ACT - Protecting Small Business Innovation

Steve Jurvetson and the search for disruption

CNetNews.com has a great interview on “the constant search for disruption” with Steve Jurvetson, managing director of venture capital firm Draper Fisher Jurvetson in Menlo Park, California.

AP reports that “Google Inc.'s top executives expressed hope Thursday that the Internet search leader will be able to form a potentially lucrative advertising partnership with Yahoo Inc. — a deal that would lower the odds of Microsoft Corp. renewing its attempts to buy Yahoo.”

According to Wired, “[l]ocal governments in California and the United States have long had the power to declare property a public nuisance when their owners allow their land to become denizens of drugs, gangs, prostitution and gambling.  The Los Angeles County Board of Supervisors, following New York's lead, is adding a new category: music and video piracy.  In an ordinance just adopted, the five-member board is declaring that piracy "substantially interferes with the interest of the public in the quality of life and community peace, lawful commerce in the county, property values, and is detrimental to the public health, safety, and welfare of the county's citizens, its businesses and its visitors."

The Mercury News writes that “Social-networking giant Facebook, which has faced political pressure to increase online safety, is putting in place 40 safeguards to protect young people from sexual predators and cyberbullies, the Palo Alto company announced Thursday.  The procedures, part of an agreement with attorneys general from 49 states, include age and identification tools and automatic warning messages when a child is in danger of giving personal information to an unknown adult. Facebook, which has 70 million online users, followed the steps of MySpace, which agreed in January to implement similar safeguards
 
ZDNet News asks whether Wall Street has too much sway over the tech sector.

Kauffman Foundation releases study on entrepreneurship

Inc.com points its readers to an interesting Kauffman Foundation study on entrepreneurship.  The publication writes that “[a]mong more than 500 U.S. technology firms recently analyzed by [Kauffman], a Kansas City, Mo.-based entrepreneurship advocacy group, twice as many founders were in their 50s than in their 20s. The average age of a company founder was 39.  The study also found that more than 90 percent had bachelor's degrees, while slightly less than a third had master's degrees. Nearly half studied science, technology, engineering or mathematics, while only a third majored in business or related fields. Those who attended an ivy-league school had higher sales, with an annual average of $6.7 million, compared to $5.7 million among the overall sample.”

The Register reports that “[h]undreds of thousands of examples of a new Trojan that poses as a media file have flooded onto P2P networks.  Since Friday 2 May more than half a million instances of the Trojan have been detected on consumer PCs, according to net security firm McAfee. The anti-virus firm reports the spread of the Downloader-UA.h Trojan as the most significant malware outbreak in the last three years.  The Trojan is being used to serve ads onto contaminated PCs as part of an apparent money-making scam.”

According to the International Herald Tribune, “Microsoft will sell television shows on the Zune Marketplace, bringing its selection of content for the digital media player a step closer to what the iTunes site from Apple offers for the iPod.  Microsoft also said Tuesday that it planned to provide software updates that add new features to Zune devices and to the PC software used to buy and manage digital content.  Microsoft ventured into downloadable video sales for the Zune in October when it released its second-generation players and software, but the content was limited to music videos.  As of Tuesday, Microsoft was selling episodes of TV shows, including Comedy Central's ‘South Park’ and Sci-Fi Channel's ‘Battlestar Galactica,’ for $1.99 each.”

Silicon Valley Watcher’s Tom Foremski reveals that “Elliot Schrage, head of Google's corporate communications team, has left the building. He has joined Facebook. This is one of the most significant departures from Google even though there has been a long string of them. I say that because if the minister of propaganda doesn't believe the message then something must be going wrong inside Google [BTW my Goebbels reference is completely inappropriate.]”

CNetNews.com writes that “[a] Republican congressman who has sponsored legislation banning access to social-networking Web sites in schools and libraries has found a new target of displeasure: Second Life.  Rep. Mark Kirk, who is seeking re-election this year, staged a press conference at a library in his suburban Chicago district on Tuesday to highlight what he called the ‘dangers’ of the virtual world to children. Flanked by local officials, he also released a letter asking Federal Trade Commission Chairman William E. Kovacic to ‘take action to warn parents of the similar dangers and sexually explicit content found on Second Life.’”

LinkedIn hopes VCs will call

CNetNews.com writes that “[o]n Monday, reports surfaced that business social network LinkedIn is likely looking to raise a round of venture capital (rather than find a corporate parent).  TechCrunch reports that investment bank Allen & Co. is hoping to help LinkedIn pull in that funding at a $1 billion valuation.  Spearheading the campaign is Dave Wehner, managing director of the Bay Area bank, who was reportedly a big part of Bebo's $850 million sale to AOL.”

AFP reports that “Microsoft founder and chairman Bill Gates has unveiled a plan to invest 147 million dollars in South Korea over five years to strengthen his company's presence here, officials said Tuesday.  Gates promised to invest the sum in the auto, education and other fields during talks with President Lee Myung-Bak, the president's office said in a statement.  He also said Microsoft would strengthen its partnership with South Korea's government and enterprises, describing South Korea as a crucial business partner, it said.”

According to the Los Angeles Times, “New York Attorney General Andrew Cuomo on Monday announced the latest effort to stiffen New York's anti-film-piracy laws.  In a news conference attended by actress Tina Fey, NBC Universal President Jeff Zucker and Dan Glickman, chief executive of the Motion Picture Assn. of America, Cuomo said 50% of all illegally recorded movies are pirated in New York, costing the state millions of dollars and thousands of jobs.”

In a different article, the Los Angeles Times points out that “[i]n the now-suspended takeover fight between software titan Microsoft Corp. and Internet poster child Yahoo Inc., the winner was a heckler in the audience.  The combined companies could have created a formidable challenger to Google Inc., but the Web search king helped scuttle the deal by complaining about the potential effect on competition and by tossing Yahoo a lifeline in the form of an advertising partnership.”

Inc.com reveals that “with inflation surging in China and the weak dollar, Chinese companies are now looking to America as a place where it is affordable and desirable to set up production facilities.”   

What is the cyber-security Manhattan project?

According to Wired, “[t]he government's new cyber-security ‘Manhattan Project’ is so secretive that a key Senate oversight panel has been reduced to writing a letter to beg for answers to the most basic questions, such as what's going on, what's the point and what about privacy laws.  The Senate Homeland Security committee wants to know, for example, what is the goal of Homeland Security's new National Cyber Security Center. They also want to know why it is that in March, DHS announced that Silicon Valley evangelist and security novice Rod Beckstrom would direct the center, when up to that point DHS said the mere existence of the center was classified.”

PCWorld.com writes that “Google played a significant part in the undoing of Microsoft's bid for Yahoo, the latest example of Google's ability to interfere with Microsoft's attempts to boost its online advertising business.  While the main reason Microsoft dropped its bid was a disagreement over price, Google served as the ammunition that Yahoo needed to discourage Microsoft from launching a hostile takeover.”

In more Microsoft / Yahoo news, Reuters reports that “Yahoo Inc's shares tumbled as much as 20 percent on Monday after Microsoft Corp withdrew its $47.5 billion takeover offer, wiping about $7.6 billion off the Internet company's market capitalization and piling pressure on its leadership.”

The Wall Street Journal reveals that “[a]s concerns mount that the slowing economy may hurt the online-ad market, Silicon Valley Web start-ups are developing new approaches. Companies such as online-software venture Slide and video and social-networking site Bebo are trying to run ads that appeal to a younger audience -- one that often turns up its nose at old-fashioned online ads, such as traditional ‘banners’ trying to promote brands.  […]  Some efforts show early signs of working. Slide, which sells programs that people can use to decorate their pages on sites such as Facebook, has launched campaigns with advertisers including Energy Brands' Glaceau Vitaminwater and Estée Lauder.  One campaign lets Slide users send virtual representations of different-flavored bottles of Vitaminwater to friends online through an application called ‘Top Friends.’  In eight days, Slide says, users sent 10 million ‘bottles’ of Vitaminwater.”

Computerworld today has an interesting article on “backscatter -- bounceback messages from legitimate e-mail servers that have been fooled by the spammers. “

The fourth decade of spam begins on Saturday

AFP points out that “[t]his week, the world will mark an anniversary that has changed the face -- and other anatomical regions -- of email inboxes everywhere: the first known spam email was sent 30 years ago on Saturday.  But the message sent on May 3, 1978 by a marketer for the now defunct DEC computer company to around 400 people on the west coast of the United States wasn't called spam, and the sender dispatched it without ill intent.  But the message sent on May 3, 1978 by a marketer for the now defunct DEC computer company to around 400 people on the west coast of the United States wasn't called spam, and the sender dispatched it without ill intent.  How things have changed.”

The Washington Post reveals that “America's spy agencies for the first time would be tasked with gathering intelligence on threats to the nation's computer networks under a policy that could be detailed by the White House as early as next week, a senior administration official said Wednesday.  Speaking at a security conference in Washington, the official said the Bush administration wants to harness the intelligence community's offensive capabilities in defense of government and civilian computer systems.  ‘We've never looked at how all the unique things this government wages against others could be used to inform our defensive posture,’ said the official, who asked not to be named because the White House has not yet released details about the plan.  ‘We really need to move from [the reality that] the advantage is always with the attacker to how we can have our offense better inform our defense to shrink that gap.’”

PCMag.com asks whether the tech industry is “recession-proof.”

CNetNews.com reports that, “[a]s expected, Amazon.com is hitting back at New York over a new law requiring online retailers to collect sales taxes from customers residing in that state.  In a complaint filed on April 25, Amazon asked the New York State Supreme Court to declare the recently passed law ‘invalid, illegal, and unconstitutional.’ (Wired.com, which reported the lawsuit earlier this week, has posted a PDF of the document.)  New York has long required vendors to collect taxes from customers in its state if they ‘solicit business’ there, according to Amazon's complaint. But a few weeks ago, the state passed a new law, as part of its state budget, that expanded the meaning of ‘solicit’ to include any company that pays New York-based entities for ‘directly or indirectly referring customers’ to its retail business, or risk ‘hefty civil and criminal penalties,’ Amazon wrote in its complaint.”

Internetnews.com today has an article discussing “the great question of the day for internet entrepreneurs”:  where’s the money in user-generated content?

Comes With Virus

CNet News has an interesting article by Ina Fried today in which Fried details her experience with buying a “recertified” iPod from Buy.com which turned out to have a virus.

Reuters writes that “[o]ffering unlimited music downloads to phone buyers will make money for Nokia as well as record labels, the handset maker said, dismissing talk the move would come at the expense of profits.  ‘We expect to make money both from our traditional device sales, as well as from the Comes With Music service,’ said Liz Schimel, head of Nokia's music business.  ‘I can assure you that we are looking out for everyone's interests in creating these new business models, including our own.’”

According to the Register, “Radiohead frontman Thom Yorke has said the band will not be repeating its In Rainbows experiment which allowed fans to download the album at a price of their choice - allegedly nothing, in most cases.  Speaking to the Hollywood Reporter, Yorke said:  ‘I think it was a one-off response to a particular situation. Yes. It was a one-off in terms of a story. It was one of those things where we were in the position of everyone asking us what we were going to do. I don't think it would have the same significance now anyway, if we chose to give something away again. It was a moment in time.’  A subsequent traditional release of In Rainbows saw it top the UK and US album charts, supporting Yorke's opinion that fans want a physical ‘object.’  In January, he dismissed the idea of net-only releases as ‘stark raving mad.’”

Internetnews.com has an interesting article on the Palo Alto Research Center (PARC), which since it was spun off from Xerox in 2002 has been “dedicated not just to dreaming up new technologies but with a much clearer plan about bringing them to market.  For starters, if Xerox doesn't want it then PARC will find a partner that will help it productize the invention.”  This, PARC hopes, will prevent it from making the GUI mistake all over again.

In a different article, Internetnews.com reports that, according to Juniper Research, “[f]ive years from now search will be a key application for one third of the globe's mobile device users.  Of the expected 4.2 billion owners of mobile devices expected by 2013, roughly 1.3 billion will depend on mobile device searches to find and locate "local" digital information. Most searches will happen in North America and Western Europe as the countries boast good local digital information suppliers (think yellow and white pages) as well as mapping data with good coverage of points of interest, according to the report.  The trend bodes well for Web search firms. For advertising boutiques and marketers looking for signs of the mobile search market's growth, the report could be manna. Of course, all these growth expectations are built on a good user experience, the firm noted.”

Will the real innovations please stand up?

The Silicon Valley Watcher has an interesting post today entitled “Incremental Is Not Innovative:  Where Is The Next Big Thing?”  The post’s author, Tom Foremski, alleges that at present “there is a lot of money flowing into companies that only offer incremental improvements over what is already available.”  According to Jeff Nolan, an ex-VC writing on SandHill.com, “the situation may leave the technology industry in another downward spiral if none of the ‘incremental’ ventures hit it big and no other genuine innovation appears soon.”

The Sidney Morning Herald reports that “Australia's biggest musical acts are crying poor in a new documentary that seeks to discourage people from obtaining music illegally and change the public's perception that they live a high life of riches and glamour.  […]  Most of the artists point to the internet as being a hugely positive force in getting their music to as many people as possible, but there is an underlying fear that, financially, the entire industry is in dire straits.  Figures released by the Australian Recording Industry Association (ARIA) show that physical CD sales dropped 12 per cent last year to $420 million. Legal music downloads were up 43 per cent to $40 million, but the strong growth has not been enough to make up for the rapidly declining CD sales.  ‘The internet has been a godsend and a nightmare for the music industry,’ [musician] Jimmy Barnes says.”

CNetNews.com writes that “Sanford Wallace, the so-called spam king, has often been accused of sending annoying messages that are typically ignored by the recipient. Perhaps he considered a series of court orders as something he could blow off.  If he did, he was wrong. MySpace has won a legal judgment against Wallace after he failed numerous times to turn over documents or even to show up for court, according to records obtained by CNET News.com.  In March of last year, MySpace filed suit against Wallace alleging he launched a phishing scam to fraudulently access MySpace profiles. Wallace was also accused of spamming thousands of MySpace users with unwanted advertisements and luring them to his Web sites.”

The O’Reilly digitalmedia blog today has a useful list of things to remember when you distribute software online.

According to FT.com, “Yahoo is to outsource part of its instant messaging service as the internet company, which is under threat from a Microsoft takeover, focuses on core businesses.  The handling of Yahoo’s Messenger, which allows PC-to-phone and phone-to-PC voice calls, is being taken over by Jajah, a Silicon Valley voice-over-internet-protocol (Voip) specialist.  Yahoo’s instant messaging (IM) service has 93m users worldwide, including 27m in the US, according to comScore, a research firm.  The company added PC-to-PC calling to Messenger three years ago in response to the growing popularity of the Skype Voip service.”

Nokia pays dearly for bundling free music with handsets

The Register reports that “Nokia faces a crippling financial bill for its strategy of bundling free music with handsets, which will give users unlimited song downloads with Nokia phones.  The world's biggest label, Universal Music, joined the ‘Comes With Music’ initiative at launch last December, and Sony BMG joined last week. The Register has learned that Nokia must pay the wholesale per-unit rate for downloads over a certain ceiling - believed to be 35 songs per user.  Two key executives have paid the price, The Register understands. Ed Averdieck, formerly Managing Director of Nokia Music (and former MD of OD2, which Nokia acquired in 2006) left the company earlier this year. The other joint head of Nokia Music at the time CwM was announced, former shooting star Tommi Mustonen, former head of Nokia Multimedia, has been given a ‘punishment that fits the crime,’ insiders say: he has to negotiate the label deals personally.”

SFGate observes that “[w]herever you go on the Web, it seems the riffraff are not far behind.  Consider Facebook, the social network started four years ago for Harvard students that has blossomed into a popular hangout for 70 million users.  Over the last month, some Facebook members have received messages inviting them to download free ring tones or buy male enhancement drugs.  These messages appeared to come from trusted friends, but the links led in one case to an affiliate ad network, Incentaclick, and in other cases to one of several sites offering drugs to improve sexual performance. None of the sites could be contacted for this story.  Other phishing and adware schemes have been reported recently by the TechCrunch blog, Wired.com and several security vendors - Sophos, Fortinet and Cloudmark, which said it's been hired by a top social network that it can't name to improve security and block spam.  The goal of many of these schemes is to collect users' passwords so members' profiles can be used as launch sites for spam delivery and hackers phishing for sensitive information.”

According to the New York Times, “STEVE JOBS, Apple’s chief executive and field general, has Napoleonic dreams of global conquest for his 10-month-old wonder gadget, the iPhone. So it may be fitting that he’s encountering his most serious resistance in a city called Waterloo.  That is where, 70 miles west of Toronto in Ontario, 19 nondescript, low-rise office buildings comprise the headquarters of Research In Motion, maker of the BlackBerry.  R.I.M. is the North American leader in building smartphones, those versatile handsets that operate more like computers than phones. But R.I.M. may have trouble dominating the market’s next phase. Once the exclusive domain of e-mail-obsessed professionals, smartphones are now prized by consumers who want easy access to the Web, digital music and video even more than an omnipresent connection to their in-boxes.”

Internetnews.com has an interesting article today on “disaster prep in the age of Web 2.0.”

In a different article Internetnews.com asks whether it’s right for hackers to fight fire with fire, revealing that “[r]esearchers from the University of Mannheim in Germany and the Institut Eurecom have reverse-infiltrated Storm by deliberately allowing the botnet to infect a series of honeypots, bait computers that were intended to be infected.  Those infected computers then sent out their own payload that had incorrect instructions so the bots on the network did not get the real instructions from the worm's controllers. They documented it in this paper.  It all sounds very Independence Day (no word on whether Jeff Goldblum figured out how to do the hack) but it does raise a legal question: Is it right to fight the hackers using the same dirty tricks they use?”

CFIUS Issues Proposed New Regulations

On April 21, 2008, the Committee on Foreign Investment in the United States (CFIUS) issued proposed regulations governing national security reviews of foreign investments in U.S. businesses.  These new regulations were issued to implement amendments adopted by the Foreign Investment and National Security Act of 2007 (FINSA) to the Exon-Florio Amendment to the Defense Production Act of 1950.  FINSA became effective on October 24, 2007, and the proposed regulations address changes to the law legislated by FINSA and codify certain existing CFIUS administrative practices.

Doing business with bad guys could result in fines, or even jail time, for U.S. companies

DarkReading has an interesting article today which explains why “[n]ew and little-known regulations could mean fines, or even jail time, for [American] companies that do business with bad guys.”  The publication writes: “If you're a security pro, you might be familiar with the U.S. Treasury Department's Office of Foreign Asset Control (OFAC) requirements, which basically require companies to check their customers' identities against a list of known terrorists to prevent them from unwittingly providing products or services to an enemy. Most major credit bureaus check customers and applicants against these lists, so if you're vetting your partners and customers that way, you're probably covered.  However, you may not have heard yet about the Federal Trade Commission's "Red Flag" program, which is designed to warn companies when they are about to do business with identity thieves or money-laundering operations. The Red Flag program, which takes effect Nov. 1, requires enterprises to check their customers and suppliers against databases of known online criminals -- much like what OFAC does with terrorists -- and also carries potential fines and penalties for businesses that don't do their due diligence before making a major transaction.”

The Register reveals that “Scotland Yard has set up a team to monitor social networking websites such as Facebook and YouTube for snippets of intelligence from clueless crooks who brag about their exploits online.  Officers from the Met's newly established Open Source Team surf websites and infiltrate chatrooms, without disclosing their identities, to gain intelligence. It's far removed from the traditional image of coppers, as epitomised by Det Inspector Jack Regan from landmark '70s cop show The Sweeney, grilling their snouts for leads down the pub over a bottle of whisky, but Scotland Yard says the changed approach is appropriate for changed times.”

Computerworld has a good article on the importance of synchronization, pointing out that “[n]ew technologies, such as Phoenix's HyperSpace, Microsoft's Live Mesh, and more, will help users synchronize their data and devices—heck, their digital lives.”

Internetnews.com reports that “massive cyberattack is targeting vulnerable Internet Information Server-based Web pages by redirecting visitors to the site toward one hosting malicious code, and it's growing rapidly.  When Panda Security first noted the infestation, it put the number of infected IIS servers at 282,000. Less than a day later, security firm F-Secure wrote its own blog entry, putting the infestation at over 500,000.  ‘In the old days, you used to think if you went to the dark side of the Internet, you had a chance of being infected,’ said Ryan Sherstobitoff, chief corporate evangelist at Panda Security.  ‘Now, you don't need to go to the bad neighborhoods to get attacked. You can be walking down the good side of the Internet and be infected.’”

BusinessWeek writes that “[t]he term ‘cloud computing’ is being used so promiscuously these days that it’s dizzying. I even ran into a company a few days ago that offers its supply chain software in a hosted model and calls itself a cloud computing company. Yikes! So I decided to try to cut through the marketing fog and see if I could bring some clarity to the matter. Here’s a Socratic I did for BusinessWeek Online. I asked a bunch of the industry’s big thinkers for their take on this, and Marc Andreessen practically wrote a book on the topic for me. He said he’s going to post it on his blog, but I haven’t seen it yet. What do other people think? Is cloud computing the industry’s latest exercise in hype or is there really something new and different going on ri