Outside the Lines

Andrew Mager posted an illustrated play-by-play of Saturday's WordCamp, a conference devoted to the popular open-source blogging platform WordPress. According to Mager's report, the hosted version of WordPress has 2.3 million new blogs in 12 months and 35 million posts, and more than 6.5 billion page views.

(Credit: Andrew Mager)

Of particular interest for the WordPress crowd is BuddyPress, a set of plug-ins that brings Facebook-like features, such as friends, groups, private messaging, status updates, and extended profiles, to the blogging platform. (WordPress competitor Six Apart also recently introduced a social dimension to its Movable Type platform.)

BuddyPress is slated for 1.0 status in December 2008.

(Credit: Andrew Mager)

As Mager reported, unlike the popular social networks, BuddyPress isn't a closed environment: "Why do we need another social network? BuddyPress is not another "data silo" like Facebook and MySpace. It's mission is to be more open source, handle better control of data, give people better choices, and build greater support for open standards."

Being more open isn't a necessarily going to move people out of Facebook, MySpace, Bebo or other semi-permeable walled gardens. However, the combination of emerging open standards, such as OpenSocial, and the growing WordPress and Six Apart communities will have an impact on embedding a social dimension into the fabric of every application.

With the Democratic and Republican national conventions coming up in Denver and St. Paul in the next few weeks, we are planning our coverage across CNET News and CBSNews.com. (Being part of CBS has some nice advantages.) CNET News reporters Declan McCullagh, Stephanie Condon, and Kara Tsuboi will be on the scene, covering the tech policies and positions of the presidential and vice presidential candidates. In addition, they will be roaming the convention floors, interviewing delegates, politicians, and pundits on tech-related issues such as Net neutrality, Internet taxation, and privacy.

CBS Evening News will have its usual wall-to-wall coverage of the conventions, anchored by Katie Couric and the CBS News political team, including CBS Senior Political Correspondent Jeff Greenfield and Face the Nation's Bob Schieffer. The DNC and RNC convention coverage will also be Webcast live on CBSNews.com.

In addition, following the television broadcast coverage, CBSNews.com and CNET are partnering to produce live, Web-only shows at both conventions. From 10 p.m. to 11 p.m. EDT, Katie will host a live Webcast, analyzing the day's events along with the CBS political team and other special guests.

If you have a question about the candidates, campaigns, conventions or other topics that you think should be addressed by Katie and crew, you can submit them by going to the CBS News pages for the Democratic National Convention and Republican National Convention. Stay tuned for more updates on our convention coverage.

During a CNBC interview Wednesday with Mad Money's amped-up Jim Cramer, Google CEO Eric Schmidt was asked about placing ads on the home page of the leading search engine. He said Google wouldn't allow ads on the home page, even though it could bring in "some number of billions of dollars."

Let's say that some number of billions is $2 billion annually, which would be close to a 10 percent bump in revenue for violating the home page with ads.

"People wouldn't like it. We prioritize the end user over the advertiser," Schmidt responded. The simple, unadorned home page has been a hallmark of the search service since its humble beginnings a decade ago.

But would the "end users" really abandon Google if the home page had advertising? How about contextual, targeted advertising for users who opt-in to such a program, similar to Amazon's recommendations, or themed ads such as for the current Olympics. Check out the examples I created below. Are ads on the home page offensive or against the Google credo of "Do no evil"? Shareholders probably wouldn't mind a few more billion in highly profitable revenue.

On this week's EIC Squared podcast, ZDNet Editor in Chief Larry Dignan and I debate whether Amazon.com's Kindle e-reader is the next iPhone.

That is a big stretch, especially given the way the iPhone has turned the smartphone business on its head, at least from a product design standpoint. The Kindle is a nice product, and Amazon could bring music, video, and other kinds of content to the device, but it's doesn't have the Steve Jobs touch.

In addition, all the talk about Kindle's skyrocketing sales doesn't ring true. If the Kindle were on such a hot streak, Amazon founder and CEO Jeff Bezos would be talking up the sales numbers. All I know is that I keep getting huge Kindle ads in my face every time I go to Amazon.

After a few hundred times, Amazon should figure out that I am not interested in the Kindle and should show me something that I might actually buy based on my history and the recommendation engine. That would certainly be a more lucrative way to use the front door advertising space.

Dear Amazon: Please stop spamming me with this advertisement when I visit your site. Show me something you know I might be interested in buying.

It's not clear why anyone should be surprised that Gmail, Amazon.com's cloud services, Salesforce.com, MobileMe, or Netflix have periods of instability or downtime. These services are not promising five-nines of uptime, and they are dependent on complex code and a vast network "tubes," as the beleaguered Sen. Ted Stevens has said, to deliver bits to users. Services such as Twitter have set a new standard for unreliability, making the other cloud-based services look good in comparison despite their outages.

The much-ballyhooed cloud from which Web services emanate is inherently unstable and prone to odd behavior from any number of causes. At the same time, the Internet overall is incredibly robust and redundant. You just don't want to be caught at the intersection of some errant configuration change or badly behaving router. In the case of a Gmail outage, you need to have alternative e-mail services that capture messages from multiple sources to stay afloat.

Over time, the complex network systems underlying the Internet will become more reliable, but don't count on the Internet of 2008 or even 2015 to be operationally flawless. If you are not careful and proactive, the cloud will rain on you without warning.

Guest post: Jean-Louis Gassée looks into Apple's MobileMe launch misfire and whether Apple can run a worldwide wireless data synchronization service for tens of millions of users. The essay was originally posted on Monday Note.

Jean-Louis Gassée

(Credit: Dan Farber)

What happened and what does it mean for MobileMe's future?

Let's start by decoding the "Launchpad Chicken" phrase. The game of chicken is one by which two young males test their virility in the following way: from opposite directions, two cars speed towards each other on the same lane of a country road. The one who steers away first obviously lacks cojones and is derisively called chicken. You might ask about brains versus testes but here we are, the chicken is the one who "blinks first". Now, let's turn to the launchpad. Picture the NASA control room before the launch of an expedition to the moon. Hundreds of (mostly) men in white short-sleeves shirts, pocket protectors and eyeglasses, hunched before screens, keyboards, and telephones. Each one monitors a subsystem: left liquid hydrogen tank, backup gyroscopes, main engine telemetry... In the huge air-conditioned control room, five of these men are sweating, something's not quite right with their baby. The temperature keeps rising, the pressure is falling, the telemetry link is weakening. Almost but not quite in the red zone. If the parameters keep drifting like this, they'll have to pick up the red phone. But who wants to be the one who aborts the launch? So, they sweat some more and hope someone else blinks first. There you have it: Launchpad Chicken.

Now, move the imagery to projects with complicated subsystems. You see how the NASA metaphor made its way to Silicon Valley. There is always hope some other engineer will raise a hand and spare me the embarrassment of admitting my part of the project could crash the launch. This is what happened for MobileMe, with a twist on the cojones, so to speak. No one had enough brains and guts to risk humiliation, to raise a hand and say: Chief, we're not ready here, let's stop everything. As a result, MobileMe badly crashed on launch. A couple of weeks later, we have a leak: an "internal" memo from Steve Jobs. The e-mail states the retroactively obvious, the project should have been delayed or at least launched in stages. No less obviously, a new leader is appointed, Eddy Cue, he'll continue to run the iTunes systems as well. Charitably, the deposed MobileMe boss is granted anonymity, he might have been misinformed by his charges, or he might not have asked the right questions at the right times, it doesn't matter anymore.

But, you'll ask, that doesn't tell us what went wrong, which liquid hydrogen tank sprung a leak. This now gets us into two more topics: sync and size. Sync here means keeping information identical, consistent over two or more devices. Less abstractly, for a simple example, I have a phone and a computer, I want their address books to identical or, at least, consistent. On simple cell phones, I use a cable (or a Bluetooth wireless connection) plus software to copy (parts of) my computer address book to the phone. But, wait a minute, I entered numbers on the phone that are not on my computer; I don't want the copy from the computer to wipe out those new numbers. Trouble starts, as if connecting the cell phone to the computer and running the program wasn't buggy enough. You want the software to compare the two address books, the phone's and the laptop's and decide what to keep and what to change, on both devices. But what about homonyms, or different numbers for the same person's home? The program, hopefully, raises those "exceptions" and lets a human arbitrate.

We're just warming up. Now picture a more real-life situation. One traveling consultant with one laptop, one smartphone, both carrying mail, address books, and calendars, and one assistant in the office with a desktop computer. In Microsoft Exchange's lingo, the assistant is a "delegate," has access, including modifications and new entries, to the traveling consultant's data. Everything must be kept identical, consistent, in sync. How is this done?

Using the Exchange server as an example, it keeps the "true" data. And the "clients," meaning the smartphone, the laptop, the assistant's PC submit changes, new mail, an updated appointment, a new contact home phone to the Exchange server. In turn, the server propagates changes to the clients. We say the updates are "pushed" to the smartphone or the laptop, just as they "push" new mail or a new calendar item to the server. You can easily imagine conflict situations: the same appointment changed by the consultant and the assistant, address updates and the like. By now, at least on Exchange, these "exceptions" are well understood and generally well-handled. But it took years of practice. Just as it has taken years for RIM (founded in 1984), the BlackBerry (launched in 1999) creators to polish what is the best-selling synchronized smartphone. Details, details and more subtle mistakes and special cases found and fixed. The BlackBerry got its stardom from truly delivering the Simple, Easy, Invisible proposition referred to in the beginning of this essay.

MobileMe aspires to deliver a similarly invisible level of synchronization for people who don't have an Exchange server, hence the "Exchange for the rest if us" slogan. But seeing the launch glitches, I wonder how many people at Apple stooped to using a BlackBerry with an Exchange account. Doing this would have sobered them a little in advance of the launch, or delayed the whole thing, or tempered the boasts. Shortly after MobileMe's first missteps, Apple publicly and smartly retracted its use of "Push" to describe MobileMe's synchronization and the "Exchange for the rest of us" motto is no longer seen on the company's Web site.

Moving to size: quantity begets nature. At some (often mysterious) point, more of the same becomes something different. One server, ten servers, more of the same. One thousand servers or, in Google's case, running one million servers is of a different nature. Meaning different people with different knowledge and appetites than the ones needed to run a company's email server. If every other iPhone customer wants to sync a PC or Mac with the newly (or old, with the 2.0 software update) purchased iPhone, MobileMe will soon serve millions and, in a not too distant future, tens of millions of iPhones. Besides knowing or not knowing the Buddha of sync, did the MobileMe team have the experience, the knowledge, the appreciation of the "size" problem before them? Very few people in our industry do. Ask Google's rivals why they were trounced by someone coming late to the game but with a better handle on the "size" or "scale" problem. (See this paper from University of California, Berkeley, where ultra-large scale computing is actively researched, with private industry subsidies.) In passing, 10 million MobileMe subscriptions at $100/year is a nice piece of change, one billion dollars, worth the trouble.

Let's step back a little. Apple "pushes" somewhere between 100 and 200 megabytes of updates per month to each Mac user. Last week, the iPhone 2.0.1 update was announced, I connected two iPhones within minutes, the 200Mb files were downloaded and installed without a hitch and I haven't heard any blogosphere complaints on the matter. iTunes has sold billions of songs, serves tens of millions of customers every day and everything works with very few exceptions. In other words, some very large scale Apple systems do work. As discussed above, the iTunes boss (some say slave driver, a meliorative term in context) in now also in charge of MobileMe.

And, last week, parts of the Gmail service were down for 15 hours or so. Last month, Amazon's respected Web Services went down. And, last year, RIM's servers went down for about half a day in the Western Hemisphere, freaking out Wall Street investment bankers and management consultants. Even the best players must endure their share of false notes.

Back to MobileMe today: if you ask subscribers who've never experienced a BlackBerry's smooth delivery of sync, they love MobileMe. It works, it's easy to set up and in the simple (most frequent) case of a PC/Mac with an iPhone, it does the wireless (OTA, Off The Air) sync job as now advertised. We'll see how this scales once iPhones are sold in 21 more countries, 43 total starting August 22nd.

Jean-Louis Gassée is a general partner at Allegis Capital. Prior to his venture capital career he founded Be, Inc., which was sold to Palm in 2001. Gassée also held several positions at Apple Computer. He started Apple France in 1981, and in 1985 became president of the Apple Products Division. Earlier in his career Gassée as worked at Data General, Exxon Office Systems and Hewlett-Packard.

On this week's EIC Squared podcast, ZDNet's Larry Dignan and I talk about the big story of this month--the Olympics. Microsoft and NBC are hoping that their servers and software can handle the load as the Silverlight code (Microsoft's competitor to Adobe's Flash) takes its maiden voyage at NBCOlympics.com. In addition, the Department of Homeland Security is advising that people traveling to the Olympics leave their phones, laptops, and other digital equipment at home. "Somebody with a wireless device in China should expect it to be compromised," said Joel Brenner, the U.S. national counterintelligence executive. The "somebody" includes cybercriminals and Chinese security forces. We also talk about LinuxWorld in San Francisco, which wasn't a big hit, and Google's new opt-out policy, which has merged its tracking efforts with DoubleClick's.

Click here for more stories on tech and the Beijing Olympics.

Guest post: Christopher Lochhead, the former chief marketing officer at Scient and Mercury, offers his advice on how companies can do more than pray for survival in a prolonged economic downturn.

It's easy to be great when things are going great. The real test of leadership is who are you when things are tough. Leaders take market share in bad times, and losers lose share, money, and market cap.

We seem to be heading into a multi-quarter (or maybe longer) downturn. Planning for a long downturn is the right approach, even if you think this is just a blip.

Strategy 1: Don't cut the budget

The first thing scared executives do in bad times is cut spending. It's easy. But often completely wrong. J. Paul Getty said, "Buy when everyone is selling. And hold until everyone is buying."

Downturns are time to invest in:

New companies

Downturns are great opportunities for change and growth. Good luck and knock 'em alive.

Christopher Lochhead

After almost twenty years in business and being the marketing chief at three public companies, Christopher Lochhead retired at 38. Now, he serves on a few boards and is a part-time strategy advisor. Every year he gives a handful of speeches, and from time to time writes something. Check out www.lochhead.com.

Rearden Commerce CEO Patrick Grady

In November 1999, Patrick Grady gathered some friends and advisers to talk about creating an Internet service that would transform the way businesses services are delivered to large corporations. The idea was to build an on-demand Web services platform and a digital personal assistant that takes the hassle out of making travel and dining plans, shipping packages, setting up Web conferences, procuring event tickets and scheduling parking or car services. The metadata-driven technology would take into account user and business preferences and normalize service interfaces so that users could access data from several providers, such as airline or hotel reservations.

In 2005, I met with Grady as his company, Rearden Commerce, was just beginning to gain some customers. He had received $42 million in venture capital at that point and a few big name customers, including Cingular, Genesys, JDS Uniphase, Motorola, Warner Music, and Whirlpool.

Flash forward to July 2008. Rearden Commerce is flush with $200 million in total capitalization, more than 2000 customers, 1.5 million users, more than 160,000 merchants, multiple revenue streams and lucrative distribution deals with minority investors American Express and Chase (which is owned by J.P. Morgan).

Grady has big ambitions for his company. He believes that Rearden Commerce will emerge as one of the top Web companies, alongside Google, Amazon and other giants, in the next several years. In fact, he thinks that Rearden Commerce's Personal Assistant will become for business and consumer users what Google is to the search. He is not far off.

"The market is that big. It's a unique opportunity in both business-to-business and business to consumer arenas. I don't know of another company outside of Microsoft that addresses enterprise, mid-size, small business and consumer markets," Grady told me in a recent interview.

As a kind of validation of Rearden Commerce's rising star, Google has been rumored to be sniffing around the company, although both companies have refused to comment on any relationship they might have. I would guess that Amazon, Microsoft and others might find Rearden Commerce attractive, even at a billion dollar-plus valuation.

Rearden Commerce's business-to-business service is not yet profitable, but Grady expects to hit break-even in 2009. With American Express and other distribution partners, the company is adding 30 to 50 customers per week, and enlisting new merchants and application providers, Grady told me. The company collects highly valuable usage data and generates revenue from target ads and by taking a cut from every transaction. The revenue share for e-commerce services, such as event tickets and dining, range from 6 to 25 percent per transaction. For applications, such as WebEx's Web conferencing service, the fees are 25 to 50 percent of the transaction. In addition, partners, like American Express, pay an annual licensing fee for distribution rights to Rearden Commerce's service.

This month the company filled out its business services with the acquisition of ExpenseWire, which provides on-demand managing employee spending, including expense reporting. In addition, the company is spending its war chest to expand outside the U.S. The service went live in the UK recently, and will expand to Western Europe later then year and into Asia in 2009.

Rearden Commerce is planning a consumer version of its business services.

But the major new focus and investment area for the company is expanding into the consumer space. In May, Rearden Commerce announced that it is working with Chase to develop a customer loyalty program for the financial firm's millions of credit card users. The new consumer service will go into beta test in Q4 2008 and be available in general release in Q1 of 2009. Among the business to consumer services planned are health care, such as making doctor and dentist appointments; personal services, such as finding a gardener or yoga class or golf tee times; home repair, such as Service Magic and Service Master; and purchased goods as in what Red Envelope offers.

In addition, Rearden Commerce is bringing social networking capabilities to its platform. For example, like Dopplr, the Rearden Commerce Personal Assistant could let users know what "friends" in the network are in what locations. Members of the Rearden Commerce network could also rate items, such as hotels, bars or car services. "I don't care what the purple-headed kid in Potrero Hill thinks. I want ratings sorted. If I have a meeting with Chase and go to a bar close by, it might be too loud and I can't get any business done. I would want the result filtered by what 9 or 10 CEOs think," Grady said.

Grady also plans to open up the Rearden Commerce platform. "You will see this summer at least two pretty significant announcements from partners regarding how open we are. We will make core parts of platform available to some people who compete with us. We don't want to hold users captive and want to give them access to best of breed applications," he said.

If Grady is to fulfill his dream of joining the pantheon of Web giants, Rearden Commerce will need to make its personal assistant available to any user, and with a less clunky name. With about 1.5 million users today and over a billion Internet users, the company is still emerging from its cocoon. If it successful in its next growth phase, Rearden Commerce won't be an independent, private company for long.

In March, Radar Networks launched Twine, an application that organizes information and connects people, places, companies, products, Web pages, videos, and photos. Along with Metaweb's Freebase, Powerset (sold to Microsoft), Hakia, Reuters' Calias, AdaptiveBlue and a few other start-ups, Radar Networks is trying to crack the code on building a piece of the semantic Web.

In a Times Online article, Web creator Tim Berners-Lee gave an example of how the semantic Web would work:

"Imagine if two completely separate things--your bank statements and your calendar--spoke the same language and could share information with one another. You could drag one on top of the other and a whole bunch of dots would appear showing you when you spent your money."

Twine won't provide that futuristic capability but it attempts to build a "semantic graph" of relationships between content, tags, people and Twines (the collection of items of an individual or group on the service). Each piece of content is a "semantic object," Radar Networks CEO Nova Spivack said, using Twine's underlying ontology and database, which applies semantic technologies such as RDF for storing data.

Spivack told me that public Twines are now visible to visitors to the site and to search engines. So far in the beta phase nearly 15,000 Twines have been created and 354,000 pieces of user-contributed content have been added into the system. More than 50,000 users signed up (34,000 are active) for the service, spending 13 to 15 minutes per session on the site, he said.

A major new release of the Twine platform is slated for release in the fall to address shortcomings and introduce new features. "We have worked on a lot of simplification, reducing the clutter, and we still need to reduce more. Twine has a lot of powerful features nobody uses, so we are moving some of the advanced features out of the way," Spivack said. "The fall release will bring more intelligence and semantics to the surface. For example, we will let anyone define a new type of thing, such as a recipe or baseball team form, to author. It's more like what Freebase does, and we will also likely integrate with Freebase over time."

In addition, performance improvements and algorithms to improve search as well as mining and crawling content are in the works. "A major focus of our work is on personalization and recommendations," Spivack said. "Ultimately, Twine is about 'interest networking' and is a content distribution network. People declare their interests, add content, join Twines and connect with people. As users work with the system it learns about their interests, using artificial intelligence and semantic Web technologies to provide more relevance. We are not attempting to index the whole Web, just the best stuff of interest to users. Ninety-nine percent of what's on the Web is not interesting to a user, so it's more about high signal to noise."

On the business front, Spivack believes that Twine can be an intermediary for users, delivering more targeted marketing messages in addition to content. It's similar to the way Facebook is creating a new kind of environment for advertising based on knowing member interests and their social or semantic graph. "The goal for Twine is to be the place on the Web that best understands your interests and represents them to others. The key is to give users control and privacy," Spivack said.

Twine is a work in progress. It's ambitious and has the potential to demonstrate how a more semantic Web could benefit users. The biggest challenge will be scaling the back-end infrastructure and attracting users, which means Twine will have to become far more easy to configure and use. We'll see in the coming months whether the forthcoming changes to Twine help open the floodgates.

Updated numbers on users and usage, 6:30 AM PST, August 1