Cutting Edge

NEW YORK--"I'm anti-tax, but I'm pro-carbon tax," Tesla Motors founder Elon Musk said onstage at the Wired Business Conference here Monday--a remark that prompted interviewer and Wired editor-in-chief Chris Anderson to quip that he was a "true Silicon Valley libertarian."

Tesla Motors Chairman and CEO Elon Musk

(Credit: Tesla Motors)

Gasoline "should probably be $10" per gallon, said onetime PayPal co-founder Musk, who is also attempting to make sending satellites into space cheaper with a start-up called SpaceX. "I'm not paying for the true cost of gasoline at the pump...since nobody's explicitly paying for the CO2 capacity of the oceans and atmospheres, it's getting consumed. We will pay for it down the road, but we are sort of ignoring it for now."

Musk's company has put out the Tesla Roadster, a pricey sports car that runs exclusively on electric power. On the way is the Model S, a more affordable sedan. Separate from the technology, Tesla has gained a reputation for financial difficulties and corporate bickering. Earlier this month, former CEO Martin Eberhard sued Musk and the company for libel and breach of contract.

Musk's rash attitude and devotion to cutting-edge innovation has constructed him as a figure less than willing to compromise. He didn't sound too satisfied, for example, with the level of innovation in the Toyota Prius, the car that is practically synonymous with environmental consciousness in the auto industry.

"A Prius is not a true hybrid, really," he said. (A plug-in Prius is on the way.) "The current Prius is like, 2 percent electric. It's a gasoline car with slightly better mileage."

That said, Tesla shines quite a bit brighter due to the utter disarray of the U.S. auto industry, with major automakers falling into bankruptcy and Detroit in a continuing downward spiral. This, according to Musk, was the inevitable result of a completely broken system.

"Great companies are built on great products," he said, and when those products take a turn for the worse, so does the company. Automakers, Musk theorized, focused too much on the money rather than innovation. "The path to the CEO's office should not be through the CFO's office, and it should not be through the marketing department. It needs to be through engineering and design."

Musk said that unions weren't inherently the problem but the way that they were structured was. "It's not out of the question to have unions. But if they do have a union, they've got to understand that they're on the same side of the company," Musk said. "I really am kind of against having a two-class system where you've got the workers and the management sort of like the nobles and peasants." In other words, Musk thinks Detroit could use a dose of Silicon Valley corporate culture.

Surprisingly, Musk implied that Detroit will survive. "I think it'll probably be a healthier place. This has been somewhat cathartic. Maybe, I think, maybe I'm being overly optimistic, but I think this will be a cathartic experience," Musk said. "I think GM and Ford, maybe not Chrysler, but GM and Ford will come out of this healthier...and more competitive."

He wants Tesla to be part of that, obviously.

"I'd like to take up some of the manufacturing plants," he said. "When the mess gets sorted out I'd like to have a conversation with whoever's in charge."

NEW YORK--As he kicked off the Wired Business Conference on Monday, Wired magazine's editor in chief, Chris Anderson, started talking about Jell-O.

Anderson was explaining the thesis of his forthcoming book, "Free," about the realities of making a profit and building a business in an environment rife with digital goods that can be replicated at almost no cost. The Jell-O angle came from an anecdote that detailed how, in the late 1800s, the manufacturers of the then-bizarre dessert got the word out about it by distributing free Jell-O recipe books around the United States.

"Giving away one thing free could help them enter the market, create brand recognition, and create demand for something that was paid," Anderson said.

The Jell-O reference probably resulted in quite a bit of head-scratching, as this was not the Wired crowd of wacky futurism, sci-fi fandom, and gadget hacking. With a slant of "Disruptive By Design," the Wired Business Conference's target audience was corporate New York, a city full of suits who have been operating in lockstep for decades and yet have seen all hell break loose in the past year.

"(These are) seemingly unprecedented times because the time is right for disruption," Howard Mittman, Wired's publisher, said in the morning's first talk, as he introduced Anderson onstage at the Morgan Library & Museum, a historic space with deep ties to business innovation in New York.

The conference was also, in effect, a marketing pitch for Wired itself, which has seen the media industry's crisis take a massive bite out of its advertising pages. By bringing the likes of Amazon.com CEO Jeff Bezos and Tesla Motors founder Elon Musk to a day of panels and talks, the Conde Nast-owned brand was attempting to give the hard sell about its own portfolio of ideas and open it up to a crowd that's historically been more likely to pick up Fortune or Forbes at a newsstand.

As he discussed disruptive business models, Anderson revealed that his take on "free" is that businesses have to accept that some things just do not, and should not, have a price tag attached anymore because the Internet has driven their costs to zero. Companies should focus on where they can charge money.

"In the 21st century, with virtual stuff...you've got swords and other digital goods in games and online spaces, and you're looking at a different economic model," Anderson said. In many video games, you can play for free, but the game experience can be enhanced with paid services. The Disney-owned kiddie virtual world Club Penguin, for example, makes most of its money with paid virtual enhancements: many a parent in the audience was familiar with their kids' desire to buy a better "igloo" for their virtual penguins. Playing for free is an incentive not unlike the Jell-O recipe book.

In a less silly context, there'sadvertising company OpenX, whose CEO Tim Cadogan was on a panel that followed Anderson's talk. OpenX gives away its open-source ad platform software but charges for consulting and other services.

One of the biggest innovators in the "free" model, Anderson said, is actually Microsoft--derided for years by geeks as the quintessential plodding software company. He explained that Microsoft didn't do much to derail piracy of its products in China because it saw the proliferation of the Microsoft brand as a way to get a foothold in a developing market that would eventually be able to pay for its products. (Not everyone would agree with this assessment, to say the least.)

"What you see in piracy is essentially the marketplace imposing "free" upon you," he said. "With a little bit of looking the other way, (Microsoft) let pirates be their best marketers...so that someday, that would come back as revenues as the country developed. They accepted piracy as a term of gray marketing."

Virtual goods are a huge business indeed, especially when it comes to online gaming, but the audience at the Wired Business Conference might not have the same take on it. The music industry is still in turmoil over the decade-plus of proliferation of free music on the Web that caused sales to plummet. Newspapers and magazines, meanwhile, are suffering due to declining revenues, and everyone's still afraid of Google (even if Google has now shown some vulnerabilities). An entire economic model based on the success of World of Warcraft's magic spears and Radiohead's onetime name-your-own-price experiment are radical, to say the least.

Or maybe the audience will prove more receptive to "free" and its manifesto. We have learned in the past year, after all, that Wall Street was dealing for decades with a whole lot of stuff that was about as tangible as a Club Penguin igloo.

SAN FRANCISCO--Memristors are arguably the most important thing HP Labs is working on--it could fundamentally change the memory chip industry--but its director has no problem talking about it openly.

While most hardcore research on future products is kept under heavy guard until it can be patented, HP Labs is insisting that forward-thinking technology research has to be done collaboratively and (mostly) in the open.

HP Labs underwent a major overhaul a year ago, shortly after bringing in new director Prith Banerjee. He whittled down the vast number of projects his researchers were devoted to, and laid out eight very specific areas of focus. Banerjee also impressed upon HP scientists the importance of working with both government researchers and universities to collaborate on future projects, like memristors.

An atomic force microscope view of a circuit with 17 memristors.

(Credit: J.J. Yang/HP Labs)

A year later, HP Labs is now ready to discuss specific projects it is pursuing with partners at universities around the world, and in some cases with government funding. They will be officially released Monday in HP Labs' Annual Report. All of the selected projects are beyond near-term products set to debut from HP, but are usually three to seven years out, according to Rich Friedrich, director of the Open Innovation Office at HP. Forty-five professors from 35 worldwide academic institutions are involved.

The application for the projects ranges from cool consumer tech like the "Multimodal Command-and-Control By Integrating Two-Handed Gestures and Speech" collaboration with academics in India and New York to looking at new ways of harnessing information for commercial enterprise like "Workload Management for an Operational Business Intelligence Supercomputer" under research by a German professor.

It's unusual for large IT companies to work so closely with those outside of the company's own labs, and more so for them to announce exactly which projects they'll be tackling.

"These are very hard problems," Banerjee said to a gathering of reporters Friday morning. He insists that his way is the only way to make significant progress in what is clearly a global market for innovation: "We can't build everything ourselves."

But all of this takes money, and when the economy is in turmoil, it's easy to imagine that anything that doesn't impact a company's bottom line immediately might be de-emphasized. Banerjee insists that is not the case at HP. While the HP Labs' annual budget of $150 million pales in comparison to HP's total research-and-development funding allotment of $3.5 billion, CEO Mark Hurd is "very supportive" of the Labs group, Banerjee said.

The Open Innovation Office has seen that firsthand. "We have more money this year than last year, even though the economy is tough," Friedrich said, because HP sees that the collaborative research "is the pipeline of growth for the company."

Jaime Oliver's Silent Drum is a drum shell with an elastic spandex head that uses shapes and shadows to compute and control sound.

(Credit: Georgia Institute of Technology)

Updated at 10:40 a.m. PDT, Wednesday, March 11, with more details on the instrument that took second place.

Imagine Keith Moon relentlessly pounding away with a set of drumsticks. Now imagine him making sounds simply by moving his hands around the head of the drum.

That's more or less what he'd be doing were he using inventor Jaime Oliver's Silent Drum Controller.

First place winner in the first Guthman Musical Instrument Competition sponsored by Georgia Tech's Center for Music Technology, it's a transparent drum shell, illuminated from the inside, with an elastic head. As one presses it, the head deforms and a variety of shapes with peaks are created reflecting the shape of the mallet or hand.

A video camera captures these shapes and sends the images to the computer, which analyzes them and outputs the tracked parameters.

Not a drum you'd find in the music shop at the mall, but that was exactly the idea behind the contest, which solicited new instruments--in physical or virtual manifestations, and played by humans, robots, or computers--that enhance music performance and creation.

Nearly 30 inventors from seven countries performed on Georgia Tech's campus to demonstrate their instrument's musicality, design, and engineering features and compete for prizes--$5,000 for first place, $3,000 for second, $2,000 for third, and free copies of the Rock Band for those nabbing fourth through sixth place.

The day started with a soothing performance by Deepak Ram, master of the bansuri, an Indian wooden flute. But the meditative state didn't last long as day two of the often mind-blowing TED got under way. (In case you aren't familiar with TED just click here.)

On Thursday there was a mix of physical and computer artistry, film production techniques, and clean-energy invention on tap with a focus on looking beyond current models of innovation. The ideas abound at TED, and it can be a rather dizzying experience. Every time you turn around another luminary is discussing their vision for the future or the latest approach to solving a major world problem. Granted, it's all heady stuff, and much of it may not leave the walls of TED. It's also a unique conference in that media is not really front and center, and interviews are generally only for the presenters and in a specific area of the conference. That's just the way it works at TED. But there are still plenty of fascinating moments to talk about and report on.

For example, digital artist Golan Levin showcased a unique mix of audio/video interaction, like an 8-foot-long tubular and robotic "eye" that watched people enter a building. I know it sounds a little "out there," but it really highlighted the way we interact with other "beings" that may be watching us.

Olafur Elliasson mused about his waterfalls project that involved building large flowing water installations at sites through New York City. He said the waterfalls helped give the city a "sense of dimension," but adding a different perspective on the iconic skyline.

And producer Ed Ulbrich with Digital Domain reviewed the way Brad Pitt was aged about 40 years in The Curious Case of Benjamin Button through new facial-mapping technology. The key, he said, was finding ways to capture 100,000 polygons or facial markers versus just 100.

Another highlight for the science community, professor Joann Kuchera-Morin offered a look inside the AlloSphere at the University of California, Santa Barbara. It's a three-story, spherical viewing station or immersive microscope where researchers can analyze everything from cells to electrons in a 3D manner. It's meant as an illuminating way of seeing medicine or engineering from a totally different perspective.

And there was a compelling presentation from visionary Shai Agassi who presented a clean-air future with electric cars in many homes. A tricky road ahead, but Agassi believes it's the best alternative and far better than hydrogen or other ideas on the drawing board. Tonight also involves the "wish" component of TED. That means awarding the TED Prizes to oceanographer Sylvia Earle, SETI founder Jill Tarter, and musician Jose Anthonio Abreu, and giving them $100,000 to do with as they choose. They will all reveal their projects for the prize money during their sessions tonight. You can find a link to the live Web cast here. There will be introductions by former Vice President Al Gore, Quincy Jones, and Richard Branson.

In the meantime, stay connected.

Daniel Sieberg reports on computers and technology for CBS News.

To call TED "elitist" makes it sound like snobbery. Not so.

Instead, imagine a gathering peppered with dozens of futurists, artists, CEOs, and scientists--plus a few more folks who defy categorization. They get all together for several days (February 3 to 7) to listen to mind-blowing talks about everything from population trends to sea creatures. It is an intellectual Mardi Gras. The presentations are filmed, and they're so compelling that they almost instantly go viral online.

This is the annual TED or the Technology, Entertainment, Design conference (those in-the-know just call it "TED"). Think World Economic Forum combined with a touch of The Wall Street Journal's All Things Digital and maybe a hint of a G8 meeting for good measure. And it's all riveting, mind-blowing stuff. In previous years the event was held in Monterey, Calif., but this year it moved south to Long Beach, Calif.

The topic of the presentations is public information and the people appearing at the lectern this year range from Microsoft co-founder Bill Gates to Web pioneer Tim Berners-Lee to oceanographer Sylvia Earle. But the list of attendees is strictly confidential.

While I know who will be here, I've agreed not to divulge the list. That's because it's hardly a typical conference that craves media attention. In fact, I'm one of only a handful of journalists allowed to cover it. Instead, the setting is meant to be informal and serendipitous without pressure to network or do interviews.

But fear not, I will be interviewing several of the presenters and reporting on what goes on. (There's a difference between presenters and attendees.) And you'll be able to find links to all the TED material (Conference organizers film all the presentations and make them available for anyone to watch).

What's it like? Imagine your favorite class or professor and these presentations are 10 times better than that. Really. Far better. It's hard to overstate the thought-provoking and imaginative capacity of the discussions. For a great example, click here to see doctor and researcher Hans Rosling talk about our misconceptions surrounding global human development. Sound boring? Check it out and then get back to me.

It's an enlightened and enlightening group of people who are very plugged in to where our world is headed. I expect my head to be spinning, and I hope in the next several days I can help you get to know TED a little better.

Daniel Sieberg reports on computers and technology for CBS News.