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August 31, 2007

Sprint's helpful new ad campaign

Posted by Tricia Duryee at 11:08 AM

Sprint Nextel rolled out a new ad campaign a couple of weeks ago to highlight the speed of its network.

Now, a somewhat stealth Sprint Web site has popped up giving people tips on how to save time in their daily lives. The site is at http://waitless.org/.

The slogan at the top of the page says: "Fast-forward through the boring parts of life."

Then it provides a daily video called a "Sprintcut." The current video, called "Speedy Sorbet," shows you how to make sorbet with a scoop of orange juice, ice and a couple of zip lock bags.

The video claims to save you two days of your life, or as Sprint claims: "Turn tedious tasks into fleeting moments with Sprintcuts -- tips that'll refund your time and amaze your friends."

Of course nothing comes without warnings.

The fine print says that Sprintcuts should not be attempted at home, but "Oh wait, tha'ts what they're for! But seriously ... Sprint is not responsible for the outcome of any attempted time-saving maneuvers. Actual time saved may vary."

The more useful ones involve quick peeling an egg and speed tying your shoe, which both claim to save four days of your life.

August 30, 2007

Investments in clean energy grow worldwide

Posted by Kristi Heim at 11:11 AM

Venture capital investing in clean energy grew by almost 70 percent in 2006, to $18 billion, according to research firm New Energy Finance. And more than $10 billion was invested in companies and projects in the first half of 2007.

The group tracked more than 1,800 investors worldwide and recorded 193 funds that invest in clean energy.

Investment was highest in North America, with most of it going toward biofuels. In Europe private equity investment growth was strong, and in Asia investment was driven by pre-IPO investments in Chinese solar companies


AFP / GETTY IMAGES

Indonesia's biofuels program makes use of palm oil.


Looking at various industries, the investments broke down into $8.4 billion for wind, $4.7 for biofuels and $2.3 billion for solar, which together made up 86 percent of the total venture capital / private equity investment.

The report is available on New Energy Finance's website. It's called "Cleaning Up 2007."

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DOJ says Microsoft antitrust settlement a success; California, other states disagree

Posted by Benjamin J. Romano at 11:08 AM

The Department of Justice issued a news release this morning saying, "competition and consumers have benefited from the final judgments entered because of the Department's antitrust enforcement efforts against Microsoft."

The Justice Department was joined by a handful of states. But several others, known as the California group, disagreed.

From Bloomberg News:

Antitrust regulators from California and five other states said in a filing today that Microsoft still maintains a monopoly over personal computer operating system software and some provisions of the settlement have yielded "little, if any, tangible pro-competitive results."

"There can be little doubt that Microsoft's market power remains undiminished,"' state regulators said in the filing in federal court in Washington. Key provisions of the settlement "have had little or no competitively significant impact."

The California group never agreed to the final judgment and was forced to join in it.

The Justice Department release was timed to a series of filings by the parties in the broad antitrust settlement, most of which expires this November, including Microsoft, the department and the states.

In a statement this morning, Microsoft General Counsel Brad Smith noted that the company intends to continue its compliance with terms of the settlement after it expires and codified its own view of its responsibilities in a set of Windows Principles issued last year.

"As it was specifically intended, the Consent Decree defined clear rules for how Microsoft competes without pre-ordaining winners in the technology marketplace. The Consent Decree shaped how we view our responsibilities and led us to adopt a set of voluntary principles that will continue to apply even after major parts of the U.S. antitrust ruling expire this November," Smith said.

The Justice Department cited several examples of middleware competitors -- including Web browsers such as Mozilla's Firefox, Opera, and Apple's Safari; and multimedia players from Apple and Adobe -- to support its assertion that the final judgment has protected competition. I asked a department spokeswoman for the hard data on which these statements are based; she said she would get back to me.

It's important to note -- and the Justice Department does -- that the settlement was aimed only at preserving competition in this middleware software category. It was not an attempt to roll back Microsoft's monopoly in operating system software. Windows is still the dominant OS, running more than 90 percent of the world's computers.

From the department's statement:

"The core allegation in the original lawsuit, upheld by the U.S. Court of Appeals in June 2001, was that Microsoft had unlawfully maintained its monopoly in PC-based operating systems by excluding competing software products known as middleware that posed a nascent threat to the Windows operating system. Specifically, the Court of Appeals upheld the District Court's conclusion that Microsoft engaged in unlawful exclusionary conduct by using contractual provisions to prohibit computer manufacturers from supporting competing middleware products on Microsoft's operating system, prohibiting consumers and computer manufacturers from removing access to Microsoft's middleware products in the operating system, and reaching agreements with software developers and third parties to exclude or impede competing middleware products."

It continued,

"[A]s Microsoft was never found to have acquired or increased its monopoly market share unlawfully, the final judgments were not designed to eliminate Microsoft's Windows monopoly or reduce Windows' market share by any particular amount. Rather, the final judgments were designed to re-invigorate competitive conditions that Microsoft had suppressed so that the market could determine the success of these software products. The final judgments are succeeding in that goal."

Here's the Justice Department's final judgment review, filed today with the court. (PDF, 11 pages).

Microsoft also filed its own report on the final judgment (PDF, 12 pages), supported by two expert reports (PDF, 44 pages), (PDF, 45 pages).

Update: Here is the filing from the California group. (PDF, 21 pages).


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August 29, 2007

Paul Allen's new brain trust

Posted by Kristi Heim at 4:12 PM

Now that the Allen Institute for Brain Science has created a detailed map of the brain, it has been busy mapping its own future.

The institute this week named a new scientific advisory board to help define and advance its scientific agenda. The board members are David Anderson and Christof Koch from CalTech, Thomas Daniel and Phyllis Wise from UW, Catherine Dulac from Harvard, Steven Paul of Lilly Research Labs, Michael Stryker of UC San Francisco, Joseph S. Takahashi from Northwestern University and Marc Tessier-Lavigne from Genentech.


GREG GILBERT / SEATTLE TIMES

Lab assistants help unlock the mysteries of the mouse brain, genetically similar to the human brain.

Allen provided a $100 million donation of seed money to fund the institute, and it has used $40 million to build the Allen Brain Atlas. Now the institute needs more funding to take on the next challenge. That money could come from federal grants, foundations and other sources, as well as from Allen himself. But the institute is intended to run as a business, says Chief Operating Officer Elaine Jones, so it's looking at new models for future investments in projects that could later be commercialized.

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Big Oil, meet Big Alternative Fuels

Posted by Angel Gonzalez at 4:05 PM

With hopes for large profits, the alternative energy industry is moving towards the same condition Big Oil is denounced for: being Big.

Ethanol producer VeraSun Energy is on an acquisition spree that will turn it into the green -- or yellow -- equivalent of huge petroleum refiner Valero Energy Corp., according to a Dow Jones Newswires story that appeared in today's Wall Street Journal. By buying big plants across the country, VeraSun -- the largest dedicated producer of ethanol -- will benefit from economies of scale.

The South Dakota company bought ASAlliances Biofuels in late July for $725 million, potentially giving it 20 percent of the country's ethanol market by 2008, the story says.

Another sign of VeraSun's mass market ambitions: on Tuesday the company opened 20 ethanol fueling stations at Kroger stores in Ohio and Kentucky, the Associated Press says. The pumps will sell a blend consisting of 85 percent ethanol.

Other alternative fuel players are also betting on large scale. Seattle-based Imperium Renewables, which recently inaugurated the largest biodiesel facility in the U.S., plans to build several similarly-sized facilities in places ranging from Hawaii to Argentina.

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Nokia relaunches Loudeye's music service

Posted by Tricia Duryee at 12:19 PM

Today, in London, Nokia announced a new series of Internet services for the mobile phone.

The brand name for the services will be Ovi, meaning 'door' in Finnish.

Ovi will allow users to have more access to communities and content. As part of Ovi, Nokia announced today a new music service, N-Gage video game strategy and Nokia mapping services.

The event is fairly important for Nokia as it shifts from being primarily a handset manufacturer to a multimedia services company.

"The industry is converging towards Internet driven experiences and Ovi represents Nokia's vision in combining the Internet and mobility. Nokia is the number one mobile device company in the world. Looking into the future, we will deliver great devices, combined with compelling experiences and services, to make it easy for people to unlock the potential of the Internet," said Nokia President and Chief Executive Officer Olli-Pekka Kallasvuo.

The music service is based on the technology Nokia bought from Seattle-based Loudeye for $60 million a year ago.

To flush out its Internet services even more, last month Nokia also bought Redmond-based Twango, a photo and media sharing and storage service (for a reported $96.8 million). Perhaps, Twango will be the next service that's integrated into Ovi?

Nokia used the Twango service to post online some photos from today's press conference.

Check it out:

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MSNBC, Conde Naste team on content; CNN choses Google

Posted by Benjamin J. Romano at 10:50 AM

MSNBC.com, the Redmond-based news organization owned jointly by Microsoft and NBC parent GE, will present content from several Conde Naste outlets under a deal announced today.

According to a press release:

"The CondeNet brands that will share content with msnbc.com include Style.com, Men.Style.com, Epicurious.com, and Concierge.com. Content from Conde Nast's publications, such as Vogue, Glamour, Self, GQ, Details, Men's Vogue, Vanity Fair, Gourmet, Bon App├ętit, Conde Nast Traveler, and Conde Nast Portfolio will also be available on MSNBC.com."

In another development, CNN.com -- which ranks third, just ahead of MSNBC, on the list of most-visited news sites -- will use Google's pay-per-click advertising technology exclusively. It previously used Yahoo's technology. See coverage from IDG News Service.

No word if Microsoft's adCenter was in the running for this high-profile customer.

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Seattle game developer strikes again

Posted by Kristi Heim at 10:46 AM

Peter Adkison, the entrepreneur and game developer who sold Wizards of the Coast to Hasbro for $500 million, must have been bored with early retirement.

His new Seattle company, Hidden City Games, is distributing a card game for girls called Bella Sara, hoping to replicate its popularity in Europe here in the U.S.

kristi3.JPG

In this game, every girl can have her own horse, at least a virtual one.

Bella Sara sells cards with whimsical, fantasy images of horses, linked to a game and an online site where players can take care of their own virtual horse. The game, created in Denmark, includes "positive messages designed to uplift girls and reinforce the principle that beauty comes from within," according to its publisher.

Bella Sara got a boost this week with a new distribution agreement allowing the cards to be sold at 2,500 stores around the country, including Borders, Waldenbooks, Barnes & Noble.

The idea that beauty comes from within could meet a challenging time here in the American setting. Considering all the beauty queens with DUIs, rehabs and jail sentences, says Bella Sera's publicist, it was hard to find a celebrity spokesperson "who wasn't a train wreck."

They finally chose Hayden Panettiere, the cheerleader from NBC's "Heroes" and "one of the few good girl celebrities out there," he said. Hope she likes horses, too.

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New sports site launches today

Posted by Tricia Duryee at 10:06 AM

Seattle-based Ultra Unlimited said today that it launched SportsUltra.com, a site that provides custom sports news and video coverage based on the teams, players, blogs and sportswriters that users want to track.

The company said it eliminates the need to bookmark multiple sites to get the news people are looking for.

"Fans are ravenous for up-to-date news about their favorite teams and players, and RSS feeds and national sports sites only deliver a portion of that content for them. With SportsUltra.com, we have created a Web site that will give specific, local, and relevant sports content to these fans, just the way they want it," said Scott Decker, SportsUltra.com's founder.

Several other sports-related Web sites have been founded in Seattle.

Perhaps one of the most high profile was Rivals Network, founded by Jim Heckman. In 2001, the decision was made to sell the company, and it eventually shut down. Heckman was also the CEO at Seattle-based Scout Media, which was acquired by News Corp. in 2005.

Heckman was also behind Seattle-based TheInsiders.com, which charges users a monthly fee for specialized content about National Football League, college and high-school teams. In 2002, Yahoo said it would carry the subscription service on Yahoo's sports site.

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August 28, 2007

Rival of ZymoGenetics drug gets FDA's OK

Posted by Angel Gonzalez at 1:32 PM

The U.S. Food and Drug Administration on Tuesdayapproved Israeli biotech Omrix's human thrombin product Evithrom for surgical use. It is the first approval of a human thrombin product since 1954, the agency said.

Evithrom, derived from human plasma, is designed to control bleeding during surgery.

It competes directly with Seattle biotech ZymoGenetics' genetically-engineered thrombin. The Zymo drug's launch -- originally scheduled for October -- last week was delayed by three months as the FDA required more time to review information about manufacturing operations. rThrombin, as the local company's recombinant thrombin is known, will be the first product to come out of ZymoGenetics' pipeline since it became a public company.

ZymoGenetics stock closed 3.45 percent lower at $11.77. In a conference call following the FDA's decision to delay rThrombin's approval, company executives maintained that they were confident that their product would dominate the thrombin market despite being beaten to the street by its rival by several months. rThrombin would also compete with King Pharmaceuticals' bovine thrombin product, which is used in about 1 million surgeries annually, according to Bloomberg.

Zymogenetics says that recombinant thrombin is less risky and a better platform to provide a more consistent supply than human or bovine-derived thrombin.

King Pharmaceuticals corporate affairs executive vice president James Greene said his company is able to manufacture twice as much thrombin as is currently consumed in the market. He also said that the bovine thrombin product, which has been used in 11 million procedures in over 12 years, is safe and "very well understood" by physicians.

UPDATE: McAdams Wright Ragen analyst Paul Latta says that recombinant thrombin "is a compelling marketing story."

"There is no fear associated with viruses, or fear of the bloodbank in general," unlike products derived from human blood, he said. Bovine-derived products raise concerns about anti-bodies, he said.

Nevertheless, Omrix will have "a first mover advantage, which will be a challenge," Latta said. But he dismissed the fact that ZymoGenetics' stock downturn has much to do with the FDA announcement, as the stock market saw a general downturn. "I'm sure it was a factor, but it probably wasn't the prime factor," he said.

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New site lets people rate financial advisors

Posted by Kristi Heim at 10:39 AM

New ventures that combine social networking and personal finance are starting to to take off, and the latest local example is financialjoe.com.

After spending 10 years in the financial industry, Shawn Tierney was unsatisfied with the quality of information people have about their investment advisors. As a former insider, he should know. Tierney worked as a financial planner for Morgan Stanley and Bank of America.

kristi2.jpg

"An advisor can get away with not servicing his clients, making poor recommendations, or never calling the client again once he makes the commission," Tierney said. "This is because no one else will ever know."

Tierney, along with his brother James Tierney and former Microsoft employees Richard Gerschwiler and John Pezzanite, started financialjoe.com as a place for people to rate their advisors, find people with the same advisor and share information about financial issues. The site launched just two weeks ago.

Users can identify themselves with tags to their advisor, joining online public forums with that advisor and other clients. Clients' names and emails are kept confidential.

Today, the forums had information about regulatory actions against Ameriprise, student loan woes and a conversation about mutual funds. Users get an email message every time a new rating is posted on their advisor.

The site can help investment firms, too, Tierney says, by providing feedback on their advisors, helping them improve customer satisfaction and avoid losing clients.

Avvo offers a similar service but for rating attorneys. "Avvo's great," said Tierney, but people are going to need financial advice much more often than they'll need a good lawyer.

A few other social networking / finance hybrids to check out are wesabe.com, Geezeo.com, and covestor.com.


August 27, 2007

Enzymes for ethanol, checks for free

Posted by Angel Gonzalez at 3:48 PM

If you know how to create enzymes that help convert wood chips into environmentally friendly fuel, the government may have some money for you.

The U.S. Department of Energy said Monday it would make some $33.8 million available to fund the development of enzymes that serve as catalysts in cellulosic biofuels production. Cellulose is what plants are made of -- and breaking it up into ethanol and other fuels could help forests, prairie grasses and agricultural waste become energy producers.

Unlike corn or sugarcane ethanol, cellulosic ethanol production -- developed by companies such as Iogen, which mulls building a plant in Idaho -- is still in the experimental stage. A scientific breakthrough leading to widespread use of cellulose in ethanol or other fuels could not only make the Northwest a key energy player, but could also dampen the negative effects of the ongoing rush for alternative energy.

For example, cellulosic fuels would reduce the need for corn, sugar and palm oil, which also serve as food crops and have seen their prices rise with booming fuel demand.

The DOE program is part of a presidential initiative to replace 20 percent of U.S. gasoline consumption with alternative fuels by 2017. Letters of intent are due September 10, and completed applications on October 30, the agency said.

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Former T-Mobile COO on the move

Posted by Tricia Duryee at 12:38 PM

Former T-Mobile USA Chief Operating Officer Sue Swenson, who left the Bellevue company under strained circumstances, has landed a new job under the same title at New Motion of Irvine, Calf.

If you don't remember, T-Mobile filed suit against Swenson about two years ago, accusing her of violating a noncompete provision. An agreement stipulated she would not work for a competitor for a year after leaving T-Mobile and that she would not disclose confidential materials to third parties.

The lawsuit was filed the same day that Amp'd Mobile -- a wireless startup in Los Angeles -- said Swenson would become its new chief operating officer.

Amp'd attempted to skirt Swenson's noncompete agreement by firing her as COO and then rehiring her as the president of Amp'd Mobile's International division, but that didn't work and a judge barred Swenson from working at Amp'd.

Swenson waited a year until her noncompete provision expired and then she rejoined Amp'd in the fall of 2006. About six months later, she encountered even worse luck when Amp'd filed for bankruptcy and went out of business.

Her new job at New Motion, a digital entertainment products company that is listed on the over-the-counter bulletin board, also sounds a little temporary.

According to a document filed with the Securities and Exchange Commission, Swenson's employment agreement has a term of two years.

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Google can manage a wireless network

Posted by Tricia Duryee at 12:09 PM

Ever since Google showed interest in participating in the next auction selling airwaves for a wireless network, the Internet giant has received a fair amount of skepticism.

But take this into account: Google's Mountain View, Calif. Wi-Fi network is celebrating its one-year anniversary. Where many telecom companies and others haven't been able to get Wi-Fi networks up and running on a reliable basis, perhaps Google has.

On its anniversary, it provided a few data points. It said 400 Wi-Fi routers cover 12 square miles and 25,000 homes. Google said about 15,000 unique users connect to the network each month, and since the beginning of this year, traffic has grown almost 10 percent each month.

Google used this anniversary to get across two messages. The first is why it built the network. It says it is into promoting alternative platforms for people to access the Web because many people still don't have access.

Second, Google said that if it can do it, surely EarthLink and San Francisco can figure out how to roll out a citywide network. The two have been working on a plan for some time to blanket the whole city, but without showing much progress.

It's also worth asking where else Google is headed in the wireless world. There are rumors floating around that the company has developed a Gphone that will launch next month. The Business Standard reported that the phone's launch will come with a financial committment of $7 billion to $8 billion.


Google also has said it earmarked a minimum of $4.6 billion for the spectrum auction in January if the FCC would approve a number of Google's proposals. The FCC did not approve all of them, however Google said it still might participate.

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August 24, 2007

Map green business online

Posted by Kristi Heim at 3:21 PM

What do an urban sustainability forum, Grist magazine and a green cleaning service have in common?

They're all Seattle points on a new online map designed to help people find eco-friendly individuals, businesses, events and organizations around the world.

The two-month-old project sponsored by the Sundance Channel is supposed to supplement the cable network's weekly environmental program The Green.

As a social networking platform, it's not clear how this one can distinguish itself from all the other sites claiming to help like minds find eachother. At the so-called Eco-mmunity, anyone can list themselves or others on the map, leading to a wide mix of destinations that may or may not be eco-friendly.

A random look at points in Seattle and Los Angeles included listings for Trader Joe's, the California Institute of Technology and Whole Foods Market. And the map's only listing in Iowa turned out to be Smith Barney Financial Advisors. Well, I guess dollars are green.

Jathrofa gets the spotlight

Posted by Angel Gonzalez at 1:42 PM

High oil prices and concern about global warming revived global interest in alternative energy sources to replace fossil fuels, but almost every promising solution has triggered its own set of environmental and price controversies.

Take corn ethanol, for example: critics say that it's not very energy-efficient, and the increasing use of corn to produce fuel has made the food staple more expensive. Or biodiesel derived from palm oil, which is heavily criticized for fostering rapid deforestation in India and Malaysia -- aggravating, instead of helping solve the greenhouse gas problem. A recent story about Imperium Renewables' biodiesel plant in Grays Harbor -- the biggest such facility in the U.S. -- generated substantial response of readers either lauding the virtues of the fuel or decrying its environmental impact.

These debates have made many pin their hopes on jathrofa, a rugged little plant that's is showcased in a Wall Street Journal cover story today. The shrub can grow practically anywhere, is inedible (so it doesn't compete with food) and its seeds contain a palm oil-like liquid that can be turned into biodiesel. Jathrofa-based biodiesel's production cost is also lower than other alternative fuels, the story says.

The crop is still in the very early stages of its career as a fuel feedstock, but some 30 million hectares of jatropha are under development worldwide, reporter Patrick Barta says in a video posted at the WSJ's website.


August 23, 2007

InfoSpace undervalued and misunderstood

Posted by Tricia Duryee at 10:35 AM

An analyst released a report today calling Bellevue-based InfoSpace "undervalued and misunderstood."

In response to that statement, Scott Sutherland, an analyst with Wedbush Morgan Securities, upgraded the stock to "buy" from "hold." It is maintaining a price target of $19 a share.

InfoSpace's stock jumped 52 cents or nearly 3.5 percent in afternoon trading today to $15.42.

To be sure, the company has gone through a series of transitions: It lost a major revenue after losing its ringtone business with Cingular; it laid off 250 people to become a much smaller company; shareholders protested that it was sitting on a bunch of cash; InfoSpace issued a $200 million special dividend.

Sutherland wrote: "We are upgrading shares of InfoSpace to BUY from HOLD, as we believe the company is nearing the end of a tough transition and that the recent sell off is overdone."

Part of InfoSpace's focus going forward is in providing back-end technology to wireless carriers, including mobile search.

"We believe revenue from mobile search and directories are emerging growth opportunities," he wrote.

Disclaimer: Wedbush Morgan said it does and seeks to do business with companies covered in its research reports, and that investors should be aware that the firm may have a conflict of interest that could affect the objectivity of
this report. Investors should consider this report as only a single factor in making their investment decision.

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August 22, 2007

More than math is off with T-Mobile's ad

Posted by Tricia Duryee at 4:37 PM

One of T-Mobile USA's offerings is myFaves, a feature that gives you unlimited calling to five phone numbers -- cellphone or landline.

It's been something the company has been really proud of, launching a whole ad campaign focused on it. Most of the time, the tagline was something like, "Who is in your Fave 5?"

But one 30-second clip strayed from that theme, and has been getting quite a bit of heat. I have received e-mail from people who find the ad offensive.

In short, the ad shows a dad running into a room, telling his family of five that if they all have myFaves, then they can make unlimited phone calls to 26 people. The kids correct the dad, saying, no five multiplied by five is 25. It ends with the mother telling the kids to stay in school.

Check it out here:

Here's what the backlash has been like so far.

One e-mail sent to me and top executives at T-Mobile says:

I am writing to you in response to T-Mobile's new television ad in which the father has difficulty processing and understanding a simple math problem, only to be ridiculed by his wife and children. I was personally offended by this ad. Must T-Mobile used the tired and overused 'stupid male/father' device in order to sell its product?

I guarantee that you would not have aired an ad in which the mother was depicted as ignorant and stupid and the father told the children 'this is why it's important to stay in school.' Your company has disappointed me by choosing to use this tasteless and insulting (but unfortunately very prevalent) method of advertising.

A second e-mail said:

I am appalled and ANGERED, when I see your company portraying an idiot father in front of his children. Then the pompous mother further demeaning the father by telling her children to go to school.... Rest assured, I will never use your product and if I do meet someone with your product I will inform them of your callous commercials, anti men, anti fathers.

That one is signed by a father who has who "painstakingly guided his children to become a lawyer and a CPA, CFA MBA."

The YouTube site also is collecting a few comments. You can see them here.

The first comment says: "Clueless dad? Check. Kids correcting him? Check. Mom disappointed and embarrassed by her husband? Check. Yep. Just another day in the life of advertising making out men to be moronic buffoons. Thanks T-Mobile. I guess I'm never giving you my business."

I think it's safe to assume T-Mobile is not in these people's Fave 5.

UPDATE: This is generating a fair amount of response on the blog and via email. Here's a couple more comments I've gotten personally.

-- "Good grief! Have these upset people not watched any television lately? Most of the sitcoms humor is entirely based on this sort of mockery of one family member against another. Is it right? Maybe not but apparently it sells because it is watched. These people need to find something to do....."

-- "Wow - lighten up people - it must be nice to have a life so simple that the ad of a mobile telephone company can OFFEND, ANGER or APPALL you. I could only wish that there were less important things in my life so that I too could give a rip about T-Mobile's method of advertising - shoot, I'm even a customer. Pick a different battle. I'm sure the ad execs bantered about the same anti-father, anti-men thoughts mentioned in email number 2 and I'm guessing someone in the room told them it was tasteless and insulting but they ran with it anyway. C'mon - get a grip and go worry about where your property taxes are going and who's ruin...I mean running your city. Please - go a day without a Starbucks."

-- And, here's another sent to execuitves: "I generally do not write to complain about advertisements but your ad really made me sick inside....I generally charge for training but I am willing to develop a diversity and sales training program free of charge for your company. Who knows, with good training, good hiring, and good management of the new individuals you hire to replace the team who thought this ad was a good idea. You might acquire a new creative talent pool who won't create ads that generate customer churn and ultimately give your competition new activations from former T-Mobile customers."

Is Europe really more advanced?

Posted by Tricia Duryee at 2:43 PM

When it comes to well-made, fine leather Italian shoes, maybe.

But cellphones?

Definitely not.

The American Consumer Institute studied whether Europe was in fact more advanced when it came to wireless technology. It concluded that the U.S. is ahead.

"International statistics suggests that the U.S. wireless market, in fact, leads its European counterparts, and the U.S. wireless market, compared to Europe, appears to be more competitive and vibrant," the study's summary said.

I thought maybe the The American Consumer Institute was paid to conduct the survey on behalf of the U.S. cellphone industry, but it claims that's not the case.

"No -- we are a 501(c) (3) nonprofit educational and research group and do not conduct paid-for research," a spokesman said. "The study just tests a common belief that the U.S. lags Europe. It uses widely available empirical evidence in its analysis. The result somewhat of a surprise to me too. It could be Europe once had a lead and it has vanished, but the belief has remained."

The question is an important one, especially as the FCC is evaluating how to make the wireless market even more competitive, so that innovation can move even faster.

The study cites multiple sources and suggests there are actually more wireless operators (155) in the U.S. than in most countries, and that even though the top three carriers have a majority of U.S. subscribers, there's still a lower concentration than in other countries.

The study then tries to answer the question: If the U.S. market is not as concentrated as its European counterparts, could it still operate as a "cozy cartel," effectively driving up consumer prices and restricting supply?

Once again, the answer was no.

The average price of a minute is far less in the U.S. than in other countries. In Germany, it was about 27 cents a minute. In the U.S., it's closer to 7 cents. Only one country was listed as cheaper -- Hong Kong at about 4 cents.

However, in Europe customers get billed for making a phone call, whereas the person receiving the call does not get billed. In the U.S., we pay for both types.

An independent study found that even though this is the case, the minutes are still cheaper in the U.S. than in all European countries.

Check out the report here.

Google may bid on airwaves

Posted by Tricia Duryee at 2:27 PM

Google is still leaning toward bidding in the U.S. mobile phone airwave auctions in January after the FCC detailed its plans for the spectrum.

At a conference of regulatory leaders in Aspen, Colo., Reuters reported that Google CEO Eric Schmidt said his company would "probably" move ahead with plans to bid for wireless spectrum that's ideal for providing wireless broadband access.

I asked Rick Whitt, Google's telecom and media counsel in Washington, D.C., a few weeks ago whether Google was going to participate. The company had said it would bid $4.6 billion in the auction as long as the FCC agreed to designate the spectrum for open access. The FCC agreed to some of Google's conditions, but not all.

Whitt said Google had to take into consideration the rules the FCC was laying out and how the bidding would take place before he could say for sure.

Reuters said it was Bellevue-based T-Mobile USA government relations chief Thomas Sugrue who asked at the conference whether Google planned to take part in the auction.

Schmidt replied: "Probably would be the way to answer that."

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Only iTickets for Seattle Opera

Posted by Tricia Duryee at 11:48 AM

The Seattle Opera announced Tuesday that it is now selling tickets over mobile devices -- actually, only on iPhones.

That's somewhat forward thinking of the Opera, although targeting only one phone (and one that costs up to $600) seems somewhat elitist.

But perhaps the technology bent has to do with one of its biggest contributors.

The Opera house was renovated with the bill mostly footed by the McCaw family, which has a long history of technology innovation. Most notable is Craig McCaw, who founded McCaw Cellular Communications, which later became AT&T Wireless. Today, he is the founder and chairman of Kirkland-based Clearwire, a wireless broadband company.

The hall is named after his mother -- Marion Oliver McCaw -- and nicknamed the MOM Hall.

The Opera said ticket buyers can go to mobile.seattleopera.org on an iPhone to search by production, find a seat or call the box office.

The application was designed by Seattle-based POP, a digital marketing agency. POP developed the site using ExpressTix Mobile and Tessitura, an ticketing software.

The opera said it will soon also be available on other high-end devices.

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'Halo 3' at IMAX impresses

Posted by Benjamin J. Romano at 9:43 AM

Nate Robinson, one of our intrepid interns, went to last night's sneak preview of "Halo 3," and brought back this report. And be sure to check out his video footage below -- including a fan who says that when the game comes out "it's going to be the biggest skip day of the year."

Seattle videogame fans were privy to a special treat Tuesday night, courtesy of hometown superstars Bungie Studios. The team behind the upcoming blockbuster "Halo 3" reserved the Seattle Center's Imax theater for a one-of-a-kind preview to show off their game's new features to, perhaps, the crowd that would appreciate it the most.

More than 500 people turned out for the event, far more than Bungie had expected, said Bungie staff writer and community figurehead Frank O'Connor. The Kirkland-based team had decided just the day before to hold the preview, but such short notice wasn't a problem for the Halo faithful -- some of whom waited in line for 12 hours and came from as far away as Oregon.

Those who made it into the theater were rewarded with the first public gameplay demonstration of "Halo 3's" single-player campaign, as well as a quick glimpse at the new multiplayer-specific gameplay options. Bungie showed off a few new vehicles (the Chopper, a motorcycle from Hell, and the Elephant, an enormous drivable base) and weapon types (some long-awaited, some wholly original). The majority of the campaign demo was spent tooling around in the game's third mission, Tsavo Highway, but the fans, who cheered heartily at every opportunity, clearly didn't mind.

The new multiplayer options, however, appear to add more than just new toys and refinements to a solid formula. New to "Halo 3" is a game type dubbed "The Forge" -- a mode in which the players are free to manipulate the environment as they see fit on-the-fly, promising a seemingly endless variety of gamplay options normally reserved only for mod-friendly PC games. This, combined with the previously announced ability to save, play back and edit video replays of matches, means the game's famously popular multiplayer just got that much better and hard to put down.

"Halo 3" comes out Sept. 25 for Microsoft's Xbox 360.


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August 21, 2007

Is Big Pharma money influencing Medicaid decisions?

Posted by Angel Gonzalez at 5:33 PM

Should big drug companies be allowed to make payments to doctors who help select products used in Medicaid programs?

This Associated Press story says that a doctor and a pharmacist sitting on Minnesota advisory panel got "big checks" from Big Pharma, although the individuals deny that the money had any effect on their recommendations.

The information, obtained by the AP under a Minnesota law that requires pharmaceutical businesses to report payments to doctors, raises questions about undue influence on how Medicaid's $28 billion budget is spent. Most of the payments to doctors go unnoticed, as only Vermont and Maine have similar reporting requirements, the story said.

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More perspectives on in-game advertising

Posted by Benjamin J. Romano at 8:45 AM

Adweek has a broad look at the market for in-game advertising and the fact that it has not lived up to the hype of just a year ago from in-game advertising purveyors, including executives at Massive.

This story provides great ad-industry context to help understand our recent profile of Massive, which Microsoft acquired, and its business model. I also focused more on how Massive fits into Microsoft's advertising strategy.

The Adweek story outlines several gripes advertisers and analysts have with dynamic in-game advertising as it exists today, including:

Lacking impact and interactivity;

Effectiveness, execution and measurement tools remain "iffy";

Distribution mainly to the PC (read: hard-core gamers), but not as much happening on the consoles (read: the TV in the living room).


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August 20, 2007

Photosynth in orbit: New images from Endeavour mission

Posted by Benjamin J. Romano at 4:44 PM

Microsoft and NASA are posting new photographs of the space shuttle Endeavour's mission to the International Space Station, including detailed views of the gash in its heat-shield.

A few days before the shuttle launched, Microsoft posted several sets of photographs of the shuttle in the Vehicle Assembly Building and on the launch pad. They were in the company's new 3-D photo-viewing environment, Photosynth.

The new collection includes images of the shuttle captured Aug. 10 before it docked at the International Space Station. "Endeavour did a complete somersault enabling astronauts to photograph the shuttle's bottom-side. The photos were then sent back to NASA for analysis and later shared with Microsoft LiveLabs to compile a 'synth,'" a Microsoft representative said in an e-mail. The new photo collection can be accessed here.

NASA ultimately determined that the gash would not threaten the shuttle. Endeavour is scheduled to return to Earth on Tuesday, a day earlier than planned in order to avoid possible complications from Hurricane Dean.

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Analysts set buy ratings on WiMax companies

Posted by Tricia Duryee at 4:01 PM

Two analyst reports released today and Friday lent favorable views of the WiMax market, and stocks responded by trading upward.

McAdams Wright Ragen said today that it has initiated coverage on Kirkland-based Clearwire with a "buy," setting a 12-month price target at $28 a share.

On Friday, C.E. Unterberg, Towbin analyst Richard Church wrote in a note to clients that he was upgrading the shares of WiMax equipment maker Alvarion to "buy" from "market perform."

Clearwire increased 89 cents today to close at $24.12 a share.

Alvarion jumped 42 cents today to $11.58.

In a note to investors, McAdams Wright Ragen said that although Clearwire is in its early stages, it appears to be well positioned.

Sid Parakh wrote:

"Clearwire has a strong experienced management team that has successfully executed scalable and replicable business models, as evidenced from prior ventures as well as progress made in several markets launched over the last couple of years, giving us increased conviction in our BUY recommendation."

Alavrion, an Israeli wireless broadband provider, got a boost for being associated with a high-growth market, even though it isn't involved in WiMax rollouts with Sprint Nextel or Clearwire, according to an AP story.

"We believe Alvarion is the best-positioned pure-play on wireless broadband adoption and should see significant growth as WiMax gains traction," Church wrote.

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Spectrum auction date set

Posted by Tricia Duryee at 1:54 PM

The FCC has set a date for the upcoming airwave auction that has generated quite a bit of debate over the past few months as Google and others push to change the way wireless networks operate.

The spectrum, considered valuable for providing wireless broadband Internet access, will be auctioned off startng Jan. 16, 2008. The FCC is also seeking opinions on how it has chosen to sell off the spectrum.

I wrote a story last week explaining what's going on, here's an excerpt:

Q: What is at issue?

A: For any company or organization to operate a wireless service, it needs access to a sliver of airwaves, or so-called "spectrum," much of which is controlled by the federal government. The FCC will conduct an auction in January to sell rights to a swath of the spectrum that's ideal for providing wireless broadband services. Technically, that swath is the 700 megahertz band.

The spectrum will become available after television companies vacate airwaves they don't need as they convert to digital or high-definition television. That deadline is Feb. 17, 2009.

Q: What is Google asking for?

A: Google and other companies, including Frontline Wireless of Greensboro, N.C., proposed to the FCC that a portion of the spectrum being sold in January should be set aside for an "open access" network, one that would allow consumers to choose the device and applications they want regardless of whether a network operator has approved them.

This auction is quite significant. The FCC is estimating that the spectrum is worth $10.1 billion.

The FCC came up with that number by taking into account another recent auction, called Advanced Wireless Services (or AWS-1). The agency said in a document released today that comparing that sale with the upcoming one is fair, but that the 700 MHz band is better:

For instance, spectrum in the 700 MHz Band possesses superior propagation characteristics to AWS-1 spectrum. In addition, as of February 18, 2009, the 700 MHz Band spectrum will be unencumbered, while full access to AWS-1 spectrum requires the relocation of both Government and commercial incumbent users. Thus, other factors aside, 700 MHz Band licenses with comparable geographic service areas and bandwidth should have a higher market value than AWS-1 licenses.

If you remember, Bellevue-based T-Mobile USA was big participant in the AWS auction. It spent more than $4 billion, doubling its spectrum holdings in the top 100 markets.

In a news conference last October, T-Mobile detailed plans to start building out a 3G network on its new spectrum. It said at the time that it intended to provide the service commercially in mid-2007, and that most markets will have 3G by 2008.

Rumors have circulated that T-Mobile is getting ready to turn a few markets on soon.

CrunchGear is reporting that T-Mobile's first 3G device, also called a UMTS phone, will go on sale starting Sept. 10. At that time, it will be interesting to see what products T-Mobile will be selling to justify the higher-speed network.

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New scorekeeper, same score: Google dominates Internet search

Posted by Benjamin J. Romano at 1:29 PM

The regular monthly report from comScore on search share is covered by bloggers, journalists, analysts and others following the battle among Google, Yahoo and Microsoft for Internet supremacy.

Last month, Microsoft touted a slight bump in its portion of the pie. This month, the news is that comScore is changing the way it keeps score to better account for the fact that search is "becoming a more ubiquitous activity across the Web." The result of this new method?

The score remains the same: Google, lots of search share. Yahoo, some search share. Microsoft, a little share. The other two, not much search share at all.

Now, comScore is gathering more data on searches, including:

-- Major "vertical" search locations -- such as eBay and Amazon.com in retail and Expedia in travel.

-- Partner Search -- searches initiated at partner sites that redirect the visitor to a search engine site.

-- Cross-Channel Search -- counts multiple searches when employing more than one search tab (e.g. Web, images, news) for a single search term.

-- Local Search -- maps, directions, and local directory listings.

-- Worldwide Search -- includes comprehensive reporting of worldwide search, with individual country reporting for the U.S., Canada, Mexico, U.K., France, Germany, Japan, China, and Korea. Additional countries will follow.

But this richer data set -- its new qSearch 2.0 interface -- will only provide that level of detail to people who pay for it. Makes sense. The rest of us can enjoy a slightly expanded -- and thankfully, comparable -- monthly report in much the same way we have.

The difference, comScore says, is that its monthly "core search" figures "now include the partner searches and cross-channel searches in the total for each property." But it's still comparable, they assure us.

So, by the numbers:

Google had 5.5 billion July searches, 55.2 percent of the total, and up 64.3 percent from a year ago. Yahoo had 2.3 billion, 23.5 percent of the total, and up 8.3 percent. Microsoft had 1.2 billion, 12.3 percent, and up 35.6 percent from last year.

By the way, the total search market -- we're talking U.S. searches performed from home, work or a university -- were up 37.6 percent. That means Google, even with a much larger base than its competitors, is growing faster than the market as a whole.

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Skype ties outage to Windows security update, faulty algorithm

Posted by Benjamin J. Romano at 12:21 PM

Skype implicated Microsoft security updates for the outage that left millions without their Internet phone service. The company had earlier faulted "a deficiency in an algorithm within Skype networking software," and ultimately acknowledged that its own software was at fault.

A Skype employee, posting to a public company blog that details the status of its service, explained the outage that began on Thursday:

The disruption was triggered by a massive restart of our users' computers across the globe within a very short timeframe as they re-booted after receiving a routine set of patches through Windows Update.

The high number of restarts affected Skype's network resources. This caused a flood of log-in requests, which, combined with the lack of peer-to-peer network resources, prompted a chain reaction that had a critical impact.

Microsoft releases security updates for its software on the second Tuesday of every month -- "patch" Tuesday. On Aug. 14, the company released nine patches, six of which were considered critical. Microsoft told The Associated Press that it was a routine patch Tuesday and noted the previously mentioned Skype bug.

While the problem was triggered by the high number of restarts, a faulty algorithm caused the network's self-healing capabilities to fail. Villu Arak, the Skype employee, continued:

... this event revealed a previously unseen software bug within the network resource allocation algorithm which prevented the self-healing function from working quickly. ... The issue has now been identified explicitly within Skype.

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120 knocks on the door for state biotech fund

Posted by Angel Gonzalez at 10:06 AM

The race for another round of tobacco money is on.

Some 120 biotech research teams have sent letters of intent to apply for grants from the Life Sciences Discovery Fund, which will disburse $18 million to $20 million from Washington state's tobacco settlement.

The full proposals are due October 24, the agency said in a statement.

The agency, which seeks to foster health care-related research in Washington state, will select a subset of applicants in January for a second round of review that will include interviews. Winners, selected from interviewed applicants, will be announced in April.

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August 17, 2007

Sprint Nextel's YouTube message

Posted by Tricia Duryee at 3:07 PM

Sprint Nextel announced Thursday that the brand name for its new WiMax service will be called Xohm (pronounced "Zoam").

And because Sprint is partnering with Kirkland-based Clearwire to build a nationwide network, the two companies will share that name.

In my story today, I talked about how Sprint unveiled the name first to employees in a short video that has now been posted on YouTube.

The video features Atish Gude, Sprint's senior vice president of mobile broadband operations, and Barry West, Sprint's chief technology officer. Both are casually dressed in jeans and polo shirts.

Check it out:

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Hard to run a company when you're such a celebrity?

Posted by Kristi Heim at 2:06 PM

Not so hard, says James Sun, CEO of Zoodango and emerging television personality. Sun may have finished his stint on "The Apprentice" as runner-up, but he's launching several ventures that promise to keep him on air.


Brian Casey

James Sun

He has a Hollywood agent out to make the most of his personality, tech skills and business acumen. Decked out in black Prada shades, intern by his side, Sun turned out for a lunch today with Chinese stars visiting Seattle to promote the 2008 Beijing Olympics.

Not everybody can make the transition from reality TV to stardom, he says, "but my agent thinks I can."

The first show he's working on is a techno house program, introducing new kinds of technology and explaining how to set them up at home. Think fun with wireless gadgets and tabletop computers.

The second show is a look at celebrities launching their own businesses. Think Paris Hilton opening a pampered pet store.

Sun says he is also planning to go on a national speaking tour with "Apprentice" winner Stefani Schaeffer. The theme is very anti-Trump: teamwork.

"Stefani and I never backstabbed each other even once," he said.

Even though backstabbing sells on the show, Sun says real business is collaborative.

But with so much going on, how does he even find time to run a company?

"My job is chief evangelist officer," Sun said. Zoodango is getting more users in Los Angeles because he's there so often talking about it.

Besides, his investors have asked him to do a daily video blog about working as a tech CEO. His last blog, a rant about hospital security officers tasering a man holding a baby, was broadcast on television 48 hours after he posted it on YouTube.

"That's the power of the Internet," he said.

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August 15, 2007

DirecTV tunes into powerline broadband

Posted by Tricia Duryee at 1:02 PM

DirecTV said today that it signed a wholesale agreement with Current Group to provide high-speed Internet service over electric-power lines, according to The Wall Street Journal..

The story said DirecTV will bundle Current's broadband and voice over Internet services under the DirecTV brand.

The satellite TV company also recently announced a partnership with Kirkland-based Clearwire to bundle its wireless high-speed Internet access with DirecTV's TV service. In addition, it also resells Internet access from AT&T, Verizon Communications and Qwest Communications.

DirecTV has lined up all these partnerships to better compete with telephone and cable operators that have started to provide the quadruple play -- that means, bundling together TV, phone, wireless phone and Internet access. Obviously, it's not placing any bets on any one technology.

High-speed Internet access is not technically possible over satellite, or at least the way DirecTV provides service today.

Broadband over power lines is a fairly new technology that allows customers to plug a modem device the size of a cellphone into an electric outlet and connect a cable from their computer for Internet access.

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Sprint's WiMax plans -- hard to say.

Posted by Tricia Duryee at 12:41 PM

Tomorrow I'll be listening to a 7 a.m. investor conference call conducted by Sprint Nextel to learn more about its WiMax plans, and specifically about its new partnership with Kirkland-based Clearwire.

But in advance of that, Engadget reported on a rumor regarding what Sprint might be calling its WiMax service.

Sprint reportedly will name the service -- to be launched later this year -- XOHM.

I know ... it's hard to say how that will be pronounced.

The struggle with building a partnership between Clearwire and Sprint Nextel was how to brand it so that the two each keep their unique identities while also making clear to customers that they can move from one network to another.

The answer was that the two were going to come up with a common "ingredient" brand that would sort of sit inside the companies' two products. I imagine this is similar to the Intel Inside campaigns, where Intel's brand is inside a Dell or Toshiba computer.

Stay tuned to hear more.

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Social networking on the phone

Posted by Tricia Duryee at 12:22 PM

Logging into social networking sites, such as MySpace, from a mobile phone is fairly common, especially in the U.S., according to Seattle-based M:Metrics, which conducts surveys.

It found that 12.3 million consumers in the U.S. and Western Europe reported accessing a social networking site on their mobile device in June.

A majority of those occurred in the U.S., where 7.5 million, or 3.5 percent of all subscribers, logged in.

Trailing behind the U.S. was Italy with 1.3 million users, the UK with 1.1 million, and Spain with 751,000.

M:Metrics said that MySpace got the most attention in the U.S. and in the United Kingdom, whereas MSN was the No. 1 choice in the other areas surveyed.

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Calidora cleans up with $4 million

Posted by Tricia Duryee at 12:12 PM

Seattle-based Calidora Skin Clinic, which has stores that offer skin care treatments and products, said it raised $4 million to expand into Southern California.

About half of the round was financed by Calidora's existing angel investors, with the remaining funds coming from Fluke Venture Partners.

Calidora has four Seattle-area locations, where people can receive procedures such as Botox injections, cosmetic and restylane, non-ablative skin resurfacing treatments, and laser and light therapies.

In this story, I wrote about how the company got its start. At that point, it had raised $3 million, mostly from Starbucks executives, where Calidora founder Colette Courtion had previously worked.

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Scorching hot virtualization: VMW continues skyward; XenSource bought for $500 million

Posted by Benjamin J. Romano at 11:32 AM

After leaping out of the gate yesterday with the hottest IPO of the year, VMware is again climbing big-time today, up about 13 percent in midafternoon trading in New York.

That's got to have the people at Seattle-based virtualization startup illumita, which pulled down $6 million in funding last week, feeling pretty good. (Did we mention they're hiring? They are.) Their investors are probably smiling broadly, too, especially the guys over at Bellevue-based Ignition Partners.

An earlier virtualization bet that Ignition made on XenSource paid off handsomely today when Citrix Systems announced plans to buy the company for about $500 million in cash and stock. Here's analysis from Mary Jo Foley on what the Citrix-XenSource combination could mean for Microsoft.

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August 14, 2007

Microsoft, employment and property, by the local numbers

Posted by Benjamin J. Romano at 10:30 PM

Microsoft just updated its "Fast Facts" page, which is where it provides more precise data on how many full-time employees it has in Washington state. General information about the company's employment growth during the past fiscal was first delivered at the company's Financial Analyst Meeting in July. Additional details were in its annual report, filed with the SEC Aug. 3.

But this is the first look at the latest numbers that describe the company's local economic impact. (The measure still misses some presumably large number of outside contractors and vendors that make the business run.)

As of July 27, Microsoft counted 35,711 employees in the state, up 7.1 percent from the level reported a year ago. In the rest of the U.S., Microsoft had 12,225 employees, up 11.5 percent, from late-July 2006. Total worldwide employment in that period increased 10.6 percent to 79,136.

I wrote a story looking at the numbers and the reasons why Microsoft's employment growth locally is slower than it is overseas.

Here are a couple of other factoids that didn't make it in that story:

The figures reveal an aging U.S. workforce at Microsoft. The average age of Microsoft's U.S. employees was 36.6 in 2006, and 36 in 2005. At the latest report, the average age was 36.9 and more than 16,194 employees -- a third of the U.S. work force -- was over 40.

The gender distribution remains heavily weighted toward men, who represented three-quarters of the company's U.S. work force.

Even at a somewhat slower growth rate, the company is still hungry for local real estate. And the latest numbers show the company has shifted to leasing a substantially larger proportion of its property in the region.

The company had 11.2 million square feet of office space in Puget Sound as of Aug. 1. That's an increase of about 2.9 percent from last year. But the increase in leased office space is 18.6 percent and, now, more than one-quarter of its local portfolio is leased, up from 22 percent last year.

That balance could shift even more. It's not clear whether these figures include all or part of the 1.3 million square feet of new office space committed to lease in Bellevue earlier this year.

At the time of that announcement, Chris Owens, Microsoft's general manager of real estate and facilities, was asked whether the company was favoring leased property instead of new construction to meet its expansion needs.

"It's not a long-term change in strategy," he said at the time. "I think some of the leasing that we did over the past year, we would view as more short-term and temporary leases not necessarily long-term additions to our portfolio."

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Mobile phone trends in Q2

Posted by Tricia Duryee at 3:25 PM

In the U.S., 33 million phones were sold in the second quarter for a total of $2.4 billion, according to The NPD Group. And there were a few interesting things to note.

The 33 million represents a 17 percent decline from the previous quarter, but a drop in that period is typical because of seasonality.

Here are a few things to note:

-- Sales increased 14 percent compared with the same time a year ago. Perhaps that's because people are paying more for their phones. Still, a plurality of phones -- 28 percent -- were free. NPD said another 28 percent cost less than $50; 11 percent cost more than $150; and 4 percent were more than $250.

-- The top five handset manufacturers are the same: Motorola at 32 percent; Samsung 18 percent; LG 17 percent; Nokia 10 percent and Sanyo 4 percent.

-- Almost 70 percent of phones sold in the quarter were equipped with Bluetooth, an increase of 9 percent from the first quarter.

-- Less than half, or 45 percent, of new phones were able to play music (up 11 percent from the first quarter).

-- 11 percent were higher-end smartphones (up 32 percent).

NPD said it gets this data by surveying 150,000 consumers each month.

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Crush or Flush gets boost

Posted by Tricia Duryee at 11:49 AM

Bellevue-based IceBreaker said today that its Crush or Flush application is now available to 4.5 million Boost Mobile subscribers.

If you don't already know, Crush or Flush is a mobile social networking service that helps people meet each other on a cellphone.

For 69 cents a day, users can chat by text message if two people have a mutual crush (without revealing each other's cellphone numbers). They can also sort and view profiles based on age, gender, orientation, location, and interests; and can find out who has been "crushing" them. If anyone remembers from middle school, a crush is someone interested in you.

Icrebreaker said Crush or Flush has more than 250,000 members since launching in January. On average, members access the service twice a week and use the service for 20 minutes a session.

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A closer review of Intelius

Posted by Tricia Duryee at 11:08 AM

I wrote a story Monday about how Intelius's new cellphone directory is being received by the wireless industry.

The short answer: not very well.

Today's edition of RCR Wireless News, an industry publication, reviewed the Bellevue company's service to see how well the directory worked.

The marks were not very high.

The reporter said not only did the service (at $15 a search) never find an accurate phone number, but some searches returned with a note saying it would take Intelius 24 to 72 hours to complete, but results were never sent.

From the story:

"I tried five searches for cellphone numbers total: three for information that I already knew, as a way to test the service, as well as for Barack Obama and --just for fun -- Verizon Communications President and COO Denny Strigl."

It turned out that Strigl's "number" returned a busy signal; Obama's was for a different Barack Obama, and results for the three others were never returned.

In my experience, I purchased three phone numbers. The first number was for Washington's Attorney General Rob McKenna, and the search returned a number for another person of the same name. I also searched for Steve Largent, the CEO of CTIA, the wireless association, and it was not correct (he did a reverse search using his number, which was also not correct). And I searched for the former CEO of Qsent, which has a contract with wireless carriers to help build any future directory. I still don't know whether that was the right number because no one returned my call after I dialed it. and other people were unwilling to give me his number to verify whether it was correct or not.

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Microsoft news summary: Bach sells shares; Office competition;"'white space" device broken

Posted by Benjamin J. Romano at 11:06 AM

Several stories of note to followers of the Redmond software giant this morning:

Microsoft Entertainment and Devices Division President Robbie Bach sold more than $9 million worth of stock in the months before the company announced a $1 billion charge against fiscal fourth quarter earnings related to Xbox 360 failure rates he called unacceptable. The sales, outside of any scheduled stock sale program, were first reported last month by MarketWatch. This Dow Jones story notes that Bach sold an additional $3 million in stock May 1, according to this SEC filing Monday, well after they should have been reported. A company spokesman called the delay "an administrative error." It's worth noting that the company's stock price did not change dramatically when the hardware failures and related warranty extension was announced July 5.

"Credible" competition for Microsoft Office is emerging in the form of a combined offering from Google and Sun Microsystems, as well as from Adobe. Mary Jo Foley reports, "Over the weekend, Google began offering StarOffice for download as part of its Google Pack. Instead of charging the $70 per copy that Sun has levied for StarOffice, Google made the office suite available for free." Google is positioning the StarOffice alongside its Google Docs & Spreadsheets offering, which would give it the kind of desktop software plus online services integration Microsoft is trying to develop across all of its offerings.

The FCC reviewed, and ultimately gave thumbs down to a device meant to demonstrate that empty television airwaves could be used for wireless Internet access. It turns out the device was broken, according to a Microsoft's chief lobbyist. His statement, quoted in this Associated Press story, attributed the "FCC's aberrant test results" to a broken internal component. Microsoft was one of several tech companies working on the demonstration device. From the AP story: "An FCC spokesman declined to comment on the matter. Microsoft said in an FCC filing that it sent a duplicate device that was functioning properly, but that the agency never tested it." We wonder if the device was out of warranty.

Microsoft released nine security updates today -- yeah, it's "patch Tuesday" again -- six of which were rated "critical." The nitty gritty details are on the company's Security Bulletin site.

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August 13, 2007

Do not call my cellphone

Posted by Tricia Duryee at 10:09 AM

My story today regarding Bellevue-based Intelius's claim that it has a fairly comprehensive cellphone directory brings up the question of privacy and how to retain it.

About two weeks ago, Intelius launched this new feature on its site; it claims that it will have about 240 million cellphone numbers in the next couple of weeks, or about the equivalent of every subscriber in the U.S.

Each one costs $15 to look up, so there's a little hurdle before people can go crazy looking up everyone they know.

Still, you ask: what can a subscriber do?

First off, if you aren't already in the database, be careful with your phone number going forward. Don't fill in your phone number on sweepstakes or forms that aren't going to a trusted source. Oftentimes, those companies will resell that information to another company.

Second, if Intelius does have your phone number, you can request to have it removed from the database. Intelius executive Ed Petersen said that the company will remove it if you fax a copy of your driver's license to verify who you are. In that case, you may want to black out everything but your picture and your name (being paranoid might be your best defense).

Third, add your cellphone number to the do-not-call list. There's been some debate about this in the past -- and it was exacerbated by a mass e-mail that urgently called for people to put their cellphone number on the list.

To be clear, there is a federal law that makes it illegal for telemarketers to call your cellphone whether on the list or not, so there's no emergency. However, if those telemarketers buy a list of numbers, and your cellphone number happens to be on it because it was combed from some third-party database, it wouldn't necessarily be identified as a cellphone number.

When the news that there is a so-called cellphone directory reached the CTIA -- The Wireless Association, the trade association was stumped. Folks there didn't know how a company could get such a comprehensive database.

Steve Largent, the former wide receiver for the Seahawks who is now CTIA's CEO, said such a comprehensive list was unlikely. But he was going to have his wife add her number to the do-not-call list just to be sure. The state's Attorney General said the idea wouldn't hurt, either.

It remains to be seen how accurate the database will be since Intelius is saying it will be more complete in the next couple of weeks. For now, Largent's number hasn't made it in, nor has a handful of numbers I tried before writing the story.

I also think there's a smaller number of people who would like their number listed. Intelius says it will fill those requests as well.

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Questioning the ethics in Targeted Genetics clinical trial

Posted by Angel Gonzalez at 10:00 AM

The tragic death of 36-year-old Illinois woman Jolee Mohr during a Targeted Genetics clinical trial has raised a dust-up over whether the enrollment of patients in such experiments is being handled ethically.

A Washington Post story published last week says there were "failures in the safety net that is supposed to protect people from the risks of medical experimentation."

The Post report said rules were breached when when Jolee Mohr's own doctor -- an investigator in the Targeted Genetics clinical trial -- prompted her to enroll in the experiment. If a patient's own doctor is involved in the research, "someone else is supposed to make the proposal," the story says. Another breach occurred when Mohr didn't take consent forms home before signing them, according to experts cited by the newspaper.

But a story today in The Chronicle of Higher Education says that "neither standard mentioned in the Post article was a true rule in clinical research."

Bioethicists cited in the story agreed with the Post in that it would be "good practice" not to allow treating doctors who are also researchers to enroll their own patients in their experimental studies. But University of Pennsylvania medical ethics professor Jonathan Moreno said such enrollments were "quite common."

In the story, a Northwestern University researcher involved in the Targeted Genetics trial said that patients who participate "always have an opportunity" to take the consent form home and read it, "but by no means do we [require[ people to come in and then go home and then come back again."

Mohr's death -- which came shortly after the injection of a second dose of Targeted Genetics' experimental arthritis drug -- cast a grim light on gene therapy, a field that is considered promising but has so far yielded little result. It also echoed another death associated with gene therapy -- the 1999 demise of Jesse Gelsinger, a patient at a University of Pennsylvania experiment.

Gene therapy seeks to cure disease by transforming certain genes. But the adenovirus vector chosen to replace some of Gelsinger's defective genes with new ones triggered a massive reaction that killed him.

The therapy Mohr was getting used a different kind of vector than in the Gelsinger trial -- an adeno-associated virus -- that many experts thought safe. The cause of death hasn't been determined yet.

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August 10, 2007

Clearwire to buy part of Amp'd Mobile?

Posted by Tricia Duryee at 12:48 PM

Two online publications are reporting today that Clearwire will acquire about 50 employees from Amp'd Mobile's content division out of its bankruptcy proceedings to build out an offering for the Kirkland company's upcoming mobile WiMax network.

The move would be really interesting because Clearwire to date has been a network company -- and its founders, led by Craig McCaw, have all been network people.

Clearwire declined to comment on whether the rumors were true; phone calls to Amp'd and to Amp'd's bankruptcy attorney went unanswered,

For now, who knows if it is true?

RCR Wireless said that reportedly Clearwire has reached a deal, but it didn't quote a single source.

MocoNews.net reported that the transaction has taken place, adding that Amp'd Mobile's founder and former CEO Peter Adderton and most of management for its content team "are close to joining" Clearwire.

It further said, the team moving to Clearwire includes Seth Cummings, Amp'd's former secnior vice president of content, who is the current executive producer of "Lil Bush on Comedy Central." MocoNews said that Cummings had already changed his LinkedIn profile to reflect the move, but a check of the site lists him simply as a media and entertainment consultant.

Sprint Nextel, which is also rolling out a WiMax network, announced recently that it was going to work with Google to build a portal for the wireless broadband service.

Perhaps Clearwire was looking for an equivalent content partnership.

Roger Entner, an analyst at IAG Research, said he hadn't heard the deal was completed, but that it would make sense for Clearwire to start beefing up its content initiatives if a service and new devices were going to be available during the first half of next year.

Entner disagreed that it may be an equivalent to the Sprint Nextel and Google announcement.

"I'm not sure if they'd use the team to do a portal. More likely it's more for dedicated content that may or may not be tailored to whatever device that would be used," he said. "The Google thing -- that's a pretty vanilla portal, similar to an Internet portal. To me, the important thinkg that says is that they have the search and advertising piece. That's implied by that."

Regardless, the market seems to be responding positively to the potential pair. The company's stock, which dropped significantly after it reported a wider than expected second-quarter loss, gained about 5 percent today, or $1.20 to $27 a share in late afternoon trading.

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China, France, Poland top podium in Microsoft Olympics

Posted by Benjamin J. Romano at 8:25 AM

With the 2008 Olympics in Beijing now less than a year away, we're getting in the mood for medals. And we can consider Microsoft's Imagine Cup, a global technology and creativity competition among students from around the world, the Olympics of software. So, with the winners of this year's cup announced today, let's do a "medal count" -- admittedly an imprecise measure because of inconsistent factors from country to country such as population and resources -- and see which countries have the top young technology talent.

The Imagine Cup has nine events from Algorithm to Short Film. Microsoft lists the top three finishers in each category. There's also an interactive map of the world showing all finalists by category and country.

Both China and France had four teams finish in the top three, the most of any country, but each had only one first place. China's was in the IT Challenge, which asks competitors to "demonstrate proficiency in the science of networks, databases, and servers, as well as the areas of analysis and decision making in IT environments." The French team took first in Web development. (Taiwan also had a second-place finish.)

Poland had three winning teams, all of which finished first. The country dominated the visual arts, winning the photography and short film categories, as well as the algorithm category -- perhaps the most demanding of the event. It's an individual competition comprised of "brain teasers, coding challenges, and algorithmic puzzles."

Romania and Brazil had two top-three finishers each.

In the high-profile software design category, in which teams of students used Microsoft technologies to design applications to improve education, Thailand took top honors, followed by Korea and Jamaica.

The complete results are available here.

The United States had several finalists, but no top-three finishers. Those so inclined to do so might read this as another piece of evidence that the U.S. is lagging the rest of the world in math and science education.

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August 9, 2007

aQuantive shareholders agree to Microsoft acquisition

Posted by Benjamin J. Romano at 10:43 AM

In a brief, well-attended -- by aQuantive's past standards -- shareholder meeting this morning in Seattle, owners of the company overwhelmingly approved Microsoft's proposed acquisition, which will net them gains of more than $30 a share, 85 percent, over the price before the deal was announced.

On May 18, Microsoft announced plans to buy the Seattle-based digital advertising company for $6 billion, or $66.50 a share.

The crowd of about 25 shareholders and current and former employees applauded when the vote tally was read. Out of 79,985,251 shares outstanding eligible to vote on the acquisition, the holders of approximately 58,197,697 shares of common stock, 72.7 percent, cast ballots in favor of the acquisition. Here's the regulatory filing confirming the vote.

One man with a big smile on his face was Hoby Douglass. He joined what was then Avenue A in 1999, before the company went public. He was wearing a baseball jersey identifying him as employee No. 106.

Douglass said the jersey was used in a marketing campaign to attract new hires.

"We did a pub crawl all over town and came up to people and said. 'Do you want to work here? Do you want to work here?' Because that's the way it was back then. And we got some new employees out of it, so it was great," he said.

Today, the company has about 2,400 employees globally who will soon become part of Microsoft, which has close to 79,000 full-time workers. The deal is expected to be finalized later this month.

Douglass later left aQuantive, but he said he continued to buy shares of its stock on the open market to add to what he accumulated as an employee. He said he did so because he always had confidence in the company's management.

"I knew the management and I thought, this is not a risk," Douglass said. "They've proven me right."

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Pearl Jam concert lyrics censored by AT&T

Posted by Benjamin J. Romano at 9:29 AM

Pearl Jam was rocking out at Lollapalooza on Sunday, per usual, this time riffing on Pink Floyd's "Another Brick in the Wall" during a performance of "Daughter." Lyrics criticizing the president were cut from AT&T's Web cast of the event.

According to the Seattle band's Web site, the lyrics "George Bush, leave this world alone" and "George Bush find yourself another home" were censored.

The concert organizers did a bit of reporting to find out what the hell happened: "When asked about the missing performance, AT&T informed Lollapalooza that portions of the show were in fact missing from the Web cast, and that their content monitor had made a mistake in cutting them."

PJ was not happy:


This, of course, troubles us as artists but also as citizens concerned with the issue of censorship and the increasingly consolidated control of the media.

AT&T's actions strike at the heart of the public's concerns over the power that corporations have when it comes to determining what the public sees and hears through communications media. ...

If a company that is controlling a Web cast is cutting out bits of our performance -- not based on laws, but on their own preferences and interpretations -- fans have little choice but to watch the censored version.

What happened to us this weekend was a wake up call, and it's about something much bigger than the censorship of a rock band.

The band plans to post an uncensored version of its performance on its Web site soon.

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Get ready for 'Halo 3' marketing blitz

Posted by Benjamin J. Romano at 8:20 AM

Clear the streets. The "Halo 3" parade is beginning.

Microsoft today announced that the third installment of its hit video-game series, due out Sept. 25, has already sold more than 1 million preorder copies.

Brier Dudley explored just how important the success of "Halo 3" is to Microsoft in his column Monday.

Now comes the marketing effort that underscores that importance. In addition to the preorder "news," Microsoft lifted the lid on its marketing plans for the game, and the "Halo 3" branded Xbox 360 is just the beginning. Think major motion picture, Microsoft says.

The company is doing promotional deals with consumer brands that it says set a precedent in video-game marketing.

Mountain Dew is rolling out the first beverage co-branded with a video game, Mountain Dew Game Fuel, which boasts an "invigorating blast of citrus cherry flavor and added caffeine for maximum intensity." (Warning: Do not pour beverage into Xbox 360, it will not improve performance.)

Should you choose to leave your Xbox 360 for long enough to hit up 7-Eleven, treat your "Halo 3" withdrawal tremors with "Halo 3" Slurpee cups and other in-store promotions.

If you need a new car, Pontiac would like you to come down to select showrooms where you can play the game before it's released. And 1,000 people who buy a G6 GXP Street will get a copy of the game. (This seems like a promotion that might be a better fit with "Grand Theft Auto." Then again, maybe not.)

Burger King, which has successfully partnered with the Xbox 360 in the past, will plaster the "Halo 3" marketing materials on its giant cups of pop and French fry containers. (They're called FRYPODS. Does Steve Jobs know about this?)

Comcast is also getting into the act with user-generated content and video downloads related to the game.

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August 8, 2007

EA, Microsoft revolving door spins again

Posted by Benjamin J. Romano at 1:17 PM

Microsoft today announced that John Schappert has been named to head the company's Xbox Live efforts in a newly created role within the Interactive Entertainment Business.

Schappert comes to Microsoft after nearly 10 years with Electronic Arts, the No. 1 video game publisher. If that sounds like a familiar career path, it is. On July 17, Microsoft announced that Peter Moore, head of the Interactive Entertainment Business, is leaving to become president of EA Sports. In his place, Microsoft hired Don Mattrick, who's last job before coming to Microsoft as a consultant in February was with ... wait for it ... EA.

Schappert was an executive vice president at EA in charge of central technology, operations, EA online and the office of the chief creative officer, according to Microsoft's announcement today.

Schappert's purview at Microsoft is the Xbox Live online gaming network, which has more than 7 million members. In addition to multi-player games, the network offers video downloads and communication services, such as instant messaging. He will also oversee Microsoft's casual games business.

So, should the growing roster of EA alums at Microsoft and vice-versa raise the hackles of competitors?



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aQuantive Q2 profit down, shareholders vote tomorrow

Posted by Benjamin J. Romano at 10:33 AM

Seattle-based digital advertising house aQuantive today reported second quarter profit of $9.6 million, down 22 percent from a year ago on cost increases. Shareholders of the company, which Microsoft is planning to buy for $6 billion, are scheduled to vote Thursday in Seattle on whether to approve the acquisition.

Revenue on the quarter increased 48 percent to $156 million.

See coverage of the earnings announcement from The Associated Press.

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Analysts give insight on 'connected console' market

Posted by Benjamin J. Romano at 10:11 AM

As Microsoft's Xbox 360 price cut takes effect today, analysts are taking a broad look at the marketplace and focusing on additional features beyond playing games.

Billy Pidgeon, a veteran analyst with IDC, notes that the Xbox 360, PlayStation 3 and Wii all have the ability to connect to the Internet and store downloaded content, giving rise to three new business models beyond hardware and software sales: "premium subscription fees, paid downloadable content (DLC), and a fledgling advertising market."

He said in a press release that the "use of connected consoles is expanding the business opportunities and cash flow this console cycle" and has "huge potential."

The IDC report predicts:

"Revenue derived strictly from connected consoles will grow from $981 million in 2007 to $10.5 billion in 2011. In 2007, online console revenue will be 2.5% of total global video game market revenue, including console and hand held hardware and software revenue. By 2011, revenue from connected consoles will represent 18.6% of total market revenue."

Meanwhile, a study from the NPD Group indicates gamers are not always aware of the additional features in their next-generation consoles:

"While playing games is the primary function of all video game systems measured in the study, it should not come as a surprise that, despite marketing efforts to educate the consumer, awareness of functions that extend beyond gaming are comparably lower.

"... PS3 owners are downloading additional content as frequently as Xbox 360 owners, but unlike 360 owners, the majority of owners and likely purchasers are simply unaware that this is even possible on a PS3. Were awareness higher, one could logically deduce that download activity would increase as well."

NPD analyst Anita Frazier said additional features will become more important in the future, but "currently the importance of these features and the awareness among consumers of these features is far from universal. To make headway in this 'next-gen' race, manufacturers still need to be primarily concerned with the quality and entertainment value of the games themselves."

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August 7, 2007

Cellfire fires off mobile coupons

Posted by Tricia Duryee at 5:06 PM

Cellfire, a San Jose, Calif.-based company, said today it has launched its mobile coupon service in Seattle.

Cellfire said more than 80 Seattle-area merchants are issuing discounts and coupons to those who sign up for the service. Restaurants such as Alfy's, Round Table Pizza and Cold Stone Creamery are participating, as are other retailers such as Hollywood Video.

Moving the coupon business to mobile phones is one more step toward mobile shopping. I wrote a story last month about how there is an increasing amount of buzz around that phenomenon and how various players are testing a lot of intermediary steps before it becomes a very big market.

With Cellfire, consumers can access mobile coupons on their phone and redeem them by showing them to a clerk at the point of purchase.

The company said it supports more than 600 different mobile handsets -- I was even able to log in to my 5-year old Sanyo.

You can sign up by going to cellfire.com, or texting "WA" to the shortcode 22888.

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Why Microsoft didn't acknowledge Xbox 360 price leaks

Posted by Benjamin J. Romano at 10:21 AM

"What a surprise," Billy Pidgeon, the veteran video games analyst at IDC, said sarcastically when asked about the Xbox 360 price cut Microsoft announced last night.

Really there was no surprise. Everyone saw this coming. Not because of Sony's price cut -- which turns out to be not much of a price cut at all, once the $500 60-gigabyte PlayStation 3s sell out and all that's left is the $600 80-gigabyte version. In fact, another analyst, Van Baker with Gartner, said he didn't see any serious pressure from the marketplace for the Xbox price cut. (He also doesn't see Microsoft competing with Nintendo for the same set of customers, something other analysts and executives might disagree with.)

No, the reason everyone saw it coming was because, well, we saw it.

"There are people at certain big box retailers that like to leak fliers," said Pidgeon, referring to the scanned copies of print advertisements from Circuit City and Toys R Us, which appeared at game-enthusiast sites such as Joystiq last month, showing the exact price cuts Microsoft just announced.

I asked Xbox 360 group product manager Aaron Greenberg why, when there was this obvious evidence the cuts were coming, executives decided to stay mum and make the announcement on their own terms. Here's what he said:

It's interesting, we've had some internal debate here about like how many people really read some of those blogs. I mean while there's been some fuzzy, camera-phone photos like, we haven't seen any mainstream media covering it. I think it's still been pretty much in the speculative space and you know, for us, we know there's always a risk that when you're timing with prices like this and you want to have real, serious integration with retail -- every major retailer is doing a big Sunday ad -- these things are always at risk and we wouldn't trade the risk of those leaks for not having the retail tie-back, so we felt like we made the right bet there. But still we also don't want to just take the leaked news and feel like we have to confirm stuff when certain details are there; some of it's right and some it's wrong. We want to be able to, as we planned, announce it when we're ready to.

Another little detail that came out of Monday's announcement: the limited edition "Halo 3" version of the Xbox 360, priced at $400, and decked out in green and gold, and, Greenberg said, it will have the same HDMI (high-definition multimedia Interface) connection as the "elite" version, which goes on sale tomorrow for $450. The upside of an HDMI connection is that it is a single cable that carries both HD video and audio signals.

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Clearwire falls after Q2 earnings

Posted by Tricia Duryee at 10:15 AM

After reporting second-quarter results late Monday, Clearwire's stock declined significantly this morning.

In trading today, it fell to as low as $23.65 a share from a previous close of $29.52. It rebounded slightly trading at around $25.29, or down $4.23, around mid-day.

In today's story, we reported that Clearwire increased revenues 32.4 percent to $35.5 million compared with the same period a year ago -- beating analyst expectations of $33.3 million, according to Thomson Financial. But the company showed a loss of $118 million, or 72 cents a share, much wider than the 59 cents analysts expected.

In reaction to yesterday's results, the AP reported that two analysts downgraded the stock.

Stifel Nicolaus analyst Christopher King cut his rating to "hold" from "buy," noting shares rose past his $27 target price. King also said despite the progress the company showed during the quarter, the stock has few reasons to rise in the coming months, especially given jittery market sentiments.

Pali Research analyst Walter Piecyk also cut his rating, to "neutral" from "buy," saying the quarterly results were below his expectations.

In contrast, Jonathan Schildkraut, an analyst at Jefferies, which acted as co-manager in Clearwire's initial public offering, maintained his "hold" and a price target of $34 a share.

Schidkraut said that results were largely in line with expectations. "Significantly, CLWR's original 25 markets demonstrated continued scaling, with the group producing gross margins of 75% and achieving positive EBITDA," he said.

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August 6, 2007

Judge reverses Microsoft verdict, was largest in history

Posted by Benjamin J. Romano at 5:32 PM

Time to reset the record books -- at least for the moment. A San Diego judge today reversed the $1.52 billion jury verdict Alcatel-Lucent won against Microsoft in a patent dispute.

At issue were two digital music patents owned by Alcatel-Lucent, but originally granted to Fraunhofer Gesellschaft, a German company.

In post-trial motions, Microsoft had asked U.S. District Court Judge Rudi Brewster to reverse the verdict, order a new trial or dramatically reduce the damage award.

The judge ruled that Windows Media Player does not infringe on one the patents, and Microsoft had properly paid Fraunhofer to license the other one.

Alcatel-Lucent intends to appeal.

In a statement issued this afternoon, Brad Smith, Microsoft's general counsel, called the ruling "a victory for consumers of digital music and a triumph for common sense in the patent system."

He went on to note that this clarifies a murky legal situation that threatened many other companies who use the patented technologies at issue in the case. Alcatel's victory had raised the possibility it could pursue similar action against other companies that have licensed the technology from Fraunhofer. There were 454 "licensed companies" listed on the Web site mp3licensing.com, which is affiliated with Fraunhofer. They include Apple, Intel, Motorola, Nintendo, RealNetworks and Sony.

"For the hundreds of companies large and small that rely on MP3 technology, the Court's ruling clarifies that these companies have properly licensed the technology embodied in the '080 patent from its co-owner and industry recognized MP3 licensor -- Fraunhofer," Smith said.

Oh yeah, and for the record, the largest jury verdict ever was $925 million won by Polaroid against Kodak in 1991.

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FCC gives 'white space' device an early thumbs down

Posted by Benjamin J. Romano at 11:54 AM

Earlier this year, Microsoft, Google, Dell, Hewlett-Packard, Intel and Philips -- working together as the White Space Coalition -- built a demonstration device to lobby the government to open up unused television airwaves -- called white space -- for wireless Internet access. The effort got the backing of Rep. Jay Inslee, for one.

But the Federal Communication Commission's initial review of the device was negative.

Broadcasting and Cable reports on the FCC's statement:

"This report determined that the sample prototype white-space devices submitted to the commission for initial evaluation do not consistently sense or detect TV broadcast or wireless microphone signals," the commission said, striking a blow to the hopes of companies looking to use the spectrum for portable devices like PDAs and game controllers.

The prototype was meant to demonstrate that accessing unused TV spectrum would not interfere with existing technology, such as TV broadcasts on adjacent channels and wireless signals.

The FCC review pleased the National Association of Broadcasters, which worries that using the white space would disrupt their signals.

NewsFactor Network covers the NAB reaction:

The FCC's latest tests "confirm what NAB and others have long contended, that the portable, unlicensed devices proposed by high-tech firms can't make the transition from theory to actuality without compromising interference-free television reception," said NAB executive vice president Dennis Wharton in a prepared statement.

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Open Access network not so open

Posted by Tricia Duryee at 11:18 AM

Two reports released today questioned the future impact of an "open access" wireless broadband network based on an FCC proposal.

The idea is that a consumer would be allowed to use any device or any application on a network. This revolutionary concept contrasts to how the world works today, where carriers reign supreme and OKs both phones and services a consumer can use.

The spectrum designed to have open access is set to be auctioned off soon, and would be available in 2009 after TV stations vacate the band for HD content.

However, two voices spoke up today, saying that by designating a swath of spectrum for open access alone probably won't work -- that life won't change much for the consumer.

The reality is device manufacturers will unlikely make phones or other consumer electronics specifically for this band without having the support of an operator's sales channel. And no one can take just any device and stick it on any network -- it has to have the proper radios installed, and there's a high price to sticking another radio in a device on the off chance someone might want to use another network.

Avi Greengart, a principal analyst at Current Analysis, said this in today's edition of RCRWireless:

"The bottom line is that the mobile device world is actually getting more fragmented and more complicated.... Despite the FCC's new open-access provisions, the tight carrier control over most wireless devices will remain, and devices taking advantage of the open access provisions will either be expensive or risky propositions for the vendor."

Lynette Luna of FierceWireless said:

"The mobile industry is a long way off from being that third pipe the FCC dreams of, and that reality should sink in shortly as open access advocates stop cheering and begin to dig down and try to interpret what the 700 MHz rules really mean in a wireless environment, especially when it comes to 'reasonable network management conditions' and how open access requirements will really be enforced."

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Nokia and Microsoft partner

Posted by Tricia Duryee at 10:40 AM

Nokia plans to use Microsoft's PlayReady mobile entertainment technology on the Nokia S60 and Series 40 mobile phones, the Redmond software company said today.

The announcement builds on the two companies' existing collaboration around mobile entertainment. It is also one of many recent moves Nokia has made in the Seattle area. It bought Redmond-based Twango two weeks ago, pledging to open a Nokia office here. It also bought Seattle-based Loudeye a year ago.

More than two years ago, Microsoft and Nokia announced a partnership to work together on Nokia's music strategy. Nokia said it would enable its handsets to play music in Microsoft's format and work with Microsoft's digital-rights management system. Its music service would also use Microsoft's digital media player to handle music played on PCs.

This time around, Nokia is embracing PlayReady's technology, which makes it easy for content owners and service providers to deliver any type of digital content in a flexible manner. As part of the agreement, Nokia and Microsoft will also collaborate on simplifying accessing and moving digital content using mobile devices for the consumer.

As an example, a consumer could purchase content directly from their Nokia device and then transfer the content to other devices, such as PCs or mobile devices.

"People are increasingly using their mobile devices for enjoying digital content, such as music, games, videos and photos," said Nokia's Senior Vice President of Multimedia Experiences Ilkka Raiskinen. "By adding support for Microsoft PlayReady technology, we are enabling service providers to offer a wide range of content and create truly compelling experiences across mobile devices, personal computers and online services."

Nokia plans to support PlayReady across a range of S60 and Series 40 devices starting in 2008.

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August 3, 2007

Microsoft files annual report

Posted by Benjamin J. Romano at 2:24 PM

Just in time for summer weekend reading, Microsoft today filed its annual report for the 2007 fiscal year, which ended June 30.

Some interesting things to note within the first few pages:

Microsoft's stock buyback plan reduced the number of outstanding shares by about 600 million, to 9,375,492,496.

This year's shareholder meeting will be Nov. 13, a Tuesday.

In the section describing Microsoft's mission in general, there's a subtle change in language from last year with regard to the company's investment in long-term growth, a big theme of last week's Financial Analyst Meeting.

Last year: "We believe that over the past few years we have laid the foundation for long-term growth by delivering innovative new products, creating opportunities for partners, improving customer satisfaction, putting many of our most significant legal challenges behind us, and improving our internal processes.

This year: "We believe that we continue to lay the foundation for long-term growth by delivering new products, creating opportunities for partners, improving customer satisfaction, and improving our internal processes." (Emphasis added.)

Thoughts on whether this language change is significant?

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Anti-piracy move: Microsoft cuts Vista price in China

Posted by Benjamin J. Romano at 10:21 AM

Microsoft said it is cutting the price of Windows Vista in China to combat piracy in the country. The price of Windows Vista Home Basic, beginning Aug. 1, is 499 yuan, or about $66. That compares to a suggested retail price in the U.S. of $199. We had an item (scroll down) in today's paper.

Our own Kristi Heim traveled to China for this two-part report on the market for fake goods there, including a close look at Microsoft's anti-piracy efforts.

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New VC funds and how they are doing

Posted by Tricia Duryee at 9:02 AM

Investors at U.S. venture capital firms raised $3.23 billion to add to their coffers during the second quarter, according to a report published by Dow Jones VentureOne this week.

That represents a decline of 62 percent from the same period last year -- the biggest decline since 2002.

During the period, there wer 15 venture capital funds raised, compared with 25 a year ago. That was the lowest quarterly fund total since the first quarter of 2003.

Although the numbers are down from last year, five huge venture funds skewed the 2006 numbers by raising more than $7.92 billion in capital. And, in 2005, two supersized funds raised $2.6 billion.

Even though funds have not been raising as much money recently, they are still performing well.

On Thursday, a separate report found that venture-capital performance continued to show positive returns in most investment areas during the first three months of the year, according to Thomson Financial and the National Venture Capital Association.

The report said an increase in the first quarter this year shows more companies have gone public or been acquired since the Internet bubble burst.

"The venture capital industry continues to outperform the public markets long term, offering strong returns to its limited partners, which include pension funds, endowments and foundations," said Mark Heesen, NVCA president.

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August 2, 2007

Should the FDA relax approval standards for biotech therapies?

Posted by Angel Gonzalez at 4:49 PM

Have biotech advances in cancer therapies evolved beyond the regulators' ability to handle them quickly?

Patients and biotech companies are simmering in frustration at the U.S. Food Administration's rejection of drugs they consider promising. A Wall Street Journal story published Thursday says these groups would like the FDA to allow products that fail to achieve their stated target, but are later discovered to be effective in certain groups among the people tested. That flexibility could save lives of terminally ill patients, they say.

The FDA argues that it's better to be safe than sorry, and that selecting successful sub-groups after the fact is bad science.

Some patient groups are taking an openly confrontational approach. We wrote Tuesday that CareToLive, a group representing prostate-cancer patients, is suing the FDA for rebuffing Provenge, Seattle-based Dendreon's lead therapy. The patient advocates say the refusal is the result of political rivalries within the agency, and is foiling some patients' last hope.

The push by such advocates, however, coincides with a nationwide call for more strict FDA supervision in the wake of drug safety scandals.


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Federal court thwarts D.C. pharmaceutical price controls

Posted by Angel Gonzalez at 3:37 PM

A federal court thwarted the District of Columbia's efforts to put a lid on medicine prices on constitutional grounds -- earning the applause of the biotech industry.

The United States Court of Appeal for the Federal Circuit upheld a lower court's ruling that found D.C.'s Prescription Drug Excessive Pricing Act of 2005 breached the goals established by patent laws.

The law sought to keep drugs from costing more than 30 percent above what they cost in other developed countries. It also required companies to reveal their invention costs to the authorities.

Supporters said the measure was necessary to counter skyrocketing pharmaceutical costs. Opponents argued that the law would stifle innovation.

The ruling marks a victory for the biotech industry, currently assailed by a legislative effort to pave the way for generics of genetically-engineered therapies.

The Biotechnology Industry Organization commended the court for its decision.
"This law, like other price control measures, would not have had the intended effect of increasing patient access to drugs," said BIO president Jim Greenwood in a statement.

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Grand Theft Auto IV delayed until 2008

Posted by Benjamin J. Romano at 2:13 PM

This could put a damper on the holiday video game season: "Grand Theft Auto IV," one of the most-anticipated games of the year, will not be released until sometime in early 2008, according to publisher Take Two Interactive Software.

The game's release is being moved from the company's fiscal fourth quarter, which ends Oct. 31, to the second quarter of its 2008 fiscal year, which ends April 30, 2008, "due to additional development time required to complete the title," according to a statement on the Take Two's investor relations Web site.

The game was to be released for Sony's PlayStation 3 and Microsoft's Xbox 360 simultaneously.

That apparently complicated development.

"Certain elements of development proved to be more time-intensive than expected, especially given the commitment for a simultaneous release on two very different platforms," Take-Two Chairman Strauss Zelnick said in a statement.

"GTA IV," the next installment of the controversial and wildly popular game that features car jacking and hooker-shooting, was going to be one of a triumvirate of titles to drive Microsoft's Xbox 360 during the all-important holiday season, the other two being "Madden NFL '08" and Microsoft's exclusive "Halo 3" title.

Update: It appears the schedule for the Xbox 360-exclusive "GTA IV" episodic content remains unchanged by this. According to the statement, the episodic content, which will be available via download from Xbox Live, is still in the 2008 line up, where it always has been.

Could this delay help Microsoft when "GTA IV" is ultimately released? The first installment of the episodic content was due in March 2008, according to comments from Take-Two CFO Lainie Goldstein during the company's June 11, 2007 conference call. Goldstein also acknowledged that Take-Two will be paid in two $25 million chunks for the two exclusive installments of episodic content -- for a total, eye-popping price tag of $50 million (a figure that has not been confirmed by Microsoft).

If the first episode of Xbox 360-exclusive content is released in March 2008 -- it's hard to imagine it coming before the game itself -- that would put it within weeks of the release of the game itself.

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WSA names new board members

Posted by Tricia Duryee at 1:51 PM

The WSA, the state's technology trade organization, said today that it has named five new members to its board.

They are:

Ron Craswell, engineering director, Google : Craswell, one of the leaders at Google's Kirkland office, oversees a number of Google projects, including parts of Google Maps, Webmaster Tools and Google Pack. He previously was vice president of engineering for Seattle-based M:Metrics.

Carla Stratfold, senior vice president of RealNetwork's program integration office: Stratfold joined RealNetworks in 2001 to work in sales. Before that, she was at Oracle.

Keith Smith, CEO, Zango : Smith, who co-founded Zango in 1999, has worked in technology development, financial services and entrepreneurial concerns.

James Sun, CEO, president and founder, Zoodango : Sun was runner-up on the NBC show "The Apprentice" this year. He started out by running an investment trading company during his college years. Before creating Zoodango, he worked as a management consultant at Deloitte Consulting.

Jennifer Shettleroe, vice president of engineering, Attachmate:
Shettleroe joined Attachmate in 1995, holding key leadership positions in product development, information technology, technical support and corporate training. She has a 20-year career in software development and delivery.

WSA board has 35 members. Along with President and CEO Ken Myer, the board drives the direction of the organization.

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Clearwire turns on three more cities

Posted by Tricia Duryee at 1:37 PM

Clearwire said today it started providing its wireless broadband service in Dayton, Ohio.

On Wednesday, the Kirkland company, which is building out a national network, said it launched service in Syracuse, N.Y. and Corpus Christi, Texas.

Recently, the company agreed to partner with Sprint Nextel to speed up the deployment of WiMax by splitting up the towns and cities that the two companies will cover.

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Onvia saves $$ by moving

Posted by Tricia Duryee at 1:17 PM

In 2002, we wrote about how unused office space was draining the bottom lines of tech companies in the region.

The companies either had secured extra space to accommodate their growth, which never came, or laid off employees, creating a glut.

In that story, we reported that Onvia, an online government-contracting service, lost $5.2 million at its two Seattle buildings (about 100,000 square feet).

Today, the company seems to have finally rid itself of its excess space.

Onvia said it plans to move its headquarters to downtown Seattle in January 2008 from its office near South Lake Union. Simultaneously, Onvia also agreed with its landlord and a third party to terminate Onvia's obligations under its current office lease at no additional cost.

What's more, as a result of these transactions, Onvia's cash flow will improve by about $2.4 million and its operating expenses will decrease by about $700,000 over a 28 month period starting January 2008.

In July, Onvia provided a $538,000 security deposit on the new lease, and upon termination of its existing lease, Onvia's $3.5 million security deposit on its current space will be returned.

Executives are feeling good about the move.

"The net result of the two transactions will be to increase our future cash balance, cash flow and earnings," said Mike Pickett, Onvia's chairman and chief executive. "In addition, the new lease will provide Onvia with additional space to handle our future growth needs."

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More data center lookers in Grant County

Posted by Benjamin J. Romano at 11:51 AM

Terry Brewer, executive director of the Grant County Economic Development Council, wrote in response to today's story on the data center boom in Quincy, that his organization has "responded to requests for information from more than a dozen clients and consultants representing clients who are researching sites for data centers."

And, of course, the interest is stretching beyond just Quincy, or just Grant County. Moses Lake, Wenatchee and The Dalles, Ore., are all benefiting from the same trend.

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August 1, 2007

Ethanol craze takes to the skies

Posted by Angel Gonzalez at 5:35 PM

This year's Seafair aerial extravaganza will feature Greg Poe --- an acrobatic pilot whose single-engine propeller plane can run on 100% ethanol, instead of gasoline.

The biofuel - extracted mainly from corn in the U.S. - doesn't perform differently than the gasoline traditionally used in small propeller planes, says Poe. With one exception.

"It does burn cleaner," says Poe. "I can smell it in the exhaust when I'm doing my aerobatic routines."

Poe's sponsor: Fagen, an engineering and construction firm that manufactures ethanol plants. Poe's performance is "a good way to help educate the public about the benefits of ethanol," the pilot says.

The ethanol industry is pushing hard to evangelize Americans about the virtues of fuel extracted from the heartland's farms. Major engineering companies and pro-ethanol organizations have already spurred the Indianapolis 500 to run its race cars on the fuel.

The increasing use of corn ethanol, although it represents a boon to U.S. farmers, is not without controversy. Rising energy prices and concerns about reliance on foreign oil have contributed to its rising popularity. But critics claim that it has contributed to an increase in food prices, and that the corn-based fuel is not a very efficient way of getting energy.

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After a Microsoft career, love of former rivals declared

Posted by Benjamin J. Romano at 12:57 PM

I listened to some excerpts from the Aspen Ideas Festival, which took place early last month, and one quote caught my attention.

Randy Heinrichs introduced himself as a former Microsoft Research employee and the CEO of a new company, 2b3d (more on that in a second). He promptly got something off his chest:

"I am formerly from Microsoft Research, and I've been waiting to say this for a long time after 10 years: I love Apple. I love Sony. I love Linux. I love open source," Heinrichs declared, to big laughs from the crowd of intellectuals at the event.

(You can listen to Heinrichs' brief speech, along with several others that kicked-off the festival on American Public Media's Word for Word, which is where I heard it. Heinrichs' comments begin at 3:39.)

"What I really love is education," Heinrich continued.

He related a story of his son asking permission to play at a friend's house. When granted, the son went to his room, and logged on to World of Warcraft.

That got Heinrichs asking himself what motivates kids to play video games -- particularly the increasingly immersive online multiplayer games -- and, "What motivates us, as adults, to continue to buy them Xbox, Sony PlayStations, Wiis, telephones, all of this digital equipment that is changing these children and building them into a new culture of digital natives, where all of us sitting here, as I look across the sea, are digital immigrants."

Heinrichs' Big Idea is to "build an interactive serious gaming and media grid to support a high-definition learning environment for these kids." His company, 2b3d (to which I could find no link online) is working on doing just that.

"I would like to get these kids to be new citizens of the world by combining our institutions of education with these digital institutions," he said.

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Another data center slated for Quincy

Posted by Benjamin J. Romano at 10:03 AM

The data center boom in Quincy, Grant County, continues.

Base Partners, a San Francisco-based data center developer, is announcing plans to develop up to 400,000 square feet in Quincy.

The data center, slated for 68 acres of land in the agricultural community, would be the fourth in town, joining Microsoft, Yahoo and Intuit.

Aaron Wangenheim, president of Base Partners, said his company has been talking to several prospective tenants for the data center. The first phase of the project -- a 100,000 square foot building -- will be built on spec, he added, and should be completed within a year.

The Internet companies, including Google, have been attracted to the Columbia River basin for the cheap electricity from the region's hydroelectric dams. Data centers, which are basically huge warehouses full of server computers that run Internet sites and business databases, for example, are major consumers of power.

Base Partners, on this one-page PDF spec sheet on the project, lists "lowest power cost in U.S." as the top answer to the question, "Why Quincy?"

Wangenheim said the likes of Microsoft and Yahoo have been "trail blazers" in Quincy, helping smooth out what he called "infrastructure issues" in getting their data centers up and running.

"Yeah, there's a lot of power and yes it's cheap, but delivery to the sites is still difficult," he said, adding that water and sewer delivery is another challenge.

The "trail blazer" companies have started the process of resolving those issues, he said. "Those guys mitigated the risk for us."

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Tricia Duryee
Tricia Duryee
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Angel Gonzalez
Angel Gonzalez
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Kristi Heim
Kristi Heim
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Benjamin J. Romano
Benjamin J. Romano
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Mark Watanabe
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