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Interview: James McCombe discusses ray tracing and the gaming industry

Ian Lamont — Mon, 01 Jun 2009 13:23:10 -0700

As E3 kicks off in Los Angeles to showcase the latest and greatest in games and gaming hardware, it's worth considering where the industry is headed in the years to come. While the current generation of PlayStation, Xbox and PC games depend on rasterization to generate graphics and gameplay, there is growing interest in how advances in ray tracing technology will impact the gaming world. Ray tracing can deliver photorealistic graphics, but the processing requirements are so great that applications have mostly been limited to special effects seen in Hollywood films and television advertisements. The Industry Standard recently sat down with James A. McCombe, the CTO and co-founder of Caustic Graphics, to discuss his company's new ray tracing products -- the CausticOne graphics accelerator card and CausticGL software API. In the near term, McCombe said Caustic's platform will profoundly change the way graphics professionals preview and render scenes and effects. Long term, the former Apple engineer believes the gaming industry may benefit as well. The following is an excerpt from the interview, as well as a video that shows Caustic's ray tracing technology in action.

James A. McCombe: Ultimately, the vision behind this is that today for professional graphics use for offline rendering, people that work in that space already understand the benefits of ray tracing. [They] use it on a regular basis and build their whole workflows around the assumption that ray tracing takes an incredibly long period of time. And they're used to that.

When they want to do rapid previews, they don't use ray tracing. They use rasterization. They tend to build preview tools around the GPU. Of course, it means that there's a tremendous visual gap between what they get when they preview, and what they ultimately get when they submit their work to a render farm or to a large computer, to wait a long time to get the results out.

Then you've got gaming. There is no ray tracing in gaming. Intel talks about it, but there is no game out there today that uses ray tracing. There's nothing out there that's even close to being able to bring truly fully ray traced [technology] to end the gap.

Our vision is [to solve] the fundamental problem of ray tracing, which is 'how do you take advantage massively parallel stream processors, to be able to bring to bear all that computing to solve the ray tracing problem and to be able to create a straightforward and standardized programming interface to allow people to migrate their existing game engines or rendering engines over to use ray tracing?'

Our vision is in that four or five years' time, the same fundamental underlying technologies will be used for both production rendering needs and for game rendering needs. The only difference will be that for games, they may not catch quite so many rays, because they need to maintain interactivity, whereas for production rendering, they'll need to cast thousands of rays for every pixel, because they're trying to create absolute beauty that's going to be on the cinema screen.

Ultimately, our vision is that the same technology, the same shaders, the same rendering techniques are being used in both. That's not technically possible today.

Industry Standard: This is where you are taking your technology, or …?

McCombe: We see no reason this would be in a game console eventually, it's just a matter of silicon integration with existing screen processors.

Knowing that we've solved these problems, I think the real challenge at this point is a business challenge and a market challenge of trying to break the Catch 22 that game developers won't write for a platform that doesn't have acceptance, and isn't integrated into commodity hardware. And commodity hardware vendors might be hesitant to integrate a piece of custom silicon into the hardware when there isn't content working for it.

Industry Standard: That's a pretty big nut to crack.

McCombe: We have a solution for that. We have this small little thing called the 3D professional market, which already places a tremendously high value on ray tracing and is willing to pay for it. And out solution right now without being integrated into a stream processor [or] a separate chip, is it's still able to provide tremendous orders of magnitude speed gain to that market, and they're willing to pay for that.

And it's our belief that if we can be successful in the 3d professional market and show that we can massively accelerate ray tracing for offline rendering, and we can offer interactive ray tracing for artistic preview while they're working, that because we're able to be successful in that space, this allows that technology to gradually trickle down to the consumer space to be used in games when the market is ready for it.

Video: Caustic Graphics -- Dynamic Geometry: The Sequel

Caustic Graphics—Dynamic Geometry: The Sequel from Caustic Graphics on Vimeo.

Where are they now: iWon

David Cotriss — Wed, 20 May 2009 06:43:35 -0700

Editor's note: This is the final installment in The Industry Standard's Where Are They Now series, which looks back at some of the major e-commerce sites, online communities, and other Internet-based businesses from the late 1990s. Today's subject: iWon.com, a site that once epitomized some of the excesses of the first Internet bubble, but has nevertheless managed to survive to the present day under a retooled business plan and new ownership.

Founding: iWon.com launched in 1999, founded by Jonas Steinman and Bill Daugherty. Steinman had been a general partner at Chase Capital Partners, while Daugherty served as the NBA's senior vice president of business development. They were classmates at the Harvard Business School. CBS funded the pair with a $30 million loan and the promise of $70 million in advertising to get iWon.com started.

History: If one company could sum up the cash craze and greed that marked the first Internet boom of the late 90’s, it would be CBS’s iWon portal. The site gave surfers cash prizes just by visiting the site and clicking links, hoping to generate leads in the process for advertisers. It was a powerful proposition in a market packed with sites struggling to survive.

The cash outlays were significant. As explained in a November 1999 Washington Post article, the site awarded a $10,000 prize daily, $1 million monthly and $10 million every April. According to the story, "Surfers [earned] up to 100 points a day for clicking on links, with each point giving them another contest entry. Every item on iWon.com [had] a tiny number beside it representing the number of points earned for clicking." As Daugherty put it, "The kernel here is that we will reward you for using us to do what you would do online anyway -- read the news or check sports scores."

iWon made deals with many Internet companies to supply "clickable" content. The companies included other sites that CBS had invested in, such as MarketWatch and Sportsline. Until iWon launched, CBS was the only major television network without its own "Web guide." In an October 1999 BusinessWeek article, analysts saw the plan as an attempt to create an umbrella brand or portal for CBS's various online properties.

Many were skeptical about the site’s business model. It wasn't just the premise of handing out scads of cash to users. By late 1999, the all-in-one portals were losing their luster, and many would eventually fail. Questions were also raised about the quality of the audience attracted to iWon. A Jupiter Media Metrix analyst told CNET in October 2000 that advertisers might not be able to trust the leads that come through sites like iWon.

In the end, CBS failed to make iWon a central part of its online strategy. The high-powered giveaways were also scaled back. Nevertheless, iWon managed to weather the storm and is still around today.

What Happened: iWon has gone through a number of ownership changes over the past decade. CBS retooled its Internet strategy in 2001 and by 2002 iWon.com was back under the control of its cofounders as one of several properties operated by Interactive Search Holdings. In 2004, Ask Jeeves Inc. bought Interactive Search Holdings, including iWon. Ask Jeeves itself was acquired by Barry Diller's InterActiveCorp around the same time.

After taking control of iWon, IAC proceeded to make some changes to the site. In September 2007, a revised version of the site was launched focusing primarily on casual games to add stickiness. Before, iWon depended on users clicking links, but under the new site let users earn "coins" which could be traded in for sweepstakes entries.

Big prizes are still part of the iWon formula. Current sweepstakes include an annual $1 million prize, various monthly prizes, a $500 weekly prize, and a $100 daily prize.

The site had 3.8 million unique visitors per month, according to comScore's March 2009 data cited on the IAC website. IAC did not break out the revenue for iWon in its 10-K report filed with the Securities and Exchange Commission in March, but did say "the impairment at the Media & Advertising segment primarily resulted from the decline in revenue and profitability in IAC Search & Media's Excite, iWon and MyWay portals businesses." IAC declined to provide revenue or profit figures for iWon or discuss future plans for the site with the Standard.

Where Are They Now? The Industry Standard was unable to track down Jonas Steinman or Bill Daugherty. The two were involved in the $343 million Interactive Search Holdings acquisition by Ask Jeeves in 2004, and were "expected to be retained" after the takeover closed. IAC, which now owns both Ask and iWon, declined to answer any questions about Steinman or Daugherty when contacted by The Industry Standard, but described them as "former" executives.

Google tries to capture more health data from searches

Sindya Bhanoo — Mon, 18 May 2009 08:24:56 -0700

Some Google users may have noticed that health-related searches generate more than a simple list of results.

For instance, a search for "headache" might prompt a response that asks, "Did you search because you or someone you know has a headache? Yes/No."

This survey, and other similar ones, are part of Google's attempt to improve the quality of data harnessed from health-related searches.

As another example, if a user were to Google "ibuprofen," an anti-inflammatory drug, he or she might be asked a follow-up by Google that says, "Did you search because you or someone you know is taking ibuprofen? Yes/No."

"Understanding how people search when they're feeling sick is an important problem to solve, as it can help improve projects like Google Flu Trends, which uses aggregated search data to detect influenza epidemics. Statistics gathered in this experiment may also help Google deliver more relevant search results in the future," Roni Zeiger, an MD and Google product manager and Jeremy Ginsberg, a Google software engineer wrote on the company's corporate blog.

They added that when "someone who searches for [arthritis pain] to understand why an aging parent is experiencing joint pain might want to learn about nearby health facilities and potential treatments, whereas somebody who searches for [arthritis pain] because she is doing a research project might want results about how common arthritis is and what its risk factors are."

Google has other health-related services based on search. The company launched a Flu Trends in April, which tracks how often people searched for flu-related terms on Google across the country or in certain states. This, the company said, is a good indicator of how many people have the flu.

Google did not respond to an Industry Standard request for an interview.

Seven improvements we'd like to see in a next-generation iPhone

Sindya Bhanoo — Fri, 15 May 2009 14:37:43 -0700

As the Apple World Wide Developers Conference approaches and the company prepares to roll out a new version of the iPhone operating system, the Mac rumor sites have been buzzing about what a next-generation iPhone might bring to the market. While some of Apple's iPhone plans are known, here's a list of seven other improvements that we would like to see:

1) Multitasking: One of my pet peeves with the iPhone is not being able to run more than one application simultaneously. For example, I often listen to the American Public Radio application, but I can't check e-mail at the same time. Jailbroken iPhones can run a "background application" that lets users run more than one app at once, but it would be nice to be able to multitask without breaking the iPhone's warranty.

2) SMS contacts: BlackBerry and Nokia owners may find this hard to believe, but the iPhone out of the box doesn't allow users to SMS contacts from their phone to other phones. This is a very basic feature that many other phones have had for years, and a very useful one considering the billions of mobile phone accounts in existence.

3) Primitive call logs: Another basic functionality beef that some annoyed iPhone users have cited: The iPhone's "primitive" call log. It doesn't let you see whether a call was incoming or outgoing, view call logs more than 30 days old, or see how long a call lasted. "I cannot believe iPhone call log is so primitive," a user named Mettur Man wrote on the Apple iPhone forum. "I like the product in general, it does not mean I have to accept every shortcomings of the product."

4) Syncing media: Syncing ripped or purchased media between multiple computers has always been a headache with iTunes, iPods, and iPhones, due to DRM concerns and technical issues. On Apple's iPhone forum, there are complaints that the iPhone's iTunes application won't complete a sync on more than one computer.

5) Picture messaging: Multimedia messaging (MMS) is the ability to do picture and video messaging. It's a major source of complaints among iPhone owners. Again, this is probably because it is available on many other cell phones. "I love my iPhone," Robby Russell wrote on his blog. "There is one problem with it...Multimedia Messaging is pretty much non-existent with non-iPhone friends & family. My family continues to send me pictures/videos via text message… because they can with their other friends and family." Apple has promised that we'll see MMS in the new release, but it remains to be seen how it will work -- or whether video will be included (see No. 7, below).

6) More e-mail: The iPhone currently only lets users view about 200 messages in its e-mail application, which is frustrating if you are stuck somewhere and desperately searching for an address or other important piece of information that was sent to you in an email. "That's like a day's worth for me, useless, cant get to messages I received or sent last week," blogged Dale Fraser. "The Blackberry had a last 30 days option, with the iPhone memory there is no logical reason to have such a small limit." He added: "You can't search messages, if they fix the limit of 200 messages, they need to add search so that you can search and find a message your looking for."

7) Video camera: For months, there have been rumors and speculation about an iPhone video camera. Besides being able to use an iPhone like a Flip to record video clips, there has also been talk about an iPhone video conferencing feature (note the Standard's prediction about this last year did not come true).

iPhone OS 3.0 will be free for current iPhone users and $9.95 for iPod touch users. Whether Apple shows off a next-generation iPhone at WWDC remains to be seen.

Google, GE absent from new EHR alliance

Sindya Bhanoo — Fri, 15 May 2009 09:46:27 -0700

Several major technology companies are notably absent from the EHR Stimulus Alliance, a newly formed group that aims to educate U.S. doctors about the benefits of electronic health records.

The alliance, which promises to educate 500,000 physicians about EHR in 200 days, includes companies such as Nuance, Intel, Dell and Microsoft. Missing from the list are major EHR players such as Cerner, Google and GE, which recently launched "Healthymagination," a long-term, $6-billion commitment to improve health information technology. Also missing is Medsphere, a promising start-up trying to help hospitals implement VistA, an open-source EHR system. The alliance did not respond to a question about the group's membership.

The EHR Stimulus Alliance has planned briefings, roundtables, presentations and webcasts on the benefits of EHR. The group also hopes to inform medical professionals about government incentives available to doctors who adopt electronic health records.

The massive effort is a sign of how anxious companies are to get a slice of the EHR pie. President Barack Obama is making a push to digitize all health records by 2014 and has allotted $20 billion dollars in the stimulus bill that will go toward transitioning to EHR.

Knol's expert-based formula fails to unseat Wikipedia juggernaut

Sindya Bhanoo — Thu, 14 May 2009 15:18:10 -0700

Remember Google knol, the user-generated online encyclopedia that was supposed to take on Wikipedia?

The plan, announced in late 2007 and rolled out last summer, involved getting subject experts to publish and discuss "knols," or articles on various topics. The easier interface, the requirement for authors to create accounts, and features like expert debates were intended to establish knol as a trusted source of information while discouraging a culture of anonymity, which has led to vandalism and other inaccuracies on Wikipedia.

That was the plan. But in practice, knol has generated only a fraction of the interest and participation that Wikipedia's English-language site commands.

Consider these statistics:

* Last month, Google announced that the 100,000th knol had been published. The English version of Wikipedia alone has nearly 3 million articles.

* Only a dozen knols have more than 100 comments.

* The knol with the most page views is The Self, with nearly 255,000 views. Individual Wikipedia articles don't show traffic data, but the site claims that articles about influenza were getting over 200,000 requests per hour on April 29th (The knol about influenza, written by a doctor, has under 4,000 views total, and just 51 page views so far this week).

Knol may be struggling to gain traffic and mindshare, but Cedric Dupont, a product manager for knol at Google, is confident that knol is headed in the right direction -- that is, providing an easy way for users to create and publish content.

"The objective of knol is to encourage people to share their knowledge online, in particular people who do not already do so today," he told The Standard. "Knol has made great strides towards achieving that goal."

He said that Google is continuously refining knol and adding new features. He pointed to Knol Collections, which lets users group and cross-link knols. This enables users to create a larger body of work. If, for instance, a user is self-publishing a book on knol, each chapter of the book could be represented through individual knols, which can then be linked into a collection.

EHR adoption inhibited by state level privacy laws

Sindya Bhanoo — Wed, 13 May 2009 08:38:21 -0700

The need for customized electronic health records software may be pricing out some hospitals, according to a collaborative study done by a Harvard Medical School doctor and an MIT Sloan School of Management professor.

The study, which will be published in the journal Management Science, found that because privacy laws differ across states, EHR software often has to be customized to account for these differences. This is a potential barrier for many hospitals, because customization costs money.

States that had unique health privacy laws in place experienced a 20 to 30 percent reduction in EHR adoption rates, Catherine Tucker, an MIT Sloan School of Management professor and the study's coauthor said.

"What we found is that when we were talking to hospitals, a lot of the costs came because these state laws are very different and so it meant that a vendor couldn't sell a standardized solution," she told The Boston Globe. "Any time you mention customization and software, it gets costly."

However, there is one potential way to hold costs down for hospitals that can't afford commercial solutions: Using open-source software.

For instance, the EHR package built by the Veteran's Administration using taxpayer dollars is free and open source, although hospitals will need to spend money and time to customize it to fit their needs.

In addition, West Virginia senator John J. Rockefeller last month introduced Senate Bill 90, the Health Information Technology Public Utility Act of 2009, which would help promote open source EHR and offer grants to hospitals willing to implement it.

Medsphere, a company that has helped commercialized VistA, sells its EHR software "for comparative pennies on the dollar," CNET reported. Proprietary systems comparable to what Medsphere offers typically run between $10 and $20 million dollars.

Five Palm Pre features that will shake up the smartphone market

Sindya Bhanoo — Tue, 12 May 2009 14:31:06 -0700

There's a new smartphone coming out, and many say it will be a game-changer as it makes a play for the market currently dominated by the iPhone and the BlackBerry. While the official sale date of the Palm Pre has yet to be announced, the device has some winning attributes that may help it pull ahead of the competition. Here's The Standard's top 5 plus points for the Pre:

1) Wireless charger -- The Pre is the first phone to work with a wireless charger, where charging takes place via magnetic induction. At just under $70, the charger is both convenient and affordable.

2) Fits like a glove -- People who have been shown demo models of the Pre say it has smooth rounded edges and fits comfortably in the hand. This contrasts with the iPhone, which looks cool but has a clunkier feel. In terms of size, the Pre is smaller than an iPhone, but larger when opened.

3) Powerful and primed for multitasking -- The Pre's Web browser is speedy compared to the iPhone and BlackBerry browsers. It can also run multiple applications at once, and users can toggle between applications with the swipe of a finger across the screen.

4) It handles Flash -- Palm plans to integrate Adobe Flash 9 into the Pre this year, which will further enhance its Web capabilities. Flash-enabled applications such as video players are not viewable on the iPhone -- at least not yet.

5) A real camera! The Palm Pre's camera captures impressive images, unlike the blurry pictures found on the iPhone and most other mobile phones. "Even in lighting that wasn't super bright, colors came out rich," Gizmodo reported.

Here's a quick demo of the Pre in action, which shows many of the other features of the Pre, including the screen and keyboard:

Kindle DX Promo shut down after "continuous negative attacks"

Ian Lamont — Tue, 12 May 2009 14:08:27 -0700

A website that promised half-price Kindle DXs has been shut down after message boards on Amazon.com and MobileRead.com savaged the offer as a "scam" and questioned the purported business model.

The site, kindledxpromo.com, was launched last week. It sought to capitalize on the publicity surrounding the launch of Amazon's Kindle DX, a large-screen e-reader aimed at the newspaper, magazines, and textbook markets. While the official Kindle DX price will be close to $500 when it goes on sale this summer, the promo was offering it for $244.50. According to a message on kindledxpromo.com which has since been taken down, the discount was possible owing to an arrangement with authors to have their works bundled on the devices for a fee. The company operating the site, Promo Publishers LLC, is not affiliated with Amazon.com.

Doubters were quick to question the promotion when it was launched, saying it sounded too good to be true.

"[A] $250 discount sounds incredible ... but then, I can always find some guy on a street corner willing to sell me a flat-screen TV for $300, as long as I don't ask him where he got it, or how he's licensed to do business from the back of a van," said one MobileRead forums user.

Another user calculated that the cost to participating authors would be high. "If there were 100 authors subsidizing each Kindle DX, every author would have to pay $1222.50 per 500 shipped," said a forum member using the handle 'avaloncourt.' "That's just not going to happen. That doesn't even include any percentage to go to him. That is merely the cost of subsidizing the equipment and not accounting for the shipping aspects."

But David Edenfield, founder of Promo Publishers, told the Standard that his plan was legitimate.

"I thought of the idea for this promotion a week or so ago, registered the LLC, bought the domain, built the site, twittered like crazy, made a lot of sales, and caused a buzz that seems to have taken on life of its own," he said. "Although I only had a few authors lined up, I had an angel investor backing me for a significant number of units with the idea that we could cause a stir, gain some eyeballs, and eventually build a viable business around our promo distribution model."

However, the skepticism expressed on MobileRead and on an Amazon.com thread convinced Edenfield to pull the plug on the Kindle DX promotion.

"As a result of the continuous negative attacks targeted both towards me personally and our business model, we have decided that our brand has been damaged, and therefore Promo Publishers will never be seen as a credible business regardless the information we provide," Edenfield told the Standard.

A email to customers who paid for the half-priced Kindle DXs stated that their PayPal transactions would be reversed.

Chinese outsourcer sees industry surge after crisis

IDG News Service — Tue, 12 May 2009 07:22:43 -0700

Chinese outsourcer Neusoft is pushing to expand in Europe and the U.S. ahead of an upswing in outsourcing the firm expects after the global recession.

Neusoft, one of China's bigger outsourcers, has appointed new top executives in Europe and the U.S. in recent months to help crack those markets, said Walter Fang, the U.S. head for Neusoft since last fall. That will diversify foreign clients for the firm, which drew 80 percent of its overseas revenue from Japanese firms last year, he said.

"Outsourcing will probably surge after the crisis is over," said Fang.

Outsourcing has suffered along with the global economy, but a continued need for cost-cutting at firms will help the industry rebound, Fang said. Rising pressure for firms to quickly develop products that keep up with changing technology will also boost outsourcing demand, he said.

Neusoft's main business is in embedded software outsourcing. It counts Intel and Nokia among its clients, though Chinese customers last year accounted for two-thirds of its revenue of 3.7 billion yuan (US$544 million).

India remains the top offshoring choice for most firms despite saturation in its market and a recent financial scandal at outsourcer Satyam Computer Services. Almost all of Neusoft's U.S. clients have outsourced to India or say they think about doing so, Fang said.

But China is among countries including Vietnam and Mexico that will benefit as customers start to consider destinations besides India, said Frances Karamouzis, a Gartner analyst. China offers a large pool of untapped, cheap labor and better infrastructure than India in telecommunications and transportation.

Offshoring to China is especially attractive for firms like financial service providers that aim to build their businesses in the country, Karamouzis said.

China's outsourcing appeal still suffers from weak enforcement of intellectual property laws. Clients rely on the internal standards of outsourcers rather than China's courts to shield against the loss of trade secrets, said Karamouzis. The outsourcers with such mature standards are usually U.S. or Indian firms with operations in China, she said.

Neusoft has worked to shake free of China's reputation by conforming to industry standards for the protection of intellectual property, Fang said. Neusoft is one of the few firms allowed access to the source code for Symbian, the operating system used by Nokia's smartphones, he said.

Neusoft's work on Symbian occurs in a restricted access room built to meet security needs. The room's computers are blocked from networks in other areas and made without USB ports to guard against the copying of data, Fang said.

(John Ribeiro in Bangalore contributed to this report.)

GE sets aside $6 billion to fund global health technology initiative

Sindya Bhanoo — Mon, 11 May 2009 07:18:18 -0700

GE has a new product called the "Lullaby Warmer," a heating device for the developing world that helps reduce infant deaths from hypothermia and asphyxia.

The development of the device is part of the company's announcement last week that it will commit $6 billion to improving healthcare by developing new technologies. A large portion of the funds will be targeted at improving healthcare for underserved communities, and projects will also address both the design and distribution of new technologies.

In another project, GE Healthcare donated GE ultrasound equipment, mobile X-rays and patient monitors to 23 public health facilities in Cambodia.

Developing healthcare technology for the developing world is an area of strong growth. In February, the UN Foundation, the Rockefeller Foundation and the Vodafone Foundation formed an alliance to improve healthcare in the developing world by leveraging mobile phones. Other companies, such as Dimagi, a Massachusetts-based start-up, are trying to develop mobile health applications for the developing world.

ConsumerWatchdog.org: Leaked Google presentation meant to counter fed inquiries on competition

Ian Lamont — Fri, 08 May 2009 15:07:46 -0700

Is Google a monopoly? That question, which is increasingly gaining the attention of regulators in Washington, D.C., is also the subject of an intense public relations war between Google and detractors.

Today, a new front was opened up, after a consumer advocacy group released a copy of a Google presentation on Google's business practices, along with critical commentary that casts doubt on Google's claims that it supports competition. The group, ConsumerWatchdog.org, said that the Google presentation is part of a campaign to counter federal inquiries into potentially anticompetitive practices.

The presentation is titled, "Google, Competition and Openness." The annotated version (on page 2 of this article) refutes many of the specific points made by Google.

The 26-page PDF starts out with headlines from 2008 that suggest Google has gained too much power. They include a July 22, 2008 Cnet column, "So when do we get over with it and declare Google a monopoly?" The Google presentation then compares this sentiment to headlines from the late 1990s, when other companies such as Yahoo and Lycos were viewed as powerful online properties. At the bottom of this page, it states "The Lesson: Search has always been a highly competitive space -- and companies can't get too comfortable."

The annotated version of the page from ConsumerWatchdog.org crosses out the last six words of this statement and adds "Now ... Google market share 72% (including YouTube)."

Another page of the Google presentation presents Forrester research that found most consumers are willing to switch search engines, with 55% using multiple search engines each week. The commentary in the margins called the data a "diversionary tactic" and said "Most advertisers can't switch ... Antitrust/monopoly problem is with search advertising and search ad syndication, NOT search engines."

The last page of the presentation concluded with Google's claim that "Google welcomes competition because it stimulates innovation, makes us all work harder, and provides users with more choice." The margin comments expressed a different conclusion:

Charm offensive doesn't match actions

Competition: All for it when DOJ believes you're anti-competitive and seeking to extend monopoly, but different tune when marketing advertising dominance of AdWords, PageRank, etc.

Openness: Pushes "open" on competitors, but not itself ... Among the most non-transparent on ad auction system, quality score, Page Rank, use of private user data, Google.org, etc.

Privacy: Silence is deafening ... no discussion here at all of privacy record, despite practices being high on FTC/Congress agenda and privacy groups (e.g. Privacy Intl.) ranking privacy practices worst in the world.

John M. Simpson, a consumer advocate working for ConsumerWatchdog.org, said that the original Google document and the commentary came from a "source we trust," but he declined to describe who that person was. The ConsumerWatchdog.org press release described the anonymous author of the commentary as "an expert."

Google confirmed that the original presentation was authentic, but said that it had nothing to hide. Adam Kovacevich, Google's senior manager for Global Communications and Public Affairs, said that the presentation had been shown to 30-40 groups and individuals in Washington, D.C., New York and Europe over the past three months. He said the audiences included policymakers, ad agencies, think tanks and academics. He declined to identify the policymakers by name, but said they included congressional staffers on Capitol Hill.

"This [presentation] was really borne out of our experience in the last two years in realizing that we needed to do a much better job in telling people about our approach to competition," Kovacevich told The Standard.

Kovacevich said he did not know who released the presentation to ConsumerWatchdog.org or who wrote the commentary.

Kovacevich, who also narrated the webinar version of the presentation, told one of his audiences on April 9 that "the whole idea of locking users into our services is not something that we adhere to philosophically as a company."

ConsumerWatchdog.org disagreed. "It's pretty clear that Google is feeling the heat, appropriately, [because of] the Justice Department inquiry into the Google Book settlement," Simpson told the Standard. "Google wants to put their best story forward ... [but] if they're out there spinning it, it is important that other facts be made available."

Google presentation with commentary (source: ConsumerWatchdog.org)

Anonymous Analysis of Google Charm Offensive

Publish at Scribd or explore others: Internet & Technolog Research privacy antitrust

Virtual goods marketplace leading to revenue opportunities within Facebook

Sindya Bhanoo — Fri, 08 May 2009 14:49:50 -0700

Facebook could see a record $500 million in revenue this year, fueled by a market of virtual goods, where users are willing to pay for points to buy things like imaginary flowers, food for their online pets and virtual poker chips they will never be able to cash out.

The Facebook virtual economy is rapidly growing and evolving to include more complex, graphic-rich games, according to companies who facilitate payments for Facebook applications.

It's already happening in full force in China. A Chinese social network called Tencat made more than a billion dollars in revenue last year, primarily through selling virtual goods.

Spare Change CEO Mark Rose, whose company handles direct payments for Facebook applications, discussed the virtual goods industry within Facebook with The Standard. According to Rose, Facebook games generating the most revenue include role-playing games such as Mob Wars, casino and card games such as poker, and games that build up a virtual world, such as YoVille.

But this is changing, said Jason Bailey, the CEO of Super Rewards, a company that helps developers integrate offers from advertisers and direct payments into their games.

"As the platform evolves we are seeing more and more immersive environments, mini-worlds of the calibre we commonly see...in console games," he told The Standard.

Outside of the gaming realm, payment providers told The Standard that virtual gift applications and dating applications also do fairly well. However, it is "nothing" compared to gaming revenues, Bailey said.

Is Google's Chrome browser the new Internet Explorer?

Paul Boutin — Fri, 08 May 2009 10:24:38 -0700

Google's Chrome browser has a market share that rounds down to zero. Yet Microsoft plans to argue to the European Commission that bundling Chrome into Windows -- an anti-trust decree the EC wants to impose -- will potentially give Google a monopoly hold on the Internet.

The claim seems laughable to anyone who hasn't used Chrome. But those who try the largely unknown application almost unanimously rave about its speed and ease of use. Never mind the arcane software benchmark charts all over the 'Net: Chrome is fast.

Google knows speed is addictive -- search queen Marissa Mayer has repeatedly said that a few hundred milliseconds per page makes a 20 percent difference in how often users type a search into Google. One of the company's major goals with Chrome is to effectively speed up the Internet for end users.

Chrome also came out ahead in an admittedly Google-sponsored security test. The reason: The browser automatically updates itself every few days. This means Chrome users are most likely to have the latest security updates installed.

Microsoft's argument may seem comical, but there's a kernel of truth to it: If Google ends up with a majority share of browser users tied to Chrome, and Google's search engine is their most frequent and trusted destination, think of the opportunities for Google to leverage that huge group of people.

Microsoft's Kelsa+ project finds "broad gains" in digital literacy among low-paid support staff

Sindya Bhanoo — Fri, 08 May 2009 09:12:45 -0700

Give an man a computer and he may surprise you, some Microsoft researchers in Bangalore, India are finding.

As an experiment, the researchers set up a spare computer terminal with Internet access in their Bangalore office and allowed low-wage workers, such as cleaning staff, to access it freely during their off-hours.

Many of the workers previously had little or no computer training began surfing the Internet, setting up e-mail accounts and joining social networking sites. And along the way, they tried to help each other.

The researchers reported that "broad gains were seen in confidence, self-esteem, and basic digital literacy, while a few individuals experienced improvements in second-language (English) proficiency and career opportunities."

“We conducted the study in a city office,” Aishwarya Ratan, one of the researchers working on the project, told On Windows. “The support staff that work there – housekeepers, security guards, drivers -- have incomes as low as US$100 a month, and despite the fact that they work next to computers all day, never have a chance to interact with them.”

Individuals taught one another what they had figured out about e-mail and and accessing videos on the Web. After several months, individuals were doing more complex tasks, such as setting up personal accounts on Orkut.

The Microsoft project, called Kelsa+, is inspired by the "hole in the wall" experiment by Sugata Mitra, who heads research and development at NIIT, a computer software and training company in New Delhi India.

Mitra set up an Internet console outside his office, which faces a slum, as an experiment. He gave no further instructions. Within a day, slum children who had never used a computer before had figured out how to point, click and browse the Internet.

The Microsoft researchers hope to continue their research and see Kelsa+ grow into a program that offers free, unrestricted access to Internet-connected PCs for low-income office workers in developing countries. It is, they believe, a simple and inexpensive way to help bridge the digital divide.

Critics slam Senator Kerry's views on the news industry

Sindya Bhanoo — Thu, 07 May 2009 11:29:20 -0700

Some observers have reacted with dismay to parts of yesterday's subcommittee meeting of the Senate Commerce Committee, in which Senator John Kerry (D-Mass.) expressed concern that online media may not maintain the same high standards of journalism that he believes print media has.

Players in the online media world have hammered newspapers and magazines for years, saying that they are too large and dinosaur-like. Yesterday's meeting brought out a new wave of criticism.

Gabe Rivera, the founder of Techmeme and several other niche news aggregators, hinted that the current rounds of layoffs that many newspapers are going through are necessary.

"Kerry's premise is false. They weren't competitive. There was redundancy. Trimming the fat yields a competitive organization," he wrote on Twitter.

In his testimony, Sen. Kerry also said steps need to be taken to make sure news media stays diverse and independent.

Implying that the Internet already lets consumers access diverse sources of news, Mike Steib, director of TV Ads at Google tweeted, "There are 90 feeds in my Google Reader."

The hearing was prompted by the crisis facing traditional media outlets, especially newspapers and magazines, as advertisers and readers have migrated to the Web. Close to 9,000 layoffs and buyouts have occurred in 2009 alone at U.S. newspapers, according to Paper Cuts, a blog about the news industry.

But some see opportunities in the disruption of the news industry.

Journalist David Cohn, founder of community journalism website Spot.Us, believes that this is an exciting time for news media.

"I think what journalism needs is 10,000 different start-ups," he told CNN.

Image: John Kerry speaking at an event in 2008 (cliff1066/Flickr)

Mixed reactions from the publishing industry on prospects for the Kindle DX

Sindya Bhanoo — Wed, 06 May 2009 13:12:23 -0700

The publishing industry is debating the impact of Amazon.com's Kindle DX e-reader, which has a larger display and other readability features that were absent in earlier Kindle models. While some newspaper partners are enthusiastic about the new device, many observers have questioned the business model and issues with the Kindle's display.

The New York Times, The Washington Post and The Boston Globe will offer reduced-price Kindle DXs to users who sign up for long-term subscriptions. Only users who live in areas where the papers do not offer home delivery are eligible for the offer.

At the Kindle's launch in New York on Wednesday, Arthur J. Sulzberger Jr., the publisher of the The Times, exclaimed that the new Kindle was "wonderful."

The device is "an important milestone in the convergence of print and digital."" Sulzberger said. "We know that the e-reader can offer the same satisfying experience [as the print edition]."

But not everyone is convinced that the little device can save an industry that is falling apart.

Damon Darlin, The Times tech editor, wrote that the screen size is still too small, and not fully satisfying.

"You never see the big picture -- a full page -- that can reward you with the story you didn’t think you wanted to read, but are lured in either by the placement of the story on the page or the art that goes with it," he said. "The larger screen should have been able to offer a different experience than the one on the first two versions of the Kindle."

The Kindle also requires that users pay for news, which may end up being a major deterent.

"Amazon aims to reinvent newspapers for the modern age," Melissa J. Perenson, a PC World columnist, wrote. "The reality is we have too many ways to get our information for free. We can read the news via the Internet, our cell phones, and other handhelds such as the iPod Touch....For these reasons, as a Kindle owner I can't justify paying $14 a month for an electronic version of The New York Times delivered to my e-reader."

Josh Quittner of Time echoed this sentiment, saying that real test of the Kindle will be whether readers are willing to fork over the dollars for a sleek hardware design and high-quality content. He also pointed to the Kindle's display, which is unable to show the rich color artwork that magazines and many newspapers have.

The Kindle DX will sell on Amazon.com for $489.

Virginia website aimed at fighting illegal prescriptions gets hacked

Sindya Bhanoo — Wed, 06 May 2009 10:46:07 -0700

Hackers last week attacked a Virginia state website that pharmacists use to track prescription drug abuse. The hackers deleted the information of more than 8 million patients and replaced the site's homepage with a ransom note demanding $10 million.

The ransom note on the Virginia Department of Health Professions website read:

"I have your [expletive] In *my* possession, right now, are 8,257,378 patient records and a total of 35,548,087 prescriptions. Also, I made an encrypted backup and deleted the original. Unfortunately for Virginia, their backups seem to have gone missing, too. Uhoh :(For $10 million, I will gladly send along the password."

"There is a criminal investigation under way by federal and state authorities, and we take the information security very serious," Sandra Whitley Ryals, director of Virginia's Department of Health Professions told The Washington Post.

The database that was hacked is the state's prescription monitoring program, which helps pharmacists monitor and prevent illegal prescription activity, such as prescription forgery and "doctor shopping," where one patient might be visiting different doctors and pharmacies to obtain certain prescribed drugs. Virginia is one 32 states to maintain such a database.

The investigation is being handled by the Federal Bureau of Investigation.

"At this point we're not commenting on the progress of the case but we're working in conjunction with the Virginia State Police," M.A. Myers, a spokesperson for the FBI told The Industry Standard.

Nearly a week after the hack, the site remains down and a message on the homepage simply states, "The Virginia Department of Health Professions is currently experiencing technical difficulties which affect computer and email systems. We apologize for any inconvenience this may cause."

Several months ago, The Standard reported on an electronic health record security breach at a Los Angeles hospital, where a former employee was accessing information and filing false insurance claims. And in October of last year, a prescription drug management company, Express Scripts, was sent a ransom note that threatened the release of millions of patient records.

Amazon's near-$500 price tag kills Kindle DX buzz

Paul Boutin — Wed, 06 May 2009 09:28:16 -0700

When it comes to e-readers, the hype machine has gotten ahead of the reality. Earlier this week, photos of the super-slim, sexy Plastic Logic Reader -- not available until next year -- circulated the 'Net and graced a New York Times article on the coming wave of big-screen readers meant to display newspaper, magazine and textbook content.

Amazon's Kindle DX, unveiled at a splashy media event in Manhattan today, is a disappointment for anyone expecting something like Plastic Logic's prototypes. It is, basically, a Kindle 2 with a bigger screen. The 9.7-inch display has twice the surface area of the Kindle 2's six-incher. The DX includes a PDF reader, but that only raises the question of why the Kindle 2 doesn't have one. The screen is still black and white. Don't expect magazine publishers to get excited about shipping monochrome versions of their publications.

The real buzz-killer, though, is the $489 price. That's comparable to the first versions of Apple's iPod and iPhone. But the Kindle, even at DX size, lacks the lust factor of Apple's gadgets. People bought the iPhone even if they couldn't afford it, because it looked cool and did things differently than every other mobile phone and media player on the market. I doubt the DX will entice people in the same way.

There'll be a lot of talk today about how Amazon is revolutionizing the publishing industry. Don't believe it until the first month's sales are tallied. For all the proselytizing tech people do about the death of print, the DX's XL-sized price tag unintentionally proves what a technological feat a printed $1 copy of USA Today is.

Windows Mobile Marketplace bans Skype, Flash, carrier ads

Paul Boutin — Wed, 06 May 2009 05:51:47 -0700

Microsoft's forthcoming Windows Mobile Marketplace (or is it Windows Marketplace for Mobile? Microsoft uses both names) is the company's answer to Apple's App Store. But in order to prevent a repeat of the roadblocks hit by aspiring iPhone app moguls, developers should read the PDF listing Microsoft's banned dirty dozen on apps for the marketplace.

Some of the bans, such as apps that link to alternate app stores, are no surprise. But Rule No. 4 bans "applications that enable VoIP (Voice over IP) services over a mobile operator network." That means no Skype for Windows phones.

Rule No. 5 bans "applications that sell, link to, or otherwise promote mobile voice plans." Translation: Wireless carriers that sell Windows phones subsidized by service plans can't promote premium plans in the store.

Advertising is expected to pay for, or at least subsidize, many apps. But Microsoft has set the terms for ad content with Rule No. 6, which bans "applications that display advertising that does not meet the Microsoft Advertising Creative Acceptance Policy Guide." The guide bans audio, Flash, and even Microsoft's Silverlight streaming media format.

Other rules warn developers against uploading user data, including location. But there's one rule that should keep customers happy: All downloads must be kept under 10 megabytes.

Image: Microsoft

Yahoo's new home page fails to learn from Google

Paul Boutin — Tue, 05 May 2009 12:21:18 -0700

A few random Web servers have recently been treated to a test version of a new Yahoo home page. MediaPost blogger Mark Walsh scored a screenshot of the page, and describes what he saw:

The biggest change is the customizable left nav bar featuring Yahoo properties that now allows people to add or edit links to outside sites through an "application gallery" that opens up via tabs at the top and bottom of the section.

The gallery displays clickable icons for a group of more than 20 third-party publishers that also includes MySpace, Barron's, Divine Caroline, and MarketWatch. It seems likely that Yahoo will add more sites to this initial group of partners, but it doesn't appear at present that Yahoo allows users to add links to any other site in the nav bar.

Sometimes a picture is worth a thousand-word blog post. Compare Yahoo's super-busy idea of a home page to that of its far more successful competitor, below. Google head of search products and user experience, Marissa Mayer, has explained publicly that Google tests showed a half-second of extra page load time, even to display more search results, reduced user traffic -- and more importantly, ad revenue -- by 20 percent.

If new CEO Carol Bartz wants to make deep, controversial cuts in order to turn Yahoo around, she should probably start with the home page.

Image: MediaPost

FTC investigates Google, Apple for being successful

Paul Boutin — Tue, 05 May 2009 11:40:03 -0700

When Google CEO Eric Schmidt joined Apple's board of directors in August 2006, technology fans expected the companies to meld Apple hardware and software with Google's expanding set of Internet-based applications.

So far, the geeks have been disappointed. Google is the default search engine on Apple's Safari browser, but that's also true of the much more widely used Firefox. Apple's iPhone doesn't use Google's Android operating system. Nor has Apple done anything special to support Google's Web-based applications such as Gmail and Google Docs. The iPhone includes a player for Google's YouTube video site, but Apple pushes its own iTunes audio and video downloads.

If Schmidt and former Genentech CEO Arthur Levinson have somehow tried to use their dual board seats in some behind-the-scenes way to block competitors -- Micrososft, Yahoo, AOL, the entire print publishing industry -- it isn't working.

Still, the Federal Trade Commission, according to a Wall Street Journal report, is investigating whether the pair's presence on both boards could reduce competition.

This isn't really about Apple. It's about Google, the singularly successful Internet company which has now been hit by three federal investigations in the past year. First the Department of Justice threatened to block the company's potential search-ad deal with Yahoo. Then DOJ investigators scrutinized Google's settlement with the Association of American Publishers and the Authors Guild over the company's plan to scan and search a large number of copyrighted books.

Neither company will comment on the situation. The Journal's analysis expresses bewilderment:

Why the FTC is taking up the issue now remains unclear. But one possibility is that Google and Apple, which long dominated separate sectors, are competing in more areas.

The Obama administration has suggested it will take a harder line on antitrust regulation than the Bush Administration.

Investigations of large tech companies always raise the ghost of the United States v. Microsoft, The Department of Justice's 1998 set of consolidated civil actions. Microsoft's settlement required the company to publish its application programming interfaces, so that other companies' applications could work with Windows as well as Microsoft's own apps. The settlement was nowhere near Justice's goals, which were said to include breaking up Microsoft, as the DOJ had done to AT&T.

But are Microsoft in 1998 and Google in 2009 comparable situations? In 1998, Microsoft's hyper-aggressive attempt to kill Netscape was obvious. To undercut Netscape, Microsoft gave its Internet Explorer browser away for free. The company created ActiveX technology for websites that would only run on a combination of the Windows operating system and Internet Explorer browser. Microsoft courted and compensated a range of big-name content producers, including Disney and CNet, to create content that only played in Internet Explorer.

By contrast, a YouTube player for iPhones seems like a consumer-demand-driven product. If there are specific actions that Schmidt and Levinson have taken to hamper competition, the DOJ hasn't yet explained them. It's possible the investigation is a fishing expedition: Google's really huge and successful, so surely there must be something for which to sue them.

Amazon's big-screen e-reader to debut Wednesday

Paul Boutin — Tue, 05 May 2009 10:49:44 -0700

The biggest complaint about electronic books such as Amazon's Kindle is that their screens are too small to effectively display magazine content. Newspaper editors also balk at the inability to lay out a page of headlines and stories, which is needed to give readers an immediate sense of what's a big story and what isn't.

E-readers are about to make the leap to the next generation. Amazon.com and a group of partners that includes The New York Times will launch a big-screen e-reader on Wednesday at an event in Manhattan.

The Times tactfully mentioned this in a story about next-generation "big-screen e-readers." However, instead of a using a photo of Amazon's new reader, the Times ran the shot shown here of the Plastic Logic Reader, a big-screen e-reader built by startup Plastic Logic. The device is being tested for launch next year by the Times' crosstown rival, The Wall Street Journal. In addition, rumors of an Apple reader are considered credible by Apple-watchers.

The new devices from Amazon and Plastic Logic are meant to display not only books, but also newspapers and magazines. Another potentially lucrative market: Textbooks. A printed copy of Paul Samuelson's Economics sells for $150 at Amazon. For millennials accustomed to reading from screens instead of books, digital versions of their required titles for school might be preferable enough to justify charging much higher prices than e-reader versions of best-selling novels, which can cost as little as $9.99 on the Kindle.

Plastic Logic's promotional photos suggest that Amazon's new reader, which hasn't yet been shown in public, may be too big for some people. It's possible that Amazon will continue to offer the existing Kindle 2, giving buyers a choice of a paperback-sized reader or an "XL" Kindle with a supersize screen. Either way, publishers are coming to terms with the continuing decline of printed publications, and are looking for digital platforms that will make their content sing so well that someone, somehow will pay for it.

(Update: Engadget has photos of a device said to be Amazon's new reader, called Kindle DX, with a 9.7-inch display compared to the Kindle 2's six-inch screen.)

Photo: Plastic Logic

Microsoft partnership brings athlete endorsements to online advertising

Paul Boutin — Tue, 05 May 2009 06:44:54 -0700

Microsoft announced a partnership yesterday with Brand Affinity Technologies, the company that licenses New Orleans Saints quarterback Drew Brees and Texas Rangers outfielder Josh Hamilton as product endorsers. Microsoft Advertising will serve the ads, but the real story is about BAT bringing its portfolio online. Advertisers will be able to find and secure endorsers from BAT's stable, to use their images and names in ads (see examples on BAT's website). Microsoft will help ensure that the online campaign is targeted effectively.

Microsoft's press release is blurry on details of who can do what, and how, but in short the partnership is intended to make it easy for vendors and their advertising agencies to hire celebrity endorsers, create ads, and serve them. Here's how Microsoft is portraying the partnership:

“Historically, endorsements were only obtainable for the largest advertisers and a handful of celebrities and athletes,” said Ryan Steelberg, president and CEO of Brand Affinity Technologies. “Now, it is easy for national and local advertisers and talent alike to benefit from the recognition and passion that consumers have for their favorite athletes and stars.

For example, advertisers can quickly capitalize on the proven power of endorsement marketing by targeting locally and using celebrity association both pre- and post-click. These are opportunities that can only be achieved in scale online, and the relationship with Microsoft Advertising and its valued network of partners is one of the ways we will open this new market of online endorsement advertising to advertisers of all sizes.”

Can you really hire Drew Brees for your online ads? Probably not, unless you have extremely deep pockets. But BAT claims to have more than 2,000 other athletes and celebrities on its talent roster. For the right price, an advertiser may be able to bring one of them into a new online campaign.

Photo: IAB

Yahoo CEO comes under fire for Flickr engineering cuts

Paul Boutin — Mon, 04 May 2009 12:08:23 -0700

"More than anything, let's give this company some friggin' breathing room," newly-arrived Yahoo CEO Carol Bartz told reporters on a conference call in January. "It's been too crazy, everybody on the outside deciding what Yahoo should do, shouldn't do, what's best for them. That's gonna stop."

But last week, Bartz made the decision to cut staff at Flickr, the widely used photo-sharing site. GigaOm editor Om Malik listed five Flickr engineers who had left the company. Some, he said, were laid off, while others resigned. Most notable is Cal Henderson, chief architect of Flickr.

Bartz' decision to fire Flickr engineers caused Seeking Alpha blogger Joel West, a business professor at San Jose State University, to turn from Bartz booster to Bartz basher:

Yahoo is now cutting heavily at Flickr, including its top development talent.

This reminds me of how CEO Ed Zander closed Motorola’s talent-laden software lab near UIUC two years ago. Ironically, Yahoo created a new office to hire that talent.

West's post won't start a backlash by itself. But it seems like an early example of how Web 2.0 boosters will view Bartz' move. Her decision to shut down GeoCities was an acknowledgement that GeoCities' build-it-yourself Web 1.0 homesteads have been replaced by simple, turnkey Facebook profiles and no-brain-required Twitter streams.

Flick, by contrast, is a successful product, at least in terms of mass-market adoption. Bartz cut technical staff at Flickr in the same week that President Obama's administration began using it to distribute official photos as part of its WhiteHouse 2.0 strategy to establish a high-profile presence on top social networks.

Financially, Bartz' decision probably makes perfect sense. Millions of mainstream Flickr users may not even learn of the staff reduction, let alone become upset by it. Layoffs are now business as usual in America. But Bartz has hurt Flickr, a prized brand and daily destination for many Internet users. The lesson for Web 2.0 boosters: As the world's economy continues to slide, no one is safe.

Photo: Yahoo