Rafe's Radar- Page 68

Why Facebook needs DST in Russia

Updated at 8:30 p.m.: to correct that DST has no funding from the Russian government.

As reported earlier, Facebook is taking a $200 million round of funding from Digital Sky Technologies, a Russian investment company. While Facebook CEO Mark Zuckerberg said in a conference call Tuesday morning that Facebook revenue numbers were up, that the company was growing, and that Facebook was, "on track to creating a nice, self-sustaining business," he explained that at Facebook, "we're open to interesting offers."

With many companies wanting to invest in Facebook, what made the DST offer so interesting?

Regional knowledge

Facebook COO Sheryl Sandberg told me that Facebook was "not actively seeking investments." DST input will be key to Facebook's Eastern European business growth, though. "This is an investment with a strategic partner. We're excited for the learnings," she said.

But a source familiar with DST laid it out for me a bit differently: if Facebook wants to be successful in Russia, DST can bring a lot to the table besides knowledge. DST is close to the government there, the source said, and while outright involvement (or obstruction) from the Russian government is highly unlikely, if Facebook wants its business to go more smoothly, DST can help.

For example, should Facebook want to hire Russians, a connected investor like DST could help. DST influence could be even more important if Facebook wanted to acquire companies in the region.

DST's Alexander Tamas told me his company is private and does not have many interactions with the government. There is no government funding in DST. Still, our source says that DST's connections to the government, subtle though they may be, are important because the Russian market is not friendly to outsiders. "It's a market where you want a partner," I was told.

DST's investment gives it no power over Facebook in the United States, and reportedly no control of the company nor access to U.S. customer data. But through this arrangement, Facebook will likely have an easier time growing its market share in Russia, of obvious benefit to its new investor. … Read more

Microsoft Vine could save your hide

Microsoft Vine looks like an odd social experiment. It's designed to help users send notifications to the people they need to reach in emergencies. I tried the product and found it very un-Microsoft-like. It's useless as a single-user app, and it's also oddly specific in its functionality. From Microsoft, I expect broad platforms and wide-open productivity tools. Vine is neither.

Or is it? I took my questions to Microsoft, and was routed to a person whose title made it clear that there's more going on with Vine than the product initially reveals. I ended up talking with Tammy Savage, general manager of the Microsoft Public Safety Initiative.

At its core, Vine is based on a new Microsoft platform for routing communications between different systems. The platform is built to know the various ways there are to reach anyone using it, and it tries multiple methods until it gets its message through.

For example, some emergency messages might go to users' e-mail accounts or be sent as text messages. Some may go to regular telephones, and will get converted from text to speech if necessary. If one communication method goes down (if calls can't go through after a big disaster, for instance) the platform routes messages over another until they reach enough people to satisfy the requirements of the message.

Rules dictate to whom a message goes. An emergency message to check on a child when a parent is unable to after an earthquake, for example, might only require one person who gets the message to reply to it in the affirmative to satisfy the rule. A note about a kids' soccer game being canceled due to a muddy field would keep bouncing through the system until all the parents got it.

To keep the product in front of users, so they don't forget about when they need it, Vine also lets you track local news, and it can be used it to "check in" when you're traveling, even if you're not in the middle of an emergency. (See Meet Vine for more.)

Silicon Valley VCs don't want Obama's money, think Google is passe

I always enjoy wild hand-wavey prognostications about the future, so I was pleased to attend the 11th annual Churchill Club Top Tech Trends event last night, moderated by my former co-workers from Red Herring, Tony Perkins (now running Always On) and Jason Pontin (publisher of MIT Technology Review). Of the 12 trends, two really made me take notice. Most of the rest, which you can see at the end of this story, were pretty standard projections from existing market circumstances.

Interesting trend #1: Centralized search will fall

Venture capital whiz-kid Steve Jurvetson gave an impassioned pitch for this trend, which he called, "The triumph of the distributed Web." He said the aggregate power of distributed human activity will trump centralized control. His main point was that Google, and other search engines that analyze the Web and links, are much less useful than a (theoretical) search engine that knows not what people have linked to (as Google does), but rather what pages are open on people's browsers at the moment that people are searching. "All the problems of search would be solved if search relevance was ranked by what browsers were displaying," he said.

Jurvetson believes that the future is "federated search," in which the Web's users don't just execute search queries, they participate in building the index by the very act of searching, immediately and directly.

What I find most interesting about this concept is that we can see it already happening, although via a different technological vector. Twitter Search is real-time search. It tells you what people are saying right now, and on popular topics, it gives you far more current information than Google. I think Twitter Search also shows us that Jurvetson's vision of search, while compelling, is incomplete. To get the real-time wisdom of the crowds for the purpose of search, you have to know not just what Web pages people are displaying, but exactly what is on those pages, and you probably also want to know what's showing up on users' computers in apps other than the Web browser.

I am not sure the Web's users will want to participate in the creation of this search engine, nor am I convinced that there's a lot of value in the concept for obscure or "long tail" search queries. But the idea is interesting, and I certainly agree that the value of real-time searching, as well as social-network-aware searching, will increase dramatically and quickly.… Read more

Waze: The traffic of the crowds

Israeli start-up Waze is at the Where 2.0 conference this week showing off its service for collecting real-time traffic and driving condition data from its users. Currently running on 80,000 smartphones in Israel, Waze shows you traffic flows on highways, and unlike other traffic services, it also shows it on side streets, and it creates routing advice based on that data.

The service allows users to report accidents, speed traps, cops by the side of the road, and other traffic-related items. What's cool is that these items fade automatically over time, and there's also the possibility … Read more

3D geomapping company Earthmine lets you 'tag' buildings

Earthmine, a serious geomapping company I first covered back in 2007, is launching a completely ridiculous demo site Wednesday called Wild Style City, which allows users to paint graffiti on buildings it has mapped in San Francisco. The launch is happening at the Where 2.0 conference in San Jose, Calif.

The Flash app lets you navigate a street-view level of San Francisco, and tag (in the graffiti sense) certain buildings, in certain places, with paintbrush, marker, and roller tools. Then people who come after you also see your tags.

It's silly, but illustrates the technology Earthmine offers does … Read more

Why isn't Zillow dead?

"Things are very good at Zillow," Rich Barton, CEO of the online real estate company, was telling me. We're in the thick of the worst economic crisis of a generation and a depressed real estate market, so this means that Barton is either a very clever CEO or an audacious liar. I was at first inclined to believe the latter, but left the interview convinced of the former. He's a canny Web entrepreneur.

It hasn't all been smooth sailing for Zillow. In October, Barton laid off about 25 percent of Zillow's staff. He said he did it because he "couldn't forecast" his business and had to assume the worst scenario. However, the trough following the 2008 bust ended up not being as bad as he thought it was going to be for Zillow, and the company is now back up to its October 2008 staffing level of about 130 people.

Zillow is currently growing, but in a different way than it was before. Page views and unique visitors are up. The site had 8.8 million unique visitors in March, which is a 70 percent year-over-year growth. Zillow has the twice the users at this point as Barton's team originally projected. However, the revenue per unique user is down to a third of what he expected it would be.

There was, of course, a fundamental shift in user behavior after the bust. But it wasn't all bad. Buying activity on Zillow went down, though site traffic went up. As Barton says, "Buyers are on the sidelines, but not passively." They're monitoring the market, he says, looking for the time to jump in, to either buy or sell. Like the Zillow site itself, physical open houses are crowded, he says. The browsing activity doesn't get reflected in home transaction data. Neither sales volumes nor prices are going up, even if people are circling open houses and online real estate sites like buzzards.

Until the market becomes a place where buyers and sellers want to engage again, they continue to gather information. So Barton continues to sell advertising and new data services.

I told Barton I thought Zillow was "real estate porn." Barton accepts this--his business at the moment is based on it--and says simply, "there's a practicality to real estate porn. People are dreaming about their next home. That's positive. They're planning."

Barton is making access to that real estate porn easier. A new iPhone app shows you the Zillow price estimate ("Zestimate") of homes as you walk or drive by them, and Barton says 10 percent to 20 percent of the site's queries are coming from the iPhone app, which was downloaded 234,000 times in its first 12 days of release.

Barton says two-thirds of the site's users are in the market right now, though when he says "in the market" he means waiting for the market to look good enough to buy or sell. He says 21.9 percent of the homeowners on Zillow are underwater on their homes (they owe more on the mortgage than the home is currently worth), and that the overall Zillow home value index "is in freefall, down 14 percent year over year." There are, he says, very few markets where the acceleration of the housing price decline is slowing--but those are mostly the markets that got hit the worst first, such as Los Angeles and Modesto, Calif.

But listing homes in foreclosure on Zillow is a growth business. "They advertise!" Barton says. … Read more

What if your refrigerator got its own electricity bill?

I talked this week with Adrian Tuck, CEO of Tendril, about interesting ways the U.S. power delivery grid could be modernized. Tendril, it needs to be said, could gain a lot from the nationwide adoption of smart grid technologies, since it makes software and designs hardware that collects electricity use data from appliances and then processes that data for utility companies and consumers.

The big idea that Tuck and I discussed is a concept that's only now boring its way through the thick bureaucracies of the utility companies: what if, instead of power companies charging for electricity at … Read more

What happens to data when a Web start-up dies?

One of the greatest stumbling blocks that a start-up Web service company has to get over is customers' fear that the company will die and take their data with it. Manufacturers of traditional software can go belly-up without it immediately affecting a product's utility. And if General Motors went out of business tomorrow (I know, shocking), its cars would still be drivable. But Web services are different. When your cloud app goes under for the last time, it sinks customers, too.

In the best of the bad cases, when a Web service goes offline, the company in question is … Read more

Twitter Search to dive deeper, rank results

Correction: Santosh Jayaram's title at Google has been corrected.

Twitter Search will become a lot more useful soon, the microblogging site's new vice president of operations said Wednesday night.

Santosh Jayaram, who until recently was manager of search quality operations for Google, was on a panel I was moderating in the evening. During the panel and later in a one-on-one discussion, Jayaram confirmed that Twitter Search, which currently searches only the text of Twitter posts, will soon begin to crawl the links included in tweets and begin to index the content of those pages.

This will make Twitter … Read more

Seesmic CEO on the business of Twitter

Loic Le Meur, the CEO of Seesmic, was beginning to get on my case whenever I posted a Twitter update from my default Twitter desktop app, TweetDeck, instead of from his new app, Seesmic Desktop. So I headed over to his office to see why this mattered so much to him.

Seesmic Desktop, as we've written previously, is the successor to the popular Twitter/Friendfeed client Twhirl. It looks like it will be very competitive to TweetDeck soon, although it has a few UI glitches at the moment.

This app is a critical but early piece of Seesmic's … Read more