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October 31, 2007

Mystery Gorilla strikes again at ZymoGenetics

Posted by Angel Gonzalez at 4:29 PM

Forget the intricacies of molecular biology -- the most elusive mystery to haunt Seattle's largest independent biotech company is the true identity of the gorilla that has appeared every Halloween afternoon for at least 15 years.

On Wednesday, the gorilla struck again, wading through the company's fancy Eastlake headquarters and aggressively pushing candy at the employees, undeterred by the flurry of activity surrounding the company's quarterly earnings call.

The unidentified person, about 5' 7", wears a full-body gorilla costume and hunches over like an ape, and is described as very agile and strong.

In all these years, nobody has figured out who it is, says ZymoGenetics spokeswoman Susan Specht. "All theories have come to nothing," she said.

One thing is well known, though: the gorilla doesn't take no for an answer. "I didn't really want candy four years ago, then I quickly learned through sign language that I had to have candy," said Specht.

The green monster truck

Posted by Angel Gonzalez at 2:13 PM

Thinking of embracing alternative fuels, but too attached to your monster truck lifestyle? Boy, Ford's got the car for you - and it's big.

The Detroit automaker's F-250 Super-Chief is on display at the Seattle autoshow, and it sports a "tri-flex" engine that can run on hydrogen (yes, hydrogen), gasoline or an e85 gas-ethanol blend.

The 11,500-pound behemoth, heavier than a Hummer H2, is very luxurious. The model shown had hardwood floors, a wet bar - and, according to Ford representatives, several video monitors not visible from the outside. The Super-Chief seems to suggest that concern about CO2 emissions and runaway consumption are not mutually exclusive - an idea that could send shivers through the spines of many environmentalists.

Although most Ford trucks can run on e85, the Super-Chief is still a concept vehicle, somewhat in the realm of science fiction. For starters: good luck finding a hydrogen pump -- there are only 122 in the U.S. and Canada, none in Washington state. But for those insisting on driven green (or yellow) fuel, there's plenty of corn out there to feed this beast's ravenous appetite.

Based on our calculations, the Super-Chief, which has an e85 milage of about 9 miles a gallon, could easily burn through two and a half football fields' worth of corn a year in the hands of the average American driver. These trucks are a Midwestern farmer's dream come true.

Merrill Lynch may subpoena Microsoft over identity of racist emailer

Posted by Benjamin J. Romano at 1:15 PM

Brokerage giant Merrill Lynch is going after someone who has sent racist e-mails to black Wall Street brokers and Al Sharpton posing as a Merrill manager.

According to coverage by The Associated Press and Dow Jones, the company filed suit in U.S. District Court in Manhattan late yesterday seeking to identify and stop the sender, who is using a Microsoft Hotmail -- now Windows Live Hotmail -- e-mail account.

Merrill Lynch thinks the defendant, identified in the suit as "John Doe," is somewhere in the Midwest.

"The offensive e-mails were sent to a number of our employees by an anonymous sender," Merrill Lynch spokesman Mark Herr said in an e-mailed statement. "We have sued the anonymous sender and will move to subpoena both the ISP and Microsoft Hotmail for information that would reveal the identity of the sender."

I've asked Microsoft for a response.

Update: "Microsoft opposes discrimination in any form and will take swift action when it learns its products or services are being used in an abusive or harmful manner," reads a statement from David Bowermaster, a Microsoft senior public relations manager. "In taking such action, Microsoft maintains its commitment to protecting the privacy of its customers. Microsoft complies with properly issued and served subpoenas, search warrants and court orders."

(Bowermaster was formerly a reporter for The Seattle Times.)

Privacy is a huge issue for Microsoft and other providers of online services such as e-mail and instant messaging. It's recently been raised as in issue around targeted online advertising.

Here are some key passages from Microsoft's Online Privacy statement, updated most recently this month:

"Except as described in this statement, we will not disclose your personal information outside of Microsoft and its controlled subsidiaries and affiliates without your consent. ... We may access and/or disclose your personal information if we believe such action is necessary to: (a) comply with the law or legal process served on Microsoft; (b) protect and defend the rights or property of Microsoft (including the enforcement of our agreements); or (c) act in urgent circumstances to protect the personal safety of users of Microsoft services or members of the public." (Emphasis added.)

October 30, 2007

Nastech slips on Wall Street

Posted by Angel Gonzalez at 5:24 PM

Nastech Pharmaceuticals had a rough time in the market Tuesday in the wake of its most recent quarterly earnings report.

Shares fell 13.27 percent to $12.88 as the Bothell firm - which specializes in delivering therapies through its proprietary nasal spray technology - saw its quarterly loss more than double to $16.4 million.

Profits are not as meaningful in early-stage biomedical companies such as Nastech, which derive most of their income from research partnerships and investors, as they are in other, commercial-stage companies. But the sudden drop in the company's numbers seems to have spooked some shareholders.

The loss, the company said in an earnings statement Monday, came as lower revenue coincided with higher research expenditures and an expanded payroll.

Judge taking extra time to mull extension of Microsoft oversight

Posted by Benjamin J. Romano at 1:44 PM

The landmark antitrust case against Microsoft will plod along for at least another three months so the parties will have enough time fully argue whether it should be extended for five years.

The re-jiggering of the schedule comes after most of the states involved in the case filed motions earlier this month asking U.S. District Court Judge Colleen Kollar-Kotelly to extend oversight of the company by five years. Most of the important pieces of the settlement were due to expire Nov. 12, but the states argued that the 2002 antitrust settlement agreement is only just beginning to foster competition and needs more time to work.

In a joint motion filed today the states and Microsoft asked for an extension to no later than Jan. 31, 2008, "solely for procedural purposes to allow the parties to brief, and the court to consider, the motions."

The filing also lays out a schedule for Microsoft and the Department of Justice to respond to the states' motions to extend. Microsoft's argument in opposition is due Nov. 6, and the DOJ, which said in a filing earlier this month that it opposes extending the settlement, has until Nov. 9 to make its arguments.

The states would file counter-arguments by Nov. 16, and Kollar-Kotelly will determine whether another hearing is needed.

'In Redmond, you don't see 7-year-olds begging on the street'

Posted by Benjamin J. Romano at 11:41 AM

That's a quote from this New York Times story about how beneficiaries of the tech outsourcing boom in India are trying to combat poverty in their own country.

Sean Blagsvedt, a veteran of Microsoft Research in India and founder of a kind of social networking Web site for poor people who don't have their own computers, was of course referring to his former employer's headquarters. "In India," he continued, "you can't escape the feeling that you're really lucky. So you ask, What are you going to do about all the stuff around you? How are you going to use all these skills?"

The story goes on to describe how technology companies are using India as a laboratory for technology to serve, as Microsoft execs might put it, the next billion people.

Microsoft earlier this year formalized its approach to doing business in the emerging economies of the world with its "Unlimited Potential" program. And during its last quarter, the company saw 40 percent growth in the fast-emerging economies of Brazil, Russia, India and China.

October 25, 2007

CTIA: Open access continues as theme

Posted by Tricia Duryee at 1:20 PM

SAN FRANCISCO -- Atish Gude, the executive leading Sprint Nextel's WiMax intiative, called Xohm, was the show's final keynote speaker today.

Gude painted a broad overview of WiMax for the crowd, which mostly consisted of people from the cellular industry.

He spent a lot of time explaining how WiMax is different than the existing wireless broadband services that cellular carriers use today.

The answer, in part, is the business model.

Gude said Sprint wants to build an ecosystem of players that include the consumer electronics industry and developers. The important thing is that the network is open to allow everyone in who wants to participate.

"The marketplace will decide what wins and loses," he said.

The mantra is different than what wireless carriers in the U.S. today. They want tight controls on the network so that they don't become simply a dumb pipe. I wrote about this in today's paper; one of Facebook's founder really launched the topic Wednesday during his keynote, arguing that carriers need to become an open platform that welcomes development.

"It makes it really hard in the 3G world to open up platforms, not to say it can't be done and there's been progress," he said, "but we are very committed to opening up APIs. We are absolutely committed to opening up the APIs and investing in a platform, and really making innovation happen in the wireless space."

He said it won't be a dumb pipe -- it will be a very smart one.

There is a lot of work to be done still. For instance, Gude said that in order for a portable DVD player to connect to the Internet over WiMax, the user interface needs work. Today, there are only four buttons -- start, stop, fast forward and rewind a movie. He asked how are you supposed to search for a movie title with just those four buttons?

He hopes someone in the development world will figure it out.

Microsoft starts fiscal 2008 with a bang

Posted by Benjamin J. Romano at 1:13 PM

The company released its fiscal first quarter earnings just now. The headline is sales of $13.76 billion, up 27 percent from the year-earlier period.

Net income for the quarter, ended Sept. 30, was $4.29 billion and earnings per share of 45 cents blew the Wall Street consensus of 39 cents, as measured by Thomson Financial, out of the water.

CFO Chris Liddell, in a statement, said revenue growth in this quarter marks the fastest first quarter for Microsoft since 1999.

Updated forecasts are as follows:

Second quarter, ending Dec. 31, revenue of $15.6 billion to $16.1 billion; earnings per share of 44 to 46 cents.

For the full fiscal year, revenue of $58.8 billion to $59.7 billion, an annual growth rate of 15 to 16.8 percent; earnings per share of $1.78 to $1.81.

Here's the quarterly filing.

Microsoft's Entertainment and Devices Division appears to have made progress toward its goal of profitability this fiscal year, riding the popularity of "Halo 3," the blockbuster game it released Sept. 25. The division turned in operating income of $134 million, compared with an operating loss of $145 million last year in the period. "Halo 3" generated U.S. sales of $170 million in its first 24 hours on the market.

Update: Investors appear to be thrilled with this news, particularly the fact that the company raised its full-year revenue guidance by about $2 billion. MSFT hit a new 52-week high today of $31.99 in regular trading, and has climbed close to 10 percent in the early part of after-hours trading.

CTIA: New directors named

Posted by Tricia Duryee at 1:12 PM

SAN FRANCISCO -- CTIA -- The Wireless Association, which organized this week's show in San Francisco, has appointed new members of the board, and two are local executives.

CTIA CEO Steve Largent said new Verizon Wireless President and CEO Lowell McAdam will be the wireless industry trade group's new chairman. McAdam had been vice chairman.

Replacing him as vice chairman is T-Mobile USA CEO Robert Dotson.

CTIA also elected 46 board members for 2008, including Clearwire CEO Ben Wolff.

Othe leadership positions: Alcatel-Lucent Mobility Solutions President Cindy Christy is treasurer, Centennial Communications CEO Michael Small is secretary, and SunCom CEO Michael Kalogris is chairman emeritus.

October 24, 2007

Microsoft-Facebook deal: Highlights from the call

Posted by Benjamin J. Romano at 1:57 PM

The long-rumored hook up has been confirmed. Microsoft is taking a stake in social-networking site Facebook. It beat out rival Google, which was reportedly in the running, for the exclusive global rights to sell third-party advertising on Facebook. Microsoft landed a deal to sell banner advertising in the U.S. on Facebook in August 2006. Expanding the deal internationally is important because 60 percent of the site's nearly 50 million registered users are outside the U.S.

Microsoft is investing $240 million in Facebook, about 1.6 percent stake at a stated valuation of an eye-popping $15 billion. Facebook was started in February 2004 by now 23-year-old Mark Zuckerberg.

Owen Van Natta, Facebook's vice president of operations and chief revenue officer, and Kevin Johnson, Microsoft's platforms and services division president, shared more details of the deal with reporters on a conference call.

Here are some highlights:

-- Johnson said, "I think this deal represents a major advertising syndication win for Microsoft" and "an enormous vote of confidence from our largest advertising partner."

-- Asked about the $15 billion valuation for Facebook suggested by the announcement, Johnson pointed to the nearly 50 million active users and the rate at which the site is adding users (Van Natta said later that it's doubling its user base every six months). If they get to 200 million or 300 million users fairly quickly, combined with "a modest average revenue-per-user, per year, and you can very quickly get to this level of valuation," Johnson said.

-- The companies declined to name or confirm the existence of other investors for the funding round. Van Natta also declined to discuss how the equity investment may affect Facebook going public.

-- Johnson said "there's a lot more we're going to be doing together," but both he and Van Natta were vague or non-responsive when asked about technical collaboration; integration of Facebook into Microsoft properties such as Windows Live or MSN; whether or not the agreement includes search advertising ( as opposed to just banner advertising); whether there's any guaranteed revenue to Microsoft as part of the deal.

-- Several reporters and analysts asked Johnson how well the existing Facebook advertising deal has worked out for Microsoft. Some referred to recent comments by Microsoft CEO Steve Ballmer suggesting that the deal has yet to become a huge source of revenue. "We see continued improvement and progress with the overall monetization of the Facebook inventory," Johnson said.

-- Neither executive provided much background on how the deal was done, including any background on other bidders. In fact, neither mentioned Google by name.

CTIA: A few wireless stats

Posted by Tricia Duryee at 12:43 PM

SAN FRANCISCO -- Steve Largent, CTIA's CEO, has shared a few stats with the crowd before keynotes took place the past two days:

-- There are 243 million U.S. subscribers, totaling about 80 percent of the population. Four years ago, there were fewer than 160 million U.S. subscribers.

-- 1 billion text messages are sent every day in the U.S.

-- 472 million picture messages were sent in June, a 125 percent increase over last year.

-- Data revenue makes up about 15 percent of carrier revenue today.

-- Oct. 13, 2008 marked the 25th anniversary of the first commercial wireless phone call. As part of that, Largent asked people to go to to vote for the top 10 biggest events in the past 25 years.

CTIA: The nightlife

Posted by Tricia Duryee at 12:19 PM

SAN FRANCISCO -- It's a long tradition at tradeshows that after an exhausting day roaming the conference floor, chatting with all the players and learning a ton that you go out and hit the nightlife afterwards.

Last night was no exception.

First on the agenda was to stop by the W Hotel, where Amdoc's two Seattle divisions, OpenMarket and Qpass, were throwing a party. The party was on a rooftop deck and people were lounging in big cabanas.

The second stop was at another locally inspired scene. It's becoming a tradition for Ontela, SinglePoint and Zenzui to throw a party, and it's a great chance to see all the wireless folks from the Northwest in one place.

I saw many other companies besides the sponsoring parties. I met the chairman of BlueFrog Mobile, who gave me a quick demo of its text TV application; and I met the executives at Travelling Wave, who are building a new type of voice recognition software for mobile.

Travelling Wave also treated me to a demo. It works like this: a person says a word and then starts typing it, and the system usually recognizes the word after one or two letters. It worked fairly flawlessly, especially given the loud, bumping music in the background. The one time it flubbed was when an exclamation point was recognized as a smiley face. :-)

I also met a handful of former Microsoft employees, VCs and others.

The last and final stop on the agenda was the party sponsored by Nokia and mSpot, which was far and away was the most popular.

The event at Ruby Skye featured hip-hop artist Ne-Yo. Long before he went on stage, a line wrapped around the block, and the word was the club, with a capacity of 900, was full, and the nearly 3,000 that RSVP'd would definitely not get in.

In case you missed it, here's what it was like inside:

From the balcony, you can see a DJ spinning before Ne-Yo took the stage.


Here you can see the crowd getting into Ne-Yo's performance.


CTIA: Facebook tells wireless world, open up!

Posted by Tricia Duryee at 10:13 AM

Facebook co-founder Dustin Moskovitz encouraged the wireless industry to open up their networks to third-party development.

Speaking at CTIA today, he said the pressure is on because Apple will be opening up its mobile phone in February to outside developers and Google is expected to make an open play next year by either releasing a new phone or participating in a spectrum auction.

A company that currently develops a mobile application has to be approved by each wireless network in order to be offered on a phone, rather than simply being installed by the end user.

Quoting Moskovitz:

There are a lot of good reasons why the state of the industry is why it is. I don't want to stand up here and tell you about your industry, but I've been working with everyone in the ecosystem over the last four years.

The mobile operating system and hardware layers are locked down, and Smartphones are pushing the boundaries, but we still have a long way to go. There's reasons why it looks like this today, but I want to talk about how crucial it is for this to change.

He said thousands of developers are waiting to build for mobile.

Moskovitz also invited RIM's co-CEO Mike Lazaridis on stage to announce a Facebook application for the BlackBerry that is fully integrated into the phone. If users take a photo and the application has been installed, the phone will ask whether the user wants o text that photo, e-mail it, or send it to Facebook (without even launching the application). The person can even tag the photo.

The BlackBerry application, being launched today, will first be available on T-Mobile USA's network.

It is interesting that Facebook's first application was built with BlackBerry, a business device. However, when Moskovitz started off his presentation, he asked the crowd how many people were Facebook users. More than half raised their hands. He said the business segment is one of the fastest growing areas for Facebook.

CTIA: Six questions with Steve Ballmer

Posted by Tricia Duryee at 9:18 AM

SAN FRANCISCO -- Microsoft Chief Steve Ballmer delivered Tuesday morning's keynote at CTIA during, focusing on a couple of enterprise announcements, as mentioned in today's paper. But he also relayed the message that Microsoft is building products that will span both a person's work and life style.

Following his speech, CTIA CEO Steve Largent asked Ballmer six questions. The questions covered a lot of topics and were quite telling on where Microsoft may be heading. I included one in the story, but here are the other five.

Because the answers are long, they have been edited down. For the full transcript go here.

Largent: How will Microsoft partner with mobile operators and device manufacturers, many of whom are here today, and how will that compare to your competition?

Ballmer: Well, I think if you sort of ask where's our DNA, where did we grow up. We grew up actually in a world in which we partnered quite broadly with a hardware ecosystem to really enable an industry. That's kind of where we came from on the PC side. That's also kind of our approach to the mobile industry.

Largent: Steve, as you probably know, we have a big spectrum auction that's about to take place in hopefully the end of January. It's scheduled now for the end of January. Does Microsoft have any plans in the spectrum auction?

Ballmer: No. We don't have plans to participate in the spectrum auction. At the end of the day, we think we may be broader in what we do than almost any company out there, but we think we have a core competence, and we think that the telecom industry and the service providers have a core competence.

[Applause by one person in the crowd.]

Thanks, dad [to that one person]. No that was a joke.

So what would it buy us to own a piece of spectrum? One piece of spectrum in one country, it would probably do a lot to alienate the telecom industry. It does not do a lot to advance our goal, which is to try to take some very exciting technology and spread it everywhere. Nobody knows what will happen out of some of our competitors, because they're rumored to be doing a lot of different things, and we'll just have to wait and see. But I think compared to anybody else participating in the industry, we are trying to provide a critical mass of solution, but really be an enabler of third parties.

Largent: What role will mobile advertising play in Microsoft's future, and what will your partners play?

Ballmer: I think mobile advertising is going to be a great revenue source for all of us. And exactly how the pie gets split up, that will be a first=rate problem for our industry to have, and we need to first really do the things it's going to take to have mobile advertising be relevant and important and high-impact. That will create revenue, and that will give us all the kind of opportunity that we want.

We're investing in the technology for advertising in general, and for mobile specifically. We bought a company earlier this year, aQuantive, $6 billion, it's an ad platform company. We bought a couple of companies, MotionBridge, and ScreenTonic in Europe that provide specific technologies around mobile portal and mobile advertising. So we think there's a bit opportunity there.

Largent: How important is Windows Mobile and mobility in general to the future of Microsoft?

Ballmer: Very. I think that if we think about, and there's two ways to explain that. One, I think there's a big opportunity for us financially. If we can really be in a position where hardware makers, and operators wanted to put some of our software in someday hundreds of millions of devices, that can be a great business for us, a great business, very different than the business that some of our competitors have, but a great business for us.

No. 2, I don't think we can serve our customers' broad desire to bring together desktop, devices, enterprise and online if we sort of ignore the mobile area. So Windows Mobile is both a great financial opportunity, and sort of a necessary strategic ingredient for us.

Largent: This last question is of a more personal nature. Do you think the Seahawks are going to be in the playoffs this year?

Ballmer: I was going to ask you that as the last question, but I have to say absolutely, positively, 100 percent. I've been in Seattle a long time now, long enough that when Steve mentioned it's been almost 20 years since he retired from the Seattle Seahawks, it kind of surprised me, but, absolutely, the Seahawks are going to make the playoffs, and our No. 2 shareholder, Paul Allen, who owns that team, is going to be very happy. You knew my answer in advance.

October 23, 2007

CTIA: iLike likes partnership with Billboard

Posted by Tricia Duryee at 1:40 PM

SAN FRANCISCO -- I ran into iLike CEo Ali Partovi on Monday, just after he announced a partnership with Billboard to create a new music chart based on social media.

I asked Partovi what that means. He said it will be able to measure different things than Billboard's traditional business, which focuses on ranking music played on the radio or is purchased.

He gave the example of Radiohead, the band that sold music exclusively off its Web site.

He said there was no way that work would have come up on any of the charts.

Billboard will be tracking two types of social music -- what people store on their computer and the habits of iLike users on Facebook.

Partovi said by tracking what people keep on the computer, you can see what tracks are popular. A user may buy a CD in the store, but rip only a few tracks onto his computer.

On the Facebook version, songs or music will have a longer shelf life. The top hits will more reflect favorites over the long haul, rather than what is being listened to or purchased that week.

For this reason, Partovi said the partnership was just as important for Billboard as it was iLike to get Billboard's brand associated with its services.

CTIA: Whrrl is spinning

Posted by Tricia Duryee at 1:25 PM

SAN FRANCISCO -- I just ran into Jeff Holden, the co-founder of Pelago, which launched its new mobile application today called Whrrl.

The service allows you and your friends to share information on your favorite restaurants. I wrote about the company in this story.

By the way, I mentioned the company in Monday's story as one of those attending CTIA. Turns out there is another company based in Washington (in Gig Harbor) called Perlego, not to be confused by Pelago. It is here, too.

Here are a couple of screenshots of the Whrrl service that went live today.

This is what the homescreen looks like on the mobile phone:


Here's what a map looks like on the mobile phone:


October 22, 2007

CTIA: iLike partners with Billboard mag

Posted by Tricia Duryee at 1:00 PM

SAN FRANCISCO -- Seattle-based iLike, the popular music program on the Web and on Facebook, said today that it is partnering with Billboard, the music chart provider, to create a new music chart based on social media.

The chart will be based on the massive volume of daily music activity that iLike tracks across the Internet. The weekly charts will reflect which songs are most popular each week among iLike users on Facebook and iLike's desktop software, which users add to their iTunes and Windows Media collections.

Billboard will also give newsfeeds to iLike's more than 4 million users.

Billboard will have two weekly charts based on the listening habits of registered users on and Facebook. The first chart will report on the week's top 25 songs "most added" to Facebook user profiles. The second chart will leverage iLike's popular desktop plugins for iTunes and Windows Media Player to monitor the top 25 songs that consumers are adding to their personal music libraries on their desktops and iPods.

CTIA: HipCricket takes an award

Posted by Tricia Duryee at 12:06 PM

SAN FRANCISCO -- Bellevue-based HipCricket said today that it will be presented today with an award at CTIA.

HipCricket provides text-messaging-based promotions for radio stations and other media.

It is receiving the annual "CSC Pioneer" award in recognition of its fast growth in CSC-based (Common Short Code) mobile marketing campaigns by NeuStar and CTIA.

HipCricket explains that CSCs are short five- and six-digit numbers that allow users to send and receive text and multimedia messages. The benefit of CSCs is that more than 95 percent of handsets can use them today, giving marketers huge reach.

CTIA: The calm before the storm

Posted by Tricia Duryee at 11:57 AM

SAN FRANCISCO -- The pre-conference activities kicked off today at the CTIA Wireless IT & Entertainment annual conference.

In today's paper, I wrote about two Seattle-area companies participating in the show. I-mate, a Dubai-based handset manufacturer with offices in Redmond, is launching products in North America this week. And Dashwire, a Seattle-based startup, is launching its beta site that allows people to manage their cellphone from a Web site online.

Today, activities get warmed up with a small event sponsored by Billboard that focuses on how mobile intersects with entertainment. Coming up soon is a keynote by Quincy Jones, the music producer and former Seattlite.

Simultaneously, the Smartphone Summit, which focuses on the enterprise side of the business, hears keynotes by Symbian, a mobile phone operating system developer that competes with Microsoft's Windows Mobile operating system.

Tomorrow, Steve Ballmer will keynote the opening day of the show, and there should be a ton of news coming down the pike, so stay tuned.

Is the canola-biodiesel cure worse than the disease?

Posted by Angel Gonzalez at 10:48 AM

Imperium Renewables, which built the largest biodiesel plant in the U.S. at Grays Harbor, gets a lot of flak from protesters who think the Seattle-based company uses palm oil as feedstock - thereby contributing to massive deforestation in Malaysia and Indonesia. The company says it uses canola oil instead, mostly imported from Canada, a crop perceived to be much friendlier to the environment.

But a recent study is casting doubt on canola's green credentials, too. A group of international scientists concluded that canola-based biodiesel may generate as many or more emissions as its fossil fuel equivalent, The Oregonian reports.

The reason: Fixed nitrogen, used as fertilizer, generates great quantities of nitrous oxide, a greenhouse gas. While previous research has concluded that less than 1 percent of nitrogen fertilizer becomes nitrous oxide, the study's authors - who include a Nobel Prize winner - say that the percentage is three to five times larger, possibly negating the environmental gains of burning biofuels that originate from feedstock requiring a lot of fertilizer, like canola (also known as rapeseed) and corn.

The report says:

The effect of the high nitrogen content of rapeseed is particularly striking; it offsets the advantages of a high carbon content and energy density for biodiesel production.

The study does not purport to provide a complete life-cycle analysis of the greenhouse-gas effect of biofuels production, and says that other factors - such as useful byproducts that could fuel crop-growing - could be beneficial to the environment. But it highlights the challenges of controlling global warming, a phenomenon that's influenced by many factors other than fuel used in transportation.

The report also underscores the promise of cellulosic ethanol, since grasses and forest products do not require much nitrogen fertilizer.

October 19, 2007

DOJ opposes extending oversight of Microsoft

Posted by Benjamin J. Romano at 3:53 PM

The Justice Department, in response to motions from several states involved in the antitrust settlement with Microsoft this week, filed a curt statement this afternoon saying it has no intention of filing for an extension and "does not believe that the standard for such an extension has been met."

At issue is the terms of the landmark antitrust settlement between the states, the federal government and Microsoft. Key provisions of the settlement are set to expire on Nov. 12, and while Microsoft has pledged to adhere to business practices that stay within the law and its responsibilities under the settlement even after it expires, the states are asking for five more years of oversight.

U.S. District Court Judge Colleen Kollar-Kotelly has scheduled a conference call with the parties for Tuesday, presumably to discuss the matter. Another hearing is scheduled Nov. 6 in her Washington, D.C., courtroom. It would be the last status conference before oversight expires.

More states call for extension of antitrust oversight of Microsoft

Posted by Benjamin J. Romano at 1:21 PM

New York, Maryland, Louisiana and Florida have joined the California group of states in calling for an extension of judicial oversight of Microsoft.

In a motion filed Thursday in the court overseeing the landmark antitrust settlement, the states write:

An extension is appropriate to assure that marketplace participants have sufficient opportunity to establish positions to compete against Microsoft, an entrenched monopolist. Indeed, experience since entry of the Court's decree in 2002 refutes the central assumption that supported departure from the 10-year term typical of antitrust remedial decrees -- that the industry section was characterized by rapid change. Just the opposite: Microsoft's Windows monopoly is indisputably resilient.

The motion for an extension by New York, Maryland, Louisiana and Florida is notable because they agreed with the Department of Justice's assessment in August that the consent decree had been successful. Thursday's filing (PDF, 9 pages) addresses that point, noting that in the August review, the New York group wrote "that the Final Judgments have begun to foster competitive conditions among middleware products, and more generally in the delivery of web-based applications and services. ... However, the process envisioned by the Final Judgments is far from complete. The inescapable fact remains that, at the client operating system level, Microsoft has a 90%+ market share."

Thursday's filing also provides a score card of sorts on where each of the states stands on extension of judicial oversight.

Of the 17 states plus the District of Columbia, 11 support extension; three have no objection to an extension; three have not taken a position on the matter; and one, Wisconsin, does not join the motion for extension.

October 18, 2007

'Halo 3' drives huge month for Xbox 360

Posted by Benjamin J. Romano at 3:32 PM

As promised, Microsoft's top video game title, "Halo 3," on sale for less than a week in September, fueled the company's broader video game business, according to just-released numbers from researcher NPD Group. (Update: Turns out NPD counts September differently than I do. Their September is longer, so the figures in this story actually represent 12 days of sales.)

NPD analyst Anita Frazier called the 3.3 million copies of the game sold in the U.S. last month "phenomenal." That figure was nearly double the total units sold under the next nine best-selling titles in September. (It also includes copies that eager fans pre-ordered online in the months of hype leading up to the game's release.)

"True to its name, the game rubbed off on hardware sales too -- the Xbox 360 realized it's best month ever in unit hardware sales outside last holiday season," Frazier said in a statement. "If ever there was a doubt that great content drives hardware acquisition, this should put that doubt to rest."

For the first time in several months, Microsoft's Xbox 360 outsold the Nintendo Wii, which also had a stellar September.

Here are U.S. console sales for September, from NPD:

Xbox 360, 527,800

Wii, 501,000

PlayStation 3, 119,400

PlayStation 2, 215,000

Next month's report will show whether today's PlayStation 3 price cut by Sony will juice its sales.

It came from the Midwest

Posted by Angel Gonzalez at 10:59 AM

What unspeakable threat can make left-leaning non-profits such as Oakland-based Food First agree with The Wall Street Journal's unabashedly pro-capitalist editorial section? What hallucinogenic compound is making environmentalists jump in the same boat as Big Oil lobbyists? The menace turns out to be home-grown: corn-based ethanol.

Many liberal environmentalists have long stood against corn-based ethanol because they tag it as inefficient (it takes a high amount of energy to produce ethanol from corn), polluting and responsible for a distortion in food prices. They see the subsidized adoption of ethanol as mainly a boon to agri-business. As Congress meets to discuss an upcoming energy bill, groups such as Food First are ramping up their opposition to a proposal to raise federal mandates on blending ethanol into gasoline to five times the current consumption level.

But the shots also come from the other side of the political spectrum. The new mandate proposal was met on Wednesday with a scathing editorial from The Wall Street Journal, saying that such a move would create a water crisis.

Heavily subsidized and absurdly inefficient, corn-based ethanol has already driven up food prices. But the Senate's plan to increase production to 36 billion gallons by 2022, from less than seven billion today, will place even greater pressure on farm-belt aquifers.

The Journal's piece says that "force-feeding" corn-based ethanol into the U.S. energy mix is not the right answer.

International institutions are also weighing in on the debate. An International Monetary Fund report said that Brazil's sugar-cane ethanol is "the only form of ethanol that is generally cheaper to produce than gasoline," a WSJ story says.

Big Ethanol's push has also created a rift in the business world. Big Oil - which could see its refining margins shrink if ethanol replaces a significant amount of gasoline - would rather see compete against gasoline in a free market.

Holiday shopping for game consoles gets interesting

Posted by Benjamin J. Romano at 10:47 AM

Not surprisingly, Sony is lowering the price of its PlayStation 3 console ahead of the holiday shopping season. The price of the top-end 80 gigabyte model was cut by $100 to $499. It also announced a new 40-gigabyte model for $399 -- cheaper than Microsoft's highest-end Xbox 360.

In August, Microsoft announced a price cut of its own: The low-end Xbox 360 "core" costs $280; the midrange version is $350; and, the high-end "elite" system is $450.

Sony's move comes on the same day the NPD Group is expected to release its latest market-share figures for September. This will be the first month to show the impact on Xbox 360 sales of the blockbuster game "Halo 3," which generated $170 million in U.S. sales in the 24 hours after it was released Sept. 25. Microsoft executives had expected perhaps a third of "Halo 3" purchasers to buy an Xbox 360 at the same time. Check back this afternoon for details.

Meanwhile, here's what the U.S. market looked like in August, according to NPD (the first number is August sales, the second is life-to-date sales):

Wii: 403,600; 4 million

Xbox 360: 276,700; 6.3 million

PlayStation 2: 202,000; 39.1 million

PlayStation 3: 130,600; 1.75 million

IT industry, Microsoft, continue to rev global economy

Posted by Benjamin J. Romano at 12:01 AM

Microsoft paid leading market-researcher IDC to draw up a major report of the economic impact of the IT industry -- and Microsoft's share of it -- on the global economy.

The big takeaway, no suprise: IT drives a big part of the global economy, and software in particular has a disproportionately large impact.

After studying 82 countries and regions, IDC found that $1.2 trillion, or 2.5 percent of 2007 global gross domestic product, can be traced back to the IT industry. That share is expected to grow to 2.75 percent by 2011.

The report gives Microsoft and its "ecosystem" -- described as "hardware, software, services, and channel firms as well as end user organizations running Microsoft software" -- credit for $400 billion in 2007 revenues and 42 percent of IT employment globally.

Pamela Passman, Microsoft's vice president of global corporate affairs, said the report is useful to the company in talks with government officials.

"What's most interesting about this are the trends that we see and for the audiences that we want to talk to about this, which is significantly policy makers," she said. "It's important for them to understand the trends, as they think about how they make resource allocation decisions."

Packaged software -- Microsoft's bread and butter, also the stuff provided to big enterprise customers by IBM, Oracle and SAP -- represents 21 percent of IT spending. But this sub-category of the industry generates half of all the IT jobs.

IDC chief researcher John Gantz explained why software has an out-sized impact on employment in the industry.

"For every dollar of software sold there's $1.25 of services around that software to be sold," Gantz said. Those services include training, installing, integrating, and working with software and also the software distribution channel, he said.

What about software's share of IT spending vs. hardware and services?

"In general, the software market is growing faster than the hardware market so over time that share will go up," said Gantz. He added that software's growth has slowed since the late 1990s -- hardware growth has slowed more -- when software spending was in the 15 to 20 percent range.

Today, software is growing about 6 to 8 percent a year. So what's causing the slow down?

"We call it basically the software complexity crisis," Gantz said. "It's fundamentally that so much of the software has to be integrated with older software that it slows the adoption down." (That also creates plenty of jobs for IT pros who can integrate the latest and greatest with legacy systems.)

How might the trend toward software as a service or, in Microsoft's terms, software plus services, affect growth of this part of the IT industry?

Right now, Gantz said, software as a service is counted by IDC as a service, and despite all the attention it's getting, "actually there's not enough of it to really make a difference.

"It's Microsoft Office Live, Dynamics Live,, and out of $220 billion for a total software market, there's not all that much activity," Gantz said. "It's the wave of the future, but the amount today is not that high."

October 17, 2007

States seek to extend judicial oversight of Microsoft

Posted by Benjamin J. Romano at 1:54 PM

On Tuesday, California, Connecticut, Iowa, Kansas, Minnesota, the Commonwealth of Massachusetts and the District of Columbia formally asked the judge overseeing the soon-to-expire antitrust settlement between Microsoft and state and federal governments to extend it for five years.

Major provisions of the settlement are due to expire Nov. 12, while some other provisions around technical documentation have already been extended for two years. The filing (26-page PDF) cites "continuing problems" with the availability of documentation, and how the lack of documentation has hampered competitors ability to benefit from the settlement.

The main focus is on the portions of the settlement regarding middleware -- software that runs on top of the operating system, such as media players and Web browsers. The states say these provisions need more time to work.

The settlement "has yet to pry open the OEM channel of distribution to competitive browsers, because no major OEM currently distributes a browser other than Microsoft's Internet Explorer (IE)," the California group of states wrote.

That's important because:

"Many new middleware technologies are just now appearing that may, in the near
future, pose a competitive threat to Microsoft's operating system monopoly.
These technologies substantially depend upon the browser. Because Microsoft
still retains control of the OEM channel for browser distribution, in part because
its illegal conduct with respect to IE has not yet been fully remedied, it is critical
that [the middleware provisions] be continued until these technologies mature."

The filing Tuesday followed a request the states made at a hearing in Judge Colleen Kollar-Kotelly's courtroom in September to extend oversight.

That request followed conflicting reports from the various government parties to the settlement on its effectiveness.

October 15, 2007

More Seattleites fear online ID theft than physical crime

Posted by Benjamin J. Romano at 5:26 PM

Computer security and safety advocates are gathering Tuesday to promote Internet safety in Seattle. Didn't you know that October is National Cyber Security Awareness Month? Be careful out there. The event is at the Seattle Public Library downtown beginning at 10 a.m.

To draw attention to the shindig, which will include Microsoft and Washington Attorney General Rob McKenna, the National Cyber Security Alliance released a survey of attitudes toward online safety nationally and in select cities, including Seattle. Security software vendor McAfee teamed with the NCSA on the study, so take it with a grain of salt.

Some interesting findings from the Seattle survey, which polled roughly 200 people, ages 18 to 49, online:

-- 22 percent of respondents or someone close to them were victims of an Internet crime or identity theft in the past 12 months.

-- More people (42 percent) are concerned about Internet crime, such as identity theft, than physical crime, such as robbery or stabbing (29 percent).

-- Time spent online in an average day:

3 hours or more 51%
1 hour to up to 2 hours 21%
2 hours to up to 3 hours 17%
30-59 minutes 8%

-- Computers in the home:

1 computer 37%
2 computers 35%
3 computers 15%
4 computers 4%
5 or more computers 8%
I do not have a computer in my home 2%

-- Not surprisingly, most of us think we're either "intermediate" (54 percent) or "advanced" (10 percent) when it comes to knowledge about cybersecurity. About 36 percent described their knowledge as "beginner."

October 12, 2007

BP: the new kid in SimCity

Posted by Angel Gonzalez at 5:45 PM

In the wake of concerns about independence from foreign crude and global warming, Big Oil is diversifying into a new economic sector: computer gaming.

BP announced this week that it partnered with Electronic Arts to bring real-world energy choices into the latest version of SimCity. The game, SimCity Societies, will be launched on Nov. 15. The objective is to raise awareness about low-carbon power choices, the U.K.-based oil giant said in a statement.

BP's venture into the gaming world follows an earlier attempt by Chevron, which created its own pared-down version of SimCity and put it on its website a few weeks ago.

The trend underscores how oil companies are coming up with increasingly creative ways to be perceived as environmentally-friendly.

BP was actually one of the first companies to address the climate change issue, at a time when other oil companies scowled: In the late nineties, the firm abandoned its legacy name of "British Petroleum", adding the motto "Beyond petroleum" to its branding. But the company has come under fire due to a tragic explosion in its Texas City refinery and oil spills in its crude oil operation in Prudhoe Bay, Alaska. BP's charismatic CEO Lord Browne, who kickstarted the green campaign, resigned in disgrace earlier this year.

Fossil fuel behemoths don't only invest in publicity stunts, though. In February, BP awarded $500 million over 10 years to the University of California-Berkeley for biofuels research, and Chevron has partnered with Weyerhaeuser to develop cellulosic ethanol, among other initiatives. The level of green investment, however, is paltry compared to the multi-billion capital budgets spent on fossil fuel production.

Wireless executives do the roshambo

Posted by Tricia Duryee at 10:10 AM

Not sure what was in the water this week, but there were a couple of high-level executive changes at two big wireless carriers.

Needless to say, at least one of them picked paper and the other scissors.

On Monday, Sprint Nextel announced CEO Gary Forsee stepped down as investors questioned the company's performance.

Sprint has struggled to keep customers happy, and has had a hard time defining a niche for itself as the third largest U.S. carrier. The company is still working on integrating the Nextel network into its Sprint customer base, while at the same time taking a huge bet by launching a new network based on the unproven WiMax technology.

With a market cap of about $51 billion, you wonder why they aren't a buy-out candidate? I mean, Google's thinking about paying $4.6 billion for spectrum in an upcoming auction -- and that's for much less spectrum than what Sprint currently owns and before the cost of building out the actual network.

That leads us to AT&T... well, not really, but hear me out.

Yesterday, AT&T, the largest wireless carrier, said that the head of its wireless unit -- Stan Sigman -- was retiring, and it appointed Ralph de la Vega as his successor.

Both men were legacy Cingular Wireless employees. Sigman was the CEO, and
De la Vega was COO. De la Vega was also previously group president of regional telecom and entertainment.

He will now be CEO of AT&T Mobility, effective immediately. Sigman will assist with the transition through the end of the year, the company said.

De la Vega has been around since Cingular bought AT&T Wireless, and was one of the top spokesmen for all of the company's announcements.

In fact, it was De la Vega I was talking to at about 8 a.m. on Oct. 26, 2004. I was on my way to CTIA, sitting on the plane before take-off, quickly getting the skinny. Three hours earlier, the FCC had approved the merger of the two companies, giving the final go ahead for Cingular to hand over $41 billion in cash to purchase AT&T Wireless.

During those crazy moments during boarding, De la Vega was passed a note during the interview, letting him know the merger was completed. "The deal is done," he said. "We feel good. We aim to execute just as quickly."

Quick is an understatement. Almost exactly three years later, the company comprises Cingular, AT&T, BellSouth and SBC Communications, and he's the CEO in charge of the company's wireless division. It is the largest U.S. carrier, and has a market cap of $256 billion (not shabby, compared to Sprint's $51 billion).

Imagine where these two companies will be in another three years? Both of the plots will be worth following.

Voyager announces third fund/four investments

Posted by Tricia Duryee at 10:02 AM

Voyager Capital, a Seattle-based venture capital firm, said today that it has made four investments from its latest fund.

The new fund, the company's third, has made investments in: Ontela, a wireless company in Seattle; SEMDirector, a search marketing software firm in California; 1020, a California company pioneering location-aware advertising; and Yapta, an internet travel planning service in Seattle.

Voyager's fund has $107 million and will be used to invest in early stage companies in digital media, software and wireless -- both in the Northwest and in California, the company said in a release today.

In 2006, it was reported that Voyager was seeking to raise a third fund worth up to $200 million.

In all, Voyager has about $370 million under management.

October 11, 2007

Biofuel musings on the Willamette

Posted by Angel Gonzalez at 12:20 PM

PORTLAND, Ore. - BBI Biofuels' Western Region workshop - whose motto is "building an industry" - made me ponder how far this budding sector is from Houston and All Things Oil.

Maybe it's only Portland's small city blocks, functional urban transport and northern European feel. Or maybe it's the way the conference looked compared to those in H-Town: no extravagant shrimp buffets or George H.W. Bush keynote speech, and certainly not as many suits wearing high-priced cowboy boots.

But the bravado - riding high on boom times - was the same.

Here are some salient points from the conference:

* People absolutely don't like oil refineries in their backyards, but they're somewhat more amenable to similar-looking big, noisy chemical facilities that produce alternative fuels. "The green aspect seems to overcome the NIMBY syndrome, but not entirely," said Dan Parker, chief executive of Parker-Messana Consulting Engineers, who helped design Imperium Renewables' Grays Harbor plant.

* Biodiesel is still a niche fuel, but the Northwest is emerging as a national hotspot. The region is far from where biodiesel feedstocks (canola, soybean, palm oil) are grown, but there are many retailers and distributors here handling the fuel, says Thomas Endicott, who heads SeQuential Biofuels, an Oregon biofuel retailer. Over 50 pumps in Washington and 35 in Oregon sell biodiesel at blends higher than 20 percent, "one of the highest concentrations of pumps in the country," he said. Some 40 "jobbers" - as fuel distributors are called - now distribute biodiesel in the region.

Part of the reason is political: City and state governments have been among the hardest pushers for the fuel to succeed. Portland is the only city in the country with a biodiesel mandate in place; government fleets are still the main purchasers of the fuel, he said.

* Energy independence is not so much isolation as supply diversification - and biofuels enable that. "We're starting to see a shift from countries depending on petroleum to those being able to produce their own oil," said Will Thurmond, of Emerging Markets Online, a market research firm. Today, the world's nearly 200 nations depend on 20 nations for their oil supply; by 2010, he predicts, half the planet's countries will be producing some biofuel of their own.

HTC names new head of Americas

Posted by Tricia Duryee at 11:59 AM

HTC, a Taiwanese mobile phone manufacturer that has a headquarters office in Bellevue, announced today that Jason Mackenzie has been promoted to vice president of sales and marketing of HTC America.

HTC works closely with Microsoft to build Windows Mobile-based phones and devices, and with Cingular (now AT&T) and T-Mobile, which also have major operations here.

Mackenzie is replacing Todd Achilles, who left HTC about a month ago for personal reasons.

As I wrote in this blog post, Achilles said he's enjoying some free time, having traveled about 80 percent of the time for work.

Mackenzie seems to be a fitting replacement, having started working at HTC in 2005 as one of the founding members of the HTC America leadership team, and helped grow the Bellevue office to more than 100 employees in two years.

"As one of our first employees in the Americas, Jason has a strong track record of working with partners, leading teams and developing sales channels," said HTC Chief Executive Peter Chou.

Microsoft employees love Facebook

Posted by Tricia Duryee at 11:39 AM

If you have a Facebook account, then perhaps you got the same message as I did today.

One of the stories Facebook inserted into my newsfeed was on some of the largest work networks on Facebook.

Surprise, surprise: Microsoft, the company rumored to possibly be buying a chunk of Facebook, came up as No. 2. That's right, Microsoft has the second-largest work network on Facebook with almost 17,000 employees.

Slightly ahead of Microsoft with the largest work network is IBM, with more than 20,000 employees.

Following IBM and Microsoft is Ernst & Young, Accenture and National Health Service. Now, I'd never heard of National Health Service, but a quick Google search revealed that it is the publicly funded health care system in the U.K. Go figure.

Those stats are interesting, but frankly, what makes Facebook the application of the decade is its intense student following, and there's a little bit of early evidence that it might be faltering.

Om Malik is writing on his blog that comScore is about to release its September 2007 market research report, and it seems the number of unique Facebook visitors took a little decline. In fact, he said, it's a 9.3 percent drop in unique visitors from 33.75 million in August to 30.6 million in September.

Possibly the decline corresponds with students returning to school and not being in front of a computer as much as they were over the summer. Who knows?

He then points out a blog post by The Wall Street Journal's Kara Swisher who says that despite this news, an investment of some sort in Facebook still seems to be in the works, and still likely at the insanely high valuation of $15 billion.

Who's interested?

She wrote:

"As has been reported here and elsewhere, one is Microsoft, of course, which is Facebook's ad-serving partner and which currently delivers the company a sweetheart guaranteed ad revenue payment of about $75 million annually.

But the second, said sources, is not, as might be expected, Google. It is, in fact, dark horse Yahoo."

Biodiesel needs Uncle Sam to thrive

Posted by Angel Gonzalez at 11:35 AM

PORTLAND, Ore. - Biodiesel production has expanded ten-fold in two years to 250 million gallons a year, but that figure is still a drop in the water compared to the 60 billion gallons of diesel consumed annually in the U.S.

Only a government mandate -- like the one that currently exists for ethanol -- could take it to the next level, said Larry Schafer, a political advisor to the National Biodiesel Board, at a biofuels workshop organized here by BBI Biofuels.

Tax credits for sellers are in place, Schafer said, but there is nothing requiring oil companies -- who control the massive distribution network for transportation fuel -- to add biodiesel to their mix. Congress is currently discussing some biodiesel-related legislation that Schafer hopes will be part of the next Energy Bill.

"If you're a petroleum company and there's no requirement to use a renewable, you probably wouldn't do it," Schafer said. Ethanol, which gained a big market share after a law pushed it as the replacement for a gasoline additive known as MTBE, now represents 4.5 percent of U.S. gasoline consumption.

Biodiesel's relative weakness underscores government's role in transforming the energy marketplace. But too much government attention can also result in confusion.

The current craze over biofuels has translated into 62 bills in Congress addressing the issue, said Larry Russo, who heads the Biomass Program at the Department of Energy.

Because there are so many bills, "chances of one of these becoming legislation this year are slim," he told conference attendants.

October 10, 2007

Is Google un-American?

Posted by Kristi Heim at 1:09 PM

So most of the searching done on the Internet is not in North America, as pointed out in the previous post. More people in Asia and Europe are searching the Web than people here, and guess what their favorite tool is? Google.

But hey, don't get any wild ideas, you UN-supporting, Rick Steves guidebook-toting left-coasters. Google's main office is on American soil. And now they've taken to dressing up their logo with pictures of a Soviet satellite. Ungrateful commies!

Watch out, Sergey. Once they find out you were born in Moscow, they might just try to send you back.

UPDATE: Well, today the folks at Google have for replaced the "l" with a sketch of the late Luciano Pavarotti, who was born on this day in 1935. Wait, wasn't he Italian?

Google search more dominant globally

Posted by Benjamin J. Romano at 10:14 AM

ComScore today released its first report on global search market share, showing Google's lead worldwide is even bigger than in the United States.

Most of the widely reported Internet search metrics measure just the U.S. or North American markets. As the comScore report indicates, that misses the majority of the world's Internet searches. Broken down by region, the Asia-Pacific region in August had the most searchers (258 million) and searches (20.3 billion), followed by Europe, North America, Latin America and the Middle East-Africa. Latin Americans conducted the most searches per capita (95).

Worldwide, the comScore report found "that more than 750 million people age 15 and older -- or 95 percent of the worldwide Internet audience -- conducted 61 billion searches worldwide in August, an average of more than 80 searches per searcher."

Google sites -- mainly the company's search engine and video site YouTube -- were responsible for about 37.1 billion of the August searches, 60.8 percent. During the same month, Google sites had 56.5 percent of the U.S. search market.

Yahoo sites had 14 percent. Chinese-language search engine was third globally with 5.3 percent.

Microsoft sites came in fourth with 3.5 percent. The company is struggling to improve its search share with a series of improvements to be released gradually this month.

October 9, 2007

Fake Steve Jobs to speak on real Microsoft campus

Posted by Benjamin J. Romano at 2:21 PM

Forbes technology editor Dan Lyons, who for the last year and a half has anonymously penned the must-read tech blog "The Secret Diary of Steve Jobs," will be making an appearance at Microsoft later this month in support of his new real fake book, "oPtion$: The Secret Life of Steve Jobs, a Parody."

According to this post, Lyons' publisher set up the stop in Redmond, scheduled for Oct. 23 at 1 p.m. It's likely a Microsoft-only event, as the post suggests. Microsoft regularly invites notable personalities, writers and experts onto its campus for the benefit of its workers.

Lyons' identity was revealed by New York Times reporter Brad Stone in early August.

Nobel Prize for Medicine likely to stir some debate.

Posted by Angel Gonzalez at 10:22 AM

This year's Nobel Prize for Medicine was awarded to three scientists who figured out how to target gene mutations in mice by using embryonic stem cells. Those three elements - gene therapy, embryonic stem cells, and the use of animals in laboratory experiments - are among the most controversial topics in research today.

The laureates were Mario Carpecchi, of the University of Utah; Martin Evans, of Cardiff University, in Wales; and Oliver Smithies, of University of North Carolina-Chapel Hill. Their discoveries led to the creation of a "knockout mouse", so called because individual genes could be knocked out to determine their function. "Such gene 'knockout' experiments have elucidated the roles of numerous genes in embyronic development, adult physiology, aging and disease," said a Nobel Foundation press release.

The award is likely to stir some debate among scientists and observers. Gene therapy testing in humans has so far failed to produce an effective therapy and has caused the death of at least one person, 19-year old Jesse Gelsinger, who died at a University of Pennsylvania trial in 1999. An Illinois woman, Jolee Mohr, died in July during a gene therapy clinical trial sponsored by Seattle-based Targeted Genetics, but whether the experimental drug contributed or not to the death is still to be determined (the company, and many gene therapy experts, believe it did not.) It may be a coincidence, but Targeted Genetics - which designs therapies based on targeted gene mutation or replacement - has seen its stock rise 7.29 percent to $2.06 in the wake of the Nobel announcement.

The use of human embryonic stem cells, which can become any type of cell, they sit in the midst of a heated political debate in the U.S., where the government currently opposes the use of federal funds in any research that could harm human embryos.

As for mice, many oppose the use of the little rodents in research. But the Nobel emboldened those who support experimenting on mice.
"Now would be a good time for animal rights leaders to step away from their opposition to animal studies and demonstrate support for humane and responsible research that benefits both people and animals," said Jacquie Calnan, president of Americans for Medical Progress, an organization that supports biomedical research, in a statement.

October 8, 2007

Toyota advergame on Xbox Live to promote Yaris

Posted by Benjamin J. Romano at 3:28 PM

People on Microsoft's Xbox Live gaming service can download a free game that's actually an advertisement for a car. The game, Yaris, debuted today, according to this New York Times story. It's the first free advergame to be distributed over Xbox Live Arcade, the story says.

The Times' coverage goes over the other advergames that Microsoft's Xbox team has been involved in, most notably the ones promoting Burger King, which were sold with burgers and fries, only at Burger King restaurants. Microsoft Entertainment and Devices Division President Robbie Bach told an audience earlier this year that he wasn't expecting the success of the Burger King promotion.

"If you had asked me a year ago, 'Gosh, you're going to do a promotion with the Burger King on Xbox Live Arcade and it's going to generate headlines in the business press about how we lifted Burger King's sales,' I would have been truly surprised," Bach said at Microsoft's Mix conference in May. "... It had a demonstrable impact on their financial results."

More companies are jumping on the video game advertising bandwagon, as the Yaris example illustrates. There are several different flavors of video game advertising, and Microsoft is wading deeper into all of them. Check out this story on the workings of Massive, the in-game advertising network Microsoft acquired.

Sony, too, is moving on its own into in-game advertising, according to this story from

Microsoft appoints chief operating officer for China

Posted by Benjamin J. Romano at 10:15 AM

Microsoft tapped a long-serving sales executive for the newly-created position of chief operating officer for the Greater China Region.

Eugenio Beaufrand has been with the company for 23 years, according to his bio, serving most recently as vice president of Microsoft Latin America.

He will oversee sales, marketing and services operations in the China market, reporting to Ya-Qin Zhang, corporate vice president and acting CEO for Microsoft Greater China Region.

Zhang is filling the role vacated when Tim Chen was lured away from Microsoft by the National Basketball Association.

October 5, 2007

Caipirinha vs. fuel

Posted by Angel Gonzalez at 5:06 PM

In Brazil, the world's top producer of sugar cane and cane-derived alcohol, people "drink the best and drive the rest," says Roberto Giannetti da Fonseca, an official with Sao Paulo State's Federation of Industries. What Brazilians don't put into caipirinhas fuels the world's most advanced ethanol economy -- a lead the U.S. has tried to follow in recent years.

Da Fonseca's trade delegation met with Seattle officials and businesspeople Friday to share Brazil's experience with alternative fuels. Da Fonseca lambasted the heavy tariffs that the U.S. imposes on foreign ethanol (54 cents per gallon) and said that corn -- the staple of the domestic ethanol industry -- "is not a feasible fuel" because it's too energy-inefficient and disrupts food prices. Kicking open the door to cheap, imported sugar-cane-based ethanol would make alternative fuels easier to adopt, he said.

The domestic ethanol industry is currently being squeezed by high corn prices and an oversupply of the fuel. This phenomenon, some experts say, is an indication that despite the costly efforts to create a local alternative energy industry, the future of the field may lie in Latin America, Africa and south Asia.

"I'm not a big believer in US-produced ethanol," says Michael Cohen, an analyst with San Diego-based Pacific American Securities. "Eventually free markets will go where low-cost production will be -- the tropical nations of the world."

Brazil's own experience with ethanol began in the 1970s, when the military dictatorship ruling the country sought to control the outflow of hard currency caused by the skyrocketing oil prices of that decade. Engineers created ethanol-friendly engines, resistant to the fuel's tendency to corrode metal, but the movement petered out as gasoline became cheap once again in the 1980s and 1990s. In recent years, cheaper ethanol, higher gas prices and better engine technology have made the sector bloom once again: 40 to 45 percent of transportation fuel consumption in Brazil consists of ethanol, and 90 percent of new cars sold have flex-fuel engines, which can use either ethanol or gasoline, said da Fonseca.

But Brazil's recent history may indicate that alternative and fossil fuels are destined to coexist, and that drivers will choose between one and the other depending on availability and price. In the last decade Brazil's national oil company Petrobras discovered significant offshore hydrocarbon reserves that have made the South American giant not only self-sufficient in oil, but also able to export the commodity.

Clearwire's stock sinks on several issues

Posted by Tricia Duryee at 1:32 PM

Clearwire's stock fell $3.23, or nearly 14 percent today, to $20.38, representing the largest drop since the company went public. The decline came after a series of events spooked investors, according to Bloomberg.

Here's some of the factors:

-- Bear Stearns cut its rating on the Kirkland company's stock to "peer perform" from "outperform."

-- Bear Stearns said there may be delays in signing a final agreement with Sprint Nextel to co-build a nationwide WiMax network.

-- Bear Stearns said a delay could mean Clearwire needs to borrow more money.

-- Sprint Nextel is quietly seeking a replacement for CEO Gary Forsee, according to the Wall Street Journal, citing "people familiar with the matter."

-- A major rainstorm with possible winds brewing could knock down its network in Seattle.

OK, I'm kidding about that last one, but a number of things obviously could affect Clearwire's short-term performance.

Following the slide, Sid Parakh, an analyst with McAdams Wright Ragen in Seattle, reaffirmed its $28 price target.

He said concerns about Sprint's turmoil are valid, but in a nutshell, Clearwire is still on track as a standalone company. It is on target to build out networks in its territories on time, and it has sufficient funds to do so at least until sometime in 2008, he said.

"In addition, CLWR has powerful partners in Intel and Motorola that, we speculate, may be open to the idea of added investments in Clearwire," Parakh wrote.

Microsoft parting ways with 'Halo' maker Bungie

Posted by Benjamin J. Romano at 8:02 AM

In the run-up to the launch of "Halo 3," Microsoft Game Studios Head Shane Kim described the game franchise as the "crown jewel" of the company's burgeoning Xbox video game console business.

This morning, Microsoft announced it is parting ways with Bungie, the studio responsible for Halo, which it acquired in 2000.

Microsoft will retain ownership of the "Halo" intellectual property and an equity interest in Bungie, which is becoming independent. "Halo 3" generated more than $300 million in global sales since it was released Sept. 25.

"While we are supporting Bungie's desire to return to its independent roots, we will continue to invest in our 'Halo' entertainment property with Bungie and other partners, such as Peter Jackson, on a new interactive series set in the 'Halo' universe," Kim said in a statement released at 8:01 a.m. today. "We look forward to great success with Bungie as our long-term relationship continues to evolve through 'Halo'-related titles and new IP created by Bungie."

Bungie will remain in its current Kirkland location and will continue developing games with a "primary focus on Microsoft platforms," Harold Ryan, studio head for Bungie, said in a statement. The statement does not rule out the potential of developing games for competing platforms, though it looks like "Halo" will continue to be a Microsoft exclusive.

UPDATE, 9:45 a.m.: More insight into why Bungie wanted to cut the cord from the Bungie Weekly What's Update!, a newsletter posted on The post by Frankie this morning at 8:03 a.m., starts out with this: "Almost Nobody asked, What's all this about Bungie and Microsoft splitting up?" A bit of sarcasm, Frankie? I was hanging around your bunker-like offices yesterday pestering employees about this as they strolled through Peter Kirk Park on the way to lunch.

Anyway, here's what he has to say about this "unprecedented and exciting agreement":

[S]tarting immediately, Bungie will become an independent company and will retain a long-term publishing agreement with Microsoft Game Studios for "Halo" titles. The new structure became effective on Oct. 1, 2007. The official blurb follows, but since you're a valuable part of our community, we thought we'd sum it up simply and concisely.

Bungie has long been built on creativity, originality and the freedom to pursue ideas. Microsoft agreed, and rather than stifle our imagination, they decided it was in both our best interests to unleash it. We'll continue to make Xbox 360 games, and we'll continue to make amazing games for MGS. In that regard, nothing has changed. All that has changed is that now Bungie Studios is once again, the property of the folks of Bungie Studios. Microsoft is and will continue to be, a brilliant, inventive and creatively collaborative publishing partner. Practically speaking, nothing has changed and you guys won't see much, if any difference, for a while unless you come to work for us, that is -- we're hiring at

October 4, 2007

Gates rediscovers Lovin' Spoonful on Zune

Posted by Benjamin J. Romano at 3:08 PM

Byron Acohido, who won a Pulitzer Prize in 1996 while at The Seattle Times and now reports for USAToday, elicited one of the most lively responses we've seen from Bill Gates in a while. Here's the excerpt from his Q&A with the Microsoft chairman.

Q: What's the coolest thing about the upgraded Zune?

A: Look at this thing! (Holds up a Zune 8) Three or four years ago there was nothing like this. This is cool as heck. I'm finding music I haven't seen in 20 years. Hey, the Lovin' Spoonful? They're in this thing. I find one of their songs. I send it to friends I had an apartment with, it was actually 30 years ago. I can send it out to them and say, "Remember when we listened to this?" It's amazing.

To take a trip on the way-back machine with Bill, here's a link to MP3s of the Spoonful's greatest hits.

In CBS' New Drama, Ethanol Makes Prime Time

Posted by Angel Gonzalez at 2:35 PM

Trading Southfork's oil tycoons for South Florida sugar cane barons, CBS' new family saga "Cane" could be a "Dallas" for the alternative energy era.

The show, which first aired late last month, portrays the travails of a Cuban-American family empire in the midst of a major decision: whether to concentrate on its lucrative rum brand, or to jump on the ethanol bandwagon. (Sugar-cane ethanol, according to energy experts, is more energy efficient than its Corn Belt cousin.)

The family patriarch Pancho Duque (Hector Elizondo), who built the family's fortune after fleeing the communist revolution in Cuba, handed over the reins to son-in-law Alex Vega, for whom the future is green (not only with dollars.)

"Sugar is the new oil: today you're putting it in your coffee, tomorrow we're going to be driving our cars with it," Alex (played by Jimmy Smits) tells the family.

But his enthusiasm fuels a family feud. His brother-in-law Frank Duque (Nestor Carbonell), unhappy at being passed over in the family succession, retorts: "You think you can become the Saudi Prince of ethanol, man... you're really a piece of work."

The alternative energy touch comes on top of other big dramatic elements: a ruthless rival family (the Samuels), the steamy Miami night life (which frankly, beats that of suburban D-FW) and even the complexity of Cuban exile politics.

In the series' trailer, Vega-Smits says that "Cuban sugar is going to become the world's fuel" -- a wistful reminder of the economic revival many exiles expect in their homeland once the Castro brothers go away. But after decades of decay, the Cuban sugar industry lies in ruins while Brazil reigns as the topmost producer of sugar-cane ethanol. The success of Vega's plans also depends on the U.S. being willing to lower its heavy tariffs on imported ethanol.

Mobile content makers are not users

Posted by Tricia Duryee at 11:02 AM

Mobile executives admitted recently that although they develop TV, games and other content for mobile phones, they don't find themselves personally indulging in the technology.

The rare survey offered a glimpse at perhaps what executives think about their own products. The poll was conducted at McGollywood, a recent conference in London. BuzzCity, a company developing wireless communities, conducted the survey and revealed the results today.

Results show that 54 percent of the 50 attendees surveyed do not use the mobile content that they are marketing.

Here's some other findings:

-- 72 percent believe that mobile social networking services are in their infancy and will likely be an extension of existing PC-oriented sites, such as Facebook.

-- The mobile Internet was the most used item among attendees, with 56 percent saying they used it on a daily basis.

-- Mobile TV and music downloads were among the highest in the never used category.

-- 38.8 percent of respondents believed that mobile advertising was the most likely source of revenue generation over the next three years.

Windows Mobile embraces the Blackberry

Posted by Tricia Duryee at 10:38 AM

You probably thought it would never happen, but it did: a Windows Mobile phone is coming with full Blackberry e-mail support.

Aside from an occasional rumor that Microsoft is going to buy RIM, I don't think there have even been hints that Microsoft and the Canadian company may work together.

According to PC Magazine, AT&T announced the Tilt, a Windows Mobile phone designed by HTC, is the first Windows Mobile device to come loaded with the Blackberry Connect software, which allows a user to have a Blackberry-like experience on the device.

It reported that the Tilt will cost $299.99 with a two-year contract, starting Friday, which ends up being a pretty reasonable price since it comes with a 3-megapixel camera, GPS, Wi-Fi, and access to the fastest AT&T network.

Microsoft Vault to store personal health records

Posted by Benjamin J. Romano at 9:54 AM

Microsoft executives have long talked about their plans to push technology further into the health care field, both at the lab bench and the bedside. The company made some first steps with a couple of recent acquisitions and today, it's launching a new "software plus services" combination designed to help people compile personal health data and share it with doctors.

HealthVault, as the company is branding this effort (the first of many ways it is emphasizing privacy), allows users to create an account online that will store data such as medical history, health plan information, prescriptions, images, cholesterol and blood pressure readings. The data can be entered by the patient or by a medical provider authorized by the patient.

Still in testing, the service is free. Security and identity are verified using Windows Live ID, the same sign-on protocol used for accessing the company's Web-based email and instant messaging services.

Underlying the end-user application is a platform -- this is Microsoft, after all -- to connect all of the various sources and outlets for medical data. The company is releasing a software developer kit for medical device makers and others who want to build applications based on HealthVault.

Another element is a new HealthVault Search service, based on MedStory, which Microsoft acquired in February. Health is one of the four areas Microsoft is emphasizing with its refreshed Live Search service. The HealthVault Search returns results from authoritative sources, which can be stored in a HealthVault account. Search is one way Microsoft plans to monetize the overall HealthVault effort.

The first question everyone who hears about this has is whether people will be comfortable sharing their most personal information with a big tech company, be it Microsoft, or Google, which also has designs on this business.

To assure users, before creating an account, Microsoft offers these promises:

* The Microsoft HealthVault record you create is controlled by you.

* You decide what information goes into your HealthVault record.

* You decide who can see and use your information,on a case-by-case basis.

* We do not use your health information for commercial purposes unless we ask and you say clearly that we may.

How do you feel about compiling your medical records in one place and trusting Microsoft or Google to handle them?

October 3, 2007

SeaMobile catches big fish

Posted by Tricia Duryee at 11:22 AM

Seattle-based SeaMobile Enterprises, which provides cellphone and other services to cruise ships and other vessels at sea, said today that it won two major contracts with the National Oceanographic and Atmospheric Administration.

SeaMobile said in a release that it has signed a three-year contract to provide satellite services to the entire fleet of NOAA ships around the world as they conduct environmental research and provide expert information on weather data, forecasts, warnings and climate change.

In addition, it was awarded the integration, installation, operations and maintenance of a "terminal system," capable of HDTV and high-speed data transmissions, for Okeanos Explorer, the new NOAA ship.

Under the contracts, SeaMobile will provide 21 ships with voice and data access while the ships are at sea. It will provide broadband connectivity between the ships and the NOAA headquarters, and NOAA scientists will be able to conduct voice calls, large data transfers and video conferencing while operating in the northern Alaska, Pacific and Atlantic Ocean regions.

The announcement substantially increases SeaMobile's relationship with NOAA. Previously, it served nine NOAA ships on a month-to-month basis. The new contract covers all ships under a long-term commitment.

SeaMobile is backed by Bellevue-based Ignition Partners, which helped SeaMobile acquire MTN Communications for $168 million in May 2006.

USDA downplays ethanol's effect on food prices

Posted by Angel Gonzalez at 10:54 AM

Corn-based ethanol is not the main culprit of rising food prices, according to U.S. Department of Agriculture acting Secretary Chuck Conner.

While the rush to make the alternative fuel a staple of U.S. automobile diet has certainly contributed to the increase, most of the blame lies with high oil prices, bad weather, and an ever hungrier China, the official said, according to this Associated Press story.

The White House and agri-business have been pushing vegetable-based fuels as an environmentally friendly and geopolitically secure alternative to pricey, foreign fossil fuels. But corn-based ethanol -- production of which has skyrocketed in recent years -- has raised its own controversy.

Opponents criticize the fuel for being less energy-efficient than other alternatives, such as sugar-cane ethanol and for driving food prices up across the globe. Proponents say that it's greener than most alternatives, and it provides a needed boost to domestic farmers. Ethanol producers' profits, however, are currently being squeezed by a drop in the price of the fuel even as corn prices remain high.

October 2, 2007

Second Life is a thirsty existence

Posted by Tricia Duryee at 12:26 PM

Sometimes I'm sure you wonder if we make this stuff up.

But I seriously got a press release today announcing that Evian spring water is available in the Internet-based world "Second Life."

In case you don't already know, Second Life is this hugely popular alter-ego existence "inhabited" by almost 8 million people around the world.

And get this: Those people "will now delight in the virtual health and beauty benefits of the world's leading brand of bottled water."

That is virtually, not literally.

Within Second Life, people will find Evian vending machines. When a person approaches the machine, a pop-up message "will appear offering to give one's skin a second life."

I'm not sure what that means, but the release goes on to say that a resident who accepts the proposal will be offered a bottle of Evian Natural Spring Water and a skin, which leads to a total transformation -- the character becomes more defined, has better texture and is lit up in a more flattering way.

"Evian has always had its hand on the pulse of what's hot. With build-it-yourself virtual worlds, fantasy lands and video games increasing in popularity, we felt that Second Life was a fitting platform for Evian to make its virtual debut," said Jeff Caswell of Evian North America. "Everyone should be able to experience the many benefits that Evian has to offer whether they're in the real world or the virtual world."

In the real world, Evian notes that these transformations are not possible after drinking Evian, but promoting wellness and a healthy lifestyle is its 2007 advertising theme. Its tagline is "The most important body of water is your own. Fill with care."

Getty adds a soundtrack to its business

Posted by Tricia Duryee at 10:03 AM

Getty Images announced Monday that it has launched Soundtrack, a new music licensing service.

The Seattle company has been trying to expand its services while maintaining its its photo-imaging business. New entrants entering the business are posing a threat. I wrote a story recently about how the company laid off 100 employees to accomplish its financial goals.

The music service, available at, was developed by Getty's recent acquisition of Pump Audio. It has more than 20,000 original tracks by independent artists and bands for use in broadcast and film production, advertising and other media projects.

Jonathan Klein, CEO and co-founder of Getty Images said:

"Our customers represent a variety of industries and they want quick and easy access to digital media -- imagery, footage and music -- that can be used in a myriad of ways. When we acquired Pump Audio in June, we made a commitment to develop dynamic and nimble new music platforms and tools which meet the growing content needs of our customers. The launch of Soundtrack is just the beginning of that strategy."

If this is just the beginning of its strategy, I guess we can expect more announcements to come. Stay tuned.

October 1, 2007

Microsoft Online and Live "cloud" services: Differences and similarities

Posted by Benjamin J. Romano at 2:05 PM

A reader wrote in today to ask how the new Microsoft Online services for businesses, described in a story today, are different from the cloud services Microsoft is working on.

"Cloud services" refers broadly to the "services" part of Microsoft's "software plus services" strategy. (And yes, I find this stuff a bit confusing, too.) Until now, these have mostly been focused on consumers and small businesses.

The biggest differences with the new business-focused services, I would say, is the specific software functions they will augment or replace, and the end users Microsoft has in mind -- namely business decision makers, IT professionals and what the company refers to as information workers.

So, for example, Microsoft Exchange Online will basically allow Acme Corp. (a large company with 5,000 or more Exchange users) to outsource its corporate e-mail system to Microsoft. Microsoft says Exchange Online will function just like an on-premise instance of the software, but instead of Acme investing in its own servers, server software and IT staff to deploy and manage Exchange, the company would instead pay a regular per-user subscription fee to Microsoft. Microsoft would run Exchange on its servers, in its data centers, and deliver the functionality to the Acme via the Web.

The consumer-focused services are different. If you're using Windows Live Hotmail, for example, you're getting e-mail as a service, funded by the advertising you see whenever you log on. Xbox Live is a little bit different in that you pay a subscription to be a member of the network and play games with your friends.

But what's most interesting about the "software plus services" strategy are the similarities rather than the differences between the various services.

As I said, the services differ in function and end-user. But the underlying cloud infrastructure they rely on -- the servers, data centers, load-balancing and management software, security and identity software shared by many Live services, and technical expertise to keep them running -- is shared by them all. Microsoft hopes to benefit from this economy of scale.

"We're taking a platform approach to services, giving each of our products the common benefits of cost, speed, scale and monetization that a platform approach offers," Microsoft Chief Software Architect Ray Ozzie said at the company's Financial Analyst Meeting in July. "... This platform will ultimately be used by and will benefit all of the audiences that we at Microsoft serve."

Here's a transcript of Ozzie's remarks. And here's a story I did in August explaining the cloud infrastructure in some detail.

Tricia Duryee
Tricia Duryee

Angel Gonzalez
Angel Gonzalez

Kristi Heim
Kristi Heim

Benjamin J. Romano
Benjamin J. Romano

Mark Watanabe