Market research vs. gut instinct — Jeff Hawkins, founder of Palm Computing and inventor of the Palm Pilot, discusses how to balance market research with your intuition.

Cashing in on non-English search engines — Global consumers are over five times more likely to buy from a website with content in their native language. Here’s how to outwit your competition and quickly become an international success.

DEMO announces $1M media prize — Trying to decide whether to launch your product at the fall DEMO conference? Here’s an incentive. Two winners will be awarded a significant amount of media publicity, totaling $1 million in ads.

Cinching sales with sports scores — Sometimes, the best way to close a deal is to not pitch your company at all. Retired serial entrepreneur Steve Blank introduces a master of the consultative sale.

10 unconventional wisdoms for funding startups — Naval Ravikant, chief executive of Vast.com, offers pointers about how entrepreneurs should approach fundings.

The flagship defense system for U.S. government computer networks is stalled

iPhone “jailbreak” excites nerds, confuses normals — Business Insider explains that in theory, a jailbroken iPhone — that means it can do stuff neither Apple nor AT&T want it to, like run on Verizon’s network and install App Store applications without paying for them — could usher in a new era of technological innovation. In practice, it mostly means Verizon will soon pick up a few of its most demanding customers ever.

Virtual Family demands your realtime — The iPhone version of Virtual Families, the popular Sims-like game, lets you stay in touch with a computer-generated character you’ve created, plus a small cast of others such as spouse, children, neighbors and coworkers. The $3.99 iPhone app connects to the $20 version for Mac or PC. Here’s the addictive catch: Your virtual family, like a real one, keeps on going when you’re not around. Spend too much time at the real office and Virtual Wife will have a surprise for you when you show up at home again.

Hands up if you’ve seen an ad on Twitter — Read/Write Web editor Marshall Kirkpatrick (don’t confuse him with VentureBeat’s Matt Marshall) reports that he’s only seen two real ads in Twitter’s ad space in the upper right corner of Twitter.com user pages. The rest are vague “sponsored definitions” links that Kirkpatrick suspects are too cheap to keep Twitter in business.

Google adds RSS to Blog Search redesign — The Google Blog Search homepage, shown below, now looks like a news site. But it flips back into a familiar — and hence easy to use — search results layout when you run a search. Also, you can now subscribe to topical blog searches, something the Official Google Blog says was a big customer demand. You can also set a Google Alert for a specific set of blog search terms, but I haven’t figured out how to get an RSS feed for that.

Foursquare

New York City-based Foursquare is run by the same team that created Dodgeball, a location-based social-networking service that was acquired and then neglected by Google. The concept is pretty simple — whenever you arrive at a new location, you “check in,” and your friends get to see where you are. You also win points for things like visiting new places and checking into multiple spots on one trip. Until now, however, you have to turn on the app to see what your friends are doing, so if you’re not checking in yourself, you probably don’t see what your friends are doing. With push notification (which some users have been playing with already, but which just went live for the general public in the App Store), you’ll see check-ins as soon as your friends make them.

As a Foursquare user, this is the first push roll out that I’m really excited about. It has the potential to make Foursquare an even more integral part of my social life. This might also make some users feel like it’s necessary to share their Foursquare check-ins on other social services like Twitter.

Of course, there are risks for overload too, especially if you have many friends on the service or have one friend who just won’t stop checking in. But Foursquare includes controls for turning push notifications off for certain users, or just turning it off completely. And for someone like me, who is much more careful about who I connect with on a location-based service (compared to connections on a sites like Facebook or Twitter), that shouldn’t be a problem.

[image via Jacob Mullins]

Augmented reality startups

Ori Inbar, who published the petition and has founded two augmented reality gaming startups (Ogmento and Arballoon), says the companies need the API so they can overlay graphics or information on the iPhone’s live camera feed, not just on recorded video clips.

Inbar says he’s developing a game for the iPhone but can’t publish it because he’s using a private API, which isn’t allowed because developers are supposed to use Apple’s published APIs.

Smartphones are a major frontier for augmented reality technology, promising to bring it into everyday use for gaming or for learning about a user’s physical surroundings. Before the technology relied on cumbersome stationary cameras and computers.

A few startups like Mobilizy and SPRXMobile place geotagged Wikipedia information or real-estate listings over buildings and spaces shown in an iPhone camera feed while other augmented reality gaming companies show 3-D animations interacting with the real world. Both Mobilizy’s Wikitude and SPRXMobile’s Layar augmented reality browsers are for the Android platform, not the iPhone.

“The battle to determine the winning device has already begun; a public API to access live video will give the iPhone a lucrative ticket to compete. We believe Apple has a window of opportunity of about 3 months before developers start looking elsewhere,” reads part of the petition.

Apple did not immediately reply for comment.

Be sure to check out my story from earlier today profiling a number of augmented reality startups.

Imagine traveling to a foreign country, pointing your camera at a building and having it up pull up a trove of historical information, video and images of the place over the past century.

Two early AR services are SPRXMobile’s Layar (in the Netherlands) and Tonchidot’s Sekai Camera (in Japan), which dig up real estate, job listings or user-generated tags when you point an Android-based phone or iPhone at buildings.

Gaming companies are using augmented reality technology by building 3-D animations that appear on screen for games that interact with a player’s physical surrounding. There are a few examples floating around like this one of an augmented reality, zombie-killing game from Georgia Tech, although few are in commercial use yet.

Other areas of augmented reality, like marketing and promotions, are a bit gimmicky, especially since most seem to rely on Web cams or stationary video cameras and are not compatible with smartphones yet. For sales applications of augmented reality, the eventual idea would be to walk down a store aisle, point the camera on your phone at a box and see an animation related to what’s inside.

There’s been a lot of startup activity in this space of late. Here’s a look at the various contenders (by the way, be sure to take a look at our coverage today of the AR community’s effort to get Apple to open up the iPhone to AR apps):

The AR Browsers

Layar is an Android-based, augmented reality browser from Dutch start-up SPRXMobile. Users can pan their cell phone cameras around and see nearby buildings and spaces tagged with information from the web. Layar currently has five such ”layers” pulling real estate listings, job posts and reviews and is only available in the Netherlands. SPRXMobile plans to bring the browser to international markets and develop an iPhone application as well. The company is based in Amsterdam, has three employees, and is angel funded.

Tonchidot has created the Sekai Camera, a social tagging service for both Android phones and the iPhone, that allows users to walk around and attach notes to spaces like where to eat or prices on products. Future users can access those tags or scrape geo-tagged information from the web about their location. The Japanese company plans to launch the application in Japan and is raising funding for international expansion. Tonchidot plans to charge for the application and also pull in revenue from advertising. The company is based in Tokyo, has 20 employees in product development, and is funded by Japanese VC firms. It’s in the middle of a financing round and didn’t disclose its investors or how much it had raised.

Austrian company Mobilizy launched Wikitude, an augmented reality browser based on the Android platform using information from Wikipedia, user-generated recommendations from Qype and the photo-sharing community Panoramio. It is a travel guide that can annotate landmarks and mountains. Mobilizy is based in Salzburg, Austria.

The AR Game Enablers

Earthmine is a mapping company that is building a geospatial platform using 3-D data on major metropolitan areas. In May the Berkeley-based company released Wild Style City, a mapping application that lets users splash virtual graffiti on cities. (See VentureBeat’s earlier coverage here.) Earthmine is based in Berkeley, Calif. and is privately funded by friends and family. It’s not seeking any additional funding now.

Ogmento is a five-person company launching an augmented reality game for children this summer on the iPhone called “Put a Spell.” Children will print a gameboard and use a smartphone camera to see 3-D animations interact with the physical board and game cards. “My kids spend all their time in front of computer and TV screens, so I wanted to take the things that attract them to screens and bring that to the real world,” said co-founder Ori Inbar. Ogmento is based in New York and Tel Aviv and is privately funded.

Sony demoed Invizimals, a PlayStation Portable game from Barcelona studio Novarama that lets children hunt and capture virtual animals around their real home, in June at the E3 conference. Kids use the camera on the PSP to search around their rooms and then lay physical cards down that appear as traps for the 3-D animals on screen. The company also released EyePet last year, a game where children can manipulate a virtual pet on-screen by moving their hands and drawing for a live camera feed.

French mobile gaming company Int13 has demoed augmented reality prototypes where virtual birds fly on-screen above a real-life table and 3-D characters dance on top of a real card held by the user. Int13 is based in Evry, France.

Augmented Reality in Marketing, Education

A few companies are creating one-off promotions or marketing campaigns using AR technology, such as books that have 3-D animations that “pop-out” when under a video camera.

Metaio builds marketing and sales promotions for different companies using augmented reality technology and has released 3-D design software for product visualizations and industrial planning. It built packaging for Lego that lets buyers see boxes’ contents in 3-D animations by using a camera and display screen. The company grew from an industrial background and also uses its technology to help plan factory layouts, by letting users manipulate virtual equipment around a building space. Mataio is based in Munich, Germany, has 50 employees, and is privately funded mainly by Metaio’s co-founders

Total Immersion develops AR marketing promotions for products, retail stores, trade events, amusements parks and online. The French company partnered with Topps Company to create 3-D baseball cards that users can hold under a Web cam and see a 3-D baseball player in the palm of their hand on the screen. They also worked with Six Flags amusement parks on “Dark Knight” themed rides where guests see 3-D clown superimposed on their faces in a mirror. And they’re currently working with Paramount and have produced an AR application for the movie maker’s Star Trek movie. Total Immersion is based in Suresnes, France, has 50 employees, and has had three rounds of funding funding from Partech, I Source and Elaia Partners

[Top photo from Mobilizy.]

True, people can always watch a fireworks ceremony on TV, but that just isn’t the same, is it? On a national broadcast, you can’t watch those colorful rockets explode over the beautiful Stockton skyline. That’s where the web comes come in — Recordnet.com, the website of the Stockton Record, has unveiled an app called Fireworks over Stockton. It features a photo of the city’s night sky, and when a user clicks on the picture, a firework goes off! Don’t get too excited, though. The site also warns, “Launching several fireworks at once may cause the screen to run slowly.”

So light up the grill, pop open a brewski, gather the family around the computer, and discover once more that some things just aren’t as good when you experience them on the Internet.

(The Record, by the way, is owned by Dow Jones, itself owned by Rupert Murdoch’s News Corp. Its website boasts some other apps that allow readers to have fun despite the bleak economic situation, most notably a feature that lets you try to balance the city’s dismal budget.)

The most active investor is Kleiner Perkins Caufield and Byers, which has a $100 million iFund from which it has invested in at least five companies — Booyah, GOGII, iControl, ng:moco, and Pelago. The iFund accounted for the largest deals Chubby has tracked: iControl’s series B of $20 .5 million, and Pegalo’s series B of $15 million.

The most gossip-worthy chart in Chubby’s report shows that the number of iPhones sold follows the same curve as iPhone startup investments, but at a six month lag.  There aren’t enough data points to prove yet that investment drives sales, but it’s a great topic for both parties and business meetings in the Valley.

In a story I just wrote for the New York Times, I spoke to Smalley, Mashable founder Pete Cashmore, and other high-volume networkers to get their social network efficiency tips. Here’s a bullet-list version of their advice (follow the link above for the more detailed write-up):

• Set an avatar. Don’t change it. Others will use it to find your posts. A photo of you is best, like the one Bonnie uses for @comcastbonnie.
• Install Tweetdeck or Seesmic Desktop rather than using your browser for Twitter and Facebook.
• If you can’t resist networking during work hours, install LeechBlock on Firefox and schedule it to disable Twitter, YouTube, and other time-eating sites during your workday.
• Take notes! Keep a notepad app of some sort open on your computer desktop. Write down anything interesting before you forget it.
• If you’re worried what others will see, use Twitter’s Protect my updates option to allow only users whom you personally authorize to read what you tweet. This is considered heresy by many Internet evangelists, but not everyone wants to be the Queen of Overshare.

The system is relatively simple. Users can choose to login to their Tweba account using their existing Twitter login or their Facebook Connect login. Or they can create a unique username and password. Once signed in, they list goods they want to sell directly on Tweba, as if they were tweeting normally. Every listing (up to 240 characters for initial posts, and more afterward) includes a link to a picture or more information. Even easier than that, members on Twitter can also add a listing to the Tweba page by including #ihave or #iwanttosell in a regular tweet on their own pages. Hashtags are also used to sort the Tweba tweet stream into goods sold and goods wanted as well as into categories ranging from #Antiques and #Cars and Accessories to #Stamps and #Personals (again cutting into Craigslist’s turf).

Here’s an example:

Users who buy goods on Tweba can pay via Google Checkout, Paypal or through an Out of Tweebay Transaction. Just like eBay or Craigslist, the seller then ships the item or items. And just like on eBay, sellers and buyers can provide feedback on one another to ensure good sales in the future. There is even an auction model that can be tapped into — with users listing items for a set number of days and fielding bids until the listing (which is assigned a particular ID number) expires.

Tweba’s traffic has climbed steadily since March — the site recorded nearly 10,000 unique visitors in May 2009. This might now sound like a lot, but for a new concept that is just six months old, the growth seems promising. It hasn’t disclosed any funding history to date.

That’s a big problem for any vendor using Authorize.net, since this basically means they can’t accept payments through their website until the service is up again. I’m told this affects both one-time and recurring payments. With its website down, Authorize has set up a new Twitter account to provide updates and address the many customer complaints and questions. Many of the tweets can be boiled down to, “The team is working hard to get things running again, but I don’t have a timetable”; the company is also trying to reassure customers, “yes we have fully redundant data center” (sic), and also just said, “Transactions are up except for Global processing and Concord. No ETA on those, but we are working on in.”

The service has been down since around midnight Pacific time. I’m also trying to find out how many businesses are affected; TechCrunch says it’s “tens of thousands of e-commerce vendors,” but when Authorize.net was acquired by CyberSource back in 2007, it reportedly had 175,000 customers, and processed 1.1 billion transactions worth $65 billion in 2006.

Meanwhile, TechFlash notes the travel section of Microsoft’s Bing “decision engine” is also down due to the fire. The Bing Travel website says the site should be back up at 5pm Pacific time today.

Today Arrington announced the formation of Crunchpad, Inc, a startup company with 14 employees in Singapore. Crunchpad will oversee manufacture of the device, also called the Crunchpad.

Here’s his description of the Crunchpad, a netbook-meets-iPhone device which Arrington came to believe was an obvious product that gadget and PC makers would fail to deliver:

The machine is as thin as possible, runs low end hardware and has a single button for powering it on and off, headphone jacks, a built in camera for video, low end speakers, and a microphone. It will have Wifi, maybe one USB port, a built in battery, half a Gigabyte of RAM, a 4-Gigabyte solid state hard drive. Data input is primarily through an iPhone-like touch screen keyboard. It runs on linux and Firefox. It would be great to have it be built entirely on open source hardware, but including Skype for VOIP and video calls may be a nice touch, too.

If all you are doing is running Firefox and Skype, you don’t need a lot of hardware horsepower, which will keep the cost way down.

“There’s factories that just churn stuff out. It’s pretty simple,” Arrington told the Business Times. A year ago, it would have been valid to question the market for a Crunchpad, given the ongoing failure of tablet PCs. But in 2009 jargon, the Crunchpad isn’t a tablet PC. It’s a netbook with an iPhone-style touchscreen instead of Microsoft’s stylus-driven tablet interface. You could use it to read books, too.

The article is worth reading as a profile of Arrington and his various business ventures. Did you know TechCrunch now has 21 employees and claims $6 million in 2008 revenue from events and advertising? Arrington claims 15 million pageviews and 5.5 million unique visitors per month for his network of blogs. That puts it ahead of most newspapers.

Can Arrington raise the funding to ship the Crunchpad to consumers? Because so much Valley investing is based on personal connections, I’ll bet a buck he makes it happen. Angel investor Ron Conway, whose Wikipedia entry says he “is thought to have made more investments than anyone else in Web 2.0, supporting more than 100 companies,” told the Business Times he wants to invest in the Crunchpad.

(Insider gossip bonus: Arrington, who made his name with a blog that refuses to adhere to some of the ground rules in use at older print-based publications, normally has little use for traditional journalism. So it’s funny for some of us that he used an old-school local newspaper, the San Francisco Business Times, to announce his company. Why not Twitter, Mike?)

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But Doom Resurrection is changing that. It’s the first authentic hardcore game on the iPhone. Much like Social Gaming Network’s aerial combat game, F.A.S.T., Doom Resurrection lives up to my expectations for a next-generation iPhone game. Game developers may have to match this kind of game play in order to make popular games on the iPhone.

Doom Resurrection is selling for $9.99, far more than the average $2 price for a paid iPhone game. If game developers can consistently produce high-quality, higher-priced games for the iPhone, then the profits generated by the iPhone might truly threaten the profits of Nintendo DS games, which cost $20 to $40. It will be interesting to see how long Doom Resurrection can sell at the high price and still rank high in the AppStore.

The experience of the game is so visceral that you almost forget you’re playing it on a phone. It’s intense, addictive, and full of blood-soaked gore.  Your palms sweat as you try to fire your weapons at demons and dodge the flaming balls they throw at you. I finished it in a few nights, but it commanded my attention for hours, not just five minutes at a time like most mobile games. And thanks in part to the pretty 3-D art, it’s easy to get lost in the game and forget your surroundings.

The plot is basically like the rest of the Doom video game series – you’re a space marine fighting demons who mysteriously appear in a Mars research facility when scientists open a portal to hell. John Carmack, technical director at id Software, worked with a half dozen people at Escalation Studios to create the game over six months. They used artwork from the original PC game, Doom 3, which debuted in 2004. But the art is “down rezzed,” or shown at a much lower resolution and thus isn’t nearly as sharp.

I felt nostalgic playing the game, but it’s not the same as Doom 3 (pictured above), which in its day was one of the creepiest and most exhilarating games on the PC. The creatures were loud and scary. You never knew when one was going to leap out of the darkness at you.  Doom Resurrection is just as violent and bloody. But it isn’t as pretty as Doom 3 itself, which had more lighting effects such as shadows moving as a light bulb on a wire sways back and forth. So the element of fear carries over from Doom 3 somewhat, but not fully.

On the other hand, I don’t consider the quality of the graphics to be a disappointment. Consider, for instance, the cartoon-like art from id’s Doom RPG (right), which debuted on older cell phones in 2006. Can you imaging being scared in a game with demons that looked like a bunch of Lego characters? And the gunfire in these games sounded like variations on the bleeps or bloops of classic video games. The quality of the iPhone graphics and sound shows you how far we’ve come in just a few years.

The major difference from a traditional shooting game is that Doom Resurrection runs on rails. That is, you don’t get to roam free through a 3-D level. Your camera viewing angle is tightly controlled, sort of like how you ride on the rails through the Haunted Mansion ride at Disneyland. Your character moves automatically through the 3-D space until you encounter an enemy. Then you’re free to aim at whatever creatures are before you. To fire a gun, you tap the lower right corner of the screen. Although the game is difficult, the controls take into account that playing a game on an iPhone should be an easier experience. The game takes advantage of the iPhone’s user interface.  For example, you use the accelerometer to aim, meaning you move the cross-hairs onto targets by tilting your iPhone in various directions.

You might think you’d lose a lot by not being able to roam freely, but putting the game on rails is a reasonable design choice given the limitations of the iPhone. It’s just too hard to control movements at the same time you’re controlling your aim with just your fingers tapping on a screen.

You scroll through weapons with a single tap on the screen. Your choices range from a machine gun for light targets to a BFG (initials for big f…ing gun) that wipes out everything but runs out of ammo fast. There are four levels of difficulty. So newbie players can tackle the game at the easier recruit level, while hardcore players can fight at the Marine, Veteran or Nightmare levels. Putting in so many levels of difficulty is a good move because it makes the game more accessible.

The game play is fast. You have to tap the screen to collect hidden objects, health reloads, and ammo. If you’re going too fast, you might miss them. Then you have to make sure that you dispatch your enemies as fast as possible, using the right weapon. The challenge comes when two or three of the enemies come at you at once, which means you may have to switch weapons fast. You constantly have to reload by tapping the upper right corner of the screen. You can dodge flames or hide in cover by hitting the lower left corner, and if a zombie grabs you, you can shake the iPhone to get free.

It’s best to play it with headphones to get the full audio effect. Also, the sounds of gunfire and screaming demons will annoy, and perhaps freak out, anybody sitting near you. There are eight levels to the game. Six are set in the Union Aerospace Corp. mining facility on Mars. I would rather have spent all eight of the levels on Mars. Two of the levels take place in Hell, which isn’t all that pretty. In fact, the scenery of Hell (below) — which you get to by falling through some orifice-like portal — looked fairly laughable to me.

Certainly, not everything is next-generation. The story unfolds through text-based still frames, sort of like a comic book. While the music sets the mood, it would be far better if there were more video scenes or spoken words. That’s clearly a limitation of the mobile platform. But over time, with new models such as the iPhone 3G S and whatever comes in the future, iPhone games will truly cross a bridge and deliver these elements as well. Meanwhile, Doom Resurrection runs fine on the iPhone 3G. There are only occasional slowdowns in the action because there is too much happening on the screen at once.

If you’re not occupied on the Fourth of July, it’s worth becoming a space marine and doing your patriotic duty by mowing down a lot of demons. It’s a great way to entertain yourself during the slow summer weeks when few console games come out.

[Are you an entrepreneur or executive active in mobile? Join us at MobileBeat 2009, our mobile conference for industry leaders. Sign up soon.]

Most analysts thought the 3GS launch would fall short of sales on launch day last year for the 3G, but they were wrong. With AT&T’s contract with Apple set to expire next year, the company may double its efforts to extend the exclusive deal before Verizon horns in on the action.

Here’s the memo:

1. Fact of the Week: On June 25, the day Michael Jackson died, text messages sent on our network spiked at 65,000 messages per second — the largest volume ever recorded — surpassing events like American Idol voting and New Year’s Eve, when millions of our customers wish their friends and family a happy new year via text.”

2. iLaunch day 2009 was one for the record books, as AT&T customers scrambled to get their hands on the fastest, most powerful iPhone yet.

Here’s a look at some of the milestones we achieved:

* Best-ever sales day in our retail stores
* Second-largest traffic day in our retail stores
* Most transactions processed via our IT systems in a single day
* Most upgrade eligibility checks in a single day
* Largest order day in att.com history
* Largest features sales day in att.com history

On this year’s launch day, iPhone sales exceeded sales recorded on 2008’s iPhone launch day, Black Friday 2008 and Dec. 26, 2008 — all heavy-volume sales days. In fact, this year we surpassed 2008’s launch day sales at about noon Central time, and sustained our previous peak hour record, also set in 2008, for 11 straight hours.

[VentureBeat's Camille Ricketts contributed to this story.]

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If the web has let a thousand flowers bloom, pornography has been its most prolific deflowerer. One study found a third of Internet users visit an adult site at least once a month (a number that sounds low to me), and one in four workers view porn during work hours, the most frequent time of day for visits. The $100 billion pornography market is a fountainhead of innovation and the most lucrative type of content: an estimated $3,000 is spent every second on the web’s 420 million adult pages (12% of the web). This is a tail longer than Ron Jeremy.

With so much web porn available, how do people decide where to get it? The most common search queries used to be porn-related, but navigational queries are now more popular, suggesting searchers are going directly to their favorite sources (social networks may also be co-opting adult traffic, suggesting people are focusing on the real McCoy). Aggregators like Xvideos, RedTube, and YouPorn have made finding porn easier, but these sites do a poor job of personalization.

In a category where people have such deep and varied tastes, there is an opportunity to create a StumbleUpon for porn. Let’s call this hypothetical product Frisky.

Frisky could be a toolbar like personalized recommendation service StumbleUpon but would likely get traction faster as a website like Digg. Users would sign up, enter demographics, and select their preferences for many criteria: orientation, age, race, fetish, number of participants, media type (photos/videos/audio/slash fiction), and more. Users might select specific stars they like and categories they don’t like, since repulsive content can kill interest faster than a mullet.

Users could then click, rate, and comment on recommendations, making Frisky continually smarter about the tastes of each user and the community. Crawling content would not be hard — the web won’t run out of porn any time soon — and most adult sites would welcome the incoming traffic; they would probably submit a lot of content themselves. Frisky would not host content but merely link to it, avoiding hosting costs and conflicts of interest with content sites.

While a lot of adult content has metadata like orientation and category, Frisky could solicit even more tags from users. This would allow further personalization, flag spam, and create valuable metadata to share with partners, who could then enhance their own tags.

Frisky’s main revenue model would be lucrative affiliate fees from paid subscription and DVD sites, which typically pay $30-50 per subscription or 40-50% revenue shares. Frisky could also sell reports on consumption patterns, with likely valuable insights since research in this area is challenging.

Marketing may be a challenge since porn is a private, anti-viral application. One strategy would be Digg-like widgets for content sites seeking more incoming traffic. Search engine marketing and partner advertising are also likely feasible given Frisky’s high monetization potential. Porn stars and companies could also create site profiles to market their popular content and interact with fans.

Frisky’s deep personalization would be a significant competitive advantage over adult search engines like Booble and aggregators like RedTube, most of which have only general popularity ratings. Frisky would also benefit from a slight network effect, since its engine would become continually smarter with every new user.

Other competitors include StumbleUpon itself, which has a porn category but doesn’t have deep categorization or targeted features. This is the same reason Pandora is a better source for popular music. Many of StumbleUpon’s top listings also just go to porn aggregators instead of specific content. StumblePorn was a Firefox install that didn’t get traction and desperately sought a small sale. AdultStumble also came and went, so to speak.

The porn market is not appealing to a lot of entrepreneurs, and it’s not one I’d personally try, but an intrepid team could build this quickly. Long tail markets are ripe for discovery engines and few tastes are more insatiable. Executed well, Frisky could bring a new level of spiciness to serendipity.

What do you think?

[Photo credit: http://www.flickr.com/photos/dannysullivan/292257748/]

Want to see previous columns?
What’s Next: a Mint for location?
What’s Next: a Pandora for fashion?
What’s Next: Free computers for small businesses?
10 lessons from a failed startup

Mark Goldenson wonders if anyone has ever used Chrome’s incognito mode for non-porn purposes (birthday gifts? riiight). He’s starting an innovative venture in health care. To submit an idea for the What’s Next series, email Mark at mjgold3@gmail.com. Selected ideas will receive attribution.

Affiliates are website operators who get a commission for routing buyers from their own site to, say, Amazon. Last Sunday, Amazon notified its affiliates in Rhode Island that the company had cut its ties with them in order to avoid paying current and back taxes.

The Wall Street Journal reports that the move isn’t just bean-counting. It’s a game of chicken against state governments that want sales tax revenue to balance their budgets but don’t want to be seen as killing jobs during a recession.

In May 2008, Overstock.com ended its affiliate programs in New York after then-governor Eliot Spitzer included e-commerce sales tax in the state’s budget.

So far, the merchants and most of their affiliates are winning. According to the Journal, Maryland, Minnesota and Tennessee have already abandoned plans to apply taxes to online sales.

[Photo from Mudflats]