Coop's Corner

Time was when SanDisk, the world's biggest supplier of flash storage cards, was one of the hottest tech stocks this side of the Milky Way. Of course, those also were the days when companies like Lehman and Merrill Lynch were living large on Wall Street.

These days SanDisk is hardly the high-flying company it was a couple of years ago. Against a backdrop of weakening consumer demand and with flash memory prices falling, SanDisk's stock has reflected the company's changing fortunes, plummeting from a 52-week high of $55.98 to finish at $15.04 on Tuesday. It's not just SanDisk feeling the pinch; five of the seven top flash memory producers suffered declines or flat sales during the second quarter.

But after the close of trading Tuesday, Samsung Electronics confirmed earlier rumors and disclosed it had made a unsolicited $5.8 billion cash offer to buy SanDisk after what it said were four months of inconclusive talks. SanDisk was quick to rebuff the offer as inadequate.

In after-hours trading, shares of SanDisk soared to nearly $23 a share. In a statement, SanDisk rejected the $26 a share offer, arguing that it undervalues the company. That's pretty much standard operating procedure in any negotiation, though SanDisk also charged Samsung with "an opportunistic attempt" to exploit a depressed stock price, as well as "the uncertainty resulting from the unresolved patent cross license agreement renewal with Samsung, and general equity market conditions."

The rejection of the offer also served as an opportunity for SanDisk to air dirty laundry, suggesting that Samsung's offer might be "a calculated negotiating ploy or an attempt to gain leverage in the ongoing licensing negotiations between the companies, particularly in light of the fact that the parties have met over 10 times on this issue since June 2007."

SanDisk is not closing the door to future talks with Samsung. Irwin Federman, the company's lead independent director, said SanDisk remains willing to enter into "good-faith discussions" but did not get more specific.

But now that Samsung has put SanDisk in play, other well-capitalized would-be acquirers may begin sniffing around. Speculation centered on Toshiba, which operates a 300-millimeter wafer plant with SanDisk. What's more, the executive in charge of Toshiba's semiconductor business said the company may make a move in order to prevent a rival from controlling SanDisk. "We need to take preventive steps, if (SanDisk) looks like it'll be acquired," Corporate Senior Vice President Shozo Saito told reporters at the Industry Strategy and Technology Forum in Yokohama, Japan.

It's unclear whether he was sending out a message of real intent or simply playing to the microphones. While Saito said that Toshiba "was interested" he said there were no talks with SanDisk about a possible acquisition.

Here's the way things work at Microsoft: After correcting shortcomings in the first and second editions of its software, version 3.0 of a Microsoft product usually silences the company's worst critics, allowing management to get on with business of crushing rivals. But I'll be first to acknowledge that Silverlight breaks with that pattern.

Since the start of the Beijing Olympics, I've been using the Silverlight 2 beta to access video over the Internet and it works just fine. As a loyal Flash user, I was surprised when Microsoft won the deal to supply NBC with video-viewing technology for the Olympics. There was the obvious old-school tie between Microsoft and NBC dating back to their collaboration building MSNBC. Still, this was Adobe Systems' game to lose. And lose it did--big time.

In the end, Microsoft was able to convince NBC it could do more by using Silverlight than by sticking with Flash. Rob Bennett, the general manager of sports for MSN, told me that it came down to a two-day meeting in November, where he brought in the Siliverlight team. I'm simplifying, but his pitch was that Flash's scalability had never been put to an Olympic-size test. Accurate or not, that argument left the desired impression. What's more, even though Silverlight was new on the surface, Microsoft argued that under covers, it was really based on very familiar Windows Media technologies.

"We talked about features like adaptive streaming, the ability to automatically keep checking how much bandwidth you have and deliver the appropriate quality stream and how to be smart about knowing what's coming up in the stream," Bennett said. He added that Microsoft made a point of playing up the scalability of the Windows Media format as well as the ways in which Silverlight could help NBC with copy protection of its video streams.

So where was Adobe in all this? Good question. After leaving several phone messages, I got the hint: the PR team at Adobe has decided to go into bunker mode for the duration of the games. But not to get too down in the dumps, fellas. A second-place finish to Microsoft hardly rings the death knell for Flash. Far from it. In fact, Adobe Flash is being used to power CCTV's streaming of the games in China.

However, NBC's Olympics deal is a terrific boon for Silverlight. Microsoft is not disclosing specifics on the number of Silverlight downloads--except to say that it registers up to 1.5 million downloads a day. For the record, that's the same thing Microsoft has been saying since April.) However, a spokeswoman said that "in the last several days, more than 50 percent of the visitors to NBCOlympics.com on MSN already have Silverlight 2 installed."

NBC was more forthcoming. The network says that almost 25 million unique users have visited NBCOlympics.com on MSN during the games and so far viewed 456 million pages and watched nearly 22 million video streams.

Adobe's next move? John Dvorak had a delightfully curmudgeonly idea, suggesting that Adobe might well try to get back at Microsoft by releasing its Creative Suite for Linux. As they used to say in Mad magazine, file that one under "Scenes We'd Like to See."

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

Does the world really need another software add-on product?

That was my first question to Pat Sullivan, a serial software entrepreneur who started ACT and SalesLogix CRM. What was so broken that needed to be fixed with his latest company, Flypaper Studio?

I suppose you could ask the same question about any number of so-called Web 2.0 apps that have appeared in the last couple of years. Still, as a former heavy-duty ACT user, I was especially curious to hear Sullivan's explanation.

The way Sullivan explains it, we're basically talking about something akin to Flash animations for dummies (my take.) With roughly a couple of million professional Flash programmers out there, ginning up fancy pages for their clients, the idea behind Flypaper is to give non-programmers the ability to repurpose that professional content. And, best of all, without paying anything extra for the "privilege." With so many companies in the United States battling the sub-prime blues, any cost-saving idea is worth serious consideration.

"There was a big problem in that Adobe Flash...is unavailable to the masses. The only way a mere mortal can do something really cool on a Web site or in a presentation is to hire a Flash programmer for a lot of money," said Sullivan. "They deliver (the finished project) to you in a form you can never edit or change. You're tethered to that programmer. We came to believe that that was really a big problem."

The project recently moved out of beta testing and is being offered in a free general release as well as a professional version for $195 per seat. The paid version also lets customers poll data through Web services and includes up to one gigabyte of storage.

I don't know if Flypaper's destiny is to remain an independent company or become a cool feature in another company's product portfolio. But the idea is intriguing. Flypaper would help businesses bypass pricey tech gatekeepers, who otherwise would be able to demand extra payment for extra work on their creations. As someone working in the Fourth Estate, I can't help but note the irony here. Over the last several years, so many techies have expressed delight at how technology was allowing the masses to bypass the former gatekeepers (ie: the press) to get their message out to the wider world. Now, it's come full circle. The implications potentially are profound. But that's fodder for another day.

In the meantime, the business plan was compelling enough to convince Sierra Ventures and SCF Arizona of Phoenix to supply $3.5 million in funding to Flypaper. The announcement hits the wire today. Last February, both organizations were participants in the first round of funding for the Phoenix-based company.

One immediate hurdle is the absence of enthusiasm among most regular people to try their hand at coding. Even if this is as simple as Flypaper claims-and nothing's ever as simple as they say in a press briefing--there's a lot of missionary work remaining. Flypaper will need to convince businesses its product is worth their peoples' time and invest the effort in training them. Corporate marketing departments and content creators will understand the gist of that argument without much trouble. But that's only a small part of any organization.

Sullivan says he heard similar arguments when he was selling contact management software.

"With ACT, there was a certain amount time the salesperson had to invest to get what they wanted out of it," he said. "But once they caught vision of what they wanted to do, they invested the time. I think the same thing will happen here...this is kind of like ACT in the beginning, where you had to convince people that yeah, you can do it. Every product has its market mountain to climb. That's part of the fun of it."

Was Steve Jobs trying to send an unofficial message to Adobe Systems? Something on the order of "get it in gear, guys, if you want to stay on my VIP list"?

As my colleague Tom Krazit reported Tuesday afternoon, Jobs used the Apple shareholders' meeting to publicly dismiss the the full-blown PC Flash version as "too slow to be useful" on the iPhone. He then went on to describe the mobile version--Flash Lite--as "not capable of being used with the Web."

That's an unusual--albeit refreshingly frank--way to talk in public about a business partner. Give Jobs credit for speaking his mind, although I very much doubt Adobe appreciated his candor.

I tried to get a comment from Adobe, which has worked closely with Apple over the years. Will Flash be supported on the iPhone or not? Here's the official non-response, response to my query:

""Flash and Flash Lite are a huge success. All major handset manufacturers worldwide license Flash today delivering a broad range of mobile devices ranging from feature phones to smartphones and consumer electronic devices. With more than 450 million Flash-enabled mobile devices shipped worldwide and 150 percent year-over-year growth we are on track to see 1 billion Flash enabled devices by 2010. Consumers demand a rich Web experience on any device and platform and Flash delivers just that. We look forward to our continued relationship with industry leaders to deliver engaging experiences to consumers worldwide."

Thin gruel. Hopefully, I can get a fuller answer later on.