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May 31, 2007

RealNetworks introduces new RealPlayer

Posted by Kim Peterson at 1:25 PM

It almost seems like you can't mention RealPlayer without seeing someone wince. Too many bad memories of unnecessary software add-ons, buffering and a user interface that sometimes wasn't the most friendly.

RealNetworks is hoping to change that with a new RealPlayer, which it introduced today at the D conference in Southern California. (Release is here.) The new player will be out sometime in June.

If nothing else, the new RealPlayer is being recognized for one trait: It will let you download videos for offline viewing. The company said it will place a "download this video" button on Web sites to make it a one-click experience.

RealPlayer won't download rights-protected video, such as a movie trailer that a movie studio might want to keep control over.

The biggest part of this? YouTube. If Real makes it easy to download videos on the YouTube video sharing service, expect the new RealPlayer to become a lot less cringeworthy.

RealPlayer won't let you transfer those videos to a portable device yet. The company said it's working on that feature for future versions.

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May 30, 2007

CRN test: Vista security marginally better than XP

Posted by Benjamin J. Romano at 1:50 PM

This does not appear to bode well for Microsoft's unrelenting security sales pitch:

"After a week of extensive testing, the CRN Test Center found that users of Windows Vista and Windows XP are equally at risk to viruses and exploits and that overall Vista brings only marginal security advantages over XP."

CRN took Vista and XP "into the wild, wild Web" with only the default security settings of both operating systems enabled. Here are some highlights from the report:

During testing, some 20 viruses were encountered. Neither OS blocked any of them.

"Vista's Windows Defender, which is designed to detect various malware, gives the new OS a slight edge over XP when detecting spyware and adware sites," CRN reported.

Vista blocked one trojan, but allowed another that was identified in September 2006, before Vista launched. XP let both trojans through.

In all, CRN performed six tests.

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Ballmer can't say "Google"

Posted by Kim Peterson at 12:19 PM

Engadget live-blogged Steve Ballmer's talk today at the D conference in Southern California.

See Brier Dudley's blog for more more coverage and analysis.

There wasn't a whole lot of meat to the interview. Here are some of the more interesting comments:

"It's the color all dirt-bike riders want!" -- Ballmer to Wall Street Journal columnist Walt Mossberg, who joked that Microsoft has the monopoly on brown electronics. Mossberg was referring to the brown version of the Zune media player.

"Search is one of the stagnant areas. We're in the game, but we've got a lot of work to do." -- On Microsoft's work in search.

"I would have hoped to be a little higher today, but it doesn't diminish our determination to invest, succeed, find the right path forward." -- On Microsoft's share of the search market.

"I can't! I can't! It's The Market Leader." -- After Mossberg told Ballmer that he's allowed to say the word "Google."

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Amazon: stock price signaling future crash?

Posted by Kim Peterson at 11:34 AM

Is's stock price getting too expensive? That's what GigaOM is wondering.

Amazon has been trading at 55.7 times its forward earnings, according to GigaOM. Look what happened the last time it got this high. In October 2003, when the company's P/E ratio was at 58.9, the stock began a slide from $60 to $25.

Amazon's stock price is just above the $69 mark, at last check. A year ago it was at $35.

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Gates: Surface to cost less than $1,000 in 3-5 years

Posted by Benjamin J. Romano at 11:05 AM

Microsoft's new Surface computer, unveiled today, is getting plenty of ink.

Chairman Bill Gates spoke about it to The Wall Street Journal, the publication hosting a top-flight tech conference this week (see live coverage by Brier Dudley) where the product debuted. In a story today, Gates said the "natural interface" of touch will change computing.

He was confident that the limited deployment of Surface in high-end hotels, casinos and T-Mobile retail stores will expose the concept to "literally millions of people."

"But the big numbers come when our hardware partners pick it up and build devices for the office and home environments," Gates told the Journal. The story continued: Gates "expects that in three to five years greater sales volumes will help drive down the cost of the Surface technology, enabling the company to 'get to price points that are under a thousand dollars for broad usage,' he says."

Hard to say what the $1,000 model would look like, but one clue about where Microsoft is going with the technology comes from the blog of Long Zheng. He found what is either meaningless filler on an old version of Microsoft's Surface Web site, or an indication that a Zune with the same kind of "multi-touch" capabilities is due on Nov. 14 -- one year to the day after the launch of the current Zune.

By the way, if you're wondering why T-Mobile is one of the launch customers for Microsoft Surface, here's a possible explanation: Two top managers of the Surface Computing group came from T-Mobile USA.

General Manager Pete Thompson came to Microsoft in early 2006. He was previously executive director of marketing and business development at T-Mobile USA, which is based in Bellevue.

Marketing director Mark Bolger moved from T-Mobile to Microsoft in September 2006. He led marketing of smartphones and the HotSpot brand.

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May 25, 2007

Bill Richardson speaks at Microsoft

Posted by Kim Peterson at 12:02 PM

Bill Richardson, New Mexico governor and presidential candidate, spoke to Microsoft employees Thursday. Jeff Maurone gives some details on his blog, and says that Richardson's most memorable quote was this:

I spoke at Google a few weeks ago ... [collective booing] I'm at 10%, I gotta do everything I can! [roaring laughter] Don't laugh, I was at the margin of error a few months ago.

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"Partial nudity" in "Halo 2" Vista version

Posted by Kim Peterson at 10:02 AM

The Windows Vista version of "Halo 2" has been delayed because Microsoft said it discovered "partial nudity" in the game, according to Microsoft is blaming an "unfortunate, obscure content error."

And it sounds like Microsoft is going to still allow that version of the game on store shelves. The company said it will place a label on the game's box alerting buyers to the content. All future runs of the game will have the nudity removed, so expect these first editions to soon appear on eBay for hundreds of dollars. Users will be able to download an online update to remove the nudity themselves.

"Halo 2" for Vista is scheduled to come out May 31 in the U.S., about three weeks later than initially planned.

I can't find any details on what the offensive images exactly are, however.

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May 24, 2007

Microsoft reschedules Professional Dev Conference

Posted by Benjamin J. Romano at 4:47 PM

Microsoft is "in the process of rescheduling this fall's Professional Developer Conference," it said today on its Web site for the event.

Thousands of software developers gather at the event, held about every two years, to hear what's next, usually from Microsoft Chairman Bill Gates. In 2005, he showed off the new user interface in what would become Office 2007. In 2003, developers got a first look at what became Windows Vista.

Microsoft has been unwilling to talk about the next generation of the Windows platform, which launched Jan. 30, during other events that have traditionally been venues to talk about the future.

"As the PDC is the definitive developer event focused on the future of the Microsoft platform, we try to align it to be in front of major platform milestones. By this fall, however, upcoming platform technologies including Windows Server 2008, SQL Server code-named "Katmai," Visual Studio code-named "Orcas" and Silverlight will already be in developers' hands and approaching launch, which is where we'll focus our developer engagement in the near term. We will update this site when we have a new date for the PDC that is better timed with the next wave of platform technologies," the company wrote.

Mary Jo Foley has some thoughts on the matter.

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Who will win: "Halo 3" or "GTA4"?

Posted by Kim Peterson at 4:04 PM

Which game will sell better this year: "Halo 3" or "Grand Theft Auto 4"? That's what I've been wondering after reading a Goldman Sachs report out today that says Microsoft was making a strategic play when it chose Sept. 25 as the official release date for "Halo 3." That's nearly a month before the Oct. 16 release of "Grand Theft Auto 4" for the Xbox 360 and the PlayStation 3.

The audience for the two games is similar, the analysts say, and so a person buying "Halo 3" will probably buy "GTA4" for the Xbox 360. Microsoft is trying to increase sales of the Xbox 360 and cut into PS3 sales, according to the report.

Microsoft also needed to launch "Halo 3" about a month ahead of "GTA4" in order to mitigate competition between the two titles and allow time later in the fall for other titles to launch, a more partner friendly strategy.

Microsoft executives say they expect the launch of "Halo 3" to be as big an entertainment event as the release of the last "Harry Potter" book and the opening of "Pirates of the Caribbean 3." But how does the "Halo 3" launch stack up next to "GTA4"?

I put my money on "GTA4" because it will be out on two consoles. But an informal poll of my friends gives the advantage to "Halo 3." What do you think?

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iPod Amnesty Bin at Microsoft Zune headquarters

Posted by Benjamin J. Romano at 3:03 PM

In what was apparently meant to be a private jab at its biggest rival, the Microsoft Zune team set up an iPod Amnesty Bin at its headquarters to collect the discarded digital music players of Microsofties making the switch to the home-team brand.

A picture taken May 18 and posted to the flickr photo sharing site shows a clear plastic bin with a sign that reads "iPod Amnesty Bin" and "bite me". There's also a green apple -- maybe a Granny Smith -- with a couple of bites missing.

A spokesman with the PR firm that handles Zune confirmed that the bin exists, er, did at one time, in a building at Microsoft's Bear Creek Campus, at the far end of Highway 520. He couldn't say if it was still there or provide any other details.

A Macworld UK blogger called the bin a retreat to "to schoolyard ethics" by Microsoft "as its empire collapses in the face of Apple's iPod."

I'm not one to take sides (happily using the Sansa I got for Christmas), but it's hard to impugn the guys and girls on the Zune team for having a little marketing fun at their competitor's expense -- especially since they're taking a page out of Apple's book in the process. The hilarious "I'm a Mac" advertising campaign is witty, but also contains a fair amount of what could rightly be called schoolyard teasing.

Meanwhile, the Zune folks want us to pay attention to their player's 9.2 percent April market share, which they announced yesterday, along with strong results for the pink Zune, now more popular than brown and white, but not black.

Update: Brier Dudley has details on the origin of the photo.

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More details on Microsoft-aQuantive deal

Posted by Benjamin J. Romano at 2:15 PM

Microsoft filed a disclosure with the SEC today providing a bit more detail on its planned $6 billion acquisition of Seattle digital advertising company aQuantive.

The filing stipulates that aQuantive must pay Microsoft $175 million if the merger is terminated under "certain specified circumstances." If regulatory approval is not obtained -- again under "certain circumstances specified in the merger agreement" -- Microsoft would owe aQuantive $500 million.

Microsoft's top lawyer expects the deal to sail through the regulatory review process, which will include a Hart-Scott Rodino waiting period.

"Acquisitions of complementary assets such as the Microsoft-aQuantive
deal normally do not raise antitrust concerns," General Counsel Brad Smith said when the deal was announced last Friday.

"It's also subject to potential review outside the United States. We've been assessing that. We believe it will require a notification in Germany; at
this point we don't believe it will require notification in the European Union as a whole," Smith said.

If you want to punish yourself with some legal reading on this beautiful afternoon, here's a link to the agreement and plan of merger document, attached to an aQuantive filing from last week.

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May 23, 2007

Amazon buys audiobook publisher. ILounge next?

Posted by Kim Peterson at 10:16 AM is pushing further into the audiobook format. The company said today it has bought Brilliance Audio, the largest independent publisher of audiobooks in the country (release here). Brilliance is expected to continue operating out of its offices in Grand Haven, Mich. Amazon didn't say how much it paid for Brilliance.

Separately, Valleywag is speculating that Amazon might be interested in buying iPod enthusiast site iLounge.

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May 22, 2007

T-Mobile gives you wings

Posted by Tricia Duryee at 11:01 AM

Bellevue-based T-Mobile USA said today that it will start selling the T-Mobile Wing, the first phone to launch in the U.S. with the Windows Mobile 6 operating system. The phone was also developed by HTC, a Taiwanese manufacturer that has its North American offices in Bellevue.

The T-Mobile Wing has a blue soft-touch exterior, touch screen, and full, slide-out keyboard.

T-Mobile USA

The T-Mobile Wing.

The phone has a couple of enhancements from a similar device that T-Mobile has sold before -- a new keyboard design, longer battery life, a 2 megapixel camera, a speakerphone and Bluetooth.

"The T-Mobile Wing is 30 percent smaller than its predecessor, the T-Mobile MDA, and is packed with broad functionality that enables users to experience the best in connectivity, productivity and mobility," said Todd Achilles, vice president of HTC America.

The T-Mobile Wing is $299 with a two-year contract and is available exclusively to T-Mobile customers beginning today.

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Could RealNetworks buy Sonos?

Posted by Kim Peterson at 10:48 AM

Business 2.0 columnist John Heilemann interviews John MacFarlane, the founder of Sonos, a Santa Barbara, Calif. company closely tied to Seattle's RealNetworks. The two companies are so tight, in fact, that Heilemann speculates that RealNetworks might buy Sonos one day.

Sonos makes an audio system that wirelessly beams music to speakers throughout a home. Sonos users can connect to RealNetworks' Rhapsody music service without having to go through a PC. For $10 a month, they have access to about 4 million songs to pipe through the home.

Sonos and Rhapsody are each other's killer app. MacFarlane tells me that Sonos customers use Rhapsody "more than 10 times as much as the average Rhapsody user." And, according to Rhapsody insiders, the service's churn rate among Sonos users is tiny compared with the overall figures.

Among those addicted to new music and new technology, the Sonos-Rhapsody combination wins raves so gushing they're almost too embarrassing to print.

MacFarlane tells Heilemann that he's received acquisition offers, but none was good enough to take.

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Microsoft Spaces doesn't make Top 10 list

Posted by Kim Peterson at 10:08 AM

Microsoft's Windows Live Spaces social networking/blogging service may have some international popularity, but in the U.S. it's pretty much nonexistent. According to Hitwise, a competitive intelligence company, MySpace ruled the social networking category in April with an 80 percent market share. Facebook had 11.5 percent, and everyone else had about a 1 percent share or less.

Spaces doesn't make the top 10 list. The Microsoft service ranked 16th with .15 percent of visits.

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May 21, 2007

Latest Microsoft reorg points to Ballmer successor?

Posted by Benjamin J. Romano at 1:51 PM

On Friday, the big news of Microsoft's aQuantive acquisition overshadowed another interesting development at the company.

Microsoft moved some big pieces around in the organization with the result that Business Division Jeff Raikes is now responsible for more than half the company's revenue and the bulk of its earnings growth, according to analysis by Robert Helm at Directions on Microsoft, as quoted in this IDG News Service story.

"It puts [Raikes] in a strong position to succeed CEO Steve Ballmer, should Ballmer decide to start a retreat from day-to-day management," Helm said.

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AT&T, the new Cingular

Posted by Tricia Duryee at 1:46 PM

AT&T received quite a bit of coverage today about its new branding campaign that it is rolling out in preparation of the iPhone launch.

The super short summary is that AT&T was slowly transitioning from the Cingular Wireless brand back to AT&T. It wanted it to be a slow process, but since consumers seemed to be accepting the AT&T brand, it speeded up the change. That means you'll start to see the wireless retail stores with AT&T logos very soon.

I wrote a brief here, but you can read a lot more about it in several publications.

Here's the New York Times' take.

The story points out that AT&T hopes by having a single brand, it will help persuade customers that the company is a one-stop shop for all kinds of communications and entertainment services, including long-distance and local phone service, wireless, television and high-speed Internet.

A Reuters story reports a tie between the rebranding and the iPhone launch.

"The iPhone is one of the most anticipated handsets ever in the wireless industry, and we want to make sure that every drop of equity from the iPhone accrues to the AT&T brand," AT&T spokesman Michael Coe said. "We want to be as far along as possible with our rebranding in advance of the launch of the iPhone."

RCRWireless News also reported the story, saying nothing was too surprising about the further transition to the AT&T brand.

Remember, the company has plenty experience in making brand changes. After Cingular purchased AT&T Wireless, everything was changed from the latter's blue to the former's orange motif. Now that AT&T has purchased Cingular, everything is returning to blue.

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RadioFrame Networks in today's paper

Posted by Tricia Duryee at 1:42 PM

I wrote a story today about Redmond-based RadioFrame Networks, one of a few in the Seattle area working on wireless infrastructure.

It is attempting to build a miniature cell site that will provide better indoor coverage inside homes and buildings.

It also address how Bellevue-based T-Mobile USA is tackling the problem -- by allowing phones to roam on to Wi-Fi networks.

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Getty hires John McKay as its top lawyer

Posted by Kim Peterson at 1:24 PM

Getty Images said today it has hired John McKay, the former U.S. attorney for the Western District of Washington, as its general counsel. McKay was one of the eight U.S. attorneys fired by the Bush administration last year, and has been pretty vocal about the incident.

McKay replaces Getty's current general counsel, Jeff Beyle, who will become a senior vice president for business development.

"Thanks to recent events, I've come to appreciate even more the powerful role images play in shaping public perception," McKay said in a press release announcing the move.

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Clearwire lifts hood on WiMax trial

Posted by Tricia Duryee at 11:57 AM

Kirkland-based Clearwire said today it has successfully completed the first phase of one of the country's first mobile WiMAX field trials.

Mobile WiMax is the standardized version of wireless broadband that allows a user to roam or hand off from one cell site to another. The previous version of WiMax was called fixed because it had to be used in a stationary spot.

Clearwire has been conducting a field trail in Hilsboro, Ore., with Intel and Motorola. The equipment is based on the IEEE 802.16e standard and works on Clearwire's 2.5 GHz spectrum.

The first phase of the field trial focused on coverage, capacity and speed associated with the air interface. Previously, Intel said it was going to open up the trial to employees in the area to get an idea of how it worked.

There aren't a lot of other companies pushing to roll out mobile WiMax quickly. Sprint Nextel, which also has ambitions to build a nationwide network, said it will start to launch markets later this year, starting in Chicago. It is critical for the trials to work since so many companies are backing the technology, which is still unproved.

Clearwire said today the first phase of the Hillsboro trial covered 15 square miles using a mobile WiMAX laptop card, the first to be based on WiMAX. Individuals testing the card received true broadband connections with multi-megabit speeds. The next phase of the trial is designed expand to cover 145 square miles and a greater number of users and devices on the network.

"The successful completion of the first phase of our mobile WiMAX trial is a significant milestone in our efforts to commercially deploy true mobile broadband services in the U.S.," said Scott Richardson, Clearwire chief strategy officer. "By demonstrating initial performance consistent with the WiMAX industry standards, we are making great progress in our ability to evolve our networks to take advantage of the benefits of a standards-based technology for future Clearwire subscribers.

Intel said the trial was also important because it means its mobile WiMax chipset is on pace to launch next year.

"With the completion of the first phase of our field trial we are on track to deliver the first integrated mobile WiMAX solution with next-generation Intel Centrino processor technology in 2008," said Sriram Viswanathan, an Intel vice president and general manager of the WiMAX Program Office. "We look forward to the next phase of our field trial that will include more people, wider coverage and greater mobility to ultimately help deliver the true promise of WiMAX."

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Alltel gets scooped up

Posted by Tricia Duryee at 10:52 AM

Little Rock, Ark.-based Alltel, the fifth largest wireless carrier in the U.S., agreed to be purchased today for about $25 billion. Here's a Reuters report on the deal.

TPG Capital and GS Capital Partners, the buyout arm of Goldman Sachs, will pay $71.50 a share in cash. Including the assumption of debt, the deal is worth about $27.5 billion.

Alltel shares rose $4.25, or 6.5 percent, to $69.46 and have gained nearly 20 percent since speculation over a potential buyout emerged in December.

In January 2005, Alltel purchased Bellevue-based Western Wireless, which also serves rural areas, for $4.4 billion.

The company's founder and chief executive was John Stanton, who now heads a venture-capital company.

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Marchex developing Spanish-language sites

Posted by Kim Peterson at 10:00 AM

Seattle-based Marchex said today it's partnering with Fox's Latin American Channels division to develop a number of Web sites that it owns, including,, (sports) and (woman).

Turns out that Marchex's ongoing domain-buying spree is not just limited to English-language sites. The company owns thousands of domain names, including most of the Zip code sites in the U.S. (like

Marchex said it recently acquired about 100 Spanish-language Web sites for $10 million in cash. It plans to make money by selling advertisements on those sites.

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Valve: No acquisition in our future

Posted by Kim Peterson at 9:55 AM

Bellevue-based Valve Software is going to remain independent, according to founder Gabe Newell. In an interview with, Newell says independence is what makes his studio great:

I think something that contributes to our ability to be successful is that we don't have external financing on our projects...There's no venture capitalists breathing down our neck, and I think that helps us make decisions that are more focused on what customers will like than what a third party has an opinion about.

Valve is best known for the "Half-Life" and "Counter-Strike" series of games.

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May 18, 2007

Google's engineers coming to Seattle

Posted by Kim Peterson at 4:50 PM

Looks like Google is opening a new office in Fremont for its engineers. Up to now, the company's local sales office has been in Fremont and the engineering crowd (some 300 strong now) has been holed up in Kirkland.

Now, Google is planning to sublease about 60,000 square feet from Getty Images at the Waterside Building on North 34th Street. That's just a stone's throw from the sales office, also on the same street.

Amy Martinez has the details....

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aQuantive employees meet with the new boss

Posted by Benjamin J. Romano at 10:29 AM

Hundreds of aQuantive employees traveled from the company's Pioneer Square headquarters this morning to Bell Harbor Conference Center for a meeting with Microsoft Division President Kevin Johnson.

They were expecting to hear more from Johnson and aQuantive CEO Brian McAndrews on the $6 billion acquisition of their company.

I stopped one employee to ask a bit about the mood of the troops.

"It's still a little bit of a new thing," said Bob Lovestedt, a seven-year aQuantive veteran. "I mean it's been rumored about for years. Not a huge surprise with everything going on elsewhere with the other acquisitions."

Microsoft's acquisition comes on the heels of three other transactions in digital media recently.

I asked him if there's any trepidation among aQuantive employees about joining Microsoft.

"Oh sure, but you know, it's too early to tell. We'll have to listen to what's being said and we'll see where we go from here," Lovestedt said.

Employees were certainly thrilled to see the impact of the acquisition, an all-cash deal worth roughly twice aQuantive's market value yesterday, on the company's stock price.

"When you see your stock double in price, you're pretty excited," Lovestedt said. "Once sort of the initial euphoria wears off than you're starting to think, 'Well, what about me?' And what's going to happen. As I say, the management team is great and aQuantive has always cared about its employees and I think things are going to work out just fine."

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Microsoft reorganizes Server and Tools business

Posted by Benjamin J. Romano at 8:08 AM

In the midst of the frenzy around Microsoft's announced $6 billion acquisition of Seattle-based online advertising company aQuantive, there's another significant piece of news coming out of Redmond.

Microsoft is realigning one of its major business groups. It said today that the Server and Tools business, responsible for some 18 consecutive quarters of double-digit revenue growth, is moving into the Microsoft Business Division headed by Jeff Raikes. The server gang, led by Bob Muglia, had been in the Platforms and Services Division, which is apparently where aQuantive and its 2,600 employees would fit.

"Microsoft senior leadership decided to make these changes to sharpen leadership focus on the company's top priorities and align its organization for innovation, ultimately enabling it to deliver even more value to its customers," the compny said in a statement delivered through its PR firm.

Server and tools, which sells its wares mainly to businesses, looks like a good fit with the Business Division.

As part of the reorganization, the developer and platform evangelism team, which tries to get attract more software builders to the Microsoft fold, is moving under Muglia's server and tools group.

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May 17, 2007

"Halo 3" beta working, getting (mostly) good reviews

Posted by Kim Peterson at 1:59 PM

I played the "Halo 3" beta last night. You know, the one that gamers waited all day for?

First impressions: The graphics are beautiful. The game play is completely fun. But I was often confused, particularly when it came to reloading guns or trying to pick up weapons on the ground.

Here's what others have to say:

Kotaku: The first thing that strikes you is the quality of the graphics compared with "Halo 2." A lot of the same elements are there -- weapons, vehicles -- but all a whole lot shinier, more finely detailed, and, well, sexier. Everything flowed beautifully.
The grass looks as good as any game I've ever seen -- on par with "Call of Duty 3's" grass that blows in the wind. The water, ohmygosh, the water. It's almost worth getting killed in the water just to get the water kill camera.

UGO: ... there's still this nagging feeling that we're playing the same game we've been playing since "Halo 2," which in itself wasn't a particularly marked change from the first entry in the series.

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A "big project" underway at Zipper

Posted by Kim Peterson at 1:37 PM

I previously profiled Zipper Interactive, a super-hot video game studio in Redmond that develops the "Socom" military-themed game series.

Zipper has been making "Socom" games exclusively for Sony since 1999, doing so well that last year Sony decided to buy the studio.

This week, Sony announced a new game in the series, the online-only "Socom Confrontation," but the developer wasn't Zipper. Instead, the Vancouver, B.C.-based Slant Six Games is making it.

I asked Sony what was going on. Spokeswoman Jennifer Clark said that Zipper has been pulled off to work on "a big project" so the Socom work went to Slant Six. All of this was likely in the works when Sony acquired Zipper. Sony is promising me a sneak peek at Zipper's project down the road, so stay tuned.

Update: says it confirmed that Zipper is working on a separate Socom game. Is that all the developer has up its sleeve?

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The end of

Posted by Kim Peterson at 10:39 AM

Microsoft is closing down its portal and will direct all traffic to its site instead, according to the blog.

Sanaz Ahari, the lead program manager for Live Search, writes:

This is a bittersweet moment as I reflect on what accomplished from its inception in February 2005, helping pioneer Ajax homepages and gadgets on the Web. We accomplished great things both in terms of technology as well as being an agile small team and connecting with our customers.

Microsoft was experimenting with as a personalized starting page for the Web, with customizable modules for news feeds and other features.

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May 16, 2007

WinHEC: Server trains run on time

Posted by Benjamin J. Romano at 5:38 PM

LOS ANGELES -- Microsoft Server General Manager Bill Laing reiterated the company's schedule for regular releases of his division's products over the next three years.

In his keynote presentation at the Windows Hardware Engineering Conference here today, Laing explained the strategy for refreshing Windows Server. And in a later interview, he discussed some fundamental differences between server and Windows client that contribute to the regular cadence of releases in one vs. the other's less-predictable cycles.

"What we wanted to do was deliver to the industry every four or five years a major release and between those releases every two to three years, an update release," Laing said in his speech. "There's a lot of feedback from customers that they wanted this predictable rhythm, they didn't want frequent change."

He offered a specific roadmap for the next several beats in that rhythm: Windows Server 2008, a major one, is on track to release to manufacturing by the end of this year. "However," Laing added, "quality is our No. 1 goal. We'll maintain our quality bar before we release."

Windows Home Server is also set to be available later this year.

In 2008, niche server products based on Server 2008 are on tap, including software for small and medium businesses, code named "Cougar" and "Centro," respectively, and another version of Microsoft's storage server.

In 2009, a second release of Windows Server 2008 is on the schedule.

I asked Laingm given the server and the client operating systems share a code base, how is his division able to stick to a schedule while client has struggled to do so? (Microsoft went five years between Windows XP and Vista, an interval executives have pledged not to repeat, but they also gave no insight into what might come next at this conference, a traditional venue for such information.)

Here's Laing's response:

They're linked in the sense that the code is common, but they don't have to be and haven't been linked to actually deliver to the customer. The other thing I'd kind of reflect on is when you deliver a client system, it's really an integrated experience that you're delivering. An example would be one minute you might be listening to music, you might be editing a video, you might be typing e-mail, you may be doing your home accounts on a spreadsheet. People want all of that on a single, integrated system.

Servers are much more role-based, so it's somewhat easier for us [in the Server Division] to advance different features at a different rate, which is probably the main way I think we are trying to drive to the train timetable. We say, the train's going to leave on this date and if we can't do an upgrade to active directory, [for example], in the next release, we'll do it in the one after. ...

And you know, our customers really do want the predictably, over features to a large extent, because they want to plan. And servers, it's a bigger investment for companies. They're a little more cautious in changing their infrastructure.

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CEO Summit: A nod to the Pod

Posted by Kim Peterson at 5:05 PM


From left, CEO Jeff Bezos, Microsoft CEO Steve Ballmer and Azim Premji, chairman of Wipro, during a break from the Microsoft CEO Summit on Wednesday.

When Microsoft said there wouldn't be news coming out of this year's CEO Summit, it wasn't kidding.

In the past, the company has chosen the occasion to make various announcements. But this time, Chairman Bill Gates simply gave a keynote speech about the future of technology. He touched on some of his favorite subjects: broadband penetration, the rapid pace of innovation, how hardware is getting smaller but phones are getting bigger, etc. etc.

See this writeup from TG Daily for more specifics.

Gates, perhaps in a burst of generosity, even acknowledged Apple's iPod as an example of a media device when speaking about the different forms of devices out there. And he didn't flinch when he said it, either.

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"Halo 3" beta delayed, everyone freaks out

Posted by Kim Peterson at 1:42 PM

Some gamers are none too happy with Microsoft today after the "Halo 3" beta video game was not available to play as promised.

The company had said it would allow gamers today to play some of the multiplayer elements of the game, which is expected to go on sale Sept. 25. People who own the Xbox 360 game "Crackdown" were invited to participate in the beta trial version of "Halo 3." But those players found today they couldn't access the game.

Gaming site Gamespot says "pandemonium" has ensued following the delay.

"Halo" developer Bungie has a short note online addressing the problem:

Folks are reporting problems downloading the "Halo 3" beta via "Crackdown" this morning. We have alerted the appropriate Live authorities and they are taking care of the problem as we speak. More news as it comes in.

Microsoft gaming guru Major Nelson's Web page was so overloaded that it now has a brief message about the situation. "Bungie Studios is working with the Xbox Live team to resolve this as quickly as possible -- stay tuned," Nelson writes.

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RealNetworks makes another mobile buy

Posted by Kim Peterson at 10:48 AM

RealNetworks continues to add to its mobile business, saying today that it paid $9 million in cash for an arm of Sony that offers music downloads and streams to wireless subscribers in eight European countries.

This follows Real's September acquisition of South Korean company WiderThan, which helps carriers sell music downloads and ringback tones.

I've asked the question before and will ask it again. After years of tough battles on the PC and Web, is RealNetworks on the verge of becoming a wireless company?

See our news story here.

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Amazon digital music store won't have copy protection

Posted by Kim Peterson at 10:36 AM

Finally confirming months of swirling rumors, Amazon said today it will launch a digital music store later this year. But unlike the many stores already out there, this one has a twist: its songs won't have copy protection restrictions.

The songs will be in the MP3 format, which means that you can pretty much do anything with a tune, such as copy it to a disc or play it on your iPod or Zune player.

This kind of flexibility is downright terrifying to some in the music industry, who fear that the open format will lead to songs being pirated and shared with others who didn't pay for them. It's a good bet that the store will not have songs from every major music label, although EMI Music said today it will license its catalog.

Amazon isn't saying when the store will open or how much the songs will cost.

Further reading:

The news release.

Jupiter analyst David Card:
"this is a big, big deal, and a critical entrant into the digital music space. Amazon knows how to sell music..."

Amazon selling only DRM-free music sends a message that a leading retailer is willing to back consumers over big business and that a digital music business can be built and continued using only DRM-free products.

Engadget: A profitable showing from EMI's "experiment" may very well convince the other labels to accede to consumer demand and start joining the free music party too, meaning that this move by a player like Amazon is certainly nothing to sneeze at.

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WinHEC: Saying "super" as if you mean it

Posted by Benjamin J. Romano at 9:25 AM

LOS ANGELES -- Day 2 of WinHEC is getting very technical, but thankfully Microsoft Technical Fellow Mark Russinovich started off his hourlong dive into the Windows Server kernel with a light-hearted swipe at the "super" culture of his employer.

Russinovich is perhaps most famous for exposing the rootkit spyware on Sony CDs that opened security holes in the Windows operating system.

He described the career path that took him throughout the industry to end up here on stage in front of an audience of hardware engineers and said he was "really excited" to be at Microsoft, which acquired his company, Winternals, last year. Then he amended that.

"They told me to say 'super excited,'" Russinovich said. "They say that unless you say 'super' you don't really mean it."

Those who follow Microsoft closely know that using "super" as an adjective and adverb is a tradition that started at the top and now can be heard in virtually every company speech and conversation.

The morning started out with a talk by Mike Nash, corporate vice president of Windows product management, who expanded on Bill Gates' presentation Tuesday with more details on the progress of Windows Vista.

Nash said Vista shipped with support for 20,000 device drivers and has since added 13,000 via Windows Update. The operating system now supports about 1.9 million individual devices.

He said Vista is compatible with 48 of the top 50 consumer software programs, including iTunes, as well all five of the most popular consumer security applications.

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May 15, 2007

Washington high-tech employment

Posted by Tricia Duryee at 3:28 PM

Unemployment in Washington fell to a record-low 4.4 percent in April, the third straight monthly decline this year, we reported today based on information released by the state Employment Security Department.

The jobless rate, adjusted to account for seasonal variations, declined from March's 4.6 percent.

Some of the noteworthy job categories that added jobs include the construction industry, up 900 positions in April; administrative and support services, which added 1,600; and bars and restaurants, up 500.

But what about high-tech? And, telecommunications employment?

The short answer is: not much has changed.

According to the Employment Security Department, software publishers saw zero change in April, compared with a month ago, maintaining 47,000 jobs. In the last year, the sector has added 3,000 jobs.

For the wired telecom carrier sector, zero jobs were added in April compared with last month -- maintaining 6,700 jobs. Compared with last year, the number of wired telecom jobs dropped by 800.

Employment at wireless carriers saw the most dramatic change. In the month of April, 100 jobs were added for a total of 12,900. In the last year, that category has added 1,100 jobs.

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Microsoft building Chinese Zune factory

Posted by Kim Peterson at 2:23 PM

Microsoft is building a factory in China to make the next version of its Zune player, according to this Marketwatch article.

Toshiba provided the parts and framework for the original Zune, which came out last November. According to the article, Microsoft wants to take a more direct role in the manufacturing for the second version.

The article seems to imply that Microsoft has dumped Toshiba. Microsoft isn't naming its new manufacturing partner but said the new factory will be in Doumen, China. That's the same city where the Xbox 360 video-game console is made by Flextronics International, according to Marketwatch.

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Microsoft Town Hall meeting

Posted by Benjamin J. Romano at 1:29 PM

Microsoft CEO Steve Ballmer and other executives held a scheduled Town Hall meeting with employees today. For a look at some of the expectations going into the chat, see this post on Mini-Microsoft.

I'm at WinHEC in Los Angeles and got a bit of insight on what the execs had to say from Microsoft spokesman Lou Gellos back in Seattle.

According to Gellos, the Town Hall was "ho-hum" and included "nothing major." Some vague specifics:

-- Ballmer talked about the business and the recent quarterly earnings report.

-- CFO Chris Liddell also talked about earnings and the ongoing campus expansion, including the timing of the Bellevue leases.

-- Human resources head Lisa Brummel said new Starbucks coffee machines in buildings on campus are among the most popular new perks the company recently added. The grocery service, another new perk, is being discontinued because it's not being used. The improvements were first announced at a similar meeting last year.

-- Brummel also explained a change in how stock awards will be presented to employees. "When you get them, they're going to say this is how much money worth of stock you're getting as opposed to saying this is how many shares," Gellos said. "It doesn't change how many they're going to get, or anything like that, just how it's communicated on that first day."

I'll be checking back at the Mini-Microsoft site for reaction to the meeting from someone who was actually there.

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Rob Glaser's 2006 salary: $3.8 million

Posted by Kim Peterson at 1:14 PM

RealNetworks Chief Executive Rob Glaser got some big salary awards over the past year, according to a regulatory filing by the company today. In March, the board approved a $325,000 cash bonus in addition to his $400,000 base salary.

He also received a $725,000 bonus in January related to his work on negotiating a $761 million antitrust settlement with Microsoft in 2005. That's the last of three payments totaling $2.9 million in bonuses he received because of the Microsoft deal.

Adding all of his bonuses, option awards and other compensation together, Glaser was paid $3.8 million in 2006.

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Voice continues to heat up

Posted by Tricia Duryee at 11:32 AM

Burlington, Mass.-based Nuance Communications said today that it agreed to acquire VoiceSignal Technologies, also of Massachusetts.

Nuance said the acquisition will help "satisfy the accelerating demand for speech-enabled mobile devices and services."

Nuance expects to serve more than one billion consumers within the next three years with voice-based mobile applications that help people retrieve and navigate vast amounts of data on mobile phones, in automobiles and on personal navigation devices.

Last month, I wrote a story about the growing speech-recognition arena that was getting closer attention following Microsoft's acquisition of TellMe. Another local company, Bellevue-based VoiceBox Technologies, is also working on the technology.

Nuance said it will pay about $293 million for VoiceSignal (minus VoiceSignal's cash and based on Nuance's closing price of $15.28 a share yesterday). It was reported that Microsoft paid $800 million for TellMe.

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Motorola announces new Razr

Posted by Tricia Duryee at 10:50 AM

Today, Motorola unveiled the Razr2, hoping to wow the world with the second version of the inconic slim phone. The phone will be available in July.

The Razr2 has a number of features that frankly I've never heard of. The press release says the phone has "CrystalTalk 1 technology," "Web browsing3," and "real-time point-to-point video3."

I'm guessing all that means is that it high-quality voice, video and Web stuff.

What I do understand is that it says it has 2 gigabytes of "on-board memory." Typically phones have little device capacity, and gets a boost from little tiny memory cards that slide into a slot.

Also, the phone is thinner -- Motorola shaved two millimeters from the original RAZR. The screen on the outside is bigger, allowing for crisp-picture caller ID and text messages.

Here's a press release about it here, and a photo of the device here.

Both the photo and the release are compliments of FierceWireless. I can't seem to access Motorola's general site right, or the one it set up especially for today.

Are that many people rushing to see the Razr2?

I guess it's possible. Motorola has sold 98,869,377 Razrs to date.

Update: The Web site seems to now be working.

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Nintendo Europe seeking new ad agency

Posted by Kim Peterson at 10:30 AM

News broke last week that Nintendo was moving its marketing and advertising people out of Redmond, possibly to New York or San Francisco.

Now, word is out that the company's U.K. advertising agency, Leo Burnett, has resigned. Leo Burnett handled advertising for the launch of the Wii console last fall. In reporting the split, Brand Republic says Leo Burnett was unhappy with "the lack of creative authority" it had on Nintendo's account. Some of the ads it created for the Wii launch, for example, were reshot.

Separately, IGN brings up a rumor I had heard last week when reporting the Nintendo story: Nintendo's marketing magazine, Nintendo Power, may shut down. Employees are being told to look for new work by September, according to IGN.

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Farecast unveils new features and audit results

Posted by Kim Peterson at 10:05 AM

Seattle airfare prediction company Farecast is no longer in its beta, or testing, period starting today. The company also said it's introducing some new features, including an alert system to tell users when certain airfares drop.

Farecast also disclosed the results of an audit of its airfare predictions. The company hired Navigant Consulting to analyze a random sample of 44,000 predictions made in the first three months of the year. Navigant said the predictions had a 74.5 percent accuracy rate.

I did a far less comprehensive survey last fall and found an accuracy rate of about 61 percent.

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AOL buys mobile advertising firm

Posted by Tricia Duryee at 9:23 AM

AOL said today it has acquired Boston-based Third Screen Media, which has developed a mobile advertising network and mobile ad-serving platform. Financial terms of the deal were not disclosed.

Rumors have been circulating for some time that Third Screen Media would be picked up by one of the search giants. It was a natural target because it gained early acceptance in the wireless world fairly quickly.

Previously, I speculated whether AOL would combine Third Screen with Tegic, the AOL Seattle division that handles mobile. As it turns out, Third Screen will operate as a wholly owned subsidiary of AOL's division.

"This acquisition brings together two pioneers in the interactive advertising space," said Thomas Burgess, founder and chief executive officer of Third Screen Media. " has long been the advertising network to watch, and Third Screen Media broke new ground in the mobile advertising space with our pioneering technology and industry-leading mobile network. Together, we can now offer advertisers and publishers a comprehensive suite of interactive advertising solutions for every type of device, platform and program."

One big complaint in mobile was that it is difficult for big advertisers to spend a lot of money in the area. Evem with deep pockets, they find it time consuming to approach each individual carrier in the U.S. to place small amounts of ad dollars.
As part of the business, could it become as easy as checking another box?

AOL said the acquisition comes as the mobile advertising industry is growing exponentially. Mobile advertising in the U.S. is expected to grow from $421 million in 2006 to $4.7 billion by 2011, while globally the market is expected to increase to $11.3 billion by the same year, according to eMarketer.

AOL acquired Bellevue-based Wildseed in August 2005, and merged it with Tegic's Seattle office, which has become AOL's mobile headquarters. AOL acquired in June 2004.

This acquisition follows one Microsoft made earlier this month in mobile advertising: ScreenTonic, a French company based in Paris. The purchase is expected to help Microsoft launch advertising on the mobile phone soon through its Windows Live properties.

With things apparently heating up in the space, I wonder if people are looking at purchasing other companies, namely Seattle-based Medio Systems, which does mobile search and advertising, or even Bellevue-based InfoSpace, which has a lot of experience in mobile but has struggled more recently.

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WinHEC: 40 million Vista copies sold

Posted by Benjamin J. Romano at 9:17 AM

LOS ANGELES -- Bill Gates said during his WinHEC keynote that as of last week, Microsoft has sold 40 million copies of Windows Vista since its launch earlier this year. He said that pace was double what Windows XP did in a comparable time frame and was "beyond our expectations."

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WinHEC: Gates, Mundie on tap at hardware confab

Posted by Benjamin J. Romano at 8:09 AM

LOS ANGELES -- With Microsoft's Windows Vista freshly out the door, this year's Windows Hardware Engineering Conference, which gets rolling with a keynote from Bill Gates at 9 a.m., will focus more on what is than what will be.

Gates is planning to discuss the operating system's performance in its first 100 days (+/-) on the market and opportunities for developers to innovate on the platform, according to Kevin Kutz, director of the Windows Client group. (In March, the company said it had moved 20 million licenses for Vista in its first month on the market, more than doubling the initial pace of sales for its predecessor. The number and comparison were greeted with some skepticism.)

WinHEC has typically been a time for Microsoft to talk specifics with its important hardware partners about future versions of Windows. Not this year: "We're not going to cover that, including Service Pack 1, at this year's WinHEC," Kutz said.

Gates will talk about the forthcoming version of Windows Server, code named "Longhorn." Thanks to an earlier posting on Microsoft's Web site for the conference, we know it will be called ... wait for it ... Windows Server 2008. (You can pick your jaw up off the desk now.) Mary Jo Foley reported it here. The site has since been updated, removing the 2008 name.

We're also expecting more details on Windows Home Server, the consumer-focused product announced at the Consumer Electronics Show in January.

Craig Mundie, Microsoft's chief research and strategy officer, and one of two people set to take over Gates' day-to-day role at the company next year, will follow Gates on stage.

His talk, Kutz said, will cover where things are headed in the next five to 10 years, as well as the interplay between software, services and hardware.

Tomorrow's speakers include Mike Nash, corporate vice president of Windows product management, and Bill Laing, general manager of the Windows Server Division, who will expand on subjects Gates is scheduled to talk about today, Kutz said.

Check back today and tomorrow for updates.

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Microsoft customer satisfaction rating falls

Posted by Benjamin J. Romano at 12:15 AM

The American Customer Satisfaction Index, from the University of Michigan's Ross School of Business, found customer satisfaction with Microsoft fell during the past year. This is the second year the index, a broad tracker of "customer evaluations of the quality of products and services available to household consumers in the United States," has measured Microsoft and the broader computer software industry. (Microsoft is the only software company evaluated seperately from the group.)

The industry, apart from Microsoft, was flat with a index rating of 75 as measured in the first quarter of 2006 and 75 in the first quarter of this year --in line with the broader index. The index measured an all-time high of 75.2 in the first quarter, by the way.

Microsoft, however, saw its number decline from 73 to 70.

"A year ago, the world's leading software producer was even with the rest of the industry; now it is behind in customer satisfaction," wrote the index's publishers. "Much of this seems to have to do with its new operating system, Windows Vista, and the new Office Suite which were both released in January."

While we've heard our share of gripes about Vista, I asked University of Michigan Business Professor Claes Fornell if the index actually measured the cause of customer satisfaction or dissatisfaction at specific companies. Turns out that it doesn't, but Fornell said new product releases can drag down customer satisfaction.

"It probably had some impact, but the release of those two products probably hasn't had their full force yet," he said. "It is true, though, usually, when a company like this releases something new, if there are issues with it, either reliability and how it works and fits with other things, there is a backlash and customer satisfaction takes a dip. In this case, it's too early to say what the full effect will be."

Worth noting: Microsoft's index score of 70 placed it below top-rated FedEx (84), Olive Garden (80), Starbucks (78) the U.S. Postal Service (77) and about 40 other companies. Consumers were more satisfied with Microsoft than with broadcast TV news (67), the newspaper industry (66), airlines (63) and, at the bottom, Comcast (56) and Charter Communications (55).

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May 14, 2007

Xbox Live: Hollywood's meeting ground?

Posted by Kim Peterson at 4:41 PM

Xbox Live is the new place to network for Hollywood types, according to this Variety article. Blowing someone's head off at night makes it easier to approach them the next day with pitches, the article says. One writer interviewed says that listening in to the profanity used in the game helps him keep up with the latest slang.

"Is it really socially acceptable to talk business at 2 a.m. on the phone? Of course not," observes Zach Shiff-Abrams, an exec at Michael De Luca Prods. "But it's completely acceptable on Xbox Live."

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Clearwire speaks to investors

Posted by Tricia Duryee at 3:21 PM

Clearwire gave last-minute notice today that CEO Ben Wolff will speak Tuesday at Morgan Stanley's 12th Annual Communications Conference in Washington, D.C.

He will speak at 6:45 a.m. at the Ritz Carlton Hotel. A live Webcast and replay of the session will be available on Clearwire's Web site.

I wrote recently about all of the appearances executives were making.

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Amazon buys digital camera site

Posted by Kim Peterson at 1:28 PM has bought London-based digital camera site for an undisclosed amount. In a statement announcing the deal, dpreview founder Phil Askey said he didn't have enough time to produce content and come up with new site features. Now with Amazon's help, he said, he'll be able to devote more time to site features.

The Motley Fool says Amazon made the right call:

It expands Amazon's reach to a niche audience that it covets. It also keeps the site away from the competition. As of this morning, some of the ads on DPReview were sending visitors to Amazon rivals like CNET's comparison shopping site and resellers of Kingston memory cards. That will change.

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eProject raises $12 million

Posted by Tricia Duryee at 11:00 AM

Seattle-based eProject, which develops collaborative project software, said today that it raised $12 million in a second round of venture financing.

The round was led by Bay Partners and included previous investor Kennet Partners.

The company said it has more than 100,000 users at 650 companies relying on its software every day, and is adding new customers at a rapid rate.

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Redfin: "Pandemonium" after "60 Minutes" airing

Posted by Kim Peterson at 10:01 AM

Seattle online real estate company Redfin said its Web site was swamped Sunday night after it was featured in a "60 Minutes" segment.

"Pandemonium here at Redfin," said the company's blog. The site became very slow after the show aired on the East Coast, the blog said, and the company scrambled to keep every server up and running.

The segment, which pretty much amounted to an ad for Redfin, talked about how the company's business model could disrupt the traditional 6 percent commission that real estate agents take in transactions.

Clips from the segment are here. You can read a summary of it here and see lots of posted comments from real estate agents who are not happy with what they saw. ("I think Leslie Stahl really blew this story, it was a cheap shot at Realtors.")

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Microsoft readying beta of 'Live Drive'

Posted by Benjamin J. Romano at 9:52 AM

Microsoft is preparing a test version of a much-anticipated new online service: Windows Live Folders. has a thorough look at this pending service, which will allow you to upload files to Microsoft's servers and then access them from anywhere through a browser. Both Firefox and Internet Explorer will be supported, according to LiveSide's report.

"This is the 'cloud storage' or 'Live Drive' that has been rumored for a year or more. Beta should begin soon, but the site is up," contributor Kip Kniskern said in an email.

According to Mary Jo Foley, who viewed the Windows Live Folders page before the site was disabled over the weekend, Microsoft is offering 500 MB of storage in the cloud for starters.

The service will offer three folder flavors, allowing users to "keep them private, share them with contacts, or make them public," LiveSide reports. Here's a series of screen shots from the service.

LiveSide's Kniskern guessed that the service will be free with perhaps a premium paid option, but added, "We don't have any specific public information."

The service would compete with hosted storage offerings rumored to be forthcoming from Google.

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May 11, 2007

TV: Cable vs. telecom

Posted by Tricia Duryee at 1:11 PM

I've been meaning to point out the significance of this since Tuesday. At an industry trade show, Comcast CEO Brian Roberts showed off new technology that enabled a data download speeds of 150 megabits per second, or roughly 25 times faster than today's standard cable modems.

The AP reported that the new technology is crucial because the industry is competing with a speedy new offering called a TV, as well as Verizon Communications' FiOS service, which is currently available in some areas on the Eastside.

Verizon's top speed is currently 50 megabits per second, but the network is already capable of providing 100 Mbps with what some people say unlimited potential. Comcast's current cable modem service is closer to the 6 to 8 Mbps range.

The new Comcast technology, called DOCSIS 3.0, was developed by the cable industry's research arm, Cable Television Laboratories. It bonds together four cable lines but is capable of allowing much more capacity. The laboratory said last month it expected manufacturers to begin submitting modems for certification under the standard by the end of the year.

The question is, why do we need such high capacity when people for the most part find their less than 1 Mbps connection sufficient?

The short answer is high-definition TV, which takes up a lot of bandwidth. If there are two TVs in the house watching two different HDTV channels, and someone is on the Internet, the system is going to get seriously bogged down. I thought I could actually tell you how much capacity this would require, but the numbers weren't readily at hand.

CNET writes that with cable, in particular, there's only a limited amount of bandwidth, and because HD channels use six times as much bandwidth as standard-definition channels, cable and satellite companies have been slow to roll out local HD channels to subscribers.

Regardless of how you do the math, you could conclude the cable industry is worried if Comcast is quick to show off technology that may or may not be available for at least two years.

GigaOm has a good debate going here about the facts of Tuesday's demonstration.

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May 10, 2007

On Clearwire's Seattle network

Posted by Tricia Duryee at 12:35 PM

In the past two days, I've written two stories about Clearwire, one on Wednesday, when its first quarter financial report first came out, and one that ran today after I talked with management. One thing that didn't seem to fit into either is a status report on how sales are going in Seattle following its launch in November.

During the company's conference call Wednesday, President Perry Satterlee acknowledged that the sales in Seattle were bumpier than expected, and he attributed it to a sales technique the company was testing. (The company didn't disclose how many subscribers it has in Seattle.)

I asked the CEO Ben Wolff to elaborate on what that means in a follow-up conversation.

He said Clearwire typically has a comprehensive approach when launching in a new market that involves a direct sales force, its own retail stores, kiosks, indirect retail channels, big box retailers, the Internet and telephone sales.

"Our direct sales force is the most expensive cost per gross add, so we decided to try something different," Wolff said. "We wanted to see if we could bring it [the cost] down sooner by starting out of the gate with a smaller sales force, and relying on less expensive channels."

In that regard, it was a success.

"The cost of acquisition came down significantly -- that was very good for us -- but the trade-off was that we didn't add as many customers," he added.

Wolff said as a result, the company thinks it is a month or two behind expectations in Seattle.

"There's a balancing act in determining what's the best balance, cost vs. the opportunity to bringing on a customer," he said.

In the first quarter, the cost per gross add (or adding one more subscriber) was $343 each. In the same period a year ago, it was $361.

Wolff said Cleariwre has since decided to add additional sales people in Seattle.

"We are beefing up a bit. This continues to be something we learn and evolve with," he said. "There's nothing alarming, we just continue to turn the dials."

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ShackPrices adds bus routes

Posted by Tricia Duryee at 12:04 PM

Seattle-based, which falls into the same bucket as Redfin, Windermere and Zillow, added a new twist to its Web site today.

And, as Galen Ward, the co-founder points out on the company's blog, it corresponds nicely with a few trends -- going green, the high price of gas and road construction. now lets home buyers search for houses along mass transit lines in King County free.

If you go to the site, you can add the option by clicking on the pull down menu to click on near transit. With the box added, you can plug in a certain bus line.

"By letting home buyers search for properties near current and future transit stops, we are giving the public a valuable tool to find homes that fit an environmentally friendly lifestyle," Ward said.

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Remember it's still the early days in wireless...

Posted by Tricia Duryee at 11:44 AM

News Corp. Chief Operating Officer Peter Chernin offered his views on both mobile and online business efforts at a press conference at the Cable Show on Wednesday in Las Vegas, according to RCR Wireless.

RCR reported that Chernin compared the wireless industry today to the cable industry in the '70s.

"In 1977, no one knew there was going to be an ESPN, Discovery or a Lifetime," he said.

News Corp. recently purchased mobile-content company Jamba for $188 million.

"We've been spending a lot of time trying to get from zero to 60 in 10 seconds," he said. "My view is we should move slowly.... I'm perfectly happy to take the time to get it right rather than rush."

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T-Mobile USA profit gets bigger

Posted by Tricia Duryee at 10:21 AM

Bellevue-based T-Mobile USA, the fourth largest U.S. carrier, said it added 980,000 new subscribers during the first quarter for a total of more than 26 million.

T-Mobile CEO Robert Dotson said part of the company's growth can be attributed to myFaves, a service that gives subscribers unlimited calling to five designated people.

The company, owned by German-based Deutsche Telekom, also reported average revenue per user of $52 during the first quarter and churn of 1.9 percent. During the first quarter, the company's profit totaled $315 million on revenues of $4.5 billion. In the year-ago period, the company reported profit of $241 million on revenues of $4 billion.

Dotson on the results:

"MyFaves is the most successful offering we've had in the history of T-Mobile and it is changing the nature of our business. We continue to add high quality customers to our ranks and myFaves is a key reason why. In the quarter, we added almost one million new customers, of which almost three quarters were again additions to our strong postpay customer base."

Although T-Mobile USA's profit gained, it didn't offset the decrease seen companywide at Deutsche Telekom.

DT said its first-quarter profit dropped 58 percent, as more than half a million German customers canceled DT fixed telephone service in favor of cheaper rivals.

"T-Mobile USA is once again front and center as the leading growth driver for Deutsche Telekom," said Rene Obermann, Deutsche Telekom CEO. "The U.S. business continues to demonstrate how a committed service culture can play a foundational role in driving our business ever forward."

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May 9, 2007

One Getty exec retires, another promoted

Posted by Kim Peterson at 3:30 PM

Getty Images said today in a filing that its senior marketing guy, Jack Sansolo, is going to retire on June 1. He's not leaving empty-handed. Sansolo will receive $275,000 in cash, which represents his salary and the bonuses he would have received. In return, he has agreed not to do anything that would be in competition with the company for six months.

Getty also gave a big promotion to Bruce Livingstone, the founder of its iStockphoto subsidiary. And it spent $1.2 million two buy two of Livingstone's companies: Web site builder Evolvs Media and independent music site Paper Thin Walls.

Update: I couldn't figure out how music applies to Getty's business model, so I asked the company what was up with these two acquisitions. A spokeswoman gave me this response: "For now, we see them as a means to explore emerging business models in these spaces that we expect to be exciting to our customers and the industry as a whole."

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SAS: Semel mum on rumors

Posted by Benjamin J. Romano at 2:26 PM

Yahoo! Chairman and CEO Terry Semel spoke not a word about the rumors of a partnership between his company and Microsoft in Seattle today.

He gave a brief, mundane keynote to close Microsoft's Strategic Account Summit, a gathering of top advertising executives. After that he chatted on stage with Microsoft's Joanne Bradford, but their talk never hinted at or even joked about a possible combination. There was no opportunity for questions from the audience or the press.

Semel, whom Bradford described as "the Hollywood guy in the Internet space," did describe some things that Yahoo! and Microsoft have in common, and poked at what may be the Achilles heel of their mutual rival on the Web, Google.

"Either of us could have been in the YouTube look-a-like and violate all the copyrights over night and do all that stuff," he said, in reference to the online video-sharing site Google acquired for $1.76 billion in November. The site was subsequently sued by major media companies for copyright infringement because users made a habit of posting popular clips from "The Daily Show" and other professional content. "We chose to think of [media companies] as long-term partners, potential partners that we could do a lot of stuff with."

He did make one mention of getting people in Yahoo! and Microsoft together to talk about improving standards for online video advertising. But that wouldn't be any kind of exclusive business deal.

Interest in Semel's appearance here grew after reports last week that Microsoft and Yahoo! had been discussing in recent months a merger or other more limited partnership, perhaps around advertising. The acquisition price tag was estimated at $40 billion to $50 billion.

The acquisition rumors sent Yahoo! shares up nearly 10 percent Friday. Shares gave back some of those gains earlier this week following news late Friday that the acquisition talks were no longer active.

Yahoo! shares lost 19 cents Wednesday, down less than 1 percent, to $30.22.

Yahoo! has long been a rumored Microsoft acquisition target. The combined companies would present a more formidable challenge to Google in the fast-growing business of online advertising.

But an appearance at Microsoft's Strategic Account Summit clearly is indicative of nothing. Semel has presented in the past, as has Google CEO Eric Schmidt.

Some analysts gave a possible Yahoo!-Microsoft partnership a chilly reception, citing the huge costs of integrating the companies' technologies and cultures.

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TV watching plummets; DVR miscount?

Posted by Kim Peterson at 1:39 PM

The number of television viewers is plummeting, the Associated Press reports. About 2.5 million fewer people have been watching the main networks compared with last year.

NBC set a record last month for its least-watched week during the past 20 years, and maybe ever -- then broke it a week later. This is the least popular season ever for CBS' "Survivor." ABC's "Lost" has lost nearly half its live audience -- more than 10 million people -- from the days it was a sensation. "The Sopranos" (a show that has earned broadcast-network-like ratings in the past) is ending on HBO, and the response is a collective yawn.

The shift may cause traditional television advertisers to rethink their spending.

There could be many reasons for the drop in viewership, the article says. An earlier daylight savings time is partly responsible.

But the article highlighted some measurement problems. Nielsen doesn't count people who download a show on Apple's iTunes or stream it from a network's Web site.

And Nielsen is trying to include the estimated 17 percent of homes that have digital video recorders, but it only counts a show if the viewer watches it within 24 hours from when it aired. That's screwing up the numbers for heavily recorded shows like "The Office."

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Posted by Kim Peterson at 1:12 PM

Wow,'s site got a crazy makeover. It doesn't look like a search engine anymore. It looks more like an advertisement, and it has its own slogan: "Innovations in search technologies."

The old is now called OpenSearch, and it's linked to from the home page. OpenSearch is a search aggregator that shows results from many Web sites, including Wikipedia, and Microsoft's There's also a Product Search for Amazon's products.

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More on Clearwire's Q1 results

Posted by Tricia Duryee at 10:55 AM

Kirkland-based Clearwire reported its first-quarter financial results last night at 9 p.m., just giving me enough time to get something in today's paper.

You can read the high-level results here.

Ten hours later, at 7 a.m. this morning, Clearwire executives talked with Wall Street analysts to discuss the results. That Webcast can be found here.

In general, Clearwire, which is working on building a nationwide WiMax network, sounded a little defensive based on concerns that it will have to raise more than a billion dollars more to make a significant dent in its plans.

It did a thorough job making a case for how fundraising and building a network from the ground up can be possible.

CEO Ben Wolff said the company's plan is to be able to reach 125 million customers in the next five years, but if need be , it can scale back that plan and reach profitability sooner.

John Butler, Clearwire's CFO, said to count on increasing expenses and losses for some time, but "they aren't any different than any predecessor wireless carriers."

Since the company's inception, it has raised $2 billion in capital and was able to raise $600 million in its public offering. It has $1.5 billion in cash and short-term investments.

"We have consistently demonstrated to have access to markets, and will tap that market soon for additional funding," Butler said.

Butler added that if the terms were not favorable, Clearwire can adjust its roll-out schedule, conserve cash and become profitable much sooner if it needed to.

Still, that argument didn't seem to sway the stock market. In early morning trading today, the company's stock continued to slide, decreasing 73 cents, or about 3.8 percent to $18.27 a share.

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Hitwise shows MSN Search numbers down in April

Posted by Kim Peterson at 10:19 AM

The Hitwise competitive intelligence service said today that MSN Search's U.S. market share dropped to 8.5 percent in April. That's down from 9.2 percent in March and 12.6 percent in April 2006.

Google continued to grab more market share, coming in at 65.3 percent for April. That's slightly higher than the month before. And Yahoo! took about 20.7 percent -- slightly lower than the month before.

It'll be a little while before Nielsen//NetRatings and comScore release their measurements for search engines in April. They pegged MSN Search's market share for March at 10.1 percent and 10.9 percent, respectively.

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Smilebox signs with

Posted by Kim Peterson at 9:41 AM

Smilebox is continuing to forge online partnerships to distribute its greeting card-meets-scrapbook service for photos and videos. The Redmond company said today that has just launched a co-branded version of the service as part of a new photo and video initiative.

Corel plans to distribute Smilebox content within its Snapfire photo and video product. Later, it will integrate the broad Smilebox service into Snapfire.

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Microsoft takes stake in CareerBuilder

Posted by Benjamin J. Romano at 8:33 AM

Here's the news release from, the online job site owned by a trio of major newspaper companies, and now, Microsoft.

Microsoft bought a 4 percent stake in, according to The Associated Press. Newspaper companies Gannett and Tribune each keep their 40.8 percent ownership share, while McClatchy's share is 14.4 percent.

Yesterday, Bill Gates talked about his friends in the newspaper industry and the "tough, wrenching" changes they are going through as advertising dollars migrate away from traditional media to online sources. Employment listings, once a staple of newspaper classified pages, are one area where online sites such as and its competitors and Yahoo! HotJobs have taken away revenue.

In a separate agreement, CareerBuilder extended its relationship with Microsoft's MSN to be the exclusive provider for its Careers channel through 2013.

Update: The transcript of Gates' keynote address yesterday sheds some more light on how he's thinking about classified and employment advertising.

"[I]t's a very different world. It's not a world where you have a single person who can deliver things like the classified ads, you have many people competing.

"So it's fascinating to look at, say, job markets within a city, or the nationwide job markets, and look at to the degree it's new people who've done that well, or it's traditional media people who have come in. One thing we can say for sure, it's a far richer experience for the person who has [to] list and find that job, and far more competitive in terms of the rate of innovation that those things are going to take place. So the Internet is like a lot of things, the only sure winner with the breakthrough are the consumers themselves. There will be some companies that do well out of it, but it really, most of it, passes on to simplify things for now the not only hundreds of millions but billions of users who are connected up through these devices."

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Microsoft announces next SQL Server

Posted by Benjamin J. Romano at 8:14 AM

Microsoft announced a new version of SQL Server, code-named Katmai, this morning at the company's business intelligence conference in Seattle.

It's the first time the company has talked publicly about the replacement for SQL Server 2005, a product that helped the company's Server and Tools Division post operating income of $979 million in the third quarter.

SQL Server is used by businesses for managing and analyzing business data.

The Katmai version is scheduled to be available in 2008.

Update: Jeff Raikes, president of the Microsoft Business Division, said at the conference that Katmai is being designed to allow enterprises to get access to data "anytime, any place."

The new release will also emphasize security; policy-based management; storage and management of unstructured data, such as documents; and improved application development.

The company is also acquiring SoftArtisans, which describes itself as "a leading developer of Microsoft Office format reporting and enterprise file transfer software."

(Second update: It turns out Raikes misspoke. Microsoft is not acquiring SoftArtisans, but rather one of its products, Office Writer.)

Raikes said Microsoft is pushing to make business intelligence software cheaper and more accessible to a broader range of workers, not just the "high priests of data."

"Our vision is to bring the powerful capabilities of BI to all the people who do information work," Raikes said at the conference, attended by about 2,600 people.

Raikes said Microsoft is making it easier for workers to use business intelligence in the familiar interface of its Office productivity software.

He said the company plans to change the economics of the business and lower the price per user.

He said that a related product, PerformancePoint Server 2007, will be released "later this summer."

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May 8, 2007

SAS: Photosynth as an advertising platform

Posted by Benjamin J. Romano at 3:40 PM

One of the most interesting things I've seen from Microsoft in the last year is being pitched as the latest, greatest digital advertising platform. This after Bill Gates described for an audience of advertisers this morning the decline of traditional media business models.

I reported on Photosynth last August, a photo-viewing application that combines technology from University of Washington, Microsoft Research and a Ballard startup called Seadragon Software that Microsoft acquired in late 2005.

A quick reminder of what Photosynth is: The software organizes sets of pictures of a specific thing or place, such as St. Mark's Square in Venice, Italy. It matches up elements the photos have in common and uses that information to build a rudimentary three-dimensional map of the space, calculate the position from which each picture was taken and place each in the appropriate 3-D context.

Fluid navigation allows the user to glide from photo to photo and click on a specific element, a mosaic for example, to see other photos that contain the same element. It's like viewing a nonlinear slide show: The user has the freedom to move about the space and view the pictures in any order. It's a bit closer to actually being there. You can learn more about it and check out a preview here.

"This same technology can serve as a way of surfacing an entirely new form of advertisement," Microsoft technical fellow and Live Labs boss Gary Flake told the audience at the company's Strategic Account Summit this afternoon.

We've seen the zooming technology from Seadragon incorporated with Silverlight, the new Web-based video platform Microsoft is pushing. In examples here and at the Microsoft Mix conference in Las Vegas last week, it was used to smoothly zoom in to a super-detailed advertisement or high-definition image starting from a small thumbnail. It could be used to repurpose complex print ads on the Web, company executives have said.

Flake showed a "Photosynth" environment of a commercial space -- a home fixtures store with faucets, cabinets and other hardware.

"I can work my way around the space, navigate around, take a step back," he said, demonstrating the application, which runs in a Web browser. "Maybe there's a sink over here. I can look at that."

On the left, the program displayed Web content that changed to correspond to the specific products he zoomed in on in "the store."

"We've effectively created the ability to place hyperlinks from your physical store to your online store," he said.

The application is a step toward a vision of three-dimensional Internet that Microsoft has articulated for other products, such as its Virtual Earth mapping application. Eventually, these applications could be combined to allow you to "travel" through a three-dimensional rendering of the real world to find a store -- in its actual location -- and then go shopping there.

Flake put it in the context of online virtual reality worlds such as Second Life, where people navigate a made-up world in the guise of whatever avatar they want.

"This is maybe properly referred to as one-and-a-half life," Flake said. "It's consistent with physical reality, but also has the ability of being combined with the Internet and the Web content that's already there."

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T-Mobile's Mother's day present

Posted by Tricia Duryee at 2:57 PM

T-Mobile USA released findings from a survey today on cellphone usage on Mother's Day.

In addition, it said it will provide a "Stick Together Day" promotion that gives T-Mobile customers unlimited picture, video, IM and text messages on May 13 (as in, Sunday, hint-hint).

The promotion highlights the findings of the survey, and T-Mobile's previous experience showing messaging increases on the big day.

The survey found that 49 percent of people said they would not be spending Mother's Day with their mom. Of those surveyed, 66 percent said the best way to say "I love you" to their mother was a phone call. In second and third place were buying a card and flowers.

Last year on Mother's Day, T-Mobile had a 28 percent increase in the number of picture messages sent compared with all other days that month.

But, fathers, don't get your hopes up, at least when it comes to photos.

Last year, while picture messaging was all the rage on Mother's Day, T-Mobile said, text messaging saw bigger increases on Father's Day.

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SAS: Gates' home not for sale

Posted by Benjamin J. Romano at 10:40 AM

Bill Gates is not selling his home.

That revelation came at the end of a keynote presentation that was decidedly devoid of news this morning at Microsoft's Strategic Account Summit in Seattle. In particular, there were no hints of a Yahoo! partnership, but Terry Semel isn't scheduled to speak until tomorrow.

The company has gathered about a thousand advertising professionals from 27 countries at the summit to pitch its various services and platforms for marketing in new ways enabled by the Internet.

In a question and answer session, Joanne Bradford, Microsoft's corporate vice president and chief media officer, asked Gates if he had "Zillowed" his Medina mansion, where he has lived since 1997.

Yes, he has used the Seattle-based real estate valuation service, he said.

"The Zillow guys are great," Gates said, noting that uses Microsoft's Virtual Earth mapping technology. But, he added, "Their algorithms for figuring out prices don't scale very well into the very low end or the very high end, I can tell you that."

Zillow is great for the middle of the market -- "the part that counts," Gates said.

Well, since he brought it up, I took a quick peek at Zillow. His waterfront megaproperty south of the Evergreen Point Floating Bridge was listed at $135.7 million.

"But if you bid that number on my house, I won't sell it to you," Gates said.

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J Allard in dreadlocks: not a pretty sight

Posted by Kim Peterson at 10:24 AM


Microsoft's J Allard, on the losing end of a bet.

A new look for Microsoft's J Allard? For a while, at least.

Allard's dreds are the result of a bet he made with Newsweek reporter N'Gai Croal over Sony's handheld PSP game player. In 2005, Croal said that the PSP would sell faster than the PlayStation 2 console. Allard bet that it wouldn't.

If Croal lost, Allard was to shave off Croal's dreadlocks onstage at Microsoft's E3 press conference. If Allard lost, he would wear a dreadlock wig for the month of May 2006, including the week of E3.

Allard was wrong, but by last year's E3 he had shifted his focus to Zune and didn't go onstage at Microsoft's event. So he's making good on the bet now with an updated bio page on Microsoft's site.

The picture shows Allard holding a PSP with the words "N'Gai had it right." Here's how Croal describes the bet.

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Vista adoption survey shows more groups testing

Posted by Benjamin J. Romano at 8:01 AM

Fewer than a third of organizations surveyed in February were evaluating or using Windows Vista, according to a survey of IT decision makers. But that number has increased 8 percentage points since Microsoft launched the operating system in November.

IT consultants CDW conducted the survey, the second of three it's planning to track attitudes and adoption plans for Windows Vista. The survey, conducted over seven days at the end of February, gathered opinions from 753 IT decision makers. The earlier survey was conducted in October.

Among the findings:

-- 29 percent of respondents said their organizations are currently evaluating, testing or implementing Vista, up from 21 percent during the first survey.

-- Of those currently using or evaluating the operating system, 19 percent don't currently plan to upgrade. That's an increase from 15 percent in the earlier survey. (The surveys have a margin of error of +/-3.5 percent at a 95 percent confidence level.)

-- Of those implementing Vista currently, 12 percent called their experience thus far "very favorable," down from 14 percent; 48 percent said "somewhat favorable," down from 56 percent; 14 percent said "somewhat unfavorable," up from 6 percent; and 4 percent said "very unfavorable," up from 3 percent.

-- IT decision makers' expectations of benefits from deploying Vista saw significant declines from the earlier survey in three areas: In the previous survey, 63 percent were expecting improved performance; now 56 percent are. There were also declines in expectations for improved patch management and Windows Update.

-- Meanwhile, their concerns increased significantly in two key areas: 38 percent said the benefits of upgrading to Vista were not clear enough, compared with 32 percent in the earlier survey. 37 percent said the hardware requirements to upgrade were too excessive, compared with 28 percent earlier. The IT decision makers were less concerned than before about not having enough money to pay for the upgrade (25 percent vs. 30 percent).

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May 7, 2007

What kind of techie are you?

Posted by Kim Peterson at 3:57 PM

According to this quiz from Pew Internet & American Life, I am a technology "omnivore." Only 8 percent of Americans are in this category, and 70 percent of them are male.

Members of this group use their extensive suite of technology tools to do an enormous range of things online, on the go, and with their cellphones. Omnivores are highly engaged with video online and digital content. Between blogging, maintaining their Web pages, remixing digital content, or posting their creations to their websites, they are creative participants in cyberspace.

Pew created this quiz to see where people fit in its new tech-user typology. It's tied to a report the group released Sunday about Americans and technology.

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AdCenter isn't the only one with problems

Posted by Kim Peterson at 1:47 PM

I wrote a story in today's paper about Microsoft's advertising system, adCenter, and some of the ups and downs it has gone through in its first year. You'll likely hear more about Microsoft's advertising plans tomorrow when Bill Gates speaks at the company's annual Strategic Account Summit.

I talked to quite a few Internet marketers about adCenter, and found that across the board they praised adCenter's return on investment, but complained about the low traffic coming in to Microsoft's search engine. The story also mentioned some of the technical issues that adCenter has had, including some problems with usability and speed.

Someone who has worked on the adCenter application for the last two years wrote me to say that Google and Yahoo! have had similar technical problems as well.

My story was about adCenter specifically, and not what's happening with the competition. But in the interest of fairness, here and here are some examples of glitches with Google adWords.

Some advertisers had a messy time converting to Yahoo!'s new Panama advertising system. You can read more about those glitches here.

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Cingular's shake-up continues

Posted by Tricia Duryee at 1:31 PM

Jim Ryan, who has served as the vice president of consumer and business data services and has been mentioned in Seattle Times pages and blog posts many times, has stepped down from the position, according to RCR Wireless.

The online wireless newsletter said Ryan joined AT&T -- previously called Cingular Wireless -- in 2003, and oversaw several major initiatives.

Although based in Atlanta, Ihe was at one time oversaw the data group still based in Redmond after Cingular purchased AT&T Wireless.

Ryan was also involved with the launch of Cingular's mobile video service, which is operated behind the scenes by Seattle's RealNetworks.

RCR said an AT&T spokesman confirmed Ryan left the company "a couple of weeks ago."

"He decided to look for other things to do," said spokesman Mark Siegel, adding that he had no details regarding Ryan's plans. "It was something he wanted to do, and we wish him all the best."

Mark Collins, who had served as the carrier's vice president of long-term products and planning services, replaced Ryan.

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T-Mobile's national Wi-Fi plan

Posted by Tricia Duryee at 10:59 AM

T-Mobile USA is planning a nationwide launch this summer of cellphones that can roam on Wi-Fi hotspots to improve reception and save on monthly cellular minutes, according to the Wall Street Journal.

The service, known as Hotspot at Home, has been in trial in the Seattle area. I wrote a story about the October launch here.

The WSJ said the Bellevue-based carrier is ready to roll it out nationwide as early as mid-June.

I had heard this timing as well, although it had surprised me a bit. From what I'd been hearing from people trying out the service here, it's been difficult to use. So it will be interesting to see if they say how successful the trial has been.

Here's the deal: In the trial, customers pay $20 a month for unlimited talking over a Wi-Fi network in homes or in coffee shops, where T-Mobile provides Wi-Fi HotSpot service.

The most logical reason why T-Mobile is interested in providing the service is because it encourages people to drop their landlines if they get great reception indoors at little additional cost.

Also, the company benefits financially. Getting people to use Wi-Fi frees some space on the company's cell network. And people are essentially paying for part of their own transmission -- over the cable or DSL connection that the home Wi-Fi network uses. Little did you know that one of the carrier's biggest costs is the fee associated with sending the call from a cell site to a phone switch.

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Ontela's picture survey results

Posted by Tricia Duryee at 10:38 AM

Seattle-based Ontela, which is creating a photo sharing service for mobile phones, said it conducted a survey that -- surprise, surprise -- finds that consumers need such a service.

Ontela said that in a survey of more than 500 consumers, it showed that while people are increasingly selecting camera phone handsets, they are frustrated by the difficulty of accessing the pictures.

It found that 40 percent of phone owners would consider changing wireless service providers in order to get a seamless photo-sharing experience.

And, in support of Ontela's mission even more, it said respondents also indicated they would expect to pay for the service when a carrier delivered images to users' popular photo sharing sites, such as Windows Live Spaces, Facebook, Snapfish and Flickr.

Other findings include:

-- 80 percent responded they do not use MMS or Internet browsing, and two-thirds reported that they had never purchased games or photo wallpapers.

-- 75 percent of consumers were unable to transfer photos from their current phone to the PC.

-- 85 percent prefer that their next phone has a camera.

-- 87 percent of users said they want to upload pictures to a photo-sharing site, but no single destination was unanimously selected.

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May 3, 2007

Microsoft's Tellme and mobile ad push

Posted by Tricia Duryee at 12:35 PM

Microsoft officially closed its acquisition of Tellme Networks today.

Tellme, based in Mountain View, Calif., uses voice recognition software to make searching for information faster on mobile or fixed-line phones.

Microsoft announced the Tellme acquisition on March 14. Now, Tellme is a wholly owned subsidiary and will continue to operate out of Mountain View.

Microsoft said today the teams are well into a rapid planning phase and expect to compete a strategy for connecting and integrating Tellme's industry expertise with Microsoft's platforms, resources and global reach.

Tellme will work under the Microsoft Business Division, run by President Jeff Raikes. Tellme CEO Mike McCue is remaining as the senior leader and is working closely with Zig Serafin, general manager of Microsoft's Unified Communications Group.

Also, today, Microsoft announced it would buy mobile advertising company ScreenTonic of Paris for an undisclosed sum.

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Clearwire expands AOL partnership

Posted by Tricia Duryee at 12:11 PM

Kirkland-based Clearwire, which is building out a nationwide wireless network, said today that AOL will resell the broadband service in all of Clearwire's existing and future markets.

Previously, AOL and Clearwire had a joint distribution agreement that covered four Clearwire markets -- Jacksonville and Daytona Beach, Fla., and Stockton and Modesto, Calif. Clearwire now serves 38 markets in U.S.

On Tuesday, Clearwire will report its first quarter earnings and discuss them during a investor conference call on Wednesday.

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T-Mobile Dash picks up on Windows Mobile 6

Posted by Tricia Duryee at 11:45 AM

T-Mobile USA said today it will be the first in the U.S. to provide the Windows Mobile 6 software to its customers.

The software will be available starting tomorrow for the T-Mobile Dash device through a free desktop download available from T-Mobile.

Windows Mobile 6 offers a number of new capabilities, including faster access to contacts and the ability to view and edit Microsoft documents, such as HTML e-mails.

The T-Mobile Dash is built by HTC, which has its North American headquarters in Bellevue.

Windows Mobile 6 comes at a time when Microsoft has started to receive favorable reception to its mobile operating system.

The GigaOm technology blog quoted Robbie Bach, Microsoft's president of the Entertainment and Devices Division: "Today we already outsell RIM BlackBerry in the marketplace, something most people don't know."

Bach followed that up by promising that Microsoft will sell 20 million Windows Mobile 6 units in 2008.

That's still only a fraction of the over all 1 billion phones sold every year.

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May 2, 2007

Digital media pitches at WSA forum

Posted by Kim Peterson at 4:48 PM

I sat through six presentations in the digital media part of the WSA's Investment Forum and Technology Showcase today. I was surprised how often advertising-supported business models came up in the discussion. The subject was addressed early that day in a panel (see Brier Dudley's blog for a full rundown of the lively debate).

At the end of the day, panelist Bill McAleer of Voyager Capital summed it up nicely: "There's only so much advertising-supported models that can survive and thrive."

So which ones will thrive? We'll have to come back in a year or so and see what happened to the presenters. For now, here's a quick rundown of who said what:

1. Smilebox. We wrote about this startup last year. The Redmond company, started by Andrew Wright, offers the ability to create slideshows and digital greeting cards. You can insert your own video and photos and then e-mail the creation to friends and family.

Smilebox now has 30 employees and is approaching 1 million installations of its software. Helped in part by a key partnership with Hallmark, Smilebox had 700,000 unique users in April and is expecting 825,000 users this month. Smilebox's product has some good viral distribution: Wright said that 40 percent of the people who receive Smilebox greetings go on to install the software.

2. Alphabet Lane. Chief Executive Villette Nolon said her company is going after people who are remodeling their homes and need help planning and finding experts. Founded in September 2006, the Seattle company has six employees and 12 contractors. It started a private beta site in February.

Nolon is planning to refine the Seattle version of the site and then take the model to 36 cities in the next 18 to 24 months. She's hoping to be profitable by 2009 and is seeking $500,000 in angel funding.

3. Flowplay. Yet another casual online game company in Seattle. This region is the headquarters for this growing industry. Chief Executive Derrick Morton (who, no surprise, came from RealNetworks' game division) said he's getting ready to launch a closed beta in late May.

Flowplay is targeting teenagers with a site that is part social networking and part gameplay. It's hoping to run a subscription model that costs $5.99 for premium PC access or $9.99 for mobile phone access. Teens who don't have credit cards can pay for the service by putting it on their phone bill. Flowplay said it will break even at about 80,000 to 90,000 subscribers and is aiming for $27 million in sales by year four.

4. Mixpo. An online video company selling to small business owners, not the consumer space. The company helps companies embed a player in their Web sites that can show photos and video. A business owner can add and delete files from that player without having to hire a Webmaster.

President Anupam Gupta, who previously worked in Microsoft's MSN/Windows Live group, said the technology would be perfect for real estate agents, travel agents, architects and designers. About 2,000 customers are using the product, and Gupta said he envisions a business model that relies on subscriptions and partner licensing deals.

5. RIPL. The panelists seemed a little mystified by RIPL and I have to admit that I was, too. Chief Executive Bill Messing, in his first public demonstration of the product, showed how users can create their own profiles with photos and widgets that showed what iTunes songs were listened to recently. Those profiles would go out to the users' friends, who could see a slideshow of the photos, along with ads.

RIPL is an example of a trend that I call a revival of push technology - particularly the way that ads pop up on friends' computers. But Messing said that this advertising will be useful and relevant. RIPL has completed a $2 million Series A round and is opening a $1 million bridge round to Series B funding, Messing said.

6. Yodio. Chief Executive Clay Loges said he thinks that voice is the "undeveloped frontier on the Internet." The basic idea is that people can call a phone number and leave a voice recording, and then go to their computers to get that voice file and publish it. You can mash it with photos or tag it, for example.

Loges showed an example of an e-mail message that featured a person's picture and a voice recording from that person. Yodio wants to sell those voice recordings, giving a percentage to the performer and keeping the rest of the money. But who would buy these? Maybe Yodio can hook up with Sanjaya Malakar now that he's free.

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WSA: Office in Shenzhen, China

Posted by Tricia Duryee at 9:26 AM

In opening remarks at the WSA Investment Forum at the Bell Harbor Conference Center this morning, the technology industry association announced a partnership with the Shenzhen Software Industries Association (SSIA) in China.

As part of the partnership, WSA will open an office in the city in the next couple of months to support the partnership.

Ken Myer, the WSA's president and CEO, said the office will help Washington state companies work with the high-tech city in China, and assist in creating business opportunities, such as distribution, manufacturing and investing.

Former Gov. Gary Locke, known for his diplomatic work in China, also spoke this morning, saying the partnership will be great for Washington companies.

"Shenzhen is an incredible city. A few years ago it was a hamlet, and now it's a very planned city with tree-lined boulevards, where they have dedicated open space and beautiful architecture," he said. "It's also very young city with young people, highly educated people.

"This collaboration and joint office is going to be an opportunity to help position Washington companies in Shenzhen and Southeast China. The WSA has that foresight in helping the membership of the WSA, not just locally, and in the rest of the U.S., but in thinking of the globe as an eventual market."

The Shenzen Longgang District Government and Pacific Prestige -- a property development company that will host the WSA's Shenzhen office -- also signed the partnership.

Qiu Chang Miao, the SSIA's vice chair, also made an appearance at the event.

"We believe this is an important forward-looking decision. Compared to Washington, Shenzhen software industry is still in early stages. It has great potential," he said.

The WSA Investment Forum continues until 6 p.m. today with a panel discussion on trends and innovation followed by break-out sessions where startup companies have the opportunity to pitch venture capitalists and industry executives.

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Mix07: Bach describes transforming world of marketing

Posted by Benjamin J. Romano at 1:28 AM

LAS VEGAS -- Microsoft has been talking up its connected entertainment strategy for a while now. The idea is to give people access to their chosen music, games, videos anywhere and anytime they want them through a host of devices, such as the Xbox 360, Windows Media Center PC, and Zune music player.

On Tuesday, Entertainment and Devices Division President Robbie Bach talked about the strategy from a different perspective: advertisers. It followed Ray Ozzie's presentation here Monday focused on new technologies for developing rich Internet applications -- the "how." Bach talked about the "why" -- the business opportunity Microsoft sees for itself and its customers.

"It's an interesting thing to note that the same technology [that] is transforming the way development is done, is transforming the world of marketing," Bach said. "How we reach people in this digital age is changing."

Here are several examples of Microsoft's recent work with advertisers that Bach outlined. For more, check out today's story on privacy concerns around targeted advertising.

Disney: The entertainment and media company is working with Microsoft and large OEMs selling computers in China to install a software gadget on new PC desktops that pipes in content meant to attract people to the company's Hong Kong theme park.

Bach showed several other branded on-screen gadgets. Gadgets, a feature of Windows Vista, are small applications that run on the desktop and typically draw information, such as current weather conditions, from the Internet.

"If you think about it, it's some of the most valuable real estate in the home," Bach said of the PC desktop. Advertisers see the branded gadgets as another opportuntiy to engage with customers. "Now your brand is front and center with them," he said.

PC makers have long loaded up new computer desktops with trial software, sometimes to the dismay of customers who have to rid their machines of unwanted applications.

The Disney gadget is aimed at an emerging Chinese middle class that does not have the history with the Disney brand that Americans do, said Edward Kummer, a Disney executive in charge of online promotions of the company’s parks and resorts.

The gadget is constantly being updated via RSS feeds with news about the theme park and also includes long-format video, itinerary planning tools and other interactive content.

"This is effectively having a Disney application on the PC," Bach said.

No details were provided about the size of the application, the computing resources it uses or whether consumers could remove these branded gadgets.

Burger King: With a target audience that's spending more time playing video games than watching TV, the No. 2 burger chain developed three small Xbox games featuring the King character and other company images. Distributed through its stores, the company sold more than 3.2 million copies in a six-week period. Action in the game, such as pocket bike racing, was mirrored in TV commercials.

"If you had asked me a year ago, 'Gosh, you’re going to do a promotion with the Burger King guy on Xbox Live Arcade and it’s going to generate headlines in the business press about how they've helped Burger King's sales?' I would have been truly surprised," Bach said. "In fact, financial analysts on Wall Street started giving Burger King a higher multiple on its stock price because of the success of the promotion."

In game advertising: Bach said gamers appreciate the presence of in-game advertisements because it makes them more realistic: Dairy Queen billboards in racing games and a Subway banner advertisement behind home plate in "Major League Baseball 2K7," for example. The ads rotate, real time, as you play the game, Bach said.

Microsoft acquired in-game advertising provider Massive Entertainment a year ago and now has about 60 advertisers on board. The company plans to have the in-game advertising deployed in 100 games by year's end, Bach said.

Nissan: The car maker is building interactive commercials that would play through Windows Media Center PCs linked to TVs.

"TV is still the most important advertising screen in the household," Steve Kerho, director of media and interactive marketing at Nissan, said on stage with Bach.

He demonstrated a linear video ad for a car that was overlaid with interactive content that would allow a viewer to click on specific elements of the vehicle and learn more about it, "bringing a certain element of the Web to the television," Kerho said.

Microsoft has showed this concept before, such as at its Strategic Account Summit last year.

The program also allows Nissan to show different advertisements to different viewers, something Kerho said the industry has been wanting to do for a long time.

"If I'm in the market for a mattress, I don't mind seeing a mattress ad. If I'm not, it's just noise and the advertiser is wasting their money," Kerho said.

After Bach's presentation concluded, a panel of marketing and media experts explored the topic further. The discussion was heated, with Andrew Rashbass, publisher of The Economist magazine, providing some of the most biting, contrarian opinions of the entire event.

One comment in particular might be reason enough for Microsoft to reconsider inviting Rashbass next time.

"It's great, by the way, that Robbie Bach is giving a talk, which 2,000 people attend, about monetization and business and he just lost $300 million in the past quarter," Rashbass said. Ouch.

That, of course, was a reference to the performance of Bach's division in Microsoft's third quarter. It was actually $315 million in the red. Microsoft as a whole raked in $6.59 billion in operating income in the period.

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May 1, 2007

Earnings: Getty, HouseValues

Posted by Kim Peterson at 1:21 PM

A couple of companies reporting earnings today:

Sales were up but profits down at Getty Images, based in Seattle. The digital image company reported a record $213 million in sales for the first quarter. That compares to $201 million for the same period last year. Profit was $38 million, or 63 cents a share. That's slightly down from last year's profit of $39.3 million, or 61 cents a share.

Profit was hurt by the $4.1 million in fees Getty paid for a professional review of its stock option compensation practices. The Securities and Exchange Commission is also conducting an informal review of the company's stock option grants.

At Kirkland-based HouseValues, an online real estate company, first-quarter sales were $17.8 million, down from $23.2 million in the previous year. The company swung to a $1.2 million loss, or 5 cents a share from a profit of $1.8 million, or 6 cents a share, in 2006.

HouseValues launched a new consumer real estate portal today at, and it's selling advertising space to real estate agents who want to promote their listings. The company had fewer customers at the end of the quarter than it did at the end of 2006.

In other news, Isilon Systems said today that Mark Schrandt has resigned as vice president of engineering. The company didn't say why Schrandt left.

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Valleywag is done with Scoble

Posted by Kim Peterson at 10:58 AM

Valleywag declares the era of Robert Scoble to be over.

He used to be an evangelist for Microsoft. He used to be a top blogger. And he used to be relevant. Now he's just a dude who interviews Silicon Valley businesspeople for the PodTech video network. Sadly, he still feels entitled to attention, so he throws a fit when he feels ignored. The result: Robert Scoble is a pretty awful brand.

Valleywag's premise is that former Microsoft employee Scoble tried, and failed, to build a cult of self. I'm not sure that's the case. Scoble's posts appeared to give an uncensored, behind-the-scenes look at Microsoft. He did wonders for the company's image. He still is an interesting and prolific blogger, but when he left Microsoft his blog lost that lift-the-curtain tone.

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Adweek gives aQuantive unit a B

Posted by Kim Peterson at 10:24 AM

Adweek puts out critical report cards on 10 interactive advertising agencies, including the Avenue A | Razorfish unit of Seattle's aQuantive.

No agency gets higher than a B+, and Avenue A| R azorfish gets a B. With the highest annual revenue of any of the 10 -- $268 million -- the agency gets an A for numbers. But it got hit with a C+ in the creative and the emerging media categories. AdWeek called the unit's use of Web animation "uninspired" and said that its work on a Red Bull site fizzled.

"The marriage of metrics- and response-focused Avenue A and Web design rollup Razorfish has worked better than most imagined," the judges write. "The challenge for the agency will be making sure its disparate offerings do not lose out to more focused providers."

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GoChongo: Commerce and creativity

Posted by Kim Peterson at 10:16 AM


GoChongo founder Shawn Plaster.

A Seattle startup is putting a spin on the YouTube concept with a new site that goes public today. GoChongo features an ask-and-answer model where users describe projects that they're willing to pay for. A user might request a musical sample, for example, or put out a call for poster designs or videos. Other users can see those requests and submit entries -- and the winning entry gets money from the person who requested it.

Add goChongo to the growing list of startups whose business model relies on advertising money. A user will see a few seconds of advertising before viewing submissions, and that ad revenue is split three ways among the requester, the performer and the company.

The idea for goChongo came from founder Shawn Plaster, 36. He worked at Accenture for 11 years, the last six in the company's Seattle office. Part of his role at the company was to study the consumer technology space.

"We were in awe of how people were willing to video and submit their content," he said of sites like YouTube. "We were trying to figure out how we can create a fun, entertaining site that would give these people an opportunity to meet one another."

Plaster calls goChongo an "entertainment destination and marketplace." (Chongo, by the way, is a Spanish slang word for "monkey" and was Plaster's nickname growing up. His brothers still call him "Chongo" today.)

GoChongo has nine employees, all working from their homes. Plaster has put $100,000 of his own money into the company and angel investors have contributed $75,000.

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