquire ADIC is a good example, he said, adding:.

Users will increasingly demand integrated platforms, not more stand-alone products. The "smart" money should be on those vendors that can combine a wide range of integrated capabilities that span the entire data protection lifecycle with a common, central point of management. For example, Quantum's proposed acquisition of ADIC is partly motivated by its desire to achieve just this. Quantum is hoping to stay relevant in the game by combining high-value data protection software such as virtual tape and data reduction with its legacy commodity disk and tape hardware platforms.

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Neah Power goes from blue chips to Pink Sheets

Posted by Mark Watanabe at 2:09 PM

Deputy Business Editor Rami Grunbaum contributes this report about Neah Power, the Bothell company working on energy systems for small devices:

Neah Power Systems, which is working on a miniature fuel cell to replace batteries in electronic devices, raised most of its first $21 million in financing from what you might call blue-chip venture-capital firms: Alta Partners, Intel Capital, Seattle's Frazier Technology Ventures and the like.

Now it has gone where few companies dare to tread: the Pink Sheets, a stock market largely populated by enterprises with dubious histories and equally dubious prospects.

After engineering a merger with a publicly traded shell company last month, Neah Power this week filed its Securities and Exchange Commission paperwork

Turns out the company has more than 100 million shares issued, meaning that the stock's rapid run-up this month ­-- from less than $1 to above $3.50 on Monday -- lifted its market capitalization to more than $350 million.

That's a lot for a company with "little or no revenue," almost no cash except $2.1 million from a last-minute private placement, and a need for at least $15 million to $20 million to continue its R&D through the end of the year, according to the filing.

It's a bit of a reach, but compare Neah Power's market cap with Northstar Neuroscience, which is slated to go public this week and would become the first technology IPO in Washington state since late 2004. At $12 per share, the low end of its estimated price range, Northstar would be worth $276 milllion -- and that's with something like $100 million in cash on hand after the IPO.

Stock Web sites typically don't carry much info on Pink Sheet stocks beyond the trading price. Analysts don't cover the stocks. All that makes them wildly unpredictable -- Neah Power's filing acknowledges that both the Pink Sheets (and the OTC Bulletin Board, to which it hopes the stock can graduate) are subject to "extreme price and volume fluctuations... [that] are often unrelated to operating performance and may adversely affect the market price of our common stock."

And indeed, after cresting at $3.70 on Monday, the stock was down to $2.80 at mid-day Wednesday. The shares trade under the ticker NPWS.

Unlike selling company shares to the public in an IPO, Neah Power's approach of going public with a reverse acquisition won't put any new capital into its coffers. It does give management a liquid currency, but one with volatile value.

The backdrop for Neah Power's venture into the Pink Sheets is a generally weak outlook for small tech IPOs.

Mark Heesen, president of the National Venture Capital Association, wrote recently that "we are becoming increasingly concerned about the economic implications of the lackluster IPO market for venture-backed companies." His group recently noted that while acquisitions of venture-backed companies last quarter were at their highest level in five years, there was a paltry number of IPOs and their average value was down to 2002 levels.

Evidently, the owners of Neah decided finding a buyer was not their best option, and trying an IPO was not an option at all. The conventional approach would have been to seek more VC funding. But instead, they are proceeding down a less well-charted road.

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SAS: Google running circles around Microsoft?

Posted by Kim Peterson at 9:47 AM

It didn't take long for the Microsoft-Google rivalry to be mentioned at the Strategic Advertising Summit at Microsoft this morning.

Rishad Tobaccowala, chief executive of the DeNuo consulting company, told the packed audience that rapid iteration is one of the reasons that "Google is running circles around Microsoft."

Jim Stengel, the chief marketing officer of Procter & Gamble, asked Microsoft executive Joanne Bradford if Tobaccowala was allowed to stay on the stage after making that remark.

"It's all right, it's all right," she said. "I'm not sure how he's getting to the airport, though."

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May 2, 2006

Amazonian gift

Posted by Monica Soto at 5:14 PM founder and Chief Executive Jeff Bezos donated nearly 30,000 shares to one or more charities, according to a new regulatory filing.

At yesterday's closing price of $34.38, the stock is worth north of $1 million. No word on who got the loot.

Our vote? Trekkies Anonymous.

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What in the Wii?

Posted by Kim Peterson at 10:45 AM

IGN talks with Perrin Kaplan, vice president of marketing and corporate affairs at Nintendo of America's Redmond headquarters, about why the company picked the name Wii for its next-generation console, which had been code-named Revolution.

IGN: Revolution seemed to be a pretty cool code-name that a lot of our readers liked. Why abandon it?

Kaplan: You know, I thought it was a neat name, too, but it's not as fitting for what we're trying to do. You think about Google being an unusual name. You think about Virgin Airlines. Amazon. Napster. All those. I think it's as unique as those. They aren't just unique, but loved names for places that we all know. And I think this is more fitting and the two i's work on a bunch of different levels. It looks like two people with heads who can play, which is the inclusive nature of everybody. It looks like the controllers. So for us it looked like a couple of different levels.

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Cingular to take AT&T name

Posted by Tricia Duryee at 10:20 AM

When SBC Communications, part owner of Cingular Wireless, announced it was buying AT&T, it said it would be renaming the wireless services, too -- back to the old AT&T Wireless name.

If you can remember, AT&T Wireless was the Redmond-based company started by Craig McCaw as McCaw Cellular Communications. AT&T Wireless was then acquaired by Cingular for $41 billion in late 2004.

Advertising Age reported today that replacing the orange jack for the "stodgy moniker" AT&T Wireless could be a huge mistake.

"Such a move could conjure up images of the rotary dial and cause so much confusion that experts estimate it may take another $2 billion in marketing expenses to explain the changes to consumers," Advertising Age said.

The article went on to say that AT&T, SBC or Cingular (it's all the same now) argued that the $4 billion spent building Cingular won't be wasted because it has "created a brand that has led to a customer base which is the largest in the U.S.," according to a spokesperson. The company also claims in the story that the single brand for all AT&T services will "eliminate customer confusion and make a much more elegant solution."

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Seattle tops video gaming list

Posted by Kim Peterson at 9:57 AM

Seattle is the top video gaming city in the United States, according to Sperling's BestPlaces and Microsoft. Bert Sperling, who runs the BestPlaces city guide site, conducted a survey of video game playing among major cities and found that the top 15 U.S. gaming cities, in order, are:

Minneapolis-St. Paul
Washington, D.C.
St. Louis
San Diego
San Francisco
New York

There are some odd things about this survey. First, Sperling measured the number of video game systems per household, including Xbox 360, Xbox, PlayStation 2, GameCube and Windows-based PCs. Why didn't he include any of Nintendo's handheld systems or Sony's PSP? And what percentage of Windows PC owners actually play video games on their machines?

Sperling also measured the number of games purchased, the number of game rentals and the "frequency of online gameplay via Xbox Live or Windows games." So online gameplay over a PS2 doesn't count?

A Microsoft spokeswoman said that the company did not pay Sperling to do the survey, and that he came up with the methodology and the questions on his own. So make of it what you will.

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May 1, 2006

Amazon drops Google for Microsoft

Posted by Kim Peterson at 3:35 PM

Head over to Amazon's search page and you'll see that the Web searches on the site are now being performed by Microsoft's engine. Amazon's Alexa search engine says it is now being powered by Windows Live.

The switch to using Microsoft from previous partner Google was reportedly done over the weekend and with little fanfare. It's an interesting move and a big win for Microsoft at a time when its search engine is losing ground in the market.

Why would Amazon do this? After all, Chief Executive Jeff Bezos is one of six Series A investors in Google, according to the S-1 papers that Google filed back in April2004. The filing doesn't say how much of Google that Bezos owns, but as a Series A investor it's probably safe to say that he's made a pretty penny.

Perhaps this is Amazon's response to the departure of Udi Manber, formerly the head of its unit, who left for Google in February.

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RIM, 0; Microsoft, 2

Posted by Tricia Duryee at 1:29 PM

The Wall Street Journal reported today that Research In Motion has been hit with another patent-infringement suit, this time seeking to halt sales of its popular BlackBerry e-mail devices in the U.S.

Visto, a maker of wireless e-mail software, has sued RIM over four Visto patents. The closely held Redwood Shores, Calif., company said it's seeking an injunction and monetary damages against Waterloo, Ont.-based RIM.

The much discussed suit a small Virginia company called NTP lodged atainst RIM provoked concern among BlackBerry users that their service would be shut off in the U.S., which led them to start considering products from other providers, including Visto, Good and Microsoft.

RIM chose to settle the NTP case by paying it $612.5 million.

But in addition to its legal woes, RIM also has to deal with competition that's catching up. The word is that the Motorola Q, expected to be the device closest yet to a BlackBerry, will launch May 22 after a number of delays.

Engadget is reporting that it will likely be announced at a press conference with Motorola and Verizon Wireless in New York.

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Soaring pay

Posted by Monica Soto at 12:25 PM

How much did Expedia executives make last year? The company filed its proxy today with the Securities and Exchange Commission.

In addition to a $1.1 million salary and bonus, CEO Dhara Khosrowshahi's pay package included $31,434 for personal use of an aircraft jointly owned by Expedia parent IAC.

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Loudeye sells U.S. operations

Posted by Tricia Duryee at 11:39 AM

Seattle-based Loudeye said today that New York-based Muze is acquiring its U.S. operations in an asset purchase worth $11 million in cash.

According to a release this morning, the transaction closed Sunday.

Muze will assume Loudeye's Web and mobile digital music commerce services operating on Loudeye's U.S.-based platform. The platform also can offer portable music subscription services to its customers. Customers using the service include O2 Germany, AT&T Wireless (now Cingular Wireless' mMode Music) and BurnLounge.

The acquisition by Muze also includes Loudeye's encoding services, which includes EMI Music customers and music sound samples services, along with its hosting and Internet radio services.

"This transaction is a continuation of our restructuring efforts to streamline operations, align technology platforms and significantly reduce our cost structure. The cash infusion from the deal also strengthens our balance sheet," said Mike Brochu, Loudeye's president and chief executive.

More information will be provide during the company's first-quarter 2006 operating results, which will come out May 9.

The asset acquisition follows a stream of bad news for the company, which included auditors questioning whether it could continue as a going concern and an announcement that a deal to create a custom digital music service for a North American retailer had fallen apart.

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The other white broadband

Posted by Tricia Duryee at 10:53 AM

We get pitched stories a lot of different ways. Here's one approach that recently caught our attention:

"For a long time, people didn't think about pork much. It took a huge ad campaign and an ingenious tagline, 'the other white meat,' to generate a real awareness of pork. Right now, we're seeing a similar occurrence in broadband."

The pitch goes on to say that everyone has heard of DSL, cable and Wi-Fi, but only now are people beginning to learn about WiMax -- perhaps like how people needed an ad campaign to become more aware of pork.

The email is from Adaptix, a local company that's working on a mobile form of WiMax -- The other white broadband.

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Clearwire ranked No. 2

Posted by Tricia Duryee at 10:28 AM

Broadband Wireless Exchange magazine has released the winners of its annual Top 10 Wireless Internet Service Providers survey, and Kirkland-based Clearwire is listed at No. 2.

If you look closely, though, you'll see that Clearwire is actually tied for No. 1.

The survey ranks wireless ISPs based on the number of subscribers using the service. It includes both Wi-Fi and proprietary WiMax-like technologies, but only fixed service, which require the user to have an antenna.

Clearwire, which is being run by Craig McCaw, is using a proprietary WiMax technology that is built by its subsidiary NextNet in Minneapolis and is available in almost 30 cities in the U.S.

The No. 1 company is MobilePro, which has one of the largest metro-Wi-Fi deployments, in Tempe, Ariz. MobilePro has 20,000 subscribers for its fixed service. But a closer look at the list reveals that Clearwire, ranked No. 2, also has 20,000 subscribers.

Robert Hoskins, the trade publication's editor and chief, said he wouldn't list Clearwire as tying, because the company wouldn't confirm its numbers. He said that's typical of McCaw, who likes to run under the radar. For example, Hoskins said that when McCaw first started McCaw Cellular Communications, he didn't let anyone know what his plan was.

"I think Craig McCaw doesn't want people focused on what he's doing," he said. "I guarantee he's laughing all the way to the bank."

The official winners' list is:

1. Mobile Pro
2. Clearwire
3. SpeedNet Services
4. Plateau Meganet Internet
5. Midwest Wireless
6. Mesa Networks
7. CommSpeed
8. AMA TechTel Communications
9. Prairie Inet
10. Camvera Wireless

Profiles of each wireless service provider can be found here.

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Tricia Duryee
Tricia Duryee

Angel Gonzalez
Angel Gonzalez

Kristi Heim
Kristi Heim

Benjamin J. Romano
Benjamin J. Romano

Mark Watanabe