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Make your iPhone look like the computer it really is

Venture Beat — Sun, 12 Oct 2008 11:52:48 -0700

The iPhone can run a lot of applications. Some of them are simple, some, like several of the games, are complex. Whether you think of it as such or not, the iPhone is a computer. Soon, it can be made to look more like a traditional one.

A company named Olo Computer has a new product coming soon that is basically a netbook (a small laptop) with a built-in dock for the iPhone. The dock, which resides where a trackpad would be on a regular laptop, apparently allows you to run what is on your iPhone on the netbook’s larger screen. With its small camera above the screen, keyboard with small spaces in between the keys and pure white case Olo’s device even looks like a MacBook (at least until the new ones come out on Tuesday).

But the picture of the device on Olo’s site is deceiving. The image on the screen shows the computer running Apple’s OS X operating system — the real version, not the version that runs on the iPhone, as iTWire points out. So unless Olo is planning to install OS X on its systems (which Apple doesn’t allow), there is no way the netbook could pull information from the iPhone to run full OS X.

It’s not really clear what the Olo system will be able to pull from the iPhone. If it can completely recreate the iPhone user experience on a larger screen while you use the iPhone’s touchscreen itself to control everything, that would be pretty cool. But how would the system know to use the full-sized keyboard of the device rather than the iPhone’s keyboard if you’re using that to control other aspects on screen?

It would seem that Olo will have some kind of customized application for the iPhone to handle the transition to the netbook screen, but would Apple allow such an application in its App Store? Maybe, or maybe not. Apple has come under fire for rejecting some applications that compete with its own apps. Apple also might not like one that changes the way the iPhone is used.

If it works, such a device could be very useful — especially for heavy travelers. Or it could be another Palm Foleo — a similar device for Palm that was cancelled shortly after it was introduced in 2007.

Reader poll: How long will the stock market continue to decline?

Venture Beat — Sun, 12 Oct 2008 09:25:16 -0700

Executives and other expects are starting to make projections about how long the stock market will be down. Our latest reader poll asks what you think about this. We also ask in a second poll how long will the downturn last for tech companies. Please cast your vote.

How long will the stock market continue to decline? | BuzzDash polls

How long will a tech downturn last? | BuzzDash polls

Don't Shoot The Messenger

Fred Wilson — Sat, 11 Oct 2008 08:10:09 -0700

I've detected a bit of irritation, and even cynicism about the motives of Sequoia, Benchmark, Ron Conway, and others (including me perhaps) in the venture capital business who have been publicly and privately advising their portfolio companies and entrepreneurs everywhere to be cautious in light of the market meltdown and the potential for a long recession.

Kara Swisher titled her post last week "Irony Alert: Bubble-Making Venture Capitalists Start Popping Them" and started it off by saying:

Is it just me or does the sudden prospect of venture capitalists–the
very investors who fueled the Web 2.0 valuation insanity with their
typically egregious overfunding of start-ups–lecturing about the bleak economy and the need to tighten belts seem just a tad ironic?

Bernard Lunn from Read Write Web posted this comment on my blog a few days ago:

Fred, this is one of the rare times that I disagree with you. Cannot argue with Sequoia’s track record. Their advice is good. Of course companies should keep their costs as low as possible. That has been the obvious for centuries. So last week the advice was “spend like drunken sailors?”. Seriously, this kind of boom one day, gloom the next reminds me of the crazy behavior that got us into this mess. My beef is with this suddenly flurry of VC advice way late in the game of advising their portfolio companies that the economic cycle has turned bad. That was obvious a year ago. Two years ago it was probable. The VCs that I know knew that. Why the sudden flurry of advice after an obvious meltdown? Better than still being in denial I guess.
I know this is bad form, but we have been giving measured advice on the changes in the economic cycle on ReadWriteWeb for over a year now. Entrepreneurs/managers need time to execute these kind of changes, so a bit of thinking ahead of the curve is what they expect from their financial advisors.
Clever slides, great perspective, good data, good data but a year late IMHO.
Bernard

Even some other VCs are commenting on Sequoia's presentation. Alan Patricof is quoted in The Deal saying:

The comments made by the partners of Sequoia Capital at their recently
held 'CEO Summit' have been widely covered by leaks to numerous
bloggers. These bloggers have disseminated the details and spread the
contagion of the sentiments to the public at large, unfortunately
running the risk that the words become a self-fulfilling prophesy.
Without challenging the comments, which expressed a heightened degree
of doom and gloom for the economic prospects of young start-up
companies particularly, I do think it calls for a somewhat more
restrained response on the outlook and required action before throwing
the baby out with the bath water.

Alan's comments are actually very good and I agree with almost everything he says. But I think everyone is shooting the messenger (ie Sequoia and to a lesser extent the other Silicon Valley VCs) who are raising the caution flag.

To Kara and others' assertions that it was Sequoia who fanned the flames of the bubble, I call bullshit. I was on a panel with Mike Moritz in the summer of 2007 and he said then:

Adam [Lashinsky] is asking Moritz about frothiness of venture valuations. Still true?

Moritz: Undoubtedly, he says. Best time to invest is when people are
cowering under their desks. Everyone has the strut back in their walk;
everyone is walking tall. Returns paltry for long time, but money keeps
pouring into the area.

Here's the deal. Everyone, including Sequoia, Benchmark, Ron Conway, etc, are still planning on investing in startups. They've been at it a long time and know that VC is a cyclical business. In fact, Moritz understand that the best time to invest "is when people are cowering under their desks".

But we have a responsibility as investors, board members, fiduciaries, and advisors to our companies to tell them what we've seen before, that acting now decisively will make it easier to survive tough times.

This is not some coordinated cynical attempt by VCs to talk down valuations or put entrepreneurs on the defensive. We are not spreading the contagion of gloom and doom. It's all about acting responsibly and making sure we all survive to fight another day. Because in the end, survival is what darwinian capitalism is all about.

How badly could a recession hurt cleantech?

Venture Beat — Fri, 10 Oct 2008 15:23:48 -0700

It’s safe to say that the cleantech investors who pumped tens of billions of dollars into cleantech over the past three years didn’t expect a serious recession any more than anyone else. Yet with one on the horizon, it looks as if heavily funded technologies like wind and solar power could get hit from more than one direction.

The obvious danger is a slowdown in venture funding, as pointed out in a leaked Sequoia Capital presentation and this contributor piece from Advanced Technology Ventures’ Todd Kimmel. Companies without large funding rounds to draw from will struggle to commercialize their products, especially mid-stage cleantech outfits, who need a lot of capital to move from pilot demonstrations to commercial installations.

More broadly, it’s questionable whether even the biggest companies will be able to tap into debt markets for ambitious projects like massive solar power plants in California’s Mojave Desert and San Luis Obispo County. Those look like safe investments that will be able to attract capital. But wind, which is a more proven technology than solar, is already having trouble getting enough capital, according to the WSJ Environmental Capital blog.

Another looming question is the price of oil. When oil was spiking upward, renewable energy looked like the obvious beneficiary. But a reaction was brewing in response to high pump prices: Falling demand. That promised to keep oil prices stable, but the fright in the markets appears to be causing a more serious contraction in oil prices. Today, oil fell below $80, marking a 13-month low.

As always, it’s impossible to predict with any certainty which way oil prices will head. But given a recession, continued low demand seems likely, and oil prices are set at the margin of supply and demand. While low prices are probably not permanent, consumers are notorious for their short memories. That means that in the interim, products like electric cars could lose some of their heroic aura. Biofuels like cellulosic ethanol, which look fine right now, could also suffer.

There are several other sectors that could be troubled, including green building materials — who would start construction now? — and water, which almost always requires a lot of money. But the final area that deserves special mention is carbon trading and emissions caps. The Associated Press reports that the Kyoto Protocol, which attempts to limit emissions worldwide, could be ignored as developing countries move to protect their assets.

At home, that could also be true. Take the Chicago Climate Exchange, for instance, which recently started up. Prices were higher than expected for its initial round of carbon offsets, but such commodities are likely to be viewed as luxury items in a recession. And for those who need excuses not to buy offsets, there are plenty of good ones, as Grist points out.

Expect to see start-ups and VCs hit standoff over valuations

Venture Beat — Fri, 10 Oct 2008 14:39:18 -0700

When the stock market goes into the dumps, it takes a while for the effects to trickle down to start-ups. That’s because start-ups are often are working away on a project that’s isolated from the larger market — and if they’re lucky, they have money from venture capitalists.

For the start-ups with no angel or VC backing, forget about raising money. They’re going to have trouble immediately. VCs are paying too much attention to their existing companies. But what about those lucky ones — those who already have a venture backer? The conventional wisdom is those companies will have an easier time getting money again when they need it, because VCs want to make sure the companies survive long enough so that they can earn a profit on the investment.

But it comes at a price. When the entrepreneur returns to the VC, an epic battle ensues over valuations. In a climate of fear, the power pendulum swings back to the VCs. The VC knows that an entrepreneur won’t be as likely to get money elsewhere, so he plays hardball. The entrepreneur is more ready to cave in on the valuation. That means when a VC gives the entrepreneur money, the VC can claim more ownership of the company with a given amount of investment (because the company is worth less.) Tension rises, and boardroom fights begin. I saw it all unfold last time, when I started covering venture capital in 2001.

Let’s take a look at the valuations of start-ups during the last boom, and how they trended in subsequent years. The National Venture Capital Association’s statistics are about as good as we’re going to get. They aren’t perfect, because they rely on valuations as voluntarily provided by the NVCA’s member venture capital firms, so the sample size may be too small to be completely reliable. But with that caveat, they do show that from 2000 through 2003, valuations fell pretty hard. You can see it took a while for the valuations to hit bottom, even though the market crash took place in mid 2000.

What does that mean for today? Well, the market’s crash these past two weeks is too fresh to have worked itself through the system. Companies are in the middle of tension-filled negotiations with their venture backers, but we don’t have any stats yet.

Now lets take a look at some recent valuations at one of the most aggressive venture capital firms in Silicon Valley: New Enterprise Associates. That firm has demonstrated how it has offered very rosy terms to entrepreneurs in recent years, bidding up value levels of companies like SolFocus and SugarCRM by offering large amounts of cash for relatively small ownership stakes. It did so because it believed: 1) the deals were competitive and NEA wanted to participate, and so outbid other venture firms to do so, and 2) because it has more money than other venture firms, and so was mandated to put its money to work.

That’s a decent strategy when you’ve got a robust economy. But when the market turns negative, NEA will have difficulty justifying these valuations. They and other investors are more likely to negotiate tougher. In some cases, the dreaded “down round” will emerge, which is where a VC invests at a valuation lower than the company’s previous ones — a particularly brutal snub because it suggests the company has lost value since it raised its last round.

NEA is the leading VC firms this year (so far) in the amount invested. The firm is second in the total number of deals (again, so far this year) to Draper Fisher Jurvetson. I don’t mean to pick on NEA. But the folks at PE Data Center have provided three examples of the firm’s investments, and they’re good for illustrative purposes:

SiBeam (formerly Silicon Microwave Systems) — The Sunnyvale, Calif. company is a developer of chips for the wireless industry. In March, the company closed a third round of funding (Series C) totaling approximately $40 million, alongside U.S. Venture Partners and Foundation Capital. The post-money valuation was $138 million, or exactly in line with the most recent average valuation of late-stage private companies, as provided by the NVCA (see chart). However, as you can see from the last boom-bust, late stage valuations came down significantly. That’s not to say we’re going to see exactly the same scenario play out this time (last time, it was a tech bust, this time it is a credit bust, and companies are generally on much sounder footing). But with the market closed for new IPOs and companies slamming the breaks on acquisitions (they feel poorer, because their lower stock prices are their main currency), there’s no doubt that late-stage companies are going to get seriously slammed on the valuation side if they raise money this year.

CVRx – The Minneapolis, Minnesota, company develops implantable devices designed to control hypertension. The company has raised several rounds of financing and New Enterprise Associates has participated in all of them. Other investors in the company include ABS Ventures, Kearny Venture Partners, SightLine Partners, and InterWest Partners. The company raised a third round $30 million in May 2006, at a valuation of $95 million, and then raised $65 million fourth round in April 2007 at a valuation of $267 million, and then a fifth round of $84 million in July year at a valuation of $424M valuation. Needless to say, those recent valuations are extremely high. Who knows, the company may be good enough to justify it. But expect them to come down, especially in light of the general decline in valuations for the health-care sector in general (see the chart below, courtesy of Dow Jones VentureSource).

DreamFactory Software – The Mountain View, Calif. company offers on-demand software, and raised a first round of $5.8 million at post-money valuation of $16 million in 2006. Then it raised $3 million more in March 2008, at a post valuation of $24 million. New Enterprise Associates led both rounds financing. As you can see from the charts, the valuations of the earlier rounds didn’t drop as significantly during the last bust. Earlier stage companies will have it slightly easier than later stage private companies. They’re more protected from the market, because they’re not searching for an IPO just yet. However, that’s not to say that investors won’t fight to hard to lower valuations even at this level.

Third quarter statistics on valuations won’t be out for another couple of months. And even then, those stats won’t reflect what happened in the current fourth quarter, which is when the real pain will be felt. It may be next year before we can give a serious assessment of the true fallout for start-ups. Expect to see more companies go out of business too, as VCs in some cases decide not to invest at all.

Sarah Lacy has some interesting thoughts on the future of the VC industry, by the way.

[Image credit: Salim Virji]

Microsoft sues DHL after train dumps 21,600 Xboxes

IDG News Service — Fri, 10 Oct 2008 14:35:38 -0700

Microsoft is suing U.S.-based cargo-delivery service DHL Express for allegedly losing 21,600 Xbox game consoles because of a train derailment in Texas, according to court documents.

In a complaint filed in the U.S. District Court for the Western District of Washington in Seattle, Microsoft said it is seeking more than US$2 million in damages from DHL for two containers of Xbox consoles that sustained "impact damage, wetting, pilfering and shortage" after a derailment near Duke, Texas.

The Xboxes were en route from a Microsoft office in McAllen, Texas, to Long Beach, California, for eventual delivery to Hong Kong at the time of the loss, which occurred on Oct. 13, 2007, according to court papers. Flextronics Industrial in Hong Kong was the intended recipient.

Microsoft claims that DHL has refused to compensate it for the loss, even though the delivery service "negligently breached its duties as a common carrier, handler, bailee, warehouseman, agent, or in other capabilities," according to the court papers.

DHL could not be reached for comment Friday.

Microsoft's Xbox game consoles also were the center of a recent controversy in Colorado, where a man was indicted on Sept. 23 for illegally reselling both Xbox 360 and Sony Playstation consoles, and returning inoperable consoles to retail and online outlets for money as if he had purchased them legally.

According to the U.S. State Attorney's Office in the District of Colorado, 27-year-old Yewchoo Ng of Boulder purchased the consoles at Target, Amazon.com, Buy.com, Best Buy, Circuit City, Sears and Wal-mart using several credit cards. He took the consoles out of the boxes, removed the serial numbers, put those numbers on older, inoperable consoles, and returned those consoles to the retail outlets, according to the state attorney's office.

The retail and online outlets lost $182,001 as a result of the scam, the office said. Ng also sold the new consoles online via e-Bay and other auction and shopping sites for his own personal profit.

123Greetings offers newly designed Web site

IDG News Service — Fri, 10 Oct 2008 14:00:43 -0700

123Greetings Friday unveiled a new web site which the company claims incorporates all the features of state-of-the-art Web 2.0 technology, such as social proofing, which rates the most popular e-cards sent by users. 123Greetings has also eliminated all obtrusive pop-up and pop-under advertising.

A press release issued by the company states that the features now available at 123Greetings.com (http://www.123greetings.com) include a new Web 2.0-driven five-star rating system, an expanded offering of e-card designs, graphics, photographs, messages and music for more than 3,000 categories, easier navigation that gives users a view of their e-card choices on one screen and elimination of pop-up or pop-under advertising.

The new 123Greetings.com was in beta testing for more than a month before the launch.

Kernel developers, Wall Street to come together

IDG News Service — Fri, 10 Oct 2008 13:49:35 -0700

The Linux Foundation is holding its first End User Summit beginning Monday in New York, in an effort to bring Linux kernel developers in closer contact with users at Wall Street institutions and other major companies.

"We're talking about a direct dialogue between the very highest-level Linux developers and the very highest-level Linux users," said Jim Zemlin, the organization's executive director.

Right now, the latter group is likely working with the kernel community indirectly, he said: "Most very large, sophisticated users of Linux acquire it through a vendor that supports that software."

Top contributors to kernel development include software vendors such as Red Hat and Novell.

"Sometimes the desires of what end-users really need end up getting filtered through the salesperson at a [vendor] and up the management chain, and by the time it gets to a developer, it gets pretty garbled," said kernel maintainer Ted Ts'o, an IBM employee who is serving a fellowship as chief platform strategist for the Linux Foundation.

The event is closed to the public and press. Set to attend are representatives from the New York Stock Exchange, Fifth Third Bank, Credit Suisse and Fidelity.

The show is more than a feel-good effort, suggested Redmonk analyst Stephen O'Grady, who will moderate a panel discussion there.

"The tangible gains from such end-user conferences of this type are always difficult to quantify with any precision, but it's virtually indisputable that collecting those that work on a particular technology and those that build businesses upon it is a good thing," O'Grady wrote in an e-mail Friday. "Even if it's just an improved understanding of where both parties are coming from, events such as these are useful."

Canadian firms shun social media tools

IDG News Service — Fri, 10 Oct 2008 13:24:03 -0700

While Canadian companies are fully aware that social media tools can improve customer service and increase sales, such tools continue to remain absent in the business space, according to a recent study commissioned by global IT consultancy Avanade.

The survey found that 68 percent of Canadian companies view social networking as the next step in collaborative activities and technology for a business, while about 40 percent fear that they will lose customers to companies that are embracing the use of social networking technology.

Roughly 78 percent of Canadian companies surveyed believe social media tools are beneficial for improving feedback and reducing customer support time; 89 percent feel such tools create the perception of a positive, forward-looking company.

Canadian companies also feel that social media tools will inevitably enter the workplace, whether welcomed or not. Of the companies surveyed, 87 percent agree they will be "forced to increase the use of social networking media and technology" in order to meet the needs of younger employees. And 83 percent say social networking, if not proactively managed, will "come into the business by stealth."

Yet companies continue to resist incorporating them into the workplace. "Most companies have no formal plans to manage the adoption of social media (such as instant messaging, blogs, wikis and social networking) or leverage its benefits," the survey reports. Only 16 percent of Canadian companies "have a fully implemented strategy for integrating social computing for employees."

Security (83 percent), apathy (50 percent) and unproven technology (61 percent) are the top three reasons Canadian companies are resisting social media tools, according to Stéphane Gagnon, Business Solutions Advisor, CRM, Avanade Canada.

In a recent study on Web 2.0 tools used at Canadian enterprises for internal employee communication, Robert Half Technology also found the majority of companies surveyed do not use or have any plans to use social media tools in their workplace.

Google prepping special iPhone ads?

Venture Beat — Fri, 10 Oct 2008 12:45:16 -0700

Just because Google will soon release its mobile operating system Android, it’s not ignoring the iPhone. In fact, the online ad giant is preparing to offer advertisers a way to tailor ads for iPhone users, according to Adweek.

For example, a normal American Airline web ad would offer a link to American’s site where users could buy tickets. An iPhone-specific ad might let you call American with just the push of a button or take you to an iPhone-customized site.

In its article, Adweek cites unidentified ad agency executives who have been briefed on Google’s plans. Google itself hasn’t confirmed the report. This seems to match what we’re hearing about Google’s warming attitude towards the iPhone. For example, we’ve been told about a noticeable shift of tone in presentations given by Android’s Rich Miner, away from a generally competitive stance to one that’s closer to, “We’re all in this together.” (Not that Google was ever particularly hostile. The first iPhone app I downloaded was Google’s.)

That attitude makes sense, given that the iPhone really offers some rich advertising opportunities, and 10 million of them have been sold so far.

The question now is, what kind of functionality will Google and its advertisers come up with, and how will it stack up against iPhone-specific features offered by ad networks AdMob and JumpTap.

[photo:flickr/rustybrick]

Ning adds Google OpenSocial support to its social networks

IDG News Service — Fri, 10 Oct 2008 12:40:27 -0700

Social network platform provider Ning Inc. - the brainchild of Netscape founder Marc Andreessen - Friday announced that it is adding support for the OpenSocial standard to the more than 500,000 social networks created by its users.

The OpenSocial initiative was launched by Google Inc. and MySpace in November to create APIs that developers can use to build applications that can run across multiple social networks and other Web sites.

The OpenSocial support allows new applications like file sharing, poll creation and e-commerce to be added to social networks created on Ning, the company noted in a blog post . Ning added that 30 OpenSocial applications are available on the site.

The OpenSocial directory on each Ning network will automatically inherit the branding and visual design of that network, Ning said. Also, OpenSocial applications can inherit the visual style of the member profile page to which they are added.

Ning also said that OpenSocial applications can automatically be integrated into a social network's viral features. Thus, an OpenSocial application could add updates to their members' latest activity feed and send messages on behalf of a member.

Frederic Lardinois, a blogger at Read Write Web, noted that Ning joins a growing number of social networks that support OpenSocial, including MySpace, hi5, Orkut and Bebo.

"For developers, supporting OpenSocial makes good sense, as they can reach a far larger audience with an OpenSocial application than if they just programmed for a given network's own APIs," he added. "The only holdout [from] supporting OpenSocial is Facebook." However, Lardinois did note that Facebook is "considering the option of opening up its development platform to other social networks in the future."

Six steps to a green data center

IDG News Service — Fri, 10 Oct 2008 12:31:03 -0700

Environmental issues exposed by the media and driven by consumers have placed IT departments under pressure to develop "green" data centers. Factors including the reduction of energy consumption and carbon dioxide emissions in large data centers often provide the impetus for becoming green. A recent report issued by the United States Environmental Protection Agency (EPA) highlights the need for data center efficiency and demonstrates the increased pressure that IT departments are under.

A green data center is defined as one in which the mechanical, lighting, electrical and computer systems are designed for maximum energy efficiency and minimum environmental impact. The construction and operation of a green data center involve advanced technologies and strategies. Some examples include: Reducing the energy consumption of the data center; Minimizing building footprints; Maximizing cooling efficiency; Using low-emission building materials, carpets and paints; Installing catalytic converters on backup generators; Using alternative energy technologies such as photovoltaic electrical heat pumps and evaporative cooling.

The consumption of energy is considered the dominant factor in defining whether or not a facility is green. And according to a 2007 Gartner report entitled 2006 Data Center Polling Results: Power and Cooling, during the last five years the power demands of equipment have grown by five or more times. In fact, companies spend more on power to run a server over its lifetime than they do in capital expense to purchase it.

IT executives therefore need to start investigating alternative ways to build an energy-efficient data center. By following these six simple steps, IT executives can come closer to achieving their vision of a green data center:

STEP 1: Virtualize and consolidate The basic concept of virtualization is simple: encapsulate computing resources and run on shared physical infrastructure in such a way that each appears to exist in its own separate physical environment. This process is accomplished by treating storage and computing resources as an aggregate pool from which networks, systems and applications can be drawn on an as-needed basis.

In addition, measurements indicate that often a single server utilizes only 5 to 15 percent of its capacity to service applications. With virtualization, the consolidation of under-utilized servers is seamless to the end user and significantly reduces power consumption.

STEP 2: Determine your cooling requirements Most data center cooling systems that are in service today were deployed in a manner that assumed the load would be spread out in a uniform fashion; that is, the load in any given area would never be far greater than its relative share of the total data center space.

However, according to the American Society of Heating, Refrigerating and Air-Conditioning Engineers (ASHRAE), the typical data center that employs dense form-factor servers and storage averages 5,000 watts per square foot of equipment space. Compare that figure to the 2,000 watts used in the same amount of space in 2002 -- energy use and heat density have more than doubled in five years! The increases do not appear to be slowing, and the increased heat requires increased cooling. And cooling requires additional energy consumption.

STEP 3: Determine optimal placement of your equipment Assuming you have enough cooling capacity for the equipment you have installed today, you must consider the placement of your equipment first. The Uptime Institute did a survey of 19 data centers and reported that, on average, only 40 percent of the cold air went directly to cool the servers in the room. Adopting an alternating hot aisle/cold aisle layout is optimal and can correct many cooling problems in a typical data center. Correct placement of vented tiles and closely coupled cooling systems are other techniques that can be used to improve cooling efficiencies.

STEP 4: Adopt chilled water as a cooling method Water can move up to 3,500 times the amount of heat that the same volume of air can. However, the use of chilled water as a data center cooling method will take some time to adopt both physically and culturally, as many find it difficult to fathom pipes of running water snaking through the plenums of their data centers. Water cooling, as part of a rack, is possible through a number of options. In some cases, heat exchangers are located within a rack, and water is circulated in a closed loop within the rack and cooled by the traditional forced air from computer room air conditioning (CRAC). In other examples, the heat exchanger is located outside of the rack.

Another example of water cooling utilizes a completely external chiller system and cools the electronics within a rack through a closed loop chilled water system, with separate supply and return lines usually routed through the data center floor. These close-coupled systems can result in shorter air paths that require less fan power. Close-coupled heat removal minimizes and almost eliminates the mixing of cool and hot air since the airflow is completely contained in the row or rack.

STEP 5: Buy from a green vendor It is essential to seek out a vendor that has power and cooling at the forefront of its research and development strategies. Selecting equipment based on lifecycle costs that take into account the energy usage of servers will become an important part of the procurement process for IT equipment in the near future.

STEP 6: Enable green controls Enabling green control within servers is also helpful to ensure that they are throttling the amount of power they consume based on actual load. These controls can step down the frequency of the servers during low load, which will translate to less power consumption. Other areas that offer environmental as well as economic benefits today are information lifecycle management (ILM), data de-duplication and the use of archiving to reduce the amount of storage on the floor. Companies usually start these projects to save money, but from an environmental standpoint the fewer disks they have spinning, the less energy they will use.

Darryl Wilson is the Regional Practice Director for Dimension Data Canada, a specialist IT services provider that helps organizations plan, build, support and manage their IT infrastructures. For more information visit www.dimensiondata.com/Canada.

Yahoo investor proposal unlikely to push Microsoft

IDG News Service — Fri, 10 Oct 2008 12:30:02 -0700

A relatively small Yahoo shareholder is proposing a new Microsoft takeover offer, but analysts don't think it's enough to entice the companies back to the negotiating table.

On Thursday, Mithras Capital, a California investor and Yahoo shareholder, issued a statement proposing that Microsoft buy Yahoo at US$22 per share, $11 less per share than Microsoft's last offer for the entire company, but still a premium over the current price.

As part of the deal, Microsoft would divest Yahoo's Asian assets and non-search businesses. By Mithras' calculations, assuming Microsoft is able to sell off the non-search businesses at Mithras' estimates, the deal would cost Microsoft about $10.3 billion.

While analysts say that Microsoft surely wouldn't ignore a good opportunity to buy Yahoo, there's nothing about this proposal that is likely to push Microsoft over the edge. "I'd have to describe it as a long shot," said Andrew Frank, an analyst at Gartner.

In the approximately three months since talks between the companies fell apart, the economic meltdown in the U.S. has driven down the value of Yahoo's stock from around $22 to around $12. Microsoft also hasn't been immune to the crisis, with its stock price falling from around $26 in July to closer to $22 now.

While the drop in stock value makes Yahoo a less-expensive takeover target, the odds of Microsoft making another offer are about even, said Sid Parakh, vice president of equity research at McAdams Wright Ragen. "It's a 50/50 possibility that they'll come back," he said.

Microsoft now may be considering whether it is better off buying back its own stock or buying Yahoo, Parakh said, because Mithras' proposal values Yahoo's stock at about the same as Microsoft's is trading at. While buying Yahoo comes with the benefit of some search market share, it also comes with the challenges of integrating a large company. "It's a trade-off," he said.

Microsoft and Yahoo both declined to comment on the proposal.

The changed economic conditions don't necessarily make Yahoo a sweeter deal, said Frank. "It may be cheaper, but the other side of the coin is that nobody wants to use cash for anything," he noted.

From a tactical standpoint, Yahoo is still about as attractive a buy as it was when the deal last fell through, Frank said. "If anything, Microsoft's search share has gone down, meaning they need a search solution more than ever," he said. "Assuming that their strategy is still to offer a kind of complete competitive suite of media options for online marketers, there's clearly still a hole there."

Mithras, which owns 1.9 million Yahoo shares, calls its proposal a compromise deal. It would require that Yahoo rescind its so-called poison pill. That is an employee severance plan that Yahoo adopted after Microsoft's hostile takeover bid that some say would encourage employees to quit in the event of an acquisition and would allow some to collect generous severance pay. Because the plan could result in significant costs to a Yahoo buyer, some analysts say that it discourages a takeover.

The Mithras proposal would come with some risk and challenges for Microsoft. It requires Microsoft to essentially buy the whole company and then sell off the Asian assets and the non-search business, assuming that Microsoft would find buyers willing to take those businesses at current market value.

Beyond finding such buyers, Microsoft would also be faced with the challenge of technically separating the businesses, a potentially daunting task, Frank said. "I've been rather skeptical of what it would take to carve out Yahoo's search business from the rest," he said. "That's a challenging proposition." He said Yahoo has structured the organization in a way that integrates inventory management with search and display, for example, which would make it difficult to separate out the businesses.

This isn't the first time that Mithras has issued a proposal outlining terms of a potential deal between Yahoo and Microsoft. In July it described a deal where Microsoft would buy all of Yahoo for $33 a share.

As Yahoo's stock continues to dive, shareholders like Mithras are likely growing increasingly anxious. "Clearly a lot of these guys have lost money," said Parakh.

Remaining objective when fear is in the air

Venture Beat — Fri, 10 Oct 2008 12:24:18 -0700

[Editor's Note: Taking a break from the doom and gloom of the economic downturn, venture capitalist William Quigley offers a more optimistic assessment of the current situation.]

It is hard to believe that just 8 years ago, venture capitalists were facing what we all thought would be the ‘great crash’ of our lifetimes. Meaning the one and only significant crash we would see before we retired. After all, even with two world wars, a cold war, and an unprecedented energy shock in the 1970’s, the 20th century only had one Great Depression. The Dow dropped 90% from its high during the Great Depression. NASDAQ dropped 80% from its high after the tech bubble burst. Market collapses of that order are only supposed to happen once in a lifetime. But now, due to the financial crisis of 2008, the consensus opinion among wall street and venture investors is that we are at the beginning of another great crash and long term economic malaise (note Sequoia’s amazing comment about a 15 year secular bear market).

If this were my first bubble bursting experience, I might buy into that dire consensus view. But it isn’t and I don’t. The figure that stays with me more than any other during these trying times is the performance of the Internet and hospitality sectors from 2002 to 2007. In the dark days of 2002, two years after the tech bubble collapsed and a year after the terrorist attacks, the hospitality sector was crushed (who wanted to fly) and many Internet stocks were trading near their cash balances. What happened? Over the next 5 years, Internet and hospitality stocks, which you could barely give away in 2002, were the #2 and #3 best performing sectors out of 75 tracked by the Wall Street Journal. The only better performing sector was coal - due to unprecedented growth in emerging market energy consumption.

When the tech bubble burst, lead by collapse of the Internet and telecom sectors, there was widespread believe that these were not ‘real businesses’. It was easy to see why people felt that way. Few Internet or telco executives were talking about cash flow and profits. Of course, the reason for this was that the public markets were not rewarding those things. Five years after the dot com crash, investors came to realize that in fact Internet and telco centric business models (think Google, RIMM) were among the most profitable businesses of our era. This lesson is now well known. What does that mean? I believe this time around the entire tech sector will not be abandoned. If anything, there will be more conviction around the best businesses and business ideas. This very same phenomenon is happening now in the banking sector. In the middle of the panic phase of the financial crisis, investors speak highly of BofA, JP Morgan, US Bankcorp.

We can’t deny that people are worried, even scared, about what is happening on Wall Street. Venture capitalists read the headlines and assume the worst. I believe the root cause of the deep anxiety being felt about the stock market and economy is the speed and severity with which it has taken hold. People have only so much capacity for dramatic change, especially when that change is negative. The pace of mortgage defaults and bank failures this year has been too much for most of us to keep up with. Images of a banana republic come to mind. But consider this point. Over half of all subprime mortgages originated in the trouble years of 2005-2007 have already been written off – to zero. Many of the remaining troubled loans are being worked out. The upshot? There is a historical wealth transfer taking place between global financial institutions and US home owners. Housing debt ratios for consumers will be cut by 40% when the write-offs and loan adjustments are complete. Consumer leverage will be close to what it was in 2001, at the beginning of the housing bubble. While unsettling, the speed at which financial institutions and governments are disposing of problem assets and injecting liquidity into the economy will accelerate economic recovery by 2010, perhaps beginning in the second half of 2009.

And what of those shaky financial institutions that triggered the crash of 2008? The consensus view, reflected by their stock prices, is that more banks will disappear and most will be permanently impaired. Now look at the numbers. The book value of global financial firms was $4 trillion in 2007. Today, it stands at $4.2 trillion. This takes into account the $300B of asset write-downs (net of tax effect) offset by $300B of equity infusions and $400B of newly retained earnings. The stock prices don’t reflect it yet, but the bulk of financial firms have addressed their problems, either by taking massive write downs or merging with stronger partners. So why does it feel so awful? Because these corrective actions have place at a speed we have never seen before. The 1980’s S&L crisis was 5 years in the making and took another 5 to fix. 2000 banks failed during that period. This time feels worse because we are taking all of the bad news at once. In just a few months, US banks have written off more of their troubled loans than the Japanese banks did with their problem loans in 15 years. Have faith in this: once the bad loans have been charged off, a process that might take another 6 months, US banks will have confidence in their own - and each other’s - balance sheets. At that point, reasonable lending practices will return. That is what always happens.

Aside from the painful –- but ultimately positive — massive deleveraging by consumers, the scourge of inflation is being wiped out. Headline inflation (which includes food and energy costs) has been running 5% per annum over the past 5 years. It is now projected be near zero for the next 2 years. Reductions in housing, energy and basic consumer staples are the primary reasons for the decline. That means growth in real wages.

Goldman Sach’s recently proclaimed that a deep recession was likely. In their estimates, the US economy could contract by 7% in the next 12 months. We must keep in perspective, however, that just a few weeks ago Goldman was rumored to be on the road to collapse. I can’t help but assume that their deeply pessimistic institutional views have been colored by their proximity to the financial epicenter. But even if we assume that Goldman’s 7% economic contraction estimate is correct, that means that 93% of business and consumer spending continues. Certain sectors like automotive, housing and hospitality will undoubtedly be hard hit. On the other hand, affordable entertainment and productivity enhancing purchases, like investments in business technology, should fare much better.

In summary, this is not a normal economic cycle. The problems in our economy were created by irresponsible home borrowers and lenders, not the typical recessionary forces triggered by excess industrial capacity The blast radius of this crisis has threatened to engulf the whole economy because banks uniquely touch every aspect of commerce. They provide the liquidity for borrowing and lending. There is reason for optimism. With the measures being taken by banks and our government, we are working our way out of this mess. We understand the problems and are addressing them. When we get to a period where 90 days go by without a major financial institution failing, I believe the frayed investor nerves will start to heal. Until then, we must have the discipline to remain informed and objective.

William Quigley is managing director at Clearstone Venture Partners, where he focuses on investments in Internet and communications related technology. He blogs at The Quigley Report.

Ugandans comment on 10 years of ICT regulation

IDG News Service — Fri, 10 Oct 2008 11:39:50 -0700

Earlier this month, the Uganda Communications Commission (UCC) celebrated 10 years of regulating the country's highly competitive ICT sector, garnering reflection from observers and ICT users.

"I think UCC has done an excellent job, given it was working in an environment where there was no dedicated ministry responsible for ICT," said Edward Baliddawa, chairman of the parliamentary committee on ICT.

Now that there is an ICT ministry in place, Baliddawa added, parts of UCC's mandate need to be reviewed in order to bring the sector to the next level.

Vincent Mugaba, an ICT user, praised the UCC for making phone connections more readily available. "However, they have failed us in many ways," he said.

"UCC should put consumers first. In Europe and other parts of the world, regulators are forcing telecoms to put prices down, allow more services on the network at minimal cost and generally give more to consumers," Mugaba said.

"Consumers have been forced to swallow a poor service, paying for dropped calls, undelivered SMS [short message service] and many more woes without UCC coming out to demand a certain level of service delivery," he added.

Another keen watcher of the sector who preferred anonymity said that the UCC's regulatory approach in Africa is one to be proud of.

"I honestly do believe that UCC has done a good job and needs all the glory and praise," he said.

He did, however, agree with Mugaba that the UCC has fared poorly regarding consumer protection.

"Either due to fear, laxity, compromise, sheer incompetence, job neglect or all of these issues combined, very little has been done to help the consumer when faced with problems relating to service providers," he said.

"It is highly unlikely that a petition a consumer sends to UCC for arbitration will receive the attention it deserves," he noted. "It is, therefore, my hope that as UCC relaunches its image and celebrates 10 years, effort is made in attending to the needs and complaints of the ICT consumer."

Twofish raises $4.5M to create economies for virtual worlds

Venture Beat — Fri, 10 Oct 2008 11:17:51 -0700

Twofish has raised $4.5 million in a second round of funding for its business of creating the economic infrastructure behind virtual worlds. The deal is another indication that the virtual goods economy is heating up, even as the real world economy spirals downward.

The Palo Alto, Calif. company made the announcement at The Virtual Goods Summit, a packed conference in San Francisco attended by several hundred people this morning. Twofish creates a “digital resources planning solution,” sort of like enterprise resource planning (ERP) for virtual worlds. The Twofish Elements solution is an economic infrastructure that allows virtual world creators to run virtual banks, track inventory, and set up an e-commerce system.

The company essentially outsources the process of setting up the system so that the game creators can focus on building a quality virtual world. Twofish can increase profits, better engage customers and reduce fraud. Its primary competition comes from game companies that wants to do this kind of work internally, but I’ll mention a few others in a second.

The whole virtual goods movement, popularized in Asia, offers an alternative business model to online game subscriptions. Strategy Analytics says virtual goods already make up a $1.5 billion industry. We’ve covered the topic, particularly on Facebook apps, previously. That makes it a viable alternative business model, along with advertising or “try before you buy” downloadable games. Virtual goods and ad models allow game companies to offer “free to play” games. Again, those are popular in Asia and that model is migrating to the United States. Here, we have yet to see a gigantic hit.

If you’re playing a fantasy game, for instance, you might not mind paying 50 cents for a better sword so that you can take on the ogres. The Twofish technology handles the transaction in real time. The investors include Triplepoint Capital, Rustic Canyon Ventures, and Venrock.

Lee Crawford, chief executive of Twofish, is up on stage right now. A couple of his competitors, Dan Kolkowitz, head of Playspan, and Chris Donahue, of Live Gamer, are also on the same panel. All of them can create a secondary market for gamers, who sometimes want to create their own virtual items and sell them. Donahue says that Live Gamer acquired the secondary market for Sony’s online games this year.

Crawford said the company’s solution gives real-time data so game-makers can monitor just how much money is coming in from virtual goods. One of the tricky things to balance is pricing, since users may balk at high-priced items that don’t do much for them in the game.

Susan Choe, chief executive of online games company Outspark, says that you need $200,000 in revenue a month before you consider adding the secondary market, which comes with costs. Choe noted that one company on the stage promised her that a secondary market could triple the virtual goods revenues, but she isn’t quite convinced that it is happening yet.

Zoho uses Google Gears to go offline — what about Gmail?

Venture Beat — Fri, 10 Oct 2008 10:55:29 -0700

There’s a lot to like about Zoho Mail, the next step in Zoho’s rapid roll-out of a broad range of business applications . But for a non-Zoho user, there’s one thing that’s kind of galling: You can access your Zoho Mail through integration with browser extension Google Gears. It’s a smart, useful feature, and that only makes it more annoying that Google hasn’t provided similar offline functionality for Gmail.

Back in July, there were rumors that Google would use Gears to create desktop versions of Gmail and Google Calendar. (Gears’ big selling point is its ability to bring web applications offline, although it has much more potential than that.) Well, those six weeks have come and gone. In the meantime, we had a brief-but-terrifying Gmail outage, making the need for Gears integration even more apparent.

It would be foolish to think that Zoho poses any immediate threat to Gmail. Google is probably taking its sweet time to get everything just right on the Gmail/Gears integration, as ReadWriteWeb speculates. And that makes sense, since the point isn’t just to pull emails from your Gmail account onto your desktop — you can do that already with applications like Mozilla’s Thunderbird and Microsoft Outlook — but to bring Gmail’s rich features offline. Still, the fact that Zoho used Google’s own technology to bring this functionality to Zoho Mail makes the wait particularly exasperating.

Zoho evangelist Raju Vegesna has a quick overview of the application’s features, and they sound pretty cool. For one thing, it gives you the option of seeing each email in the order it arrives, like Outlook (and most other desktop email tools), or to see them grouped into conversation threads, like Gmail. There’s also a mobile version Zoho Mail website that’s customized for the iPhone. Zoho Mail is also integrated with Zoho Chat. Finally, Zoho Mail is free, and, as with other Zoho applications, you can also use it with your Google or Yahoo accounts.

The Pleasanton, Calif.-based company is owned by AdventNet.

Zoho launches e-mail app with offline, mobile access

IDG News Service — Fri, 10 Oct 2008 10:53:14 -0700

Zoho has added e-mail to its portfolio of Web-hosted applications for individuals and organizations.

Zoho Mail will work on Internet-connected PCs, via mobile devices and also when users are offline, the company announced Friday.

"This is a very significant addition, a key component for us, because at Zoho we're trying to be the IT department for small and medium-size businesses," said Raju Vegesna, Zoho evangelist, in an interview.

Although Google's Apps hosted collaboration and communication suite gets most of the attention in this market, Zoho is widely considered a very credible competitor that edges larger rivals in the number of applications it has available and the features they offer.

Zoho Mail is a component to Zoho Business, a suite of hosted Zoho collaboration and communication software designed for use in SMBs that is free for up to 10 users. Thereafter, it costs US$50 per user per year.

Organizations can port their domains over to Zoho, which hosts the e-mail and handles all the back-end storage and operations.

In addition to being part of Zoho Business, Zoho Mail is also available to individual Zoho account holders, who will get their own e-mail address at the zoho.com domain free with no storage limits and without ads.

Zoho Mail can also be used as an e-mail client to send and receive messages from other accounts that also support POP (Post Office Protocol).

Zoho Mail lets users organize messages into folders and categorize them using labels, and it gives them the option to have messages listed chronologically or grouped into threads.

When disconnected from the Internet, users can still access Zoho Mail, thanks to its support of the Google Gears browser plug-in, designed to provide offline access to Web applications. To take advantage of this feature, Zoho Mail users need to install Gears on their Internet Explorer or Firefox browsers.

Meanwhile, Zoho has a mobile version of the mail service optimized for the iPhone and has plans to support other mobile devices in the future, like the Blackberry, Vegesna said.

World Bank urges Zambia to review telecom issues

IDG News Service — Fri, 10 Oct 2008 09:25:10 -0700

As Zambia's international gateway issues continue, the World Bank said a review is needed of the problems relating to infrastructure, regulatory and institutional requirements of the telecom industry in order to solve troubles affecting the sector.

The challenges in the telecom sector that Zambia is facing go beyond the issue of the international gateway, according to the World Bank country manager for Zambia, Kapil Kapoor.

"It is unfair to place the blame solely on the international gateway fees as the only hindrance to telecom sector development but to also look at other factors related to infrastructure development, regulatory and institutional requirements," Kapoor said.

The Zambian government has refused to deregulate the country's international gateway, claiming that doing so would put the security of the country at risk.

Private mobile operators Zain Zambia and MTN have been protesting the Zambian government's regulation of the international gateway and the high cost of acquiring a gateway license.

The Ministry of Communications and Transport increased the international gateway fee two months ago from US$12 million to more than $18 million, making Zambia the most expensive country in Eastern and Southern African for private telecom investors to do business.

Private operators in Zambia must route their international calls through the government-owned Zambia Telecommunication Company (Zamtel), which owns and operate the international gateway. However, Zain Zambia and MTN issued a joint statement recently claiming that Zamtel's gateway is experiencing increased failures on international calls.

Both operators have sent letters of complaint regarding the international call failures to Zamtel and the Communications Authority of Zambia.

Stock market swings wildly — plunges, then recovers, now down 4 percent

Venture Beat — Fri, 10 Oct 2008 08:41:07 -0700

udated

The Dow Jones Industrial dropped nearly 700 points in the opening minutes of trading today, as global investors continue to see no firm answer from U.S. leaders about how to solve the mess we’re in. Those investors, used to decades of U.S. confidence — confidence that we showed even in the aftermath of 9/11 — are panicked because we’ve so far shown no resolve about what to do now that the bailout package doesn’t appear to have worked as it should. Fear has taken over.

The market did recover its losses briefly after the open, but then turned south again. As I write, it’s in free fall. Just a few minutes ago, the Dow was down 3.7 percent (see image above). Now it’s down more than six percent. This is a wild ride. [Update: The Dow recovered and closed only 1.5 percent down]

At some point, we’ll hit a bottom, when savvy investors kick in and start buying stocks they consider undervalued for the long haul. But there’s just too much uncertainty right now to see where that point is. Over the last year, we’ve lost more than 40 percent of the stock market’s worth (Dow is down more than 41 percent over that period, while the S&P, a wider reflection of the overall market, is down more than 44 percent; the Nasdaq is down more than 43 perent). We’ve lost $10 trillion in market value.

President Bush sought to assure the markets, by saying the bailout package will work but just needs some time. Other economists point to continued problems, such as the wipeout of the multi-billion dollar market for preferred securities and the lack of support for failed bank Lehman Brothers’ counterparty obligations, which has undermined mutual trust between banks and traders. The debt markets thus remain locked.

Two banks, Morgan Stanley and Goldman, are reeling. Shares in Morgan Stanley dropped 24 percent lower early in today’s trading, after dropping nearly 26 percent yesterday. Mitsubishi UFJ Financial is considering an investment in the bank, and investors fear it might fall through. Goldman was down 15 percent.

In another reading, bond trader John Jansen says this is all a “giant systemic margin call and the means to meet the margin call is via sales of liquid assets. So, the wreckage floating in the street results from those sales.” Notably, he says the move by funds into private equity (where money is locked away for years) where there was more “glitz” than offered by the stock market, meant that there were fewer places to get immediate liquidity, leaving U.S. Treasuries as one of the favored places.

This reading is compatible with the series of slides shown by Silicon Valley venture firm Sequoia Capital to its portfolio companies this week. The slides, 56 in all, attempt to explain how forces such as increased productivity and low rates set by the Federal Reserve created a bubble in consumer spending, which set into play other forces that have led to a crack in the wider economy, such as a lowering of advertising growth — and a trickling down to the valley in the form of a “death spiral” for companies that don’t take tough, cost-cutting action. Screenshot of some of those slides below:

Downturn bites as Plasmon UK enters administration

IDG News Service — Fri, 10 Oct 2008 07:24:45 -0700

The U.K. operations of archiving specialist Plasmon have been placed in administration, as the company continues takeover talks with a potential buyer.

In a statement to the London Stock Exchange (LSE) last month, Steven Murphy, president and CEO of Plasmon revealed that earlier in the year, the company had undertaken a 'strategic business plan' that included new products for the changing face of the enterprise archiving sector.

The company consequently launched a new range of archiving solutions that integrated server-based intelligence, magnetic disk, and its UDO optical media. Although the company apparently experienced a rise in its global sales pipeline, it "did not achieve the increase in revenues necessary to support the organic development of our strategic plan."

Plasmon admitted it had been in discussions with a U.S. based private equity firm, which was offering to provide a "significant new investment (about $25 million or £14.4 million), but last month it announced these discussions were terminated. Plasmon subsequently requested an immediate suspension of the listing of its shares on the London Stock Exchange.

Members of Kroll's Corporate Advisory and Restructuring Group were appointed this week as joint administrators of the company, and are continuing to trade the company's U.K. and European sales and marketing division, alongside the company's U.S. subsidiary, Plasmon Inc. This tactic, they say, is allowing the company to continue the sale and support of its products worldwide, whilst a going concern sale of the business is explored.

The Administrators also say that they are in discussions with a number of interested parties and are hopeful that a sale of the remaining business can be achieved in a relatively short time frame.

Techworld meanwhile has been informed that a third (about 50) of Plasmon's 300 global staff have already been made redundant, mostly in the U.K. It also seems that most of the losses have come from the software and UDO media teams, as the company rids itself of elements considered non essential to its primary archival storage business.

Techworld was also told that the administration process is not a surprising move, although it is dramatic, and should not be interpreted as a sign that Plasmon has gone to the wall. Instead, it is apparently part of the ordered process as the company restructures itself in preparation of being acquired, hopefully in the next few days.

That said, it remains to be seen how UK Plasmon customers, who now effectively have no local subsidiary with which to deal, will react.

Meanwhile, Plasmon has recently announced the joint development of a new Plasmon optical library that provides fiber channel connectivity to IBM customers. As part of this development effort, Plasmon and IBM will provide IBM Power Systems customers running IBM i, with an optical archiving option.

Social network provider Ning opens access to OpenSocial developers

Venture Beat — Fri, 10 Oct 2008 06:30:56 -0700

Ning, a company that lets anyone create a social network, is integrating with OpenSocial, the standards platform that makes it easier for any developer to write applications for Ning.

Other social networks, including MySpace, hi5, Bebo and Friendster, already use OpenSocial. This means that a developer can build an application on a single standard — OpenSocial — and have them easily work on any of these networks. Thousands of developers have used OpenSocial to build applications for these sites.

Ning had already offered access to developers through its own platform, but the move to OpenSocial may see a surge of new developer activity: Today, launch partners include nearly 30 applications, such as Box.net’s service for sharing large files.

Ning stays it has more than half a million social networks, about 65 percent of which were used in the last 30 days, according to the company. Ning doesn’t offer more detail on metrics such as monthly unique visitors or total registered users, but certainly there is some opportunity for developers.

Ning users who create networks will be able to offer apps to their respective users through customized versions of application directories, featuring OpenSocial applications.

Ning is considering integration with Facebook’s platform. Facebook, however, has been internally debating how to fully open its platform; in the meantime, Ning has focused on OpenSocial integration.

Fitbit gains $2M to help you lose weight

Venture Beat — Fri, 10 Oct 2008 05:00:53 -0700

Fitbit, the maker of a small device that tracks how many calories you’ve burned, has raised $2 million in a first round of funding. The San Francisco company was a hit among judges when it launched at the TechCrunch50 conference, and it plans to start selling its devices in early 2009.

There are other portable weight loss devices out there — for example, Weight Watchers offers its own mobile application. What’s exciting about Fitbit, however, is the extent to which the company says it will automate the process. You just clip the device to your clothes, and it tracks things like how many calories you burned through exercise and how well you slept. (Unfortunately, things are a little less automated on the food side; it looks like you’ll need to manually enter the foods you’ve eaten into the Fitbit website.) Then you can view your health reports on the company’s site, and adjust your behavior accordingly.

The Fitbit Tracker will cost $99, and will be available for sale initially on the company’s website, says chief executive James Park. There are plans for a roll-out to retail stores later in the year. If the economic downturn continues, Fitbit may have picked the wrong time to launch a device that some might see as a luxury or a novelty, but Park says the company has kept the Fitbit Tracker relatively affordable.

The round was led by True Ventures, joined by Jeff Clavier’s SoftTech VC and a group of undisclosed angel investors.

Great Advice From Brad Feld

Fred Wilson — Fri, 10 Oct 2008 04:15:03 -0700

“ My recommendation to all of you entrepreneurs out there is to get off the negative sentiment treadmill, step up, and lead. The people working for your company are likely confused, concerned, and overwhelmed with all the noise in the system. In the near term, building your business will likely be more challenging on a number of dimensions. So what - that’s the normal cycle of business. You don’t need to be a blind optimist and spout happy talk, but you do need to have a clear sense of purpose and goals for your company. Leadership 101. When I look back at the dotcom apocalypse that was 2000 - 2002, I realize some of the best companies I’ve ever been involved in were created during that time. In the midst of this, I remember the endless stream of “the Internet is over” and “the information technology business in now a mature business and there will never be innovation again.” Yeah - whatever. Get some exercise, take a shower, eat a good breakfast, and get out there and build a great business. —Brad Feld - OK Entrepreneurs, It's Time To Step Up