The Social

Well, this hacker has quite the sense of humor.

Reports started spreading this weekend that iPhone users in Australia had been falling victim to "ikee," a worm that replaces default wallpaper with a picture of Rick Astley, the British pop singer whose song "Never Gonna Give You Up" has gained eternal infamy thanks to the mainstreaming of the "Rickrolling" prank craze. The photo is accompanied by the message "ikee is never gonna give you up," and it's apparently quite difficult to remove. According to security firm Sophos, this is the first worm detected that targets the iPhone.

The vulnerability is pretty specific: the phones must be jailbroken in order to be affected, and it appears to spread by searching an infected phone's contacts to find other jailbroken-phone users who have installed the Unix software SSH (secure shell) but haven't yet changed their passwords from Apple's default root password, "alpine."

Sophos says that it has not heard of any occurrences of the worm outside Australia, and that while it doesn't appear to do anything worse than irritate and embarrass affected users, that it highlights the vulnerabilities that jailbroken phones face.

A test 'Square' in action, and a screenshot of the geo-tagged receipt.

(Credit: Engadget)

Well, we finally have a glimpse at "Square," the new mobile payments venture coming from Twitter co-founder and chairman Jack Dorsey. As expected, it's a little hardware add-on that can turn an iPhone into a credit card reader.

The funny part: Details about the small-business-oriented project have been on the Web for months. It was just that nobody had put two and two together until some eagle-eyed folks at Engadget realized that a URL on a screenshot of the "Square iPhone Payments Venture" first reported by Coolhunting matched a domain registered to Dorsey.

Dorsey, who stepped down as Twitter CEO almost exactly a year ago, is headquartering the company in New York, though we hear he already has employees in both Gotham and San Francisco. Its Web site will likely be located at SquareUp.com. Currently, that site is a collection of links to a smattering of businesses, including Sightglass Coffee, a new San Francisco coffee shop in which Dorsey has invested. (Wanna bet they're testing Square out there?)

From Coolhunting:

The innovation is in a small, plastic card reader that fits in to the headphone jack of an iPhone (or iPod Touch) and transfers the credit card's swipe data to the app. After the employee enters the amount to charge, the customer confirms by scrawling their signature with their finger and then either one enters the customer's email address to send the receipt to. The payment is processed by Square for a small percentage plus a fixed fee; the funds are transferred directly to the store's bank account, cutting both time and complexity on the processing side. The customer's receipt includes a map showing the location of the transaction which is handy for those who record, sort and file such things.

We heard that the venture is being called Square rather than "Squirrel," its originally reported name (according to TechCrunch's MG Siegler, this is because it looks kind of like an acorn) due to some unclear legal-copyright-licensing-whatnot issue. CNET News first reported the name change along with the news that Dorsey had been an angel investor in location-based mobile navigation start-up Foursquare.

Funding a hardware venture is typically more expensive than a Web-based one for obvious reasons: the up-front cost of production and manufacturing.

But two sources with knowledge of Square's logistics said that Dorsey believes he can keep production costs extremely low, possibly manufacturing a "square" at a cost of about 40 cents apiece. The company may then even give the devices away for free, making money instead on transaction fees. That's the old Gillette razor business model--make the razors cheap or even free, but replacement blades more expensive.

Regardless, we hear Dorsey has been working on a funding round.

(Credit: Flickr user Kyle Simourd)

Bears have some awfully funny inclinations. Back in 2004 there were all those wackynews stories about the bear who'd downed three dozen cans of beer at a campground and proceeded to pass out.

But this one takes the cake: this summer, when Vermont hiker Kris Rowley was approached by a bear and it kept following her, it proved more interested in chowing down on her iPhone.

Rowley, who serves as Vermont's chief information security officer, tells CIO.com: "In a semi-panic, I threw the phone at the bear."

The bear proceeded to ignore Rowley and started clawing at the iPhone instead, CIO.com explains. Rowley used that as her chance to make a hasty exit. She returned two days later to get her iPhone back--bringing along a baseball bat for defense--and found it still there, but chewed and scratched up to the point where she couldn't use it anymore.

Unfortunately, the Genius Bar support team at her local Apple Store wouldn't take "a bear ate my iPhone" as a legitimate excuse to get a new one on the house: Rowley had to pay full price for a replacement.

Maybe that would've been different if she'd brought the bear along with her. Just a thought.

Searching for a Zipcar with the company's new iPhone app.

(Credit: Zipcar)

SAN FRANCISCO--It's like the ultimate yuppie geek convergence: there's finally an iPhone app for car-sharing company Zipcar. To put it in the most stereotypical of terms, you now no longer need a computer to book that Prius for your weekend Whole Foods run.

Apple gave a green light to the free download earlier this week, so Zipcar members can now use the app to find and book available cars using GPS-enabled maps, access account and car database information, contact the company's headquarters, and use a "virtual key fob" to lock and unlock their reserved cars. It's the first-ever mobile endeavor for Zipcar besides text-message alerts, something that may be surprising considering the company's outside-the-box, next-gen image.

"This is an entirely new channel of communication with members," Zipcar Chief Technology Officer Luke Schneider told CNET News in a meeting at the company's San Francisco office, adding that over a quarter of the company's 325,000 members (which it calls "Zipsters") own iPhones. Applications for more mobile platforms are tentatively on the way, he added, as another quarter of Zipcar members own non-iPhone smartphones. But he said the company hasn't decided which to develop next.

Zipcar, founded a decade ago in Cambridge, Mass., is designed as an alternative to car ownership and rental. You pay by the hour, gas and insurance are included, and cars are scattered in parking spaces across cities and university towns (the places where living without a car is most feasible) so that once you've booked a vehicle, you can show up and unlock it with your membership card. Schneider came on board when the company merged with a rival, Flexcar, about two years ago.

With its iPhone app, Schneider said, Zipcar hopes to achieve a twofold goal: first, making the membership experience easier by allowing for mobile reservations and database information; and two, attracting new customers by letting them toy with the app even if they aren't already members. Load up the "virtual key fob" without logging in or having a reservation, and a pop-up message will appear saying, in quirky Zipster fashion, "You do not have a current reservation, but you can make fun sounds anyway." In other words, you can push the horn-honking button until your friends want to wring your neck. It's about "the experience" of the Zipcar brand, Schneider explained.

For the company's management, the mobile app can also fine-tune some of the data that Schneider says they're "constantly obsessed" with: which car models are in demand at which times of the day and year, which locations seem over- or under-served, and so forth. It doesn't collect any sensitive personal data, he assured me.

I had a chance to test drive the new iPhone app on Wednesday, when I picked up a Zipcar to drive to Mountain View for the TechStars Investor Day event. The app is extremely well-designed, and making a reservation is a no-brainer. It's overall terrific branding for Zipcar: newcomers will certainly get the idea that this is a company that's tech-savvy, rooted in convenience, and has a sense of humor.

And Zipcar needs to keep up that image, now that the car-sharing trend is catching on with rivals from both the nonprofit space (like the Bay Area's City Car Share) and the mainstays of the rental car industry.

The Zipcar iPhone app's 'virtual key fob' is cute, but more gimmicky than convenient.

(Credit: Zipcar)

"Zipcar established a category that didn't exist yet," Schneider said of competition in the market. "It validates the space when bigger competitors come in."

My gripe with the app, unfortunately, is with the nifty part that everybody's talking about. The unlock-by-iPhone feature is more of a fun toy than a utility; it simply isn't as convenient as it should be. First, you've got to load up the app and let it log you in--which takes a few seconds, enough time for me to fish around in my wallet and find my "Zipcard," the ID card that also locks and unlocks reserved cars. Then, upon hitting the lock or unlock button, the app has to communicate with Zipcar via data connection--not a short-range signal like an automatic door opener--and sometimes that can take another second or two. (Once, in fact, it just didn't seem to want to work.) Typically, I just got impatient and dug out my card.

Additionally, the app won't replace the credit-card-sized "Zipcard." They'll still need to use the card, not the iPhone interface, to unlock a car when they initially pick it up.

But that's a security regulation more than anything else, Schneider told me: "We don't want you to be stranded if your battery's run out."

Your decaf caramel macchiatos and no-whip pumpkin spice lattes are going mobile.

In a double-shot launch (sorry), coffee giant Starbucks unveiled late Tuesday its first two iPhone apps. The first one, called MyStarbucks, is a no-brainer: you can use the phone's GPS capability to find nearby stores (previously, this was available via text message), search ingredient and calorie information for Starbucks beverages, study coffee bean varieties, and build virtual drinks to see what exactly would be in one if you ordered it.

But it's the second app, called Starbucks Card Mobile, that could be worth a double-take. The app allows for balance check and refilling of Starbucks gift cards, which the company has expanded into a customer loyalty program by offering discounts, free refills, and two hours of free Wi-Fi to cardholders. And in two experimental test markets, the Starbucks Card Mobile application can use a barcode to replace the plastic gift card altogether.

As far as mobile e-commerce is concerned, this could be a big deal.

Mobile retail promotions, from text-message codes to redeem for free drinks to the nascent pop-up deals in geolocation app Foursquare, are nothing new. And mobile payments are commonplace in countries like Japan and South Korea. In the U.S., they haven't caught on yet. But having a ubiquitous national retailer like Starbucks in the game could change this.

The barcode-based electronic gift card from the new Starbucks iPhone app.

(Credit: Starbucks)

"We're really venturing into new waters in terms of mobile payment," Stephen Gillett, senior vice president of digital ventures at Starbucks, said regarding the Starbucks Card Mobile app.

"The mobile app is really the powering of some of our most frequently used functions on (the Starbucks card's Web site) and our in-store activity in terms of balance and payment and favorite orders," Gillett said. The app was developed internally with some help from third-party companies like mobile billing start-up mFoundry, he said.

Unless you're geographically very lucky, you won't be able to pay for a venti frappuccino with your iPhone just yet. Only 16 Starbucks outlets, eight in its home turf of Seattle and eight in Silicon Valley, can currently handle the barcode-based gift cards. These are stores already internally designated as test spots for new Starbucks technology, Gillett said.

"In some of these Seattle stores we've tested store manager laptops, allowing them to get instant messaging, full access to e-mail, and conferencing," he said. "These are some of the stores that got the new AT&T Wi-Fi earlier."

As a result, that means the integration process may be smoother for the test stores than it would be for a random Starbucks elsewhere in the country. "The store employees are used to getting new kinds of technology, new kinds of services earlier than most markets," Gillett said.

Estimates vary on just how big the U.S. gift card industry is, but according to the Federal Reserve, it's certainly well into the billions and continues to grow. As for Starbucks, already one in seven transactions at the coffee chain involves its array of gift and loyalty cards, Gillett says. "We see a significant amount of our traffic represented by loyalty cards of some sort," he said.

And eliminating that need for a physical gift card is a pretty obvious next step, especially if you've ever spent any time fishing around for one in a handbag.

The question is whether a new concept like barcode-based gift cards can easily scale to a chain as widespread as Starbucks. Mobile barcode systems have typically been rolled out in far smaller contexts--short-term advertising campaigns, for example, or companies with far smaller reach such as Equinox, a high-end gym in a handful of U.S. cities that recently began letting members check in with an iPhone-based barcode. And while Starbucks has been battered by the recession and has closed several hundred stores in the U.S., it still operates or licenses over 10,000 outlets in the U.S. and thousands more overseas.

So Starbucks is taking a slow approach to mobile payment testing, which means that customers outside of Silicon Valley and Seattle might not be seeing it any time soon.

"We're really working on getting that (customer) feedback before we put any long-term plans in future markets," Gillett said. "This really is a consumer-driven app in so many ways. This is an app that we need the customer experience to have a very strong influence on."

He was equally mum om whether Starbucks Card Mobile will offer advance mobile ordering options or other potential features. "Again, we're really looking to this app hitting the real world before we lock in future functionalities," Gillett said.

The same goes for taking the app beyond Apple's handset. Apple and Starbucks have a years-long and complicated history encompassing both iTunes and AT&T wireless service, but a mobile payment option ideally wouldn't be restricted to the iPhone.

"We are definitely interested in non-iPhone based platforms, particularly Windows and Android and BlackBerry," Gillett said. "But at this point we're just really focused on the launch for this."

A screenshot of the back-end dashboard of Citysourced, as displayed at TechCrunch50.

(Credit: Josh Lowensohn/CNET)

SAN FRANCISCO--It's about time people got excited over here.

It's not that the smattering of fresh new companies presenting at the annual TechCrunch50 start-up launch conference was boring, per se. Most of them, in fact, had an extremely practical slant to them, like the array of job- and car-hunting sites that take something Craigslist does and make it way less sketchy. And therein lies the problem: Sometimes, those sorts of productivity and next-gen enterprise start-ups simply aren't that cool and shiny when you stick them into a PowerPoint demo.

But it was on the morning of the second day of the conference that the judges, audience, and organizers seemed thoroughly impressed by an app that they could actually use. Meet Citysourced, a new iPhone app that lets the residents of an individual city log complaints and inquiries--graffiti, potholes, neighbors who go streaking--and send them straight to City Hall.

They had two announcements accompanying the launch: first, that Palm had made a research-and-development investment in Citysourced to build an app for the Pre handset; and second, that the city of San Jose, Calif., had signed on board to use Citysourced as its official mobile 311 system.

You might be thinking that this sounds familiar. That's because it's not the only player in the space: Open311 has gotten some buzz for applying the open-standards model to building civic feedback systems. Also, earlier this year the city of Boston commissioned a mobile development company called Connected Bits to build a complaint-filing app called Citizen Connect.

But none of the existing civic-engagement apps have caught on yet, and Citysourced's mix of no-brainer efficiency and easy-to-read maps seemed to impress both the judges and the audience. So did the back-end Web interface for mapping and tracking inquiries and complaints. Digg founder Kevin Rose, one of the judges, called it "an amazing idea" and started offering suggestions: he wanted to be able to subscribe to a feed of updates from his neighborhood, for example, as well as see volunteer opportunities and vote on the priority of issues, Digg-style.

Citysourced "just seems that it's one that's sort of a no-brainer," TechCrunch founder and conference organizer Michael Arrington said after the presentation, asking for a show of hands in the audience to see how many iPhone owners in the audience would want to download the app. Many arms were raised.

The challenge, as panel judge Tim O'Reilly pointed out, is that Citysourced can only beat its competitors if it has the best approach to the market, namely its effectiveness in getting new cities on board. The start-ups' executives said that they're already in talks with some more of the 10 biggest cities in the country and should have more announcements soon.

In either case, the laptop-wielding masses at TechCrunch50 seemed to think that this new mobile start-up is one to watch.

Music service iLike, best known for third-party applications on platforms like Facebook, made its big iPhone app launch today. The company has rolled out an app for alerts about local concerts, and also launched its previously announced program for bands and artists to create custom fan applications.

Apple still has to approve the "Local Concerts" app, according to a release, but iLike is excited about its potential impact regardless.

"It's something that we really felt was a good idea on paper as we started developing it," iLike CEO Ali Partovi told CNET News, "but as it reached completion and we started using it ourselves it really started seeming like a killer app."

iLike already has had a concert app in the iTunes Store. The company didn't promote it much, Partovi said, because the iPhone 3.0 software was what really made the app worthwhile, and so iLike was waiting until that came out.

"We found that there really were a few key capabilities that the iPhone OS didn't support at the time," he explained, referring specifically to push notifications and some software tweaks that enable better personalization. So the revamped iLike concerts app, thanks to iPhone software upgrades, will scan the music selection on an iPhone or iPod Touch, and send pop-up alerts when a band or artist that the user listens to will be in town.

"It turns the iPod into much more of a live device to be connected to the world of live music," Partovi said of the free app.

The custom artist apps, meanwhile, haven't changed much from when iLike originally announced the program in May. Over 250 artists have signed on to the program, the company said, including Pete Yorn, Reba McIntire, and Enrique Iglesias. iLike takes half the revenues from sales of the apps, and charges a $99 fee with the right to serve ads if the artist in question decides to offer its custom app for free.

CNET News reported last month that iLike was also in talks with the major music labels to open a download store, after a deal to offer full-length songs through subscription service Rhapsody failed to materialize.

The city of Boston is set to launch an official iPhone application for residents to file complaints about "neighborhood nuisances--nasty potholes, graffiti-stained walls, blown street lights," according to The Boston Globe.

Called Citizen Connect, the app will let Bostonians send pictures and tips right to City Hall.

The app was built with the help of a New Hampshire mobile development firm called Connected Bits.

Citizen Connect has been submitted to Apple but hasn't made it into the iTunes App Store just yet. When it does, it will be free.

Beware, Citizen Connect: complaints about this 'Aqua Hunger Teen Force' ad campaign turned into a huge mess for Boston two years ago.

(Credit: Boing Boing)

The Boston Globe said Citizen Connect is the first app of its kind, but other cities have also been turning to new technology to make the minutiae of municipal government run more smoothly. New York's 311 nonemergency hotline for residents now has a presence on Skype and Twitter. New York also now accepts photo and video submissions for 911 and 311.

But the iPhone app has a few advantages. Per the Globe: "The application, which will be free to download from Apple, will allow residents to use the Global Positioning System function on their iPhones to pinpoint the precise location of the problem for City Hall. After submitting a complaint, users will get a tracking number, so they can pester city officials if the problem persists." Ooh! Pestering city officials sounds like fun!

That said, the idea of a complaint-filing iPhone app for Boston is particularly hilarious: the most famous instance of Boston municipal complaints in recent history happened when people started calling in concerns about suspicious-looking devices that turned out to be an ad campaign for the cartoon flick "Aqua Teen Hunger Force." This fact, however, did not come to light until the city had already shut down all traffic on the Charles River.

Or, as one blogger has pointed out already, the system could easily get flooded with photos accompanied by captions like "Please send a cop over to make these Yankees fans leave this bar."

NEW YORK--Barry Diller doesn't want to predict the future.

"I'm not a great predictor of these things," the IAC/InterActiveCorp CEO said onstage at his Wednesday keynote for the Advertising 2.0 conference, when interviewer and BusinessWeek reporter Jon Fine asked him when he thought the depressing economic news would finally end. (His personal belief is that it won't get much worse.) "Not that, by the way, anybody's predictions are worth very much to anybody." And he was particularly wary of commenting on the macro economy. "Oh, you certainly don't want to hear from me on that," Diller said. "You've heard from every baboon in the world on the macro economy."

IAC's Barry Diller

Advertising 2.0 was co-hosted by IAC and held in the digital conglomerate's airy, glass-walled headquarters along the West Side Highway in Manhattan's Chelsea neighborhood. The building, designed by architect Frank Gehry, opened in 2007. Less than a year later, Diller announced plans to split the sprawling IAC into five separate publicly traded businesses. The slimmed-down company now focuses primarily on online media brands like Citysearch, Match.com, Evite, and Ask.

"What we thought was that agglomeration, putting disparate assets together was fine in the great building stage...where we started about 12 years ago," Diller said. "We built up a fairly large number of disparate businesses. All of them had some form of interactivity, but they were all from selling mortgages to dating...It wasn't giving investors or commentators or anyone else a clear picture of what the company was."

Then there was a battle for board control with shareholder John Malone of Liberty Media. The two now have a "good relationship," Diller said.

While much of the "new IAC" relies on advertising revenue, Diller declared at the conference that strictly relying on advertising as a business model is not sustainable. "I absolutely believe that the Internet is passing from its free phase into a paid system," he predicted (though, keep in mind, Diller did say he doesn't like to predict). "Inevitably, I promise you, it will be paid. Not every single thing, but everything of any value. Again, take commodity away from it."

The wealth of free content on the Internet was a matter of short-sightedness, Diller explained. In his opinion, it came out of the fear of piracy.

"People were so frightened of not being dinosaurs, and baring their heads, and not having what happened to the music industry happen to them, they just slapped everything up on the Internet for free," he said. "That's an accidental historical moment that will absolutely be corrected."

Diller doesn't believe that the poor economy will make it more difficult to get people to pay for things online. One of his subscription-based businesses, dating site Match.com, is doing very well right now: "It would not shock any of you that I think that of the things that, actually, people will do when enduring a storm, financial disaster, or otherwise, is want to hook up in one way or another with other people," Diller said.

Why is he such a believer in the triumph of paid content? Look at the iPhone, Diller told the audience, and the wild success of its App Store.

"The iPhone is a great example of what's going to happen," he pointed out. ""One of the greatest barriers to buying things is the steps that it takes, and we all know the difference when you go to Amazon and you just push your little thing and it's bought, paid for, delivered, billed, et cetera., instantly, and how much that has enabled or how much that has made the difference between just browsing and buying...that little thing, that in fact you scroll it, you do it, it comes, everything else is taken care of, is the answer to what's going to happen on the Internet when, in fact, we get the applicability of that broadly."

He acknowledged that media outlets' readership rates may drop, but that their profits will stabilize once again.

Another thing that Diller was willing to predict? His own demise. Sort of. Interestingly enough, he said he's of the belief that a modern media company is unlikely to outlast its original founder successfully.

"News Corp. makes sense because News Corp. is the absolute extension, to the fingertips, of one person," he said, referring of course to Rupert Murdoch. "I think (in) every case other than that, is that once that original founder has gone, for whatever reason, then the truth is it should all be taken apart because they make no sense. You can't replace with a suit somebody who's built the thing up and understands all of its bits and pieces in the rhythm of their heartbeat."

Interviewer Jon Fine wanted to know if that would be IAC's fate, too.

"I think that's true," Diller said.