Cutting Edge

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.

The USB 3.0 cable is substantially thicker than the USB 2.0 cable as it contains six wires rather than two.

(Credit: Reuben Lee/CNET Asia)

Intel demonstrated a working version of USB 3.0 at the Consumer Electronics Show in Las Vegas last week. Here's why it will make eSATA and FireWire obsolete.

When USB 3.0 is expected to hit the market in early 2010, it will have been 10 years since the now ubiquitous USB 2.0 was introduced (April 2000). The current USB 2.0 specification runs at a theoretical maximum speed of 480Mbps, and can supply power (for those looking for the hard details, you can find the USB 2.0 specification here (zip file).

According to the USB Implementers Forum, there were 2 billion USB 2.0 devices shipped in 2006 (one for every three people in the world), and the install base was 6 billion (almost one for every person in the world). In November 2007, the USB Implementers forum announced the USB 3.0 specifications, and Intel officially demonstrated the technology at CES 2009.

Now, the juice: USB 3.0 promises a theoretical maximum rate of 5Gbps, meaning it's 10 times faster than USB 2.0. USB 3.0 is also full duplex, meaning it can upload and download simultaneously (it's bi-directional); USB 2.0 is only half duplex.

Put side by side with eSATA and FireWire 800, USB 3.0 is far superior. eSATA, an external connection that runs at the same speed as the internal SATA 1.0 bus, has a maximum theoretical of 3Gbps. This makes USB 3.0 faster than eSATA and about six times faster than FireWire 800 (full duplex at 800Mbps).

USB 3.0 also provides another advantage; while eSATA is faster than FireWire 800, unlike FireWire it cannot supply power. USB 3.0 has the advantage of being faster than both, even while supplying power.

Finally, USB 3.0 has improved power management, meaning that devices can move into idle, suspend, and sleep states. This potentially means more battery life out of laptops and other battery-based USB-supporting devices like cameras and mobile phones.

Of course, there are other factors to consider; the FireWire 3200 standard is also in the works and promises to allow 3.2GHz speeds on existing FireWire 800 hardware. USB 2.0 generally doesn't meet its theoretical maximum throughput, due to its dependence on hardware and software configuration, where FireWire gets much closer.

It's hard to say whether USB 3.0's updated architecture will still use more CPU time than FireWire does.

But in the age of powerful hardware (can anyone say "3.2GHz, quad-core CPUs"?), all of this means that FireWire is still not going to match USB 3.0's theoretical maximum of 5Gbps.

The ultimate signal that this war has already been won is Apple's recent decision to ditch FireWire from its consumer line in favor of USB. Previously, Cupertino had been one of FireWire's greatest advocates. And surely the company will be one of the first to adopt USB 3.0.

All in all, we can't wait for motherboard manufacturers like Gigabyte and Asus to start supporting the technology and mainstream PC builders like Dell to start integrating it into their products. Bring on the speed.

Alex Serpo of ZDNet Australia reported from Sydney.