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September 28, 2007

Plans to fly a biofuel jetplane - Down Under

Posted by Angel Gonzalez at 3:04 PM

Aircraft maker Boeing said Friday it seeks to fly a biofuel-powered jet plane in New Zealand in the second half of 2008.
The effort, in collaboration with Air New Zealand and engine maker Rolls Royce, is part of Boeing's research to determine what biofuels are suitable for the environmentally-challenging, jet fuel-hungry airline industry.
The company is planning a similar demonstration in collaboration with Virgin Atlantic and GE.
Boeing is testing fuels from several makers; these alternatives use feedstocks ranging from algae to soy beans to oil from the babassu palm.

National Academy of Engineering... Check!

Posted by Angel Gonzalez at 2:34 PM

On Sunday, local science star Leroy Hood will get a rare feather on his cap: he will be inducted into the National Academy of Engineering - becoming one of seven people who belong to at least three of the National Academies.

Hood, who heads the Institute for Systems Biology on the north side of Lake Union, is also a member of the National Academy of Science and the Institute of Medicine of the National Academies.

Hood gained fame in the field of biotech by helping invent the automated gene sequencer and other tools used in genetics. In 2000 he co-founded the ISB in Seattle, where computing science mixes with biology to seek new knowledge related to health care.

But Hood still needs to be invited to the National Research Council to complete his collection of all four national academies.

WiMax World: The home modem

Posted by Tricia Duryee at 1:15 PM

CHICAGO -- This probably should have been one of my first posts, but sometimes things don't happen in order.

There was a lot of talk this week about future devices that will emerge once networks start getting up and running. The first thing in the progression seems to be modems that can be used at home or at certain locations. Nextwill be PC cards for laptops, then laptops embedded with WiMax chips, and from there -- who knows? A host of consumer devices will go up for sale with WiMax, for instance, MP3 players, cameras, handheld gaming devices and more.

But if you are having a hard time picturing the home modem, I took a picture Thursday. As you can see, it is portable, but it's not particularly handy for toting around. Typically these also have to be plugged into an outlet.

This is for the Sprint Nextel Xohm network. The booth workers say it looks like a coffee cup. If that's true, they must be from Seattle -- it's pretty dang big.

Check it out:

motorola 001.jpg

WiMax World: Clearwire address the crowd

Posted by Tricia Duryee at 1:01 PM

CHICAGO -- At WiMax World Thursday, Clearwire's Scott Richardson gave hourlong presentation on the progress the Kirkland company has made on deploying a wireless broadband network.

I wrote about the show's final keynote speech for today's paper here.

But in addition to what I wrote about Richardson, Clearwire's chief strategy officer, said he's been spending a lot of time with other vendors and suppliers since the industry has the potential to include a lot of different gadgets and ideas.

Richardson is helping to build the WiMax ecosystem, a concept that Sprint Nextel talks a lot about as it prepares to build its WiMax network.

As an illustration of the types of people Richardson spends time with, he invited on stage with him another company -- Postdata's Flyvo division, which is developing WiMax devices.

On stage, they gave a demonstration of a handheld video game device that can connect to the Iternet. The user can play not only games online with other competitors in cyberspace, but they can also surf the Web.

I caught up with Flyvo's business development manager Ross Lee on the show floor.

He said the device is targeted to launch soon in Korea with KT Telecom
and will cost about $400, but may be offered through the carrier for a $200 discount. He said the demand is expected to be high there, where playing online games is popular.

Here's a live demo Lee gave me at Flyvo's booth:

September 27, 2007

Windows XP to be sold until June 30, 2008

Posted by Benjamin J. Romano at 5:01 PM

Microsoft said this afternoon that it's extending the deadline for retailers and OEMs to stop selling Windows XP from Jan. 30, 2008, to June 30. The move was chalked up to demand from small businesses for the older product and Microsoft's "overambitious" goal of switching the world to Vista, launched Jan. 30, in only 12 months.

Check out this story for details.

Anyone out there considering a switch from XP to Vista? If so, what's holding you back? And how do you read the extension of the deadline?

WiMax World: Much, much bigger

Posted by Tricia Duryee at 9:26 AM

CHICAGO -- This year's WiMax World has 100 more exhibitors than last year, and booths seem twice as big, considering that they actually have gadgets and other gear to demo.

If you are looking for an example of someone here for the first time, you don't have to look that far.

Spokane-based ReliOn, a company building fuel cells for back-up power needs, is a newbie to the show.

Sandra Saathoff, ReliOn's spokeswoman, said the industry seems to be hitting a point at which it may need backup power solutions for cell sites.

Part of the reason is that the FCC may mandate that cellphone companies, and conceivably WiMax providers that provide voice services, must provide eight hours of backup in case of an emergency.

ReliOn has built a closet-sized system using fuel cells and hydrogen tanks that can provide 48 hours of continuous 1 kilowatt output. Cell sites could require more than that output, which would decrease the amount of time the hydrogen would last. The cabinet costs somewhere in the $14,000 range, but is much more compact than batteries, Saathof said.

wimaxworldfloor 026.jpg

WiMax World: Clearwire top provider

Posted by Tricia Duryee at 7:00 AM

CHICAGO -- Clearwire this morning received the Best of WiMax World USA 2007 Award in the service provider category.

The annual awards, announced by xchange magazine, recognize leaders in the development and deployment of the high-speed wireless broadband technology.

Clearwire will be recognized in the November issue of xchange, as well as on the WiMax World Web site.

Clearwire is providing wireless broadband based on technology that is a pre-cursor to WiMax. It allows you to plug a modem into an electrical outlet on one end and into a laptop or PC on the other in order to make a connection. The service is offered in more than 40 markets in the U.S., including Seattle.

The rest of the winners are expected to be posted sometime today here.

UPDATE: Here's an entire list of the winners:

The WiMAX World USA Award winners were:

-- Chip Design: Sequans Communications SQN1130

-- System Design: ZyXel MAX-1200/3200 Mobile WiMAX Product Series

-- Device/Peripheral/Application Software: Airspan Networks MiMAX USB

-- Industry Innovation: Sprint Xohm Mobile Internet Services

-- WiMAX World Digital Cities Deployment: Telsima WiMAX Rollout in India

-- Industry Choice: WiMAX CPEi 800/850 Series Desktop CPE

WiMax World: The Mini Cooper experience

Posted by Tricia Duryee at 5:56 AM

CHICAGO -- Nokia showed off a tablet integrated into the dashboard of a Mini Cooper. I didn't get the full demo of how it would work, but I know that the device would control the car's entertainment system. I think it also does navigation. As you can see, you can take the device with you when you leave the car, giving new meaning to a car stereo faceplate.

Here are some pics:

wimaxworldfloor 003.jpg

wimaxworldfloor 018.jpg

WiMax World: Motorola demos Web browsing

Posted by Tricia Duryee at 5:45 AM

This is the second part of the Motorola demos. The first one -- in the last post -- demonstrated how Google Maps works over WiMax. In this one, Motorola shows how a browser can work over WiMax.

In both cases, the demonstration took place at a meeting room at WiMax World. For an accurate experience, Motorola set up a base station in the room using its own technology tonnected to the Internet using a T1 line. The WiMax chipset is in a phone that looks very much like the Razr.

A product marketing manager said the end WiMax product will look much different than a Razr.

Here's a video of a demonstration using the Opera browser:

WiMax World: Nokia ultra-mobile devices

Posted by Tricia Duryee at 5:32 AM

CHICAGO -- I reported a story today recounting how for the first time the focus at WiMax World was on devices and applications rather than justbuilding the networks.

Even though networks won't be up and running until late this year or early next, the devices are set to launch at about the same time.

The early emphasis will be on PC cards, which can easily be plugged into a laptop for WiMax connectivity. However, there's an emerging category of devices that are smaller than laptops, but larger mobile phones.

Check out a conversation I had with Chris Staley, Nokia's vice president of sales and customer and market operations. He did a good job explaining where the category is going:

September 26, 2007

'Halo 3' rings up $170 million in first 24 hours

Posted by Benjamin J. Romano at 2:33 PM

Microsoft is claiming the title of greatest entertainment company EVER!

OK, not really, but they are saying that the estimated $170 million in U.S. "Halo 3" sales recorded since Tuesday at 12:01 a.m. represents "the biggest entertainment launch in history."

Not clear yet how, or whether, the company will record the added costs it faces to replace scratched "Halo 3" disks that came loose and rattled around inside their commemorative packaging.

WiMax World: Revving up

Posted by Tricia Duryee at 11:06 AM

CHICAGO -- The energy here at McCormick Place has cranked up today, the first day of WiMax World.


Yesterday, the show had a pre-conference day that seemed mild and subdued for an industry on the cusp of rolling out its first commercial networks.

That changed today with this morning's keynotes.

Sean Maloney, an executive vice president at Intel who was being called the father of WiMax, opened up his presentation with an energizing video called "WiMax Love."

He said that WiMax should aim for global domination, just as the cellphone industry went after the whole world.

"It's a dangerous time. We've come a long way from our pioneering work and from standards setting," he said. "We are at the deployment stage, and this is where the race is going to be won or lost over the next year or two."

He listed four challenges that the industry must address:

-- Performance of WiMax networks.
-- Applications must have the capability of the Internet. The Interent is not going to re-optimize everything for smaller devices, so the mobile industry must optimize for the Internet
-- Keep costs low. The chips should be $30 and the customer shouldn't have to pay more than $30 a month.
-- Make things easy to use. Everyone must be able to figure out how to use it.

Maloney's keynote was followed by Barry West, chief technology officer at Sprint Nextel.

He said that WiMax is like a horse out of the stable and running around the track. "There's no other horse in sight," he said.

West said WiMax is definitely in the lead ahead of other technologies. The closest one is LTE, or long-term evolution, which is an adaption from the GSM world -- the technology used by T-Mobile USA and AT&T's wireless division.

Motorola Chief Technology Officer Padmasree Warrior concluded the keynotes.

She said WiMax is much better than existing 3G wireless broadband technologies. She said WiMax has three times better performance and two times the spectrum efficiency at half the cost.

As an example of an application used on a WiMax network, she gave a demonstration. She said YouTube is great, but unfortunately it is in the past -- everything on it is already old news. With WiMax you can make it real-time.

Using a software application that looked like instant messenging, she shared a TV session with some colleagues at Motorola's Schaumburg, Ill.,headquarters, while having live chat sessions, such as a video conference.

Although the demo involved viewing the Discovery channel, you can imagine it might be more compelling with a live football game.

WiMax World: Record attendance

Posted by Tricia Duryee at 7:19 AM

CHICAGO -- Fred Wright, senior vice president of Motorola's broadband business, took the stage this morning and reflected on WiMax World's growth.

Wright was one of the early participants in the conference, now holding its fourth annual session.

He said there were 500 attendees and a handful of exhibitors in 2004, and this year the number has soared to more than 8,000.

The show's growth mirrors the huge opportunity in front of them, Wright said. He shared statistics that said only 2 percent, or about 5 million people, were using wireless broadband in 2006. By 2010, that number is supposed to go up to as many as 73 million.

Yankee Group Analyst Berge Ayvazian gave an industry update prior to the keynotes this morning. He said that there are more than 275 WiMax trials going on worldwide in 65 countries. Of those trials, 75 are actually commercial services offering fixed and nomadic wireless broadband.

A lot of those trials and deployments are in Europe, Latin America and the Middle East and India.

There's also a handful in the U.S. I write a lot about Clearwire's efforts, which have extended to services in more than 30 U.S. cities, and about Sprint Nextel, which is expected to launch its Xohm service in a handful of markets as soon as December.

But there are others as well. DigitalBridge is serving small towns in Idaho and Montana, and Horizon Wi-Com is rolling out services in the Northeast, where Verizon's territory has traditionally been located.

Overall, there's a lot of talk about two emerging markets.

In Third World markets, WiMax is attempting to bring phone and Internet access to a lot of communities for the first time. The wireless technology is proving to be much easier to deploy than traditional wireline services.

In the U.S., the market is about creating new competition and giving people mobility. It's about untethering the Internet to create a whole new set of applications as people's lives become more focused around multimedia, social networks and other applications.

Next up are keynotes by Intel and Sprint Nextel.

WiMax World: Finding a vendor

Posted by Tricia Duryee at 6:39 AM

CHICAGO -- I ducked into a session on operating WiMax networks Tuesday, and I stumbled upon a company called IntraISP, a wholly owned subsidiary of Kirkland-based Clearwire.

Steve Roatch, executive vice president and chief operating officer of IntraISP, was speaking on the panel.

He said that Clearwire acquired IntraISP in June at a very early stage. The company is focused on managing billing and customer management software for WiMax and broadband networks.

Roatch said when Clearwire was looking for a billing system, it didn't approach traditional vendors that serve the telecom industry. Instead it turned to Internet-focused companies. IntraISP got its start serving AOL/Netscape, Roatch said.

And, although Clearwire bought IntraISP, it's allowed to serve even competing WiMax service providers.

He said the big challenge in IT for WiMax networks is staying ahead of plan.

"Keeping up with the business is one of the greatest challenges," he said.

That's especially true as marketing and development teams add new content and applications customers demand.

"The big challenge is in delivering personal broadband," he said.

WiMax World: Motorola gives live demos

Posted by Tricia Duryee at 4:05 AM

CHICAGO -- At WiMax World last night, Motorola invited the press, analysts and some partners on board a river boat in downtown Chicago to demonstrate some of its WiMax products expected to launch early next year.

The live demonstration required installing four base stations at different points along the Chicago River to deliver the service. In opening remarks, Motorola said it didn't realize what it was getting into when someone had the great idea of demonstrating WiMax on the river. It was essentially an urban canyon because radio frequencies tend to scatter when they hit water and the river is 30 feet below street level.

But as you'll see the demonstration went fairly well.

Here's a map of where the cell sites were located:

motoboatpics 011.jpg

And here's what a WiMax base station looks like on top of a building:

motoboatpics 007.jpg

The more interesting stuff came when Motorola pulled out the devices that were going to use WiMax. I wrote earlieron this blog about how the key was in applications -- not the network. Here are two examples of applications to add to the list:

First up is a live demonstration of a WiMax chipset being used to stream videos from YouTube to the phone. The phone is a working prototype of WiMax, which is not expected to launch commercially until later next year. (Excuse the amateur video quality, I'm a beginner. Also, I apologize for the poor sound quality, but it was very loud in the background because of the number of people on the boat).

In this video, you can see how the WiMax PC card will work in a laptop. WiMax covers much larger distances than Wi-Fi. In the beginning of this clip, you can hear a Motorola executive in the background saying how someday my video could go straight to the Web via WiMax, skipping the mundane process of recording it to tape and then transfering it to my PC and then to the Internet on YouTube.

September 25, 2007

WiMax World: On the hunt for applications

Posted by Tricia Duryee at 10:57 AM

CHICAGO -- This is my second WiMax World. Last year, the conference was celebrating the fact that a big-time carrier, Sprint Nextel, had chosen its technology to deploy for its new wireless broadband network.

This year, I'm trying to get a sense of what the buzz is all about.

And although it's super early, I can already feel that the honeymoon period has subsided somewhat, and there are a lot of nuts and bults conversations going on about how they are going to make this all work.

The two main questions I'm hearing are:

-- How will the carriers make money?
-- And what will be the "killer" applications that will drive adoption of the technology?

There are many other issues, too, but I find the second question the most difficult one to find answers for.

I'll probably write a few blogs on this topic, but there were already a couple potential answers shared during this morning's sessions.

Atish Gude, the senior vice president of Sprint Nextel's mobile broadband operations called Xohm, said his company will figure it out later.

"I think it's about the right business model, and it's about having a network that can handle tremendous amounts of Internet time at a low cost," he said. "People will find uses for taking it with them and application developers will come up with great ideas."

To be fair, he later followed up with a slightly more clarified statement: "The first step ought to be taking what they use on the Internet and making it mobile, and after that there can be a lot of models that could be even better...It's not about technology, it's an experience. What do people get when people take their content with them -- and I'm not just talking about your Yahoo or Google content, but your own information from your media center PC at home. It's about accessing that on an anywhere basis -- that's the experience that Xohm is really meant to be."

Richard Lowe, a president at Nortel offered a personal example of how he would use it.

He said it would start at home, where he'd receive an early phone call from a co-worker right as he is leaving the house. He'd transfer it to his iPhone, so he could conduct a video conference call. On the way out of the house, he passes the refridgerator, where he would receive an updated shopping list. Once he gets into the car, the car would automatically pull the address of where he is going and give him turn-by-turn directions. Once he parks at a meter, the car automatically pays the fee, and then sends the charge up to his Quicken account, which would make the deduction.

He said: "4G is more than access, applications and mobility." The term he was keen on using to describe this was "hyperconnectivity."

"It doesn't equal mobility," he said. "It's about a lifestyle that exists out there."

WiMax World: Some perspective

Posted by Tricia Duryee at 10:37 AM

CHICAGO -- Things are still just ramping up here, while Yankee Group analyst Philip Marshall started this morning's keynotes with some perspective.

He said more than 40 percent of consumers surveyed want mobile Internet access, but less than 10 percent can access the Internet on the go.

He said that's because it's expensive, it's not packaged attractively by wireless carriers and, to a lesser extent, the service performs poorly.

From a WiMax provider's perspective, he asked, how do you economically deliver mobile Internet services in an environment that's looking for unlimited data, or all you can eat?.

He said that puts the pressure on the carriers to figure out how to make money as they transition from focusing on voice calling to an Internet model.

"The Internet is emerging using the service provider as a distribution and market," he said. "It looks like an Internet browser and the service providers are challenged by that because the service model has to change."

He said providers need to move from a communications-centric model to a media- centric model. He points to Google, which took the fairly straightforward technology of Internet search and bundled it with advertising.

Marshall summarized the current market has having latent demand for mobile Internet.

Moderator Berge Ayvazian, also of Yankee, asked Marshall if latent demand means pent-up demand: "Is it latent because people don't bang on the door insisting for it, and asking to uncork it and unbottle it?"

Marshall said perhaps that's true if companies provide services that consumers really want, just like on the Internet, but they had to find the applications that would really drive adoption.

"I'm not sure what those services are going to look like in the mobile world," he said. "whereas in the Internet world, we had to go beyond just connection."

WiMax World: The facts

Posted by Tricia Duryee at 8:42 AM

So what is mobile WiMax?

It is broadband Internet access delivered wirelessly to you wherever you are.

For starters, mobile WiMax will probably come from a PC card or a chip in your laptop that allows you to get Internet access. It's similar to Wi-Fi, except that the coverage will be more extensive.

Down the road, new uses are envisioned: WiMax chips installed in cars to provide navigation or cameras that come with the chips.

Speeds: It's expected that the service can deliver up to 20 to 30 megabits per second, a lot faster than DSL or cable, which runs from 1 to 8 megabits.

However, those speeds are possible only if few people are using the service. It's more likely the speeds will be about 2 to 3 Mbps. As demand for faster speeds grows, it can be increased.

Mo Shakouri, vice president of marketing at the WiMAX Forum, said mobile WiMax can reach 30 megabit speeds for each 10 MHz of spectrum. For perspective, Sprint and Clearwire have about 100 MHz, so they are could provide up to 300 megabits.

Cost: Based on what service providers say, they are expecting to charge more than rates for DSL or cable today because their service, they say, is more valuable.

Radio cost: One of the biggest reasons cellular chipsets have not been integrated into consumer-electronic devices more readily is they cost a lot. WiMax chipsets are supposed to be cheaper. Because they aren't much bigger than Wi-Fi chipsets today, the silicon expense should not be much higher.

WiMax World: The skinny on where WiMax stands today

Posted by Tricia Duryee at 8:18 AM

CHICAGO -- I wrote an advance story Monday about WiMax World that gave a small update as to where the emerging wireless broadband technology stands.

But I didn't get into too many specifics because I thought it might bog down the story with too many technical details. I figured I would take a moment to do that now.

To get the skinny, I talked to Mo Shakouri, vice president of marketing at
the WiMax Forum, a trade association.

First, I characterized WiMax as an emerging technology because a standard for the technology was extablished only recently, and now companies in the field must go through a certification process to get their equipment deemed "true mobile WiMax." The geeky term for that is 802.16e.

So currently there is no mobile WiMax in the world today. Those that offer similar services, such as Kirkland-based Clearwire, are using proprietary equipment (probably from Motorola), or they're offering fixed WiMax, which comes under the name of 802.16d.

But that's going to change soon.

Shakouri said by the end of the year there will be five certification labsaround the world. The one in the U.S. will be in Virginia.

The labs are checking to see if everything works together. For instance, the base stations have to be able to interact with WiMax PC cards and handheld devices.

"We are on target for mobile certification for 2.3 GHz and 2.5 GHz by the end of this year and beginning of next year," he said. "We expect to get mobile equipment certified in the first half of 2008."

So why is it that Sprint Nextel says it will have its WiMax network up and running in select cities by the first of the year?

Shakouri explained there are two reasons. One: Over the past six to nine months, work has been conducted to take the risk out of the certification process. If a problem does arise, it's likely to be small. "Because of that, people have been more comfortable and are taking the risk," he said.

The second reason is that there is an urgency in deploying the technology.

"Normally you would have said, I will wait until the equipment is certified, but the demand is so high," Shakouri said. "The operator is taking the risk....They believe that there is such industry momentum."

He said the WiMax Forum has counted 270 operators deploying and testing equipment around the world, and 50-plus are talking about deployment.

WiMax World: It begins, sort of

Posted by Tricia Duryee at 6:41 AM

CHICAGO -- WiMax World kicks off today at the McCormick Place in Chicago.

Sort of.

The only reason why I qualify that is because Wednesday is the official first day of the two-day show, but today is the pre-conference, and as far as I can tell there's a full line-up of activities.

Here's a story about the whole show that ran Monday.

In general, today's spotlight will be on Kirkland-based Clearwire and Sprint Nextel, as they gear up to launch a nationwide mobile WiMax network early next year.

Essentially this pre-conference day is focused on the competitors lining up against the WiMax contingent.

In particular, there's going to be a lot of focus on the upcoming FCC spectrum auction. The airwaves are particularly good for wireless broadband, but it has yet to be determined which technology the winning bidder will choose to roll out.

Speaking today are executives from Ericsson and Qualcomm, as well as a panel of service providers. Those include Towerstream, a company delivering broadband to companies, Rogers Communications of Canada, Cisco Systems, and Xohm, a business unit of Sprint Nextel.

Check back in because I'll be writing updates during the day.

WiMax World: Arriving in Chicago...

Posted by Tricia Duryee at 6:32 AM

CHICAGO -- I flew in on Monday in order to get here on time to attend WiMax World today.

I shared a cab with a woman from the airport to our downtown hotels.

It was during that cab ride that I realized something: that there is a new universal hand signal for using an iPhone, just as there's a sign for typing on the BlackBerry. If you can't picture the BlackBerry sign, think of holding an invisible device with both hands and then pretending to type with two thumbs. That usually follows phrases such as "I'll e-mail you, or I sent you an e-mail."

Well, that's not the sign for an iPhone.

Get this, the woman sitting next to me in the cab, who was turning 70 years old in January, was a die-hard iPhone user. In fact, she had forgotten her phone at home when her husband dropped her off at the airport in Memphis. Luckily her flight was delayed, and he went home, got the iPhone and brought it back from her. She told this story as if her life was about to end without the thing. She said she wouldn't know where she was going for lunch, or be able to call the person she was meeting.

All the while, she was gesturing. It wasn't acting out two-thumb typing; instead, her index finger stretched straight and made a left-to-right swiping motion, imitating the move to unlock the screen or to scroll left and right and up and down.

The woman didn't stop there. The self-proclaimed photo maniac showed me pictures of her grandchildren, zooming in and out on their face, and then even switched to the weather application to tell me what the weather was going to be like while in Chicago (the answer to that is HOT and muggy).

So this is a warning. Prepare to start seeing people swiping their fingers in the air when they say, "I'll call you."

Even if they are 70 years old.

September 24, 2007

The story behind the story

Posted by Kristi Heim at 7:28 PM

So why are you journalists in Seattle spending so much time writing about malaria in Africa, when there are plenty of problems in your own back yard? This is a question I've been asked before, and no doubt I'll be asked again.

I can give all the standard arguments for why we should care:

-- It's Bill Gates.
-- It's a technology inventor's dream about changing the world.
-- Malaria is a lens to look at the extraordinary ambitions of the largest charitable foundation in history.
-- Global health is emerging as a defining industry in our region.
-- Imagine the headline: "World's richest human sets out to defeat tiny insect." No, make that "parasite within tiny insect."

In the end, it comes down to a simple question of numbers.

As we sit here comfortably over three days reading this series, 9,000 people will be dead from malaria.

Talk about high impact.

But let's not focus solely on the negative. In a world saturated with crime and war, as one reader noted today, people want to see solutions.

They want to see how an entrenched problem that everyone thought would go on forever, given the will, the right tools and enough money, might just be fixed.

It's not for me to judge whether this is the right solution, or even whether it's the right problem, but I do think chronicling the effort is worthwhile.

Maybe travel and the Internet have simply distorted my world view. After the Sept. 11 terrorist attacks, a French journalist made the now famous statement "We are all Americans."

With the equivalent of a 9/11 happening every day, shouldn't we say we are all Africans? Genetically speaking, it's probably true.

The Gates Foundation has spent $1 billion so far to fight malaria. That seems like a lot of money.

But if every person in the United States saved less than a penny a day, collectively we would have the same budget by the end of the year.

And if every person in Seattle gave up just one latte a month -- let's say $36 a year -- they could raise $22 million for the cause of their choice, it would be possible, for example, to buy one $5 bed net for the entire population of the Central African Republic.

Still not convinced? Read this.

Maybe Bill Gates is full of hot air. Maybe he's just trying to square his karma. If you've always wanted to say something to him, here's your chance. He might be reading.

Of course, nobody knows whether solving malaria, if it can be done, will ultimately help Africans have a better life. Considering the numerous problems they face, says economist Tyler Cowen, investing in one is almost like buying a lottery ticket.

I guess the only thing we know for sure is what doing nothing has achieved.


A 3-year-old child with malaria sits in a hospital bed in Zambia

3guppies starts moblogging

Posted by Tricia Duryee at 2:48 PM

Seattle-based 3Guppies said today that it has made a mobile blogging widget for users to add to their social networking sites, such as MySpace.

The new widget is free at the 3Guppies Web site.

It allows people to update their blog from their cellphone and allows friends to subscribe to text message alerts, which provide updates to be sent to their phone anytime a blog is updated.

"A large portion of today's society communicate and tell their life stories through their media on social networks," said CEO John Dearbon. "With the 3Guppies moblog, we are bridging the two most popular forms of communications -- the cellphone and social networks -- to upload and download user-generated content."

I talked to Dearborn recently for a story I wrote on Facebook and other social networking applications. He didn't make the story because I ended up talking to so many companies in the area taking a stab at it.

In the interview he said a lot of companies get into making widgets not knowing that it takes a lot of work to get noticed by users:

"We want someone to come in and copy our html code and paste it into their 'About' section to say here's what I'm about as a person, I've endorsed this. I think it's cool.

"If you don't do it in a way they enjoy, and that fits into that community and is distinct, your efforts will be in vain. You really have to study and know that community, and what they react negatively to and what they love."

Crank up the rumor mill: MSFT+Facebook=?

Posted by Benjamin J. Romano at 12:07 PM

This round of speculation brought to you, yet again, by The Wall Street Journal, which this afternoon quotes "people familiar with the matter" describing a potential Microsoft investment of $300 million to $500 million in social networking site Facebook. It adds that those figures would buy Microsoft 5 percent of the company, putting Facebook's value at $6 to $10 billion, and that Google is another potential investor in the company.

The story also includes the obligatory no comments from Microsoft and Facebook. The article cautions that these people call any deal "still preliminary and Facebook could wind up not taking an investment from either Microsoft or Google."

Microsoft and Facebook hooked up on an advertising deal earlier that Microsoft was most proud of. And, as the Journal reported almost exactly a year ago, Facebook has done the deal dance with the tech biggies before. That story included this memorable anecdote about Facebook founder and CEO Mark Zuckerberg being something of a late riser during negotiations with Redmond about a potential acquisition:

"During one series of talks with Microsoft, Facebook executives told their Microsoft peers they couldn't do an 8 a.m. conference call because the company's 22-year-old founder and chief executive, Harvard dropout Mark Zuckerberg, wouldn't be awake, says a person familiar with the talks. Microsoft executives were incredulous."

For more background, see Microsoft's own page on the digital advertising deal it landed with Facebook last August.

September 21, 2007

Dr. Dan's bid for biodiesel empire

Posted by Angel Gonzalez at 3:01 PM

Seattle alternative fuels pioneer Dan Freeman, who has sold biodiesel for six years from his Ballard auto shop under the Dr. Dan nom de guerre, unveiled Friday the second location of what he hopes will be a growing empire.

The pump, located at Espresso Express on 65th Street and 15th Avenue NE, north of the University District, was set up with the help of a federal grant to develop biodiesel stations in the Puget Sound area. Freeman said he'd like to open two more locations of "Dr. Dan's Biodiesel" in the Puget Sound area within six months.

Freeman claims the Seattle area has one of the highest concentrations of biodiesel users in the country. The fuel -- which can be used in diesel engines -- has certainly gotten a push from high oil prices, environmental concerns and the unpopularity of Middle Eastern military operations with some voters.

"Not having to rely on foreign oil is a big thing," said Harry Sanders, a biodiesel user who was present at the inauguration.

Microsoft proxy: Exec stock awards show missed goals

Posted by Benjamin J. Romano at 10:31 AM

Microsoft filed its annual proxy statement today. It scheduled its annual shareholders meeting for 8 a.m. Nov. 13 at the Washington State Convention and Trade Center -- a switch from the usual location, Meydenbauer Center in Bellevue.

The proxy also includes a discussion of how the board of directors thinks the top company executives did against their goals for the year. The goals included:

-- Customer satisfaction.

-- Product acceptance, including (i) the percentage of developers targeting Microsoft platforms and/or using its latest tools; (ii) the amount of activity and advertisements generated through its Web sites; (iii) sales of Windows licenses and Office units; and (iv) new Windows Server licenses.

-- Platforms and Services Division ("PSD") share of Internet searches using MSN-Microsoft Web sites.

-- Sales Marketing and Services Group net revenue and contribution margin.

-- Entertainment and Devices Division ("EDD") division net revenue and contribution margin.

-- Microsoft Business Division ("MBD") net revenue and contribution margin.

The board had this to say about the performance: "We were satisfied with our performance in product acceptance and SMSG and MBD financial metrics. Our performance in customer satisfaction, while steady, and Internet searches, while growing, fell short of our challenging goals, and we were not satisfied with our performance in EDD financial metrics."

As a result, Chief Financial Officer Chris Liddell received 46,250 shares, or 37 percent of his target. (An award of 100 percent of the target would indicate the board thought fiscal year 2007 performance showed "meaningful improvements
in performance as compared with actual fiscal year 2006 results.")

Platforms and Services Division President Kevin Johnson received 58,500 shares or 22.5 percent of his target.

Business Division President Jeff Raikes and Chief Operating Officer Kevin Turner each received 133,250 shares, 51.3 percent of their targets.

Details of compensation for Entertainment and Devices Division President Robbie Bach were not listed. Named executives typically include the CEO, CFO and the three highest-compensated executives.

The board also adopted a new requirement that executives "maintain a material personal financial stake in Microsoft to promote a long-term perspective in managing the enterprise, and to align shareholder and executive interests."

As such, the CEO must own stock equal to 10 times his base pay (not a problem for Ballmer, who, with 408.3 million shares, owns 4.3 percent of the company). Division presidents and the COO must own stock worth five times base pay. Other executives must own stock worth three times base pay.

Total compensation for the named executives, including base salary, bonus, stock awards and other compensation such as relocation expenses and matching contributions to 401(k) plans is:
CEO Steve Ballmer: $1,279,821
CFO Liddell: $4,733,262
PSD President Johnson: $7,026,526
MBD President Raikes: $6,182,567
COO Turner: $8,450,750

September 20, 2007

Gates still richest American (Slim's on his heels) Buffet No. 2

Posted by Benjamin J. Romano at 3:28 PM

The Forbes list of the 400 wealthiest Americans -- only billionaires need apply -- is still topped by Microsoft founder and Chairman Bill Gates. He weighs in with $59 billion, up from $56 billion at the end of 2006.

But, as Forbes notes, Gates' days at the top of the world's heap of rich guys may be numbered. As some have already estimated this year, Mexican magnate Carlos Slim Helú is gaining on, and may have surpassed, Gates in wealth. Forbes pegs Slim's total on par with Gates'. As we noted this summer, Gates is giving away his money much faster than Slim.

The latest Forbes list has Warren Buffett as the second-richest American, with $52 billion.

Other Washingtonians on the list:
11. Paul Allen, Microsoft, $16.8 billion
16. Steve Ballmer, Microsoft, $15.2 billion
35. Jeff Bezos,, $8.7 billion
135. Craig McCaw, McCaw Cellular, $2.8 billion
239. James Jannard, Oakley, $2 billion
380. Timothy Blixseth, timberland, real estate, $1.3 billion

Intel's latest on WiMax

Posted by Tricia Duryee at 1:47 PM

At the Intel Developer Forum in San Francisco, Intel discussed Wednesday how it sees the mobile Internet taking shape.

Intel is one of the biggest investors in Kirkland-based Clearwire, and has huge commitments to the emerging WiMax wireless broadband technology.

It promised in a press release issued Wednesday that it will "usher in a new era of reliable broadband-connected wireless computing starting next year."

The way I understand this is that there will be a new category of devices that will come out for WiMax networks that are smaller than a laptop, but bigger than a phone. That category is largely being called UMPCs, for ultra-mobile PCs, but now Intel is also calling them Mobile Internet Devices (MIDs).

The deal with these devices is that, unlike a laptop, they are considered low power, so they could conceivably last you all day -- more like a cellphone. This is especially appealing if you have ever been at a conference and you are frantically trying to get some work done when you realize you are in the battery red zone and have to find an outlet immediately. The solution today usually includes looking under the skirts of several tables until you find an outlet, and then sitting on the floor.

However, Intel gave a different reason as to why this is important -- it said mobile WiMax will be needed because user-generated addicted people will need higher speeds to access high-definition videos, music, photos and other large data files on the go.

"In the first half of 2008, Intel will take a major step to deliver what these users are looking for with our first platform designed from the ground up for MIDs and UMPCs -- codenamed Menlow, which will deliver 10x lower power compared to the first UMPCs in the market. After Menlow our next-generation platform -- codenamed Moorestown, will increase battery life an order of magnitude by reducing idle power by 10x compared to Menlow," said Anand Chandrasekher, Intel senior vice president and general manager of the Ultra Mobility Group.

Here's a video Intel posted to YouTube that has Chandrasekher showing off a number of these devices. If you watch towards the end, there's one that looks like a stretched out iPhone.

If you didn't get enough in the last video, you can see a another presentation that's pretty silly. In this video, an Intel worker uses WiMax to prepare for jump off a cliff in Zion National Park. His friend at the bottom of the rock checks the weather and makes an payment on his buddy's health insurance.

Gates Foundation supports online activism

Posted by Kristi Heim at 1:40 PM

The Bill & Melinda Gates Foundation's partnership with MTV is taking new shape as the U.S. election year approaches. The foundation is one of the key supporters of the thinkMTV social networking venture, launched today as "a platform for activist campaigns."

The site connects people and causes, with user-generated news and video and links to take action on issues such as poverty, war, politics, health, environment and education.

The Gates Foundation started supporting thinkMTV back in 2005 as part of its education efforts.

If you want to see Jay-Z talk about a water crisis or Pete Wentz explain why he put Ugandan refugees in a Fall Out Boy video, this is the site for you.

But MTV is also paying individuals for activism. For those who volunteer, donate blood or do other good works, it's giving "badges" that can be used for things like access to MTV events, media exposure, meetings with celebrities and video cameras. More on that here.

Cellphones trump TVs, but Internet No. 1

Posted by Tricia Duryee at 1:32 PM

Cellphones have become so essential, people would rather go without TV, but when choosing between cellphones and Internet access, the Internet wins, according to a new survey released this week.

JWT, a large U.S. advertising agency, asked about 1,000 people a number of technology questions earlier this month. The results show that cellphones and Internet access are playing a very important role in people's lives.

Asled how long people could go without Internet access, 15 percent of respondents said a day or less, 21 percent said a couple of days and 19 percent said a few days.

A lot of the findings seem to make a good business case for cellphone operators, as well as WiMax service providers such as Kirkland-based Clearwire and Sprint Nextel, which are all rolling out mobile Internet access.

"Mobility represents the next big shift," says Marian Salzman, JWT's executive vice president and chief marketing officer. "Older Americans are happy to sit in the same place to go online, while younger people expect to be able to connect anywhere at any time."

In fact, 48 percent of respondents agreed with the statement: "If I cannot access the Internet when I want to, I feel like something important is missing."

HTC's US executive leaves Bellevue office

Posted by Tricia Duryee at 11:52 AM

Todd Achilles, the vice president of sales and marketing with HTC Americas, has left the Taiwanese cell phone manufacturer, according to RCR Wireless News.

HTC Americas is based in Bellevue, where Achilles opened an office about a year ago to support Microsoft and to strengthen ties with Cingular and T-Mobile, which also have major operations here.

HTC mostly makes phones that use the Windows Mobile operating system and are branded under the carrier's name, such as the T-Mobile Dash, or the Cingular 3125.

RCR reported that HTC is actively pursuing candidates to replace Achilles, but did not mention where he was working now. Phone calls to Achilles' cell phone were not answered.

In a story published in November, I reported that HTC's Eastgate office has expanded from three to 40 workers. Achilles said then that it could easily reach 100 by the end of 2006 if it keeps hiring at the rate of five to six job offers a week.

Future hires were to include a 12-person engineering team to drive some of the highest-level industrial design work for the company. The team is expected to push the boundaries for creating devices for new networks capable of high broadband speeds. Products could include devices that mimic miniature, long-battery-life laptops that can make phone calls.

HTC is also rumored to be working on Google's attempt at a mobile phone, called by some the Gphone. Brier Dudley blogged yesterday about rumors surfacing that the phone's launch could be pushed back until next year in order to move it to the faster 3G networks.

Perhaps a major departure like Achilles could also cause a delay.

UPDATE: Achilles just called me to confirm that he left HTC a couple of weeks ago. He said: "I've been enjoying some free time and I'm hanging out working on some projects, and catching up, which is kind of nice." Achilles said at the job, he was traveling about 80 percent of the time, and wanted to spend some time off before having his second child in November.

Record broken for longest phone call

Posted by Tricia Duryee at 11:07 AM

Late last week, it was reported that a British man named Tony Wright broke the world record for the longest phone call by talking for more than 40 hours.

The previous record for the world's longest phone call stood at 39 hours, 18 minutes and 24 seconds. It was set on November 3, 2005 by Sandra Kobel and Stephen Hafner, from Switzerland, according to The Sun.

Wright broke the record while talking to Jenny Barnard, of north London. Apparently, the phone call spanned dozens of people on various conversations, including subjects ranging from heartbreaks and romance to psychobabble, and from stomach mucus to the upcoming Led Zeppelin concert.

But don't worry, the record-breaking phone call won't come with a record-breaking bill.

Apparently, the stunt was pulled in unison with the launch of new low-cost monthly call plans from Tesco internet phone.

Wright was using one.

The Sun reported him as saying: "Luckily, I do not have to worry about a huge phone bill because we are using Tesco internet phones, meaning that this mammoth call is free."

Wright's attempt at getting into the Guinness World Records book won't be his first. He attempted to stay awake for a record-breaking 11 days earlier this year.

Unfortunately, he didn't really receive credit for that one. The BBC reported that the Guinness book does not record sleeplessness records because of the associated health risks.

September 19, 2007

M:Metrics launches survey for mobile audiences

Posted by Tricia Duryee at 5:45 PM

Seattle-based M:Metrics, which surveys mobile phone users to provide insights into the industry, launched a new product today called M:Audit.

In conjunction with the announcement, M:Metrics released results related to its first customer, AdMob, which sells advertising inventory on mobile Web sites.

M:Metrics said it conducted a survey by placing ads on the Web sites that AdMob serves. The ads lured people into clicking on an ad by offering a chance to win something. In return, participants answered a few short questions about themselves. The data was collected during the third quarter and from more than 2,000 mobile sites.

M:Metrics found that 37.5 percent of the respondents were 25 to 34; the second largest group, at 28 percent, was 18 to 24. The smallest group, not surprisingly, consisted of those 65 years and older, only 0.2 percent.

Cooperation is good for WiMax

Posted by Tricia Duryee at 4:52 PM

Monica Paolini, an analyst with Senza Fili Consulting in Issaquah, sent out a report today examining whether the partnership between Clearwire and Sprint Nextel was healthy for the roll out of WiMax wireless broadband networks.

As part of the deal, explained in this story, Sprint Nextel and Clearwire expect to build out portions of the nationwide network and enable roaming between their two systems. Sprint Nextel will cover the more populated areas, potentially reaching up to 185 million people, or about 75 percent of the population in the 50 largest markets. Clearwire is focusing on areas covering about 115 million people. The two companies expect to be able to cover about 100 million people by the end of next year.

Her conclusion is long and in depth and goes into many technical reasons, but in a nutshell the answer is yes.

"The planned partnership between Sprint and Clearwire shows how cooperation can be more beneficial to the market than competition," she wrote.

A lengthy description goes into how both companies have a lot of spectrum -- the airwaves that the service will travel on -- but that they'll need them if they plan to offer a speedy service with lots of bandwidth to many customers.

"Cooperation enables both operators to deploy a more robust network that supports better performance and to do so in a cost effective way while also developing a combined footprint that is more attractive to subscribers and wholesale partners."

Tim Chen latest Microsoft China executive to leave

Posted by Kristi Heim at 12:26 PM

Tim Chen, Microsoft's top executive in China, jumped ship to head to the National Basketball League's operations in China, the NBA said today.


Tim Chen will be seeing a lot more of Yao Ming.

Before he joined Microsoft, Chen led Motorola's China operations. He's a well known executive in the country and was undoubtedly sought after by many companies.

At Microsoft, Chen helped the company make progress on intellectual property issues in China, including inking partnerships with PC makers and successfully pushing for a law that requires new computers to be sold with authentic preinstalled operating system software.

He also helped host Chinese President Hu Jintao in carefully scripted visits to Microsoft and dinner at Bill Gates' home.

Chen starts with the NBA on Oct. 15, so Microsoft is searching for his replacement and has named Ya-Qin Zhang as acting CEO in the meantime.
Zhang heads the company's R&D group in China.

Chen's departure follows those of Kai-Fu Lee, whose move to Google sparked a lawsuit between Microsoft and the search giant, and Jun Tang, a basketball player himself, who left his job as president of Microsoft China to join online game company Shanda Interactive Entertainment.

This story says Chen's move illustrates Microsoft's difficulty hanging on to executives in the world's fastest growing economy. I'd say it illustrates any multinational company's dilemma with job-hopping executives there, since the number of opportunities far outweighs the number of capable high-level managers in China.

September 18, 2007

Gates Foundation executive is knighted

Posted by Kristi Heim at 12:59 PM

Dr. Tadataka "Tachi" Yamada, president of the global health program at the Bill & Melinda Gates Foundation, today can add knighthood to his list of achievements.


Tachi Yamada joined the Gates Foundation in 2006.

Yamada received the honor for his work at pharmaceutical giant GlaxoSmithKline, where he was head of research and development from 2000 to 2006. During that time he helped make GSK into an R&D powerhouse, the U.K.'s most innovative company and the commercial leader in researching diseases of the developing world, the U.K. government said in a press release. Yamada earned a B.A. in history from Stanford University, his M.D. from New York University School of Medicine.

The official title "honorary Knight Commander of the Order of the British Empire (KBE)" is given by the Queen. Foreign citizens are recognized for important contributions to relations between their country and Britain, but only U.K. citizens with knighthood get the title of Sir or Dame. Yamada is an American citizen.

"I am delighted and humbled to receive this great honor," he said in a statement. "The U.K. is at the forefront of scientific innovation, particularly in discovering new medicines and improving global health. It has been my privilege to work with extraordinary British colleagues throughout my career in academia, in industry, and now in the fight against health disparities throughout the world."

Yamada joins a list of American recipients that includes former Presidents George Bush and Ronald Reagan; Secretary of State Colin Powell, General Norman Schwartzkopf; actor Bob Hope; composer/conductor Andre Previn; director Steven Spielberg and Microsoft Chairman Bill Gates, who was given the honor in 2005.

Americans reply to more text ads than others

Posted by Tricia Duryee at 11:09 AM

Although receiving an advertisement via a text message is less common in the U.S. than in some European countries, Americans are more likely to respond, according to a report released today by M:Metrics, a Seattle mobile measurement firm.

M:Metrics found that 17.2 percent of U.S. subscribers have received a text message ad in July, whereas in Europe as many as three out of four mobile subscribers reporting receiving one.

In the U.S., response rates were the highest, with 12 percent responding to the ads. The United Kingdom had the second highest response rates at 9.2 percent.

The big concern with sending ads via text message is that they will annoy customers, especially if they are sent without permission. Also, in the U.S., subscribers may be charged for the message if they do not have an unlimited texting plan.

M:Metrics found that across all geographies a majority, or 73 percent, of the ads are from the subscriber's mobile service provider; 17.5 percent of subscribers said they received an ad from a company that had permission to send it, and 21.1 percent said the advertisers did not have permission.

"Certainly the level of interaction is impressive compared to almost any advertising vehicle available today" said Evan Neufeld, a M:Metrics senior analyst. "It is undeniable that text-based mobile advertising is both a highly prevalent and an extremely effective medium for engaging customers."

Microsoft launches GPS-based mobile search

Posted by Tricia Duryee at 10:54 AM

For some time, Microsoft has been providing mobile search capabilities to Sprint Nextel, the third largest U.S. carrier.

Late last night Microsoft said it expanded the partnership by integrating two new features into the search capabilities -- GPS, or location based services, and voice search using Tellme technologies.

Users will also be able to surf both information provided by Sprint and the entire Internet. The Tellme voice search will be available on selected Sprint phones as a separate download.

The service sounds a lot like the other search application that Sprint uses. InfoSpace's Find It! application, which has been on the Sprint network for some time, uses GPS and voice capabilities to search Yellow Pages, including movie times and other information.

Coincidentally, that application changed hands Monday when InfoSpace announced it sold its yellow and white pages directory to Idearc for $225 million.

Clearwire modems in Seattle

Posted by Tricia Duryee at 10:26 AM

Clearwire has begun selling PC cards to let Seattle customers access its broadband service without having to lug around a modem, according to InfoWorld.

The card will easily fit into a laptop, bypassing the modem, which has to be plugged into an outlet.

According to InfoWorld, anyone can visit a Clearwire store in the Seattle area and sign up for the portable service. After rebates, the PC card, made by Motorola, costs $80. Monthly service costs $60 (compared with the $42 charge for the bulky modem) and offers 1.5Mbps download speed.

I reported in August that Clearwire was going to start testing the PC card in a few unspecified markets. It makes sense to test it on their home turf.

At the time, the company also said it will test in the same markets a faster residential connection speed at 2 megabits per second (Mbps), bursting up to 4 mbps, for $44.99 a month (that compares with 1.5 Mbps and 3 Mbps for the top-speed plan).

September 17, 2007

Nokia buys cellphone ad company

Posted by Tricia Duryee at 1:50 PM

There's been a lot of action today in the wireless industry, and here's yet another big play made by a big player.

Nokia said it has agreed to acquire a Boston-based Enpocket, a company that displays ads on cellphones, according to the Wall Street Journal.

The Journal said the acquisition is another step in the handset maker's push into software and services. The push started last month when it launched a Web services site called "Ovi," Finnish for door.

Nokia also bought Seattle-based Loudeye, and more recently Redmond-based Twango to work on this mission.

Nokia did not say how much it paid for Enpocket, a 120-person start-up with technology that can display cellphone ads in a variety of formats, including banners for mobile Web pages, video spots and text messages. AOL recently bought mobile advertising startup Third Screen Media. Still independent is Seattle-based Medio Systems, which is developing a search-plus-advertising approach.

Enpocket works with Sprint Nextel, Vodafone and Bharti Airtel of India, and has run ads for brands such as Hyundai and Pepsi.

It's official: Too much Internet use can kill you

Posted by Kristi Heim at 1:46 PM

A man in China dropped dead after playing online games for three days straight, according to reports from Chinese media today and this story.

The 30-something man from Guangzhou died Saturday after being rushed to the hospital from the Internet cafe, the Beijing News said. Exhaustion was given as the most probable cause.


Most of the customers at this Internet cafe in China are students.

It's hard to know how much of this is real and how much is state propaganda designed to discourage Web addicts. Chinese authorities have been cracking down on Internet content and Web-surfing activities, including banning new cybercafes and limiting the time users can spend playing games online.

As for this poor guy from Guangzhou ... maybe his avatar can live on in Second Life.

InfoSpace sells

Posted by Tricia Duryee at 1:39 PM

Bellevue-based InfoSpace said today it has agreed to sell its online directory business, including, to Idearc for $225 million in cash.

"The sale of our directory business is part of the board of directors' ongoing review of our company and the opportunities available to enhance value for our shareholders," said Chairman and Chief Executive Jim Voelker. "In addition to unlocking the value of our directory business that was not reflected in the company's market valuation, this transaction is extremely tax efficient, allowing us to capitalize on our net operating losses to significantly maximize the cash proceeds from the sale."

The sale follows numerous restructurings by the company, which has struggled to convince the stock market that its businesses are worth what InfoSpace thinks it is.

The press release said the transaction is expected to be completed by the end of 2007.

At closing, InfoSpace said it will return the net proceeds from the sale to shareholders as a special cash distribution. This follows a previous cash dividend to shareholders of about $200 million this summer.

The sale of raises the question of what InfoSpace's overall strategy is. Left in its stable are online search properties, such as Dogpile, and its mobile infrastructure business, which provides search capabilities and helps carriers build storefronts that sell ringtones and other digital content.

Last week, a report surfaced that InfoSpace's mobile business may be for sale.

Triangle Business Journal reported Sept. 14 that Durham, N.C.-based Motricity is raising as much as $175 million in capital to buy InfoSpace's mobile business before attempting to go public.

The report even went so far as to say that a deal was expected to be announced soon.

If that's the case then InfoSpace will be pared back to its online properties, or perhaps it's selling off the company piecemeal and giving the cash back to shareholders?

In trading today, shareholders definitely congratulated InfoSpace on the sale. Its stock price jumped $ $17.38 a share.

T-Mobile buys SunCom

Posted by Tricia Duryee at 11:26 AM

T-Mobile USA, the fourth largest U.S. wireless carrier, said today that it is acquiring SunCom Wireless for about $2.4 billion in cash and assumed debt.

This includes a cash payment of about $1.6 billion and assumption of $800 million in debt. T-Mobile USA is a wholly owned subsidiary of Deutsche Telekom, a German telecommunications giant.

T-Mobile said the acquisition will add to its network coverage in the southeastern U.S. and the Caribbean. SunCom serves customers in North Carolina, South Carolina, Tennessee, Georgia, Puerto Rico and the U.S. Virgin Islands.

Similar to T-Mobile, SunCom operates a GSM/GPRS/EDGE network. It has been providing roaming to T-Mobile in these markets since 2004.

In a release, T-Mobile President and Chief Executive Robert Dotson said:

"The strategic fit of the SunCom operations will make this a near-perfect acquisition. It will round out our domestic footprint, allowing us to serve 98 of the top 100 markets, and will significantly benefit our financial position by reducing roaming expense. Furthermore, it will add a talented group of employees that will enable us to serve more than one million new SunCom customers with industry-leading national products and services available under the T-Mobile brand."

SunCom has about 1.1 million customers. T-Mobile reported almost 27 million customers at the end of the second quarter.

That still puts T-Mobile well behind Sprint Nextel, the third largest U.S. carrier. It reported that it had about 54 million customers at the end of the second quarter on its two networks.

Microsoft to study ruling before deciding on appeal

Posted by Benjamin J. Romano at 2:24 AM

In a brief press conference with reporters outside the Luxembourg court room where Microsoft was handed a defeat in Europe today, General Counsel Brad Smith said the company still has to evaluate the ruling before deciding whether to exhaust its last avenue of appeal.

"I think we need to read the decision before we make any kind of decisions," Smith told a scrum of reporters. "I believe in these kinds of things that although there's a lot of drama, one needs to step back and read first, think second and decide third ... and that is the order in which we're going to take things."

A video of his remarks can be found here (.wmv file).

Smith acknowledged that the Court of First Instance agreed with the European Commission on the most important points in the case.

He struck a conciliatory tone, recommitting Microsoft to compliance with the European competition laws it violated.

"It's clearly very important for us as a company that we comply with our obligations under European law," Smith said. "We'll study this decision carefully and if there are additional steps that we need to take in order to comply with it, we will take them. It will take us a little bit of time, at least over the next few hours, to read the decision carefully, but certainly that is one of our strongest convictions as we go forward."

He recounted efforts Microsoft has made to ensure that Windows Vista, the latest version of the operating system software in which it has a monopoly, did not run afoul of the European Commission's 2004 decision, which has now been upheld by Europe's second-highest court.

Smith said Microsoft is "gratified" that it was able to have "constructive discussions with the European Commission last year that enabled us to bring to market Windows Vista in conformity with the Commission's 2004 decision."

Smith reflected on what has transpired since the European Commission started its investigation into Microsoft's business practices in 1998:

"The world has changed. The industry has changed and our company has changed. We sought to underscore that over a year ago when we published what we describe as our Windows Principles, principles intended to ensure that future versions of Windows, starting with Windows Vista, would comport not only with U.S. law, but with the principles that are applicable here in Europe as well.
"We've sought to be open and transparent and we've sought to strengthen our ties with the rest of our industry. Indeed it's notable, that just last week we announced a new agreement with Sun Microsystems and the week before that we announced a new agreement with Novell -- two of the companies that started out on the other side of this case almost nine years ago."

Smith said one constant is the company's commitment to Europe. He said when the case started, Microsoft offered Windows in 24 European languages; today it is available in 41. In 1998, the company had 3,900 employees on the continent. Today it has 13,000. Its research and development investment has also ballooned during the past decade from $3 million in 1998 to nearly $500 million now.

Smith is expected to hold a formal press conference at 5:30 a.m., Redmond time, with reporters from around the world. Check back here afterwards for updates.

Meanwhile, European Commission officials applauded the court's decision.

"This judgment confirms the objectivity and the cerdibility odf the Commission's competition policy," Commission President Jose Manuel Barroso said in a statement, according to Reuters.

EC Competition Commissioner Neelie Kroes, viewed as a driving force behind the Microsoft case, suggested the decision could have implications for other companies, particularly those in high tech.

"The court has upheld a landmark commission decision to give consumers more choice in software markets. That decision sets an important precedent in terms of the obligations of dominant companies to allow competition, in particular in high tech industries," Kroes said, according to a report by Dow Jones.

European court upholds decision against Microsoft

Posted by Benjamin J. Romano at 12:45 AM

The Court of First Instance just issued its highly anticipated ruling on Microsoft's appeal of a March 2004 decision by the European Commission to sanction and fine the company for abusing its monopoly in PC operating systems. The decision is relatively straightforward, but, as expected, it's still nuanced, as indicated by the headline on this news release the court issued shortly after delivering its brief decision this morning (PDF, five pages):


However, the Court has annulled certain parts of the decision relating to the appointment of a monitoring trustee, which have no legal basis in Community law

On March 24, 2004, the European Commission completed a five-year inquiry and found that Microsoft's Windows operating system "broke European Union competition law by leveraging its near monopoly in the market for PC operating systems onto the markets for work group server operating systems and for media players." Here's the EC's news release from that time.

The company was given six months to make available to competitors "the interfaces required for their products to be able to 'talk' with the ubiquitous Windows OS," also described as "interoperability information." The company was also ordered to offer European consumers an unbundled version of Windows without Windows Media Player built in. Microsoft was also fined an eye-popping 497 million euros, or $613 million.

The European Commission also called for the apointment of a monitoring trustee to assist it in monitoring Microsoft's adherence to the decision. According to the Court of First Instance's statement today, "He was to have access to Microsoft's assistance, information, documents, premises and employees and to the source code of the relevant Microsoft products. All the costs associated with the monitoring trustee, including his remuneration, were to be borne by Microsoft."

In June 2004, Microsoft challenged the EC's decision and the fine before the Court of First Instance, one step below the highest judicial authority in Europe. Today's ruling is the outcome of that appeal.

On the question of interoperability information, the court found that the EC correctly determined that Microsoft's refusal to share that information resulted in an abuse of its dominant position in the operating system market.

Also, the court found that the "degree" of interoperability between Windows and server software sought by the EC was "well founded" and the remedy it imposed -- forcing Microsoft to "disclose the 'specifications' of its client/server and server/server communication protocols to any undertaking wishing to develop and distribute work group server operating systems" -- was appropriate.

Further, the court rejected "Microsoft's claims that the degree of interoperability required by the Commission is intended in reality to enable competing work group server operating systems to function in every respect like a Windows system and, accordingly, to enable Microsoft's competitors to clone or reproduce its products."

The court concluded, "The absence of such interoperability has the effect of reinforcing Microsoft's competitive position on the market and creates a risk that competition will be eliminated."

On the question of bundling Windows Media Player into the Windows operating system, the court agreed with the EC's decision that the two products were tied together, to the detriment of consumer choice, and upheld the remedy requiring Microsoft to offer a version of Windows without the player.

The court noted that "independent companies, like [Seattle-based] RealNetworks, ... design and supply competing [media player] products independently of operating systems." This was one of several ways the court determined that Windows Media Player and Windows are in fact seperate products -- a precursor to the finding that they were illegally tied together.

RealNetworks, which settled with Microsoft on the question of bundling two years ago, applauded the court's decision. "The standards affirmed by the European Court should help ensure fair competition for all Windows application developers," Real's General Counsel Bob Kimball said in a statement this morning.

The hefty fine was upheld. The court determined that the EC "did not err in assessing the gravity and duration of the infringement and did not err in setting the amount of the fine."

Finally, on the question of the monitoring trustee, the court found that the EC's creation of such a position -- with its own "powers of investigation and capable of being called upon to act by third parties" -- went "far beyond" merely seeking an outside expert to help with its investigation and monitoring of Microsoft. It struck down the creation of the monitoring trustee position.

Decisions of the Court of First Instance can be appealed to the brought before the Court of Justice of the European Communities, the highest court in Europe. Microsoft would have two months from today to decide to appeal.

As of 1:50 a.m., Redmond time, the company's General Counsel Brad Smith, who was in the Luxembourg court room to hear the decision, had not yet issued a statement on the ruling. He is expected to hold a press conference later this morning.

September 14, 2007

Chinese business women look for local partners

Posted by Kristi Heim at 11:35 AM

When a business group from China visits a business group in Seattle, the odds are you'll see a lot men in dark suits. But earlier this week, an unusual group from China came through town: women entrepreneurs blazing a trail in a country where the odds are not often in their favor.

The visitors included Li Xiao Yan, the young general manager of Beijing Jingcheng Yanda Technology and Trade, a company specializing in energy conservation and management that she founded in Beijing. Li was looking for U.S. partners to provide energy technology products to China. Li's company is already importing energy management products from California. She said that with recent government incentives for technology that helps reduce electricity consumption, the opportunity is huge.

Led by Madam Feng Cui, president of the Chinese Association of Women Entrepreneurs, the eight women attended a reception in the waterfront Medina home of local businesswoman Laurie McDonald Jonsson. It was a reunion for some of the women, who met in China last year during a trip Jonsson organized for Stellar International Networks.

Wistar Kay/Stellar Networks

Li Xiao Yan (middle, in orange scarf) talks with Laurie McDonald Jonsson (in tan suit).

Their American counterparts were local lawyers, doctors, company executives, academics and others interested in making professional connections and friendships in China.

Another visitor, Li Daxiang, chair of Beijing Leitianxiang International Education and Culture Exchange, said she was anxious to meet Americans interested in exchange programs with China. Li said she hoped the problems with Chinese product quality would not put a damper on trade.

Wistar Kay/Stellar Networks

Zhang Zumei, general manager of a Macau investment company Kong Tai Luen Fat, tours the Jonsson house.

All of the entrepreneurs said they hoped that establishing friendships between American and Chinese women would build good will at a time when relations between their two countries are strained.

A few of the Chinese women were visiting the U.S. for the first time. As successful as they have become in the new capitalist China, they were clearly in awe of their surroundings, even without knowing they were just down the street from the richest man in the world. One local guest quipped: "I hope they don't think all Americans have homes like this."

September 13, 2007

Clearwire launches in Spain

Posted by Tricia Duryee at 10:46 AM

Clearwire, which is building wireless broadband networks worldwide, said today that it launched a network for the first time in Spain.

Spain marks Clearwire's third international market. The Kirkland-based company, started by wireless entrepreneur Craig McCaw, also has networks in Ireland and Belgium, and through joint partnerships in Denmark and Mexico.

In Spain, Clearwire chose Seville, the Andalusian capital, as its first market. The service is called Instant Internet, or Instanet. In Seville, Clearwire will cover more than 300,000 households and 850,000 residents.

The release talks up the benefit of Clearwire's set-up requirements, which eliminate the "hassles or delays of traditional ADSL services." Clearwire requires no software installations or visits to the home.

Clearwire is directing people in Spain to the Web site at, where the tagline for "instanet" is "the internet without telephone lines." In addition, it says imagine having access to the Internet and being able to surf within one hour.

Clearwire sounds like it is trying to appeal to people who have had a hard time working with the telephone company, and providing better customer service.

The Spanish network is still using the older version of wireless broadband, and not mobile WiMax, which will be the standard going forward.

WiMax will be the focus of a trade show starting in two weeks in Chicago. Clearwire's CEO Ben Wolff will keynote at WiMax World on Sept. 27, on the topic of "Clearwire's vision for WiMax Mobile Broadband."

UPDATE: Wolff will no longer be Clearwire's keynote at the event due to a scheduling conflict. Taking his place will be Scott Richardson, Clearwire's chief strategy officer. His talk will give an update on Clearwire's progress and go into examples of how people will use mobile WiMax, also being called personal broadband.

Sprint launches look-alike shopping portal

Posted by Tricia Duryee at 10:27 AM

Sprint Nextel said today it launched a mobile shopping service that allows people to purchase from 30 online retailers from their phones.

The service is powered by Boulder, Col.-based mShopper.

Sprint is claiming to be the first carrier to launch a mobile shopping portal. But I wrote a story in July about Verizon Wireless using Seattle-based mPoria to create a shopping portal of its own.

The conclusion I came to in my story about mobile shopping is that it is really in its early days, but interest is mounting with, eBay and other big online retailers starting to consider the technology as a serious opportunity. The hope is that all the mobile users who buy ringtones and other digital goods on their phones will eventually switch over to physical goods. You can see some baby steps already occurring, such as when people pay for parking or buy a bus token with their phones.

Since my story ran, mPoria announced a strategic partnership with Seattle-based Medio Systems. Medio will provide mobile advertising campaigns to mPoria's retail customers, who will pay only when their ad is clicked on.

From today's papers, here is the WSJ's take on Sprint's mobile shopping service, and here is AP's take.

September 12, 2007

Google ready to fund sustainable transportation

Posted by Angel Gonzalez at 4:31 PM, the search engine giant's bid to save the world, said Wednesday it started requesting investment proposals "to the tune of $10 million" on sustainable transportation solutions.

The money might sound like small peanuts for such a big challenge - barely enough to buy the original version of the Dukes of Hazzard's gas-guzzling General Lee. But Google thinks it will help prod people to work on interesting ideas to help come up with a transportation solution that's more environmentally friendly than our current fossil-fuel-based model.

"While $10 million is a fraction of the total investment needed to transform our transportation sector, we hope this RFP will help catalyze a broader response," said a note in's blog.

The proposals, of no more than five pages, should help advance the commercialization of plug-in hybrid cars, electric vehicles, or vehicle-to-grid solutions, the company said.

UW reports increase in tech licensing

Posted by Angel Gonzalez at 4:18 PM

Those Huskies are seeing more and more of their tech innovations fuel start-ups, according to the University of Washington's technology transfer office.

Licensing agreements and options grew to 198 in 2007 from 153 the previous year, or 29 percent, UW TechTransfer said in a statement Wednesday.

Some 11 companies were spawned from UW technology, one more than last year. Many of them were in the health sciences and energy technology fields.

The startups include EnerG2, which seeks to build super-efficient energy cells for use in hybrid vehicles using nano-materials. Another is CorazonX, which is developing technology to detect coronary artery disease.

September 11, 2007

RealNetworks in better shape than Britney

Posted by Tricia Duryee at 5:20 PM

Britney Spears got a ton of attention at Sunday's MTV Video Music Awards for being out of shape and performing poorly.

That was far from the case for Seattle's RealNetwork's Rhapsody digital music service, which seemed to be on top of its game at the show.

Last month, Seattle-based RealNetworks and MTV Networks, a division of Viacom, announced a wide-ranging partnership in which the two companies will market and operate the Rhapsody service together.

The unveiling event was set to take place at the video awards, where Rhapsody was supposed to get a lot of airtime, as part of the partnership that required financial and other commitments by both MTV and RealNetworks.

I missed the show (it's hard when you don't have cable), but from what MTV and RealNetworks said, it sounded as if Rhapsody pulled off a pretty unusual stunt.

At this year's show, held at Las Vegas' Palms Casino, in addition to the main awards ceremony, MTV had several guest suites, where artists such as Justin Timberlake and Timbaland, Kanye West, Fall Out Boy and the Foo Fighters played for smaller audiences.

Rhapsody focused on these shows. When the awards show went for a break, Rhapsody streamed video from the suites live for a commercial.

The Foo Fighters, in one example, said in a shot: "Hear it at"


A screen shot from RealNetwork's MTV Music Video Awards commercial.

The next screen said, "Think Foo Fighters."


The next image in the same commercial.

Some integration of the two services has already begun, with Urge subscribers being allowed to log in to both Urge and Real's Rhapsody service, but the main integration of the two services has yet to occur.

September 10, 2007

RFID chips and cancer -- ask Amal

Posted by Kristi Heim at 6:23 PM

Embedding microchips in humans scares some people on privacy grounds alone. Now the chips are raising alarms for a different reason -- a potential link to cancer.

Studies done in the 1990s found that chip implants had "induced" malignant tumors in lab mice and rats, according to this AP story.

The Food and Drug Administration approved the VeriChip by Applied Digital Solutions for use in humans in 2005. At the time, the man in charge of the Department of Health and Human Services, which oversees the FDA, was Tommy Thompson.

Two weeks after the approval took effect, the story recounts, Thompson left his job, and five months later he took a paid position on the board of Applied Digital Solutions.

This just doesn't look good for Thompson or for the 2,000 people with RFID chips in their bodies now.

To get a sense of how worrisome this newly uncovered research might be, I asked one of them. Amal Graafstra has put two chips in his own hands voluntarily, but he deliberately avoided the kind approved by the FDA.

Amal Graafstra

Graafstra opens a door by waving his micro-chipped hand near the keypad.

The reason is that he wanted to be able to remove his implants easily for any reason. The "anti-migration" coating on pet and human implant chips makes them much harder to take out.

Graafstra said he strongly suspects it's this coating that caused cancerous cells to grow around the implant sites on the animals in the studies.

"Now I'm just that much more satisfied I chose not to get an 'FDA approved human' or pet implant which have this coating," he writes in his blog. Graafstra manages to provide a good source of do-it-yourself information on RFID, as well as some clear-headed thinking about the science around it.

Could it be that these self-taught "guinea pigs" provide better expertise on the topic than the FDA?

Real's going online with reality TV

Posted by Tricia Duryee at 5:32 PM

RealNetworks launched a new reality TV series today on the Internet with the help of Warner Bros. Digital Distribution.

The series id called "On Set, On Edge" and follows the real life of filmmaker Vanessa Parise as she films a movie called "Jack and Jill vs. The World." The movie stars Freddie Prinze Jr. and Taryn Manning.

The first three of the 20-episode series are available now, and can be found under Real's at this page. I also found a blog that claims to have a sneak preview here.

If all goes according to plan, SuperPass subscribers can watch the first five episodes, as well as video diaries and behind-the-scenes features. Two new episodes will premiere each week on

The press release also talks about how there will be a lot of online components, including a blog that follows the show and provides commentary.

Clearwire partners with ICO

Posted by Tricia Duryee at 4:21 PM

Clearwire, the Kirkland-based company that is helping to build a nationwide wireless broadband network using WiMax, said today it is partnering with ICO Global Communications, a satellite company.

The joint agreement will include collaborating on mobile video trials -- starting early next year in Raleigh, N.C. ICO is also planning a similar trial in Las Vegas, Nev.

Although ICO is based in Reston, Va., it has very close ties to Clearwire.

For starters, its human resources and finance office is based in Kirkland, near Clearwire. Also, Clearwire founder and Chairman Craig McCaw is an investor and the chairman of ICO's board. Overall, the company's board includes some of the top executives from Clearwire's ranks, including Gerard Salemme, a Clearwire executive vice president, and Ben Wolff, Clearwire's CEO.

The press release issued today said the collaboration between the two will test connecting wireless broadband and satellite TV, allowing for interactive mobile video -- something that is gaining attention as wireless and entertainment worlds start to merge. People are starting to look at how joint relationships could be more valuable than just combining mobile and TV on one bill (I explored that topic in this story on the so-called triple and quadruple play).

"Our next generation wireless personal broadband networks are built to deliver data, voice and video over a single network," said Scott Richardson, Clearwire's chief strategy officer. He said it makes sense to work with ICO to test "an interactive mobile video element" that can add to Cleawire's offerings in areas where it doesn't plan to build its nework, while also enhancing the use of infrastructure and spectrum where the coverage overlaps.

Tim Bryan, ICO's CEO also weighed in by saying, "We are well positioned to be the first provider of next-generation mobile satellite services, and we have a clearly differentiated offering by leveraging integrated satellite and terrestrial networks to deliver advanced consumer mobility services."

Who knows exactly what the trial will look like for users, but the company said ICO will provide multiple TV channels to "large-screen user devices."

Alcatel-Lucent will supply the system architecture and design based on mobile multimedia DVB-SH (an open standard, unlike Qualcomm's MediaFlo mobile TV proprietary technology, which is used by Verizon Wireless and others). Hughes Network Systems will provide the device as well as interactive elements.

September 7, 2007

Microsoft still on lease for large space on Seattle waterfront

Posted by Benjamin J. Romano at 11:11 AM

While Microsoft's new presence in downtown Seattle got the headlines, the company 's name has been on the lease for a significant chunk of prime downtown property for years.

When the company acquired Visio in 1999, it also took over office space in World Trade Center East at 2211 Elliott Ave. Microsoft still owns the lease for about 184,000 square feet there, according to Greg Johnson, president of Wright Runstad, the building's landlord.

After the Visio acquisition, "the gravitational force of Redmond just kept pulling people out of that office to the point where it was empty," said Chris Owens, Microsoft general manager of worldwide real estate and facilities.

Microsoft sublet the space to another tenant and its remaining time on the lease is too short to move back.

"We have obligations to lease the space to people and then the lease will expire for us. ... I think that's the only choice there," Owens said.

"It's great space," he added. "If we had another bite at that apple, I would have liked to have had it."

Microsoft learned from its earlier experience with a downtown Seattle workforce.

"It informed us on how big a challenge it is to put a stake in the ground in Seattle when we have such an Eastside-centric population and business model," Owens said. "We learned we have to take conscious efforts to manage that and we have to pick groups that are very willing occupants in Seattle ... to make sure it's sustainable, that they want to be here, that they're not being forced to be here."

September 6, 2007

Xbox exec takes on finance for the poor

Posted by Kristi Heim at 4:30 PM

A former Microsoft executive who led the launch of Xbox and the co-founders of both and have all joined a local non-profit dedicated to helping poor people gain access to credit.

They're part of a wave of experienced technology people leaving the business world to apply their skills to problems of inequality.

Maybe they were listening to Bill Gates' Harvard commencement speech...

Their business experience is valued at Redmond-based Unitus, which looks at microfinance, or providing tiny loans and other services to working poor, as "an up-and-coming business sector, not a charity," in the words of its spokesman. Unitus also operates a separate, for-profit investment fund.

That for-profit approach is somewhat controversial and has its share of critics. But in microfinance the line between doing good and making money is blurring.

Unitus reaches more than 2 million people now with loans, insurance and other services that would not be available to them through traditional banks. Like an aggressive tech startup, it plans to expand to a million more by the end of the year.

Xbox veteran Ed Bland, who was a general manager in Microsoft's Entertainment and Devices Division, left to join Unitus as chief operating officer.

SOURCE: Unitus

Ed Bland's job is anything but.

Other techies that have recently joined Unitus are Derek Streat, co-founder of and now Unitus VP of microfinance solutions; co-founder Jonathan Weinstein, now Unitus director of product development; former Microsoft and BEA employee Diana Reid, now Unitus VP of donor and investor relations; and RealNetworks and Microsoft veteran Sandra Winters, who is Unitus director of strategic alliances.

Ocean power

Posted by Angel Gonzalez at 1:43 PM

Two and a half miles off the Oregon coast lies Finavera Renewables' latest experimental toy: a buoy that turns wave movements into electric power.

The Vancouver, B.C.-based company announced the deployment, near Newport, Or., on Thursday. The device is the biggest of its kind off the North American West Coast, the company said in a statement.

The buoy will gather data that will be used in a next-generation product that could be deployed next year. Finavera hopes it can start selling ocean power in 2010.

The increasing scarcity of fossil fuel alternatives and widespread alarm about global warming have spurred interest in renewable energy sources. This interest is compounded by recently enacted Washington and Oregon mandates that require a significant share of the states' electricity to come from renewable sources in the near future.

Finavera's water toy, known as AquaBuOY (the capitalization is Finavera's) looks like this:

SOURCE: Finavera Renewables

Finavera Renewables' AquaBuOY, an experimental device designed to convert wave motion into electricity, floats off the Oregon coast .

September 5, 2007

The money is real, but the debate is virtual

Posted by Kristi Heim at 5:40 PM

Note: Please keep the comments polite and refrain from any personal attacks.

Following on my post last week about hybrid Web sites that combine social networking and financial services, a lively debate arose about rating financial advisers online. It seems timely to raise these issues, considering the turmoil in markets recently and the subprime lending debacle. Investors can certainly benefit from better information, and the web makes sharing it much easier.

One concerned reader made these criticisms about the site and about financial advisors in general:

"Clients of 'financial advisors' that are usually brokers/salesmen simply do not have the knowledge to rate those brokers. I have helped many advised clients and NONE of them understood the fees they were paying, or how their returns compared to the indexes. They had no idea that their broker participated in revenue sharing, or that they were being charged 12b-1 fees. Some thought they paid no fees at all! None knew what their bill for financial costs came to, or the effect of those costs over time. They had all been manipulated into trusting their 'advisor'... blindly.

"The questions asked on financialjoe are very superficial and will NOT give a true rating for advisors. Not even close.

"Uneducated people answering superficial questions and giving unreliable ratings isn't what investors need.

"What needs to happen is that investors need to be educated on what their financial advisor will never tell them. For example:

" 'the BCT study found that the raw returns of equally weighted mutual funds (net of all expenses) for 1996 to 2002 were 6.626% for the investors working on their own and were 2.924% for funds provided by advisors.

" 'In other words, the public working on its own did more than 100% better than financial advisors when it came to selecting equity mutual funds. After factoring in inflation and taxes, clients of financial advisors lost money and lost purchasing power.'

"If someone is calling themself a 'financial advisor', they should advise, not sell. It's almost impossible to do both honestly I have learned.

And's Shawn Tierney responds:

"To categorize clients who use a financial advisor, essentially saying that they're all too ignorant to rate their brokers, is a gross misstatement! There are millions of doctors, attorneys, business owners, and other professionals that use financial advisors; are they ignorant? There are also tens of thousands of financial advisors who work for all the major wire-houses, banks, and other firms that hold CFP's, CFA's, and Masters of Economics degrees; are they not qualified to advise?

"The majority of investors cannot even explain the functionality of a mutual fund, let alone the fee structure, and most don't want to learn because of the complexity involved. Study after study has shown that investors fail to become educated due to the complexity of the investments, and the level of vocabulary Wall Street injects.

"During our focus testing, used various levels of vocabulary in the questions. We found the more in-depth the question, the less participation, and completion of the questionnaire.

f"'s focus is participation. Through participation will come knowledge by way of experienced wisdom.

"For example:

"Through investors rate their advisors. As each rates their advisor they become tagged to that advisor, and are exposed to that advisor group discussion. It takes one of the users to bring up the discussion of 12b-1 fees, or anything else they have learned through experienced wisdom. Through these discussions they can together determine if the advisor disclosed the entire fee, or just portions of the entire fee.

"Did the advisor disclose the entire fee for a wrap account (total fund expenses plus wrap fee) or did he essentially lie and just disclose the wrap fee leaving out the total fund expense because he wanted to capture the business.

"The result? Mission accomplished! The advisor has now been exposed to every client that he services who participates as a user of, as well as every potential client who was thinking about hiring him. This is a permanent record that cannot be expunged by the NASD or any other regulatory who settles financially without admitting guilt.

"The final result is permanently weeding out these types of 'advisors' who conduct unethical behavior. But, this cannot be accomplished without participation! So, in knowing this, why would we structure questions that we know will alienate the average investor?

"The comment also states, 'None knew what their bill for financial costs came to, or the effect of those costs over time. They had all been manipulated into trusting their 'advisor"...blindly.'

"I can assure you through personal experience in explaining fees to clients that there are those clients who, after breaking down the fees to them, say, "I really don't care about the different types of fees, just tell me the total fund expense". I also know of RIA's (Registered Investment Advisors) who tell their clients that their management fee is 1%, but fail to disclose to their client the additional mutual fund expenses held in a separate account.

"As for the questions being 'superficial' that is simply incorrect and needs no further explanation other than the aforementioned.

"The financial industry encompasses more investment vehicles than just mutual funds. The commenter, 'Caution!!', submits the BCT study, but fails to attach the entire package. Yes, the BTC study that published has a lot of great info, but as says themselves:

"I can't think of the findings for any study that apply to every single financial advisor in America.

"The study is not perfect. It is unfortunate that the authors use the word 'broker' in their landmark study to apply to almost all financial advisors. Their use of the word 'broker' does not just encompass Series 7 licensed reps who are paid commissions and loads. It truly applies to almost all financial advisors who sell mutual funds. 
If you hold a Series 7 or Series 65 license, if you are a registered rep, RIA or IAR, if you work for a broker-dealer, major brokerage firm, wire house, or if you are an insurance agent with a Series 7 or Series 65 license, the BCT study may very well have analyzed your transactions (both buy and sell transactions) during the years of the study. Unless you work for a fund supermarket on a salary, your transactions were probably analyzed in the BCT study.

"In the study, virtually everyone selling mutual funds (even RIAs and IARs) are referred to as "brokers"-even if you don't have a Series 7 license.

"Why are these findings so scary? The BCT study implies that about 50% of all FAs produced returns of less than 2.924% per year.
When you factor in taxes and inflation, the clients of all of these "advisors" lost spending power and thus literally became poorer each year. This gives even more credence to the Wall Street Journal's Jonathan Clements' warning of many years that people would be better off if they avoided financial advisors.
I disagree-if only for the reason that skilled financial advisors provide many valuable services besides investment management-but that is the topic for another article.

"The findings of the BCT study seem to apply most directly to advisors who have been selling mutual funds with a 5.75% load, a 3% or some other relatively high load or a front-end, back-end or level load. Even if the fund is a so-called "high-performance fund," with all these fees on top of the human tendency to buy high and sell low, advisors' returns may be much lower than most FAs ever suspected".

"The BCT study found that it is the combination of high-cost mutual funds and advisor behavior that lead to such poor returns. Thus, it is conceivable that even if an advisor uses super-low cost index funds, he or she could significantly under-perform the indexes simply due to buying when prices are high (and everyone is exuberant about the market) and selling when prices are low (and many people are scared).

"Conversely, it is possible that some advisors using high-cost funds could deliver outstanding performance by buying these funds when the prices are low (and when such funds are unpopular) and then selling them when prices are high (and everyone else wants to buy them). This is not what the BCT study found-but it is possible that a few advisors in America could be delivering such performance.
The above advisors might somehow be able to overcome the performance hindering effects of high-cost funds through their mastery of behavioral finance".

For the ENTIRE article the following link will take you there.

"I will finalize my response with this. No system is perfect, but will improve as technology advances, and as we find new ways to enhance the services we provide.

"I can assure you one thing will be accomplished. Investors will become wiser, poor advisors will be weeded out, and nothing will have a greater impact on Wall Street than the community of investors who came at them through!"

Tech companies wake up to traffic nightmare

Posted by Kristi Heim at 2:13 PM

How many people have companies like Microsoft lost over the years because of the commuting nightmare between Seattle and the Eastside? Maybe none, maybe only a few. Considering the worsening traffic situation for people who need to work on one side of the lake every day, but want to dwell on the other, life is definitely not easy.


Arteries clogged daily

Now it sounds like some tech companies are finally getting wiser because our local transportation officials are not.

Today we're seeing a stream of news about Microsoft's possible plans to expand along South Lake Union and F5 Networks building up its waterfront campus and opening a new R&D center in Bellevue. Meanwhile, Google is serving up perks on both sides of the water. The locations all seem aimed at lessening employees' commuting woes.

If more companies would match F5's incentive program, which gives employees up to $300 a month if they bike, walk, bus or carpool to work, the traffic situation just might improve a bit more.

Energy's Great Game

Posted by Angel Gonzalez at 10:34 AM

By creating an on-line simulation along the lines of SimCity, Chevron is trying to prove that figuring out how to provide civilization with enough energy is not an easy game.

Energyville, created by Chevron in conjunction with The Economist Intelligence Unit, lets you name your own power-hungry city and pick different options to feed it with energy. You can choose among biomass, hydro-power, natural gas, hydrogen, solar and others; every choice has some economic, environmental and security impact. The impact of your choices can change following events like terrorist attacks and technology breakthroughs.

No matter how green-minded you are, you won't be able to power your cities with solely biomass or solar sources. If you forget to add an offshore petroleum platform, the game will kindly remind you that airplanes and cars need fossil fuels to run.

The game, posted at a website Chevron created to foster energy debate, is "an engaging way of looking at the real-world decisions that have to be made in meeting rising global energy needs," said Chevron vice president Rhonda Zygocki in a statement. "Sponsoring Energyville supports our efforts to encourage a global debate of the critical energy issues. Energyville gives people an opportunity to test their energy literacy and learn for themselves the challenges in powering their own city."

In Energyville, your final score depends on how well you balance your energy needs with the cost, security issues and environmental effects of your choices. In my third attempt at being Seattle's energy czar, my score ranked 2,359th among 20,735 players -- after heavily betting on wind power.

The site offers a tool to engage in some amateur sociology. It computes the average energy preferences of players by location, gender or profession. Wind and solar proved a major preference of the average U.S. player, according to the Chevron site. Players from Qatar - a major hub for gas-to-liquids projects - saw a future dominated by coal. Vatican City players gave petroleum the largest share of the pie. Budding policymakers in Saudi Arabia, the world's largest oil power, also bet heavily on wind, solar and biomass solutions.

Big Oil has been increasingly vocal in the alternative energy debate, as skyrocketing costs and environmental and security concerns have made fossil fuels the target of both environmentalists and politicians. Many expect Congress to enact legislature regulating carbon emissions in the near future, and the State Department is hosting an environmental summit in Washington D.C. in late September. Oil companies like Chevron want to make sure they have a seat at the table as new measures are discussed.

Microsoft releases test version of Windows Live suite

Posted by Benjamin J. Romano at 9:27 AM

After reports earlier this week that the Windows Live suite was on its way, Microsoft today announced a beta or test version of the software will be available later today at this site.

Included in the suite are updated versions of Windows Live Mail, Photo Gallery, Writer blog posting tool, OneCare Family Safety parental controls, Messenger, "and more," according to a blog post this morning from Chris Jones, a corporate vice president heading the Windows Live effort.

Also new is a "unified installer" that will allow all of the pieces of the suite to be downloaded at once. "Once downloaded it will also keep customers' Windows Live services up to date automatically," according to an email from Microsoft's PR firm.

No word on when the beta tag will be removed from these online services.

September 4, 2007

Dr. Venter's revenge

Posted by Angel Gonzalez at 1:53 PM

In the race to decode the human genome, superstar biotech entrepreneur J. Craig Venter saw his thunder stolen by a rival, government-funded effort. But he may have ended up with the last laugh.

The Rockville, Md.-based institute that bears his name and collaborators at other research centers published today in a peer-reviewed journal the first "diploid" genome -- that is, with information from the two sets of chromosomes, one inherited from each parent. That will permit comparing genetic differences between individuals. The genome is Dr. Venter's own.

The detail and breadth of the study surpasses that of previously published genomes, which included composite data from many individuals, says a New York Times story. This approach could become "the gold standard for many years," the story said.

The study shows "five to seven times" more genetic variation between humans than in the previous genome analysis, Venter's institute said in a satement.

This method could further the push towards personalized medicine. But that would require collecting genetic information from millions of individuals, a step that raises privacy concerns. In an interview with Technology Review, Venter encourages people to make their genetic information publicly available.

New Microsoft perks around the corner?

Posted by Benjamin J. Romano at 11:15 AM

Business Week's detailed story on changes in Microsoft HR policies during the past two years under the direction Lisa Brummel, includes some perks the company has been or may be offering employees in the future.

Most of these have been talked about -- some were part of the revisions Brummel made to HR policy in May -- but many have not been widely publicized before:

-- Shuttle bus service, with Wi-Fi, coming soon.

-- Food delivered to desks, but no more grocery delivery; and "maybe -- just maybe -- free lunch" to compete with Google's famous perk (Brummel is "contemplating" this, CFO Chris Liddell is "studying it" and CEO Steve Ballmer is skeptical.).

-- Doctors making house calls for Microsoft employees.

-- Perhaps satellite offices or work-from-home schedules. (The article says Brummel has been "considering" the former and is a "proponent" of the latter.)

-- Even new recruits are getting some action: The company's recruiting center has been transformed into a "hip hotel lobby complete with an Xbox lounge and copious snacks."

Will these perks and perhaps others be announced at the company's annual employee meeting Thursday at Safeco? For all the speculation on what is and what should be, check out two recent posts at Mini-Microsoft.

Also interesting to note is the tenor of the comments in those posts, which counter the generally positive depiction of Microsoft's HR changes in the Business Week articles.

For reference on where Brummel's coming from, check out this profile and Q&A we ran last year.


Lisa Brummel, senior vice president of human resources at Microsoft, talks with an employee in a cafeteria on the campus in September, 2006.

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iPhones for sale in China, but no bargain

Posted by Kristi Heim at 10:05 AM

When the hottest electronics gadget in years meets the world's biggest producer of counterfeit goods, it just seemed inevitable that fake iPhones would spawn.

What's surprising is that some unauthorized iPhones sold in electronics markets in China's biggest cities, according to a Chinese news story, are actually more than double the price. It's not clear to me whether the iPhones in question are real or copies. The phones are manufactured for Apple by Hon Hai Precision Industry in Shenzhen, one of the cities where shoppers can find the unauthorized gadget for sale.

The fact that at least some people in China are willing to shell out $1,170 for this device speaks to the nature of the world's largest mobile phone market. Here's a good photo comparing a real iPhone with a Chinese version on the right.

While Chinese consumers seem unwilling to pay much for software, they're obsessive over the latest hardware. To keep trend-conscious users interested, new versions of mobile phones are released every six months, a much shorter time frame than they're updated here.

By the time Apple releases its iPhone in China in 2008, perhaps the country's more advanced mobile phone users will have moved on to the next craze.

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NYT: Windows Live Suite due this week

Posted by Benjamin J. Romano at 9:00 AM

The New York Times reports Sunday that the updated suite of online services Microsoft executives have been promising this summer is due to arrive this week. The Windows Live Suite is said to include Windows Live Mail, Messenger, Photo Gallery, as well as security software and possibly blogging software -- all installed in one move with a Unified Installer program.

In describing Microsoft's Internet services strategy, the story references Microsoft's bruising antitrust battle and raises the specter of history repeating itself. Veteran technology reporter John Markoff writes:

"Microsoft's new approach is in many ways a mirror image of the strategy used during the 1990s in defeating Netscape Communications when the start-up threatened Microsoft's desktop dominance. Microsoft tried to tie the Internet to Windows by bundling its Internet Explorer Web browser as an integral part of its desktop operating system. The company lost an antitrust lawsuit in 2000 brought by the Justice Department in response to this bundling strategy.

"Today, that strategy has been flipped with the growing array of Web services that are connected to Windows. But the new approach, which the company refers to as 'software plus services,' is once again beginning to draw industry charges of unfair competition from competitors."

Those griping rivals were not named in the story.

Last week, I interviewed Howard University's Andrew Gavil, an antitrust law expert and close follower of Microsoft's court battles and subsequent settlement with the U.S. government, certain portions of which are coming to an end later this fall. I asked him then whether he saw Internet services as a potential new antitrust front.

"Ten years ago it was servers," Gavil said. "Now it's more of these Internet services. To the extent that you can do it in a way that's tied to Windows, you are attempting to utilize the market power you've developed with Windows to limit consumer choices and to keep them in the fold."

For more background on Microsoft's push into Internet services, check out stories we ran last week on the strategy and the technology behind the effort.

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Tricia Duryee
Tricia Duryee

Angel Gonzalez
Angel Gonzalez

Kristi Heim
Kristi Heim

Benjamin J. Romano
Benjamin J. Romano

Mark Watanabe