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Updated: 3 hours 6 min ago

Let's Talk About Why Yahoo Really Bought Tumblr: Native Advertising

3 hours 35 min ago

If we needed an event to wake people up to the power of native advertising, it's surely Yahoo's $1.1-billion purchase of Tumblr.

We'll be talking about this a lot at AdNatively, a one-day conference I'm emceeing in New York on Thursday, May 23.

So what is native advertising? A quick, simple definition: It's an ad whose form and delivery is identical to the content environment in which it is served.

The opposite, in other words, of interruptive advertising: billboards, takeovers, and big banners that take up space on the page but don't otherwise relate.

Tumblr's Real Value

So why did Yahoo buy Tumblr? People talk about the hip, cool vibe of Tumblr's network of millions of blogs. Or the younger demographic Tumblr has attracted, which Yahoo desperately needs.

But Yahoo doesn't need blogs and young'uns for their own sake: It needs them because marketers need them. And the only way marketers can reach Tumblr users is through Tumblr posts, which advertisers will pay to feature on Tumblr users' "dashboards" - the stream of posts from accounts they follow.

That's more theory than practice at this point. Yahoo hopes to turbocharge Tumblr's revenues through its large sales force, which has been itching to have more native advertising formats to sell. 

Tumblr investor Fred Wilson of Union Square Ventures is delivering a keynote address at AdNatively. I'm keenly interested in what he'll have to say.

Wilson is also an investor in Twitter, which has a similar native model: Advertisers can pay to promote a tweet so it's seen by more people, or on Facebook, where sponsored posts get more prominent play in users' News Feeds.

Fuck Yeah, Native Ads

Native advertising is not without its controversies. A big one is the learning curve: Marketers must master each potential advertising environment and learn its intricacies, from Tumblr users' love for animated GIFs and the phrase "fuck yeah," to Twitter's peculiar language of retweets and replies to Facebook's maddening algorithms.

It's no wonder that some give up and just buy banner ads, which can be bought and sold by machine, almost like stocks. Native-ad environments are catching up, opening up their ads to automated buying and selling through application programming interfaces, but there's no question that native ads add complexity.

Native ads seem inevitable, though, as content consumption goes mobile and social. Back in 1994, when Wired's HotWired website sold the first banner ad, that little rectangle was arguably a native format adapted to the new medium of the Web. But Web browsing has evolved. If we're changing how we design interactive experiences for touch interfaces and screens of all sizes, shouldn't we change how marketers fit in, too?

Full disclosure: ReadWrite and its owner and publisher, Say Media, are actively thinking about the native-advertising question. ReadWrite runs ad formats, like sponsored posts, which some observers include in the native-advertising mix. So we're not just curious bystanders. But I promise you that ReadWrite will do its best to cover native advertising objectively and disclose when we have a stake in the game.

The conversation at AdNatively promises to be a rousing debate. If you're in New York for Internet Week, please join me, Fred Wilson, and others - ReadWrite readers get a 50% discount on attendance.

Image courtesy of Shutterstock.

If Google+ Is Good, Why Does Google Force It On Us?

6 hours 35 min ago

Google really, really wants us to like Google+. Google is embedding Google+ into each of its products, making it increasingly difficult to use its services without embracing the Google+ borg, whether you want to or not.

Judging by Google+'s still stagnant market share, you generally do not want to use the social service, or whatever it is.

When prodded by complaints that Google is forcing Google+ into its disparate products, despite not necesssarily fitting very well, Vic Gundotra, Google's senior vice president over Google+, rejected the criticism at Google I/O:

I'm not sure that [the integration is] forced. I think there are some people who may have a misunderstanding of what we're trying to accomplish... One of the core insights we had when we started Google+ was that Google itself was deeply fragmented. 

So what did Google do? It invented Google+ as "a way for Google to get to know [its] users," according to David Glazer, director of engineering for the Google+ platform. This is fine, so far as it goes, but this speaks to Google+'s value for Google, not its users. 

For example, I use Zagat, a restaurant rating service that Google acquired in 2011, all the time. And each time that I use it now, I get this obnoxious prompt:

This wouldn't be a huge problem except that it pops up every single time I visit Zagat.com. Including when I'm on my mobile device. See that little X in the top right? That's much harder to see/find on an iPhone.

Even worse, if I click on "Start now" Google takes me away from Zagat entirely and into Google Local, orienting me into whichever city I'm currently sitting in, rather than letting me get back to the location I was actually interested in (often New York, as I experiment with new restaurants). 

Google, in short, is foisting Google+ on me for its good. Not mine.

As Forbes' Robert Hof highlights, Google can't seem to articulate why users should want to use Google+. They seem to have the party line down as to why it's good for Google (see above), but for users? Google draws a blank.

Which is surprising, given how good Google is at convincing us to use its different products. Maps? It's amazing, and much better than Apple's Maps application. Search? Been the gold standard for years. Now? Revolutionary, and is sorely tempting me to dump my iPhone. Even Google+ features like Hangouts are increasingly services that I turn to for quick collaboration with colleagues.

But Google+ as a forced integration between Google's products? It just gets in my way and slows me down. Until Google figures out why I should want to use it, rather than have to use it, Google+ will remain a social also-ran, however much Google tries to force it.

The Sky Is Falling For Smartphone Maker HTC

7 hours 22 min ago

Smartphone manufacturer HTC is in disarray. According to a report from The Verge, the company is hemorrhaging executives from its Seattle-based office amid poor sales, internal turmoil and controversy. Within the last several months, HTC has lost its chief produdct officer Kouji Kodera, VP of global communications Jason Gordon and product strategy manager Eric Lin among several others. 

In a classic "the sky is falling" scenario, everybody is blaming everybody else. Many in HTC blame Facebook for the problems selling the HTC First - "The Facebook Phone" - while others blame erratic snap decisions from CEO and co-founder Peter Chou. 

To all my friends still at @htc - just quit. leave now. it’s tough to do, but you’ll be so much happier, I swear.

— eric L (@ericlin) May 20, 2013

See Also:

Why Your App Design Doesn't Have To Be All Thumbs

7 hours 34 min ago

The debate about app design largely centers around screen size.

What if designers worried about digit size instead?

Luke Wrobleski, a respected designer who sold a company to Twitter and more recently founded Polar, an app maker, thinks it's time to reconsider mobile design principles. Instead of worrying about questions like whether to upsize smartphone apps for tablets, designers should start by asking how their users will physically interact with their devices when using an app.

The technical term for this is input type—keyboard versus touchscreen, one-handed or two-handed interactions, and the like. This requires designers to think about how a device is held, which fingers are used, and how the app in question can optimize the experience for users' dexterity. 

The Beginning: Start With Responsive Design

For a smartphone, the primary input type has become a single hand with a single finger, typically the thumb. For tablets, it's two hands with two inputs, typically both thumbs. And for desktops, it's still restricted largely to the mouse, trackpad, and keyboard, but can branch out in rare circumstances, in the case of devices like the Chromebook Pixel or Microsoft Surface to touchscreen inputs as well. 

Wrobleski's Polar makes an iOS app that lets users poll friends on any topic and then build communities around these topics. Just last week, Polar launched a desktop Web client that is designed to match not just the look but the functionality of the mobile app versions and the input types taken into account with each one. As you change the size of your window, the app morphs from the desktop version to the tablet/touchscreen computer version, and then down to its smartphone version.

If you resize ReadWrite in a browser window, you'll see a similar transformation. This is known as responsive design, and it's an increasingly popular approach to Web design. Last week, at its I/O conference, Google unveiled tools that promise to make it much easier to build responsive websites.

That way, Polar not only looks the same in-app for the iPhone and iPad as it does on the mobile Web, but it adapts for pretty much every platform for optimal use. It's not about scaling the layout of interface objects up and down; it's about scaling the whole experience up or down. 

Next: Think About How We Hold Our Devices

But responsive design has largely been limited to these screen-size adjustments. Input type may be an even more important concept because it factors in both the physical limitations of the device from a display and functionality standpoint as well as how those limitations translate to our physical interactions with the devices. 

Wroblewski detailed the input-type approach to design in a blog post on May 13 that covered the app's new Web client, which lets users quickly scroll through and vote on topic pages related to everything from Star Wars and Game of Thrones to Web design and photography.

"Topic pages on Polar were designed to adapt to not only different screen sizes but to different input types as well," Wroblewski writes. "The end result is a Web interface that aims to fit into the reality of Web use today. In particular, the human ergonomics of how people interact with different devices ..."

It turns out that thinking about ergonomics on mobile devices and adapting design accordingly is not a widely used approach. Steven Hoober, who Wroblewski cites as his primary source for input-type research, published a report earlier this year on UXmatters, "How Do Users Really Hold Mobile Devices?" that collected two months of observations on how more than 1,300 people used their mobile devices. 

Hoober's report aimed to dispel the myth that designers should follow a "best practices" approach to app design that relies on assumptions that cast the widest net. Instead, Hoober advises that the approach should be far more customized, taking into account the constantly changing nature of mobile use that is contingent on factors like device type and screen size as well as physical location, be it standing or sitting on a bus or in a cafe. 

"The way in which users hold their phone is not a static state," Hoober writes. "Users change the way they’re holding their phone very often—sometimes every few seconds."

While Hoober did verify the assumption that majority of smartphone use is done one-handed with the thumb—49% of the time—he also discovered that designing from that standpoint alone could lead users to alter their behavior and thus deemphasize the very reasons underlying the approach.

"What if a user sees buttons at the top, so switches to cradling his phone to more easily reach all functionality on the screen—or just prefers holding it that way all the time?" he explains.  

Comfort-First Approach

Wroblewski stresses that Polar was designed primarily to be "comfortable to use," incorporating the ideas behind Hoober's findings into the app's design to cover the best input types for every device.  

For instance, Polar's smartphone app contains no left-hand column because users wouldn't typically be able to access it comfortably using one hand and one finger. It does support keyboard use in the event someone is using a large-screen phone-tablet hybrid, also known as a phablet, that's more typically held with two hands.

By contrast, when using Polar on a full tablet, a browsing column is present to take advantage of two-handed use. That's placed strategically on the left edge, with voting options on the right to take advantage of quick thumb access to the left and right sides of the screen. 

The desktop version of Polar mostly matches the mobile app experience. The main difference: When Polar detects a large enough screen, it adds keyboard support.

This type of comfort-first approach has its downsides.

"Looking at the Polar interface on a laptop can be a bit disconcerting because we’ve essentially left the middle of the page 'blank,'" Wroblewski says. This runs contrary to the fill-'et-up instincts of most Web designers, but it's the only way Polar could create something that easily scales down both aesthetically and functionally from a 27-inch monitor to a 4-inch smartphone screen. 

While these methods are very much experimental, they showcase the implementation of a much more sophisticated approach for thinking about mobile app design. We know that the diversity of devices is only increasing. With responsive design, we've scrapped a one-size-fits-all approach to screen size. The next step is to discard one-swipe-fits-all thinking about how we interact with those screens.

Photo by Intel Free Press

How Google Is Wooing Developers To Make Apps For Android First

8 hours 34 min ago

This post is the first in the ReadWrite series "Making Android Pay," in which we'll explore the opportunities and challenges mobile developers face in trying to make money from Android apps.

In December 2011, Google chairman Eric Schmidt predicted that mobile developers would be building apps for Android first instead of iOS by the middle of 2012. That obviously hasn’t happened. But Google has doubled down on its push for more Android-first apps, largely by making it easier for developers to make money from them.

"It has taken a long time, it is slower than we like, but we are getting there,” Ibrahim Elbouchikhi, a product manager for Google Play Commerce, said during Google I/O last week. 

Up to now, the main sticking point for many app creators has been simple: money. Make that, at least for most Android developers, the lack thereof. Until recently, Google just didn't offer tools that would let developers fully exploit the global Android ecosystem for their own financial advantage.

Developers: Show Us The Money

There's also the fact that, until Android 4.0 Ice Cream Sandwich and 4.1 Jelly Bean, Android apps just weren't as good as iOS counterparts. Google first had to give Android feature parity with the iPhone and iPad before it could begin optimizing the ecosystem for money-making.

"Last year was sort of about reaching feature parity with, let’s say, other competitive platforms, where this year it has been all about going up to the next level. Innovating, doing things that are different," Ellie Powers, product manager for Google Play, said in an interview with ReadWrite. "Like now we have the beta testing feature unique to our platform and other sources of analytics coming together."

Google VP of Android Hugo Barra announces new tools at I/O 2013

Such bullishness hasn't yet dispelled doubts remain even among some of Android’s stoutest supporters, including some developers at I/O last week. One grilled Elbouchikhi about how much he could expect to make from a bona fide hit app. There's no easy answer to that question — let's just say that lots of variables are involved in that particular equation — but it's also a sign of just how heavily that question weighs on the minds of developers.

In this series, we'll take a close look at the new tools Google has rolled out to lure developers away from Apple and get them to develop for Android first. Let's just say that the thickness of developer wallets seems to be front and center in Google's thinking.

Aww, What A Cute Widdle Android Baby

Google still thinks of Android as a very young, even though it has been on the market for nearly five years and in development since 2005. "I feel like Android is a baby," said David Burke, engineering director for Android at an I/O session. "I think there is so much more we can do."

If Android itself is a baby, that makes the developer tools and monetization techniques Google has been pushing nearly newborn. The Google Play Developer Console — a suite of tools for publishing and distributing Android apps — was announced at I/O 2012. and the company has only been working on solving developers' biggest issues for about a year and a half.

Google realizes it still has developer issues with Android, from app discovery to user retention to the fundamental act of getting developers paid. But if we learned anything at I/O last week, it is that Google is aware of these problems and working hard to address them. In fact, almost every Android announcement at I/O last week was aimed at boosting Android's standing among developers by addressing its perceived shortcomings vis-a-vis iOS. 

Will that make Android No. 1 in the hearts of mobile developers? We'll see.

"We are still very new. My mother still hasn’t figured out why people would want to buy apps. But most people have. I think there are a lot more business models that are going to develop in the future," Powers said.

What will it take for you to build for Android first? Let us know in the comments. 

Next: New tools in Google Play for getting you paid.

Top image: The Google Android team onstage for a fireside chat at I/O 2013. All photos by Nick Statt for ReadWrite

Xbox One: The Most Restrictive Game Console Ever Made

9 hours 41 min ago

If the Xbox One is the future of gaming, then that future is as grim as everyone feared.

In an event Tuesday morning that felt like a casual bar conversation compared to Sony's brain-exploding extravaganza back in February, Microsoft unveiled the next-gen Xbox — not in a giant conference center, but in a tent set up on a soccer field at its Redmond campus.

With a hard-line focus on the One's television connectivity and a smart decision to actually show off the physical console, Microsoft pulled off a tight one-hour presentation that glazed over the trickier undercurrents at play. But the devil is in the details, and it's now apparent that while the Xbox One will not require a constant Internet connection [though this is now a disputed factor - see update at the bottom of the story], as many had feared, it's still the most restrictive console ever made. 

As the event highlighted, the One is an aggressive grab for the living room from the get-go. But for gamers, long the core market for the Xbox, two really important questions remain. How much of the hardware we buy do we really own, and how far can and should a manufacturer go in telling us how to use our console?

Microsoft drew some very serious lines in the sand today. It's up to consumers to decide whether or not to play ball. 

Microsoft's Iron Grip

The rumor of a universal always-online requirement was finally quelled, but even more mysterious news boiled up in its place. Microsoft openly revealed that the One will require users to download all games to the console's hard drive to play, but Wired's Chris Kohler reported that to do this a second time with the same disc will require a player to pay an unspecified fee.

Microsoft quickly responded by saying that the Xbox One will "enable customers to trade in and resell games" and that the company will have more details to share later, likely at the Electronic Entertainment Expo next month. But the same spokesperson also added this ominous note in a comment to the game-news site Polygon:

Xbox One’s support for used games and these other scenarios may not look like they have on previous console generations, and that’s what we’ll be explaining as soon as we’re able.

That's as clear as mud, of course. But tacking on fees for re-using an already-purchased game disk could seriously damage the used game market, or even kill it entirely. Not only would used games get more complicated to rebundle and price, resellers would likely offer less for used games in the first place.

That would antagonize retailers and consumers alike. It would be a giant step backward in an era where a game that provides maybe 8-10 hours of gameplay will still cost $60. Such a policy could even boomerang on game developers themselves, since many gamers finance their purchase of new games by trading in their old ones. If the trade-in market vanishes, so does that source of cash for new purchases.

The good news here is that a used game fee was "a surprise" to GameStop President Tony Bartel when he spoke to Polygon. Bartel went on to call the fee requirement "speculation." In a separate statement to ReadWrite, the company replied, "GameStop is working closely with Microsoft to ensure there is an opportunity for customers to take advantage of our popular buy-sell-trade model and provide a seamless transition for consumers to enjoy the next generation of console gaming." 

While the Xbox One will be able to operate without an Internet connection, the always-online issue won't go away entirely. Microsoft announced that it will be handing that ability over to publishers, who can designate certain game functions that will only work on Microsoft's Azure cloud platform — in other words, effectively requiring an Internet connection to play.

This isn't great news, especially considering Electronic Arts took the stage at the One unveiling. EA, voted the worst company in America two years in a row, recently tried to play nice with its consumer base by discontinuing its insane Online Pass program, which charged gamers a fee to access some online levels or items via a used game disk. But you can bet the company will be near the front of the line when it comes time to bake core game functions into the cloud to make an online-only gaming world an unavoidable, and unpleasant, reality.  

Say Goodbye To Your Current Collection

So what about that huge library of Xbox 360 games you've collected so far? Sorry, those won't work on the One. (PlayStation 3 games won't work on Sony's upcoming console, either, so there's plenty of blame to go around on this front.)

But what about all those awesome indie games you've downloaded through Xbox Live Marketplace or the full 360 titles you bought digitally? Those will carry over, right? Nope. It turns out that only music, movies, and TV shows purchased through Xbox Live will follow you to the One.

Then there's the Kinect. While it sports very impressive voice recognition and motion control, reports quickly surfaced that the updated camera-sensor combo will need to be plugged in at all times to use the One. For starters, that's both annoying and a bit creepy, considering the Kinect will be on all the time watching everything you do. But this bit of news also suggests that the One itself might be pretty pricey, if it comes with the next-generation Kinect bundled.

Your Move, Sony

To be sure, Sony's PlayStation 4 could be equally bad, or even worse; we won't know until Sony really unveils it at E3 next month. For the moment, though, Sony at least stands a chance of offering a more consumer-friendly future for console gaming.

Is it inevitable that both the software and hardware we buy in the gaming realm, be it the new SimCity or the next-gen Xbox, are simply no longer ours to own, let alone to hack and mod and use in the way we're most comfortable?Microsoft may not have come out and said so outright, but it's certainly taken quite a few steps down that gloomy manufacturer- and publisher-dominated road.

Update: When asked directly by Kotaku whether or not the Xbox One would have a time limit on its ability to play games offline, Microsoft Vice President Phil Harrison said these fateful words: 

Kotaku: If I’m playing a single player game, do I have to be online at least once per hour or something like that? Or can I go weeks and weeks?

Harrison: I believe it’s 24 hours.

Kotaku: I’d have to connect online once every day.

Harrison: Correct.

The company is immediately backpedaling on Harrison's statement, telling Polygon Wednesday morning that the comments represent only "potential scenarios," adding, "...we have not confirmed any details today, nor will we be."

Photos by ReadWrite's Taylor Hatmaker for ReadWrite

Xbox One Photo Gallery: A Close-Up Look At Microsoft's Shiny, Shiny Future Of Gaming

20 hours 43 min ago

Today in Redmond, Microsoft unveiled the Xbox One, its vision for the future of home entertainment. The Xbox One will expand Microsoft's Xbox agenda well beyond gaming, blurring the boundaries of gaming and interactive TV further than ever.

Let's take a look.

The Xbox One isn't much of a departure when it comes to design — but the tech under the hood is on steroids and then some.

With integrated Blu-Ray, Kinect and a whole new batch of hyper-responsive voice and gesture controls, Microsoft is angling for casual gamers and the hardcore set alike.

Microsoft's "futureproof" Xbox One features a reimagined (but not wholly reinvented) controller with developer-programmable buttons and "vibrating impulse triggers" that provide tactile feedback.

The Xbox One soaking up the spotlight... literally.

Microsoft hosted its Xbox One event in a tent at the center of at its Redmond, Washington Xbox campus.

Don Mattrick takes the stage for the biggest reveal moment of the day: the name of Microsoft's new console.

If the Today Show is any indication, the Xbox ain't just for l33t gamers these days — it's a console designed for the whole family.

Microsoft's new Xbox Live design takes after the successful formula of its predecessor rather than reinventing the wheel.

The Xbox One's multitasking chops on display, featuring a live Skype video chat demo.

With a demo of Call of Duty: Ghosts for the Xbox One, FPS fans are in understandable throes of ecstasy today. The new shooter will take the hit franchise in a new direction, setting the player up as the underdog in a ragtag team of post-apocalyptic warriors, who are presumably ghost-like in some capacity.

Since we can only assume that a handful of gamers out there won't be so into the Today Show thing, Forza Motorsport 5 will launch with the Xbox One.

The Xbox One may have made its photo op, but one big question remains: price. With so many advanced features on board, it's hard to imagine that the console will be able to match the $299 bill of its predecessor's base model. If Microsoft really wants to stave off the competition when the console becomes available—"later this year," executives said—the Xbox One's price tag needs to be as impressive as its spec sheet.

Photos by Taylor Hatmaker for ReadWrite

Xbox One: Microsoft's Big Bid To Pwn The Living Room

21 May 2013 - 8:11pm

It's not every day one of the big three gaming powerhouses announces a new console. In fact, we've been waiting a solid eight years. In an event on its Redmond, Washington home turf today, Microsoft announced the Xbox One, its next generation Xbox gaming console — and more.

In fact, the Xbox One is pretty much an audacious land grab by Microsoft, an attempt to stake out your living room as its undisputed turf. Here's how.

  The new console packs 8GB of RAM, a base 500GB hard drive, USB 3.0, wi-fi direct, and built-in Blu-Ray. The One runs on a custom eight-core AMD chip and will come bundled with Kinect, the motion-based controller system that Microsoft introduced with the Xbox 360.   Contrary to rumors, the Xbox One will not require an Internet connection at all times. Though it may crimp your ability to play used games and apparently won't play Xbox 360 games at all.    On stage in Redmond, Head of Xbox Don Mattrick touted the Xbox team's ability to stay agile with trends — not always the company's strong suit — by feeding the voracious appetite of avid gamers. "Nearly 8 years after our launch, the Xbox 360 remains a vibrant platform," Mattrick said. "We made an early bet on Xbox live. Gamers were hungry to adopt emerging technologies... we doubled down on Xbox Live. Today it's time for technology to step behind the curtain."
But it is in the living room that the Xbox One stakes its major claim to fame. A new generation of Xbox Live will be the revamped, beating heart of the console, weaving together interactive TV, real-time major broadcast events like sports and awards shows and connected gaming, naturally.

The new Xbox Live interface enables quick-switching between Xbox Live's homescreen, movies and live TV — and in the demo, quick meant quick. ""You can switch to your game like it's a TV channel flip" according to Xbox Live head Marc Whitten. The quick-switching is thanks to "snap mode," a multitasking feature that allows apps to remain running in the background so that they can pop back up instantly.

By hosting its own event on its own terms, Microsoft is jumping the gun on E3 — the biggest North American gaming conference, and traditional grounds for big, flashy hardware announcements. Of course, Microsoft is also beating Sony to the punch, considering that the rival's PlayStation 4 reveal is just around the corner too. 

All photos by Taylor Hatmaker for ReadWrite

Sorry, Internet: Tumblr Founder David Karp Is Not A Billionaire

21 May 2013 - 6:54pm

On Monday, Yahoo announced it was buying Tumblr, the blog network, for $1.1 billion. And then the tweets started, with people declaring that Tumblr founder David Karp was now a billionaire.

The conflation of Tumblr's purchase price with Karp's net worth assumed that Karp got nearly all of the Yahoo payday. And that's simply not how it works for venture-backed startups. Investors like Union Square Ventures and Andreessen Horowitz will share in the take, with Karp getting an estimated $275 million.

(See also: Tumblr's Perverse Lesson: To Get Rich, Don't Make Money)

That's a lot of money, but it won't get him on Forbes' list of the world's billionaires.

You try explaining this to people on Twitter, though.

From high school drop out to billionaire: previously coy Karp cashes in on Tumblr smh.com.au/it-pro/busines…

— Sandra Sully (@Sandra_Sully) May 20, 2013

David Karp (26) now a billionaire after Yahoo! agrees to buy Tumblr news.com.au/technology/yah… Thx #FF @josepheach @sanddragger @conservotop

— Joey Myers Jr. (@JoeyMyersJr) May 20, 2013

Funny how people think that the founder of a venture backed company sold for $1.1b is somehow a billionaire

— David Galbraith (@daveg) May 20, 2013

David Karp--High school drop-out to billionaire stuff.co.nz/technology/dig… I too have no clue why anyone needs to go to school for 12yrs #Tumblr

— Tolstaja Zhirniavka (@tolstunka) May 20, 2013

Sadly, even some respectable publications like Australia's Sydney Morning Herald made the error:

From high school drop-out to tech billionaire: Meet David Karp. ow.ly/lbRIw #Tumblr

— smh.com.au (@smh) May 20, 2013

Other people asserted that Karp was a "high-school dropout." That's actually a debatable point. He left high school to continue his education through home schooling, and never received a formal diploma.

I hate how the media is referring to David Karp as a "high school dropout". Like, yeah he's a dropout but now he's a hot billionaire.

— Trey Amandus Bennett (@trey_amandus) May 20, 2013

Vespa lover, yes. Billionaire, no.

Who knew that newly billionaire @davidkarp likes to ride Vespas? nym.ag/163cMDH #VespaVita

— Vespa USA (@VespaUSA) May 20, 2013

And Business Insider's Henry Blodget tried to resolve the issue with punctuation:

New York tabloids discover @davidkarp, the city's newest ~billionaire tech god read.bi/11RmFms

— Henry Blodget (@hblodget) May 20, 2013

Related stories:

Photo by Web09

Who's Got Big Brands? Tech's Got The Biggest Brands Of Them All

21 May 2013 - 5:59pm

According to the 2013 BrandZ Top 100 report, tech companies hold the top three slots in this year's list of top global brands — Apple, Google and IBM leading the pack in that order. Microsoft rolls in at number 7 on the list.

There's big money in them thar brands, too. The ClickZ report pegs Apple's brand as worth $185.1 billion, up 1% from last year. Google rose more from last year, up 5% to a brand worth of $113.7 billion. IBM's brand shrank 3% to $112.5 billion and Microsoft shrank even more: 9% down to $69.8 billion.

These valuations are based on proprietary valuation methods, so take them with a grain of salt. Still, it's interesting to see how marketing views the power of the almighty brand.

Check out BrandZ's technology sector rankings to see how your favorite companies stack up against each other.

Image via Shutterstock

New Opera For Android Makes Switch From Presto To WebKit

21 May 2013 - 3:30pm

Browser maker Opera just released a new version for Android with a slew of new features, an upgraded design and better performance. And, for the first time for Opera, it is not running on its own Presto rendering engine.

Opera for Android is running WebKit.

In February, Opera said that it was ditching Presto in favor of WebKit, the open source browser engine that powers the likes of Apple's Safari browser and Google Chrome. The release of the new Opera for Android is the first "final" (gold version, not in a beta stage) release of Opera running WebKit, according to Falguni Bhuta from the Opera communications team.

Opera's decision caused a bit of a hullabaloo among the browser communityMozilla's Robert O’Callahan said at the time that it was, "a sad day for the Web." O'Callahan and other browser enthusiasts lamented the loss of Presto, as it was one of only a small handful of browser rendering engines available to developers. Including WebKit, the others are Mozilla's Gecko and Microsoft's Trident for Internet Explorer.

New Features Come To Opera

Rounding up the new features for Opera, users will find some interesting capabilities:

Discover - A new feature to Opera for Android, "Discover" helps users find new articles with just a swipe from the homescreen. Opera has selected relevant global and regional news sources to give users a way to find what it going on around them.

Off-Road mode - Opera Mini has long been known for its compression technology that helps users minimize how much cellular data their browser is using. This often helps when you are having trouble getting a data connection or are roaming and is new to the full Android version of Opera. 

Combined address and search bar - Basically, Opera just created its own "omnibox" that allows you to type in website URLs or search from the same field.

Tabbed browsing - Not specifically new in the final Opera for Android version, but the UI has changed a bit from the last version and offers private browsing.

History - Easier to find your browser history. Swipe to the right to access content from the left of the homescreen.

Save for later - Allows you to download a complete webpage so as to read it later or while offline. Goes well with the "Off-Road" mode when you just want to be able to load an article or a website for later review but know that you are not going to have access to cellular data or Wi-Fi. 

Customizable navigation bar - Top or bottom, put the navigation bar where you want it.

New Speed Dial - Opera's "Speed Dial" feature now syncs with bookmarks to provide easier access to frequently visited websites from Opera's homescreen.

The new version of Opera can be found for free in Google Play.

Dell Kills Its Public Cloud, Continues To Flail In Post-PC Era

21 May 2013 - 2:50pm

Dell is a computer company desperately in search of a new market as the desktop and laptop PCs dwindles. But the Austin-based company is finding that that an elusive target.

Public Cloud? That's So 2011

Yesterday the company announced it was dropping Dell Cloud, its home-grown infrastructure-as-a-service public cloud service. It is also pulling the plug on its planned OpenStack-based public cloud service and online storage service before they even get off the ground.

Dell isn't out the cloud game altogether, mind you - it will be reselling public cloud services through its new Dell Cloud Partner Program. And it's still working on private cloud offerings.

Dell's decision to drop its program after only two years isn't terribly surprising - it was regarded as pricey compared to similar offerings from HP and IBM, and going head to head with similar services from Amazon Web Services and Google without good pricing and a very solid support system is tantamount to suicide these days.

Bring On The Dongles

But Dell is still on the hunt for new revenue. Reports out today indicate that the hardware maker will be releasing a new thumb-drive PC, codenamed Project Ophelia, this July for a reported $100.

PC World has revealed that the device will be based on Android and can be plugged into a TV or monitor via the HDMI port. File storage will be handled via Wyse's PocketCloud.

Dell wants to get this device in the hands of telecomm carriers, who could use Ophelia to deliver streaming TV to customers who don't currently have smart TVs or devices like Roku or Apple TV to pull in online content.

Developers will get their hands on the PC-on-a-stick first, in order to build Android apps and build up a collection of TV-friendly apps. Since there's a lot of Wyse thin-client tech packed into this thing, presumably there will be some capability to have portability between home and work.

This is an interesting concept, save for the fact that there are already similar and cheaper devices on the market now. The concept of a dongle PC is not new, and to date, they haven't really taken off.

The idea also ignores the very real trend away from vertical screen and keyboard/mouse devices to handheld tablets and smartphones. While Ophelia devices would give you portability, you still need a mouse, keyboard and screen to use these things… so the portability is constrained. And if I'm essentially recreating a PC-like portable work setup anyway, why not just use a laptop?

I suspect that's why Dell is emphasizing the telecom angle when it pitches these things. Carriers could offer Ophelia with video and data plans, maybe. But it's hard to imagine consumers buying these things off the shelf when there are other similarly priced set-top devices already on the market and proven to work.

Dell is clearly throwing a lot of things against the wall to see what sticks. Public cloud didn't work, and it's difficult to see Project Ophelia working out, either. Servers, however, aren't doing badly right now. Perhaps Dell should stick to what it knows best.

Congress Wants To Take A Tax Bite Out Of Apple

21 May 2013 - 1:34pm

Tim Cook is going to have an interesting day today. The CEO of Apple will be testifying before the U.S. Senate Permanent Subcommittee on Investigations, which would love to know how Apple has managed to avoid paying billions of taxes. Given the loopholes in U.S. corporate tax laws, Cook might save himself a lot of stress and just hold up a mirror in response to the senators' questions.

One Startup’s Story: The Evolution Of An Outsourcing Strategy

21 May 2013 - 1:05pm

Guest author John Fearon is CEO of Dropmyemail.com, which backs up emails in the cloud and Dropmysite.com, a cloud-based backup company.

At any startup, the first hurdle is the lack of resources - lack of funds, lack of manpower, lack of time. Outsourcing – or relocating - the work can be a great to overcome those obstacles while controlling costs, increasing efficiency and even making workers happier

But it’s not a simple, one-size-fits-all process. In building my company - Dropmysite / Dropmyemail – I found that managing outsourcing was an ever-evolving combination of local and remote capabilities that stays flexible enough to meet changing conditions.

(See also Are Crowdsourcing And Outsourcing No-Nos For Startups?)

Learning The Hard Way: My Outsourcing Experiences

When we launched two years ago, for example, the whole development team was based in India. As a one-man founder bootstrapping the business, this allowed me to hire a team for much less money.

Plus, with India being 2.5 hours behind my Singapore headquarters, my productive workday was effectively extended. In the morning, I conducted business deals and meetings. Then, in the evening - as the team returned from their lunch - I would concentrate on working with them in real time over Skype on building our product.

After six months, I was able to sign up a local CTO to help build a Minimum Viable Product (MVP) that enabled me to secure funding. With some cash in hand, I started building a local team of developers to be able to improve the product more quickly.

At that point, I had two teams of technical workers in different locations – which started to cause problem. We had constant confusion, communication issues and lack of control. At this stage of the business we needed top talent, no low cost workers, so I ended the contract with the Indian team to focus on the local team.

So far so good, but soon my lead technologist decided to go back to Argentina for family reasons. He had consistently delivered good work so we decided to try a long-distance relationship. He hired a few ace developers for the Argentinean team and everything seemed like smooth sailing.

Eventually, though, the 12-hour time difference started to take a toll. Meetings were impossible to schedule and both teams were exhausted. Work delays proliferated, as even the assignments were received 12 hours later. We closed the Argentinian office, bringing one developers to Singapore.

(See also The Pros And Cons Of IT Outsourcing: Globally, Nationally And Locally.)

6 Outsourcing Lessons Learned

My experience with outsources taught me a variety of valuable lessons:

1. Keep Teams Together In One Place. Specific functions should be grouped in the same office and time zone to reduce miscommunications or time lags performing urgent work done. It also makes brainstorming sessions easier to coordinate to create better products.

2. Not All Functions Need To Be Together. That said, it may not be necessary for different function teams to be together. Front office teams (sales and marketing, for example) should be in their home market while the back office (IT and operations) can be anywhere.

3. Give Each Team A Focused Goal. Beyond stating the obvious, all teams need clear directions and key performance indicators (KPIs). Just as important, local and remote teams work better when staffed with self-starters who need less direct supervision.

4. Contract Remote Teams On A Per Project Basis. This frees them to do their work without having to rely on other teams to proceed. The offshore work should be completed parallel to that done onshore. If the remote team isn’t pulling their weight, this approach contains the impact, reducing contamination of other teams and projects. Finally, per-project deals make it easier to replace them if necessary.

5. Daily Communication/Alignment Is Critical. There needs to be constant two-way communication between teams. Remote technology development teams must make frequent reports back to the home base. The lead tech officer has to ensure that their work remains aligned to the overall company direction. Communication between business functions is also essential. Tech teams having to speak to each other, and also keep the salespeople in the loop so clients and partners stay informed.

5. Outsourcing Strategies Must Continually Evolve. Currently, Dropmysite / Dropmyemail keeps core functions and technical development in Singapore, but we have business development staff in India, Japan, and the U.S. And we have outsourced side projects to other locales, including Vietnam. The key is to find and execute the right strategy at the right time.

 

Lead image courtesy of Shutterstock.

Tumblr's Perverse Lesson: To Get Rich, Don't Make Money

21 May 2013 - 12:02pm

$1.1 billion. That's how much your company is worth if it's long on users and short on paying customers. Just ask Tumblr. Or Instagram. Each yanked down billion-dollar acquisitions despite making virtually no revenue. 

Is this a big deal?

Acquihires And Billion-Dollar Payouts

Some seem to think so. At least, for acquihires, the kissing cousin to the revenue-free-massive acquisition. For example, Pando Daily's Sarah Lacy slams the acquihire, arguing that

Lazy profit-seekers love these periods in the Valley. Why not? They can make money without having to actually build a company. It’s like a get-out-of-actual-entrepreneurship-free card.

Venture capitalist Mark Suster goes one step further, holding that acquihires actually have a corrosive effect on the tech industry:

You have been at Google, Salesforce.com, Yahoo! for years. You have worked faithfully. Evenings. Weekends. Year in, year out. You have shipped to hard deadlines. You’ve done the death-march projects. In the trenches. You got the t-shirt. And maybe got called out for valor at a big company gathering. They gave you an extra 2 days of vacation for your hard work.

And that [jerk] sitting in the desk next to you who joined only last week now has $1 million because he built some fancy newsreader that got a lot of press but is going to be shut down anyways.

What kind of message does that send to the party faithful who slave away loyally to hit targets for BigCo? ...

It says if you want to make “real” money  - quit.

Fair enough. I've been involved in three such acquihires, and I see their point. Acquihires send a signal that failure is OK and, indeed, profitable.

But the same holds true for the billion-dollar exits on chimerical revenues. They represent entrepreneurs cashing in on popularity contests without actually having done the hard work of monetizing that popularity. That is, they represent entrepreneurs making big-money success on little-revenue failure. 

The Downside To Making Money

And why shouldn't they? It turns out that it's very difficult to remain popular while charging for one's service. LinkedIn has done it by charging recruiters. Google has done it by aligning relevant ads next to search results. But monetizing people's inane pictures of their meals? Instagram didn't even bother.

Pinterest is starting to roll out paid services. Foursquare, too, has been straining to make more money lately. Ironically, these noble efforts to actually sustain the companies on real revenue may make them far less valuable.

For one thing, monetization efforts can fail. Just look at Groupon's gyrations as it has sought to turn a massive sales force into a profit-generating machine. It hasn't been pretty, and it can turn off users who don't want to be sold.

But more pertinently, the second a business starts to make significant revenue, it will start to be valued on real-world metrics like "profit" and "operating margin" and "sales," not breathless potential based on "users" and "page views" and "social engagement." It turns out that the multiples on the former are far lower than they are on the latter.

The Entrepreneur's Dilemma

What to do? Entrepreneurs can't really set out to build a revenue-free company that VCs will sustain indefinitely. So most are probably right to initially focus on adoption. Assuming they can get traction, it pays to continue to focus on adoption, because it's harder to turn free-riding users into paying customers (or find businesses to pay for access to those users). So long as the venture money is flowing, why would an entrepreneur ever choose to fixate on the dismal science of making money? 

For me, I think if you're not making profitable money then your future - and that of your customers' - is always up for grabs. Whatever promises the purchasing company makes, they are the buyer, and you are the seller. As Dave Winer points out, this inevitably means they're in control. Not you.  

Maybe that doesn't matter. But it does mean we may be building disposable companies with little lasting impact. That doesn't seem like a good thing.

Image courtesy of Shutterstock

Google Admits Defeat In Its 7-Year Battle With Amazon And PayPal

21 May 2013 - 12:35am

Google just announced that is it is shutting down Google Checkout, a Web-based payments system it launched to great expectations seven years ago.

It will continue to offer Google Wallet and handle transactions for apps, games, music, and movies on the Google Play store. But Google is largely getting out of the business of processing payments for physical goods and services.

Google Checkout may have had great expectations, but it delivered little in the way of results. Amazon and eBay's PayPal continue to dominate e-commerce, with a host of lesser-known players also doing the digital scutwork of processing credit-card transactions online. (Two of those, Braintree and Shopify, are offering discounts to former Google Checkout customers.)

Google does billions of dollars a year in credit-card transactions. But most of that is for a purely digital product: online ads purchased by small businesses.

How Google Did Not Get Ahead In Advertising

The theory has long been that Google could use the sheer bulk of these money flows to get into other parts of the payment business, first with Google Checkout, later with Google Wallet.

That theory has not worked out in practice. Where Google has a captive market, as with its ad products or the Google Play store, it's a natural thing for it to handle payments. Where Google has had to compete in payments, it has struggled.

What's Google left with? Google Wallet, a confusingly named product, is now much more of a wallet. In instances where developers use its new mobile-app payment feature, Instant Buy, to sell goods to smartphone and tablet users, Google essentially just stores a credit-card number and passes it on for processing. For Web-based merchants, Google Wallet will store coupons and help drive traffic to online stores.

And in the handful of physical retail locations that take Google Wallet, the tap-to-pay feature available on some Android smartphones will work. Google never actually processed these payments—it just passed on a card number to the merchant, who used some other service to actually handle the transaction.

Missing The Bigger Opportunity

But Google is missing out on a much bigger opportunity—which is serving as an alternative to Amazon.com for the whole world of commerce as mobile, digital, physical, and virtual collide.

It's not clear, for example, what will happen to Google Shopping Express, an experimental same-day delivery service Google is testing in the San Francisco Bay Area. That relies on Google Wallet to process payments for physical goods—exactly the business Google has said it doesn't want to be in anymore. A Google spokesperson tells us Google Wallet will continue to be an option for Shopping Express.

The real prize for Google in being a player in the payments world is data—data about what advertisements and experiences lead to transactions. The risk is that Amazon and PayPal, by handling more kinds of transactions than Google is willing to do, including traditional e-commerce, will attract more merchants. Or that merchants will simply sign up with a payments processor and leave Google out of the equation altogether.

While Google's not completely of the payments game—and one should never count the monolith of Mountain View out—it feels like Google is taking a big step back from the money business. Whether its bet on digital and mobile payments is a tactical retreat or a strategic defeat might not be clear for years.

Updated with comment from Google on its Shopping Express same-day delivery service.

Congress Whacks Apple With The Tax Avoider Stick

21 May 2013 - 12:21am

An 18-month congressional investigation turned up evidence that Apple is a major-league tax avoider, the New York Times reports — one that allegedly sheltered billions of dollars from taxation by moving the money through a web of subsidiaries, some of which had no employees and claimed to be exempt from taxes. Apple CEO Tim Cook will testify before the Senate Permanent Subcommittee on Investigations tomorrow; Apple has released an advance copy of his testimony.

Flickr Gets A Makeover — It's Been Supersized And Instagrammed

21 May 2013 - 12:06am

It wasn’t that long ago that Yahoo stood accused of letting Flickr decay beyond repair. 

Today, under the guidance of new CEO Marissa Mayer, the company has given the oft maligned image-sharing community a major facelift. Yahoo’s announcement promises a Flickr that’s “more spectacular, much bigger, and one you can take anywhere.” 

Ladies and gentlemen, welcome to the grid. Here’s what’s new on your Flickr account:

Room To Grow

As recently as yesterday, free Flickr users could upload and display 200 images at a time. Now every user has one terabyte of storage space. For those of you playing along at home, that’s enough for roughly 200,000 photos. Or as the Flickr staff puts it even more dramatically, “you could take a photo every hour for forty years without filling one.”

Following Flickr’s consistently freemium model, you can get even more perks by going pro. Fifty dollars will remove all advertisements. And for the serious professional, $499.99 will double your storage space to two terabytes per year. Or, you know, more than 400,000 photos. 

If you already had an original Flickr Pro account, priced at $24.95, you’re getting a heck of a deal. Yahoo has upgraded you to the $49.99 option until August 2013, free of charge. Pro user Aaron Brazell sent us a screenshot of his pro account, pictured below:

Introducing The Grid

The most instantly noticeable change is an aesthetic one. Your photos have enlarged themselves to jaw dropping size and now dominate the screen. Taking a cue from Instagram, your home page is now an infinite scroll through your contacts’ recent photos.

Your profile page has also gone the way of Pinterest and Windows 8, filling the page with a grid of images. Just like Facebook and Twitter, your profile page includes a background photo to offset your profile picture. 

I found that Flickr had already put one of my Favorites as my background image, a photo I didn’t even take myself. As it’s not credited, I certainly hope the photographer doesn’t take issue.

Wait, What’s Going On?

A lot here has changed and Flickr power users are still trying to figure out what’s new. Flickr’s most active discussion forum, Flickr Central, is abuzz with comments about the change. Given that these are the people that continued to daily use Flickr even as the rest of the Internet complained it was dead, it’s no surprise they’re unhappy with the change.

“I signed on Flickr to post a story about Yahoo vowing not to screw up Tumblr … and then I see the clusterfuck that is the new homepage,” one user wrote

Meanwhile, confusion abounds at Flickr’s official Help Forum. I’d be amazed if the staff can answer all 1,100 plus questions that were added in the last hour. It looks like Yahoo might want to update Flickr’s FAQ guidelines, which still link to old news like the ability to pay $24.95 for a pro subscription.

If you're confused, don't add to the backlog. I have reached out to Yahoo for details on when the new FAQ will be up and will update when we know more. 

Update May 21 at 8 AM Pacific: a Yahoo spokesperson informed me the Flickr FAQ has been updated with new information about the redesign. 

Who Hates The Yahoo-Tumblr Deal? Tumblrers, That's Who

20 May 2013 - 8:13pm

The Tumblr acquisition may give Yahoo the young, hip audience it’s always wanted — assuming it can keep them. Because Tumblr users aren’t happy, and they’re letting it all out. 

“Yahoo is buying Tumblr guys THIS IS NOT OKAY THEY’LL RUIN OUR HOME,” blogged one user in a sentiment repeatedly echoed on the #yahoo, #tumblr, and #yumblr tags on Tumblr, all of which are currently experiencing an overload of activity. 

Via the 5EXi Tumbr

Tumblr users’ greatest fear? Change, of any kind. Many have vowed to leave at the first sign of Yahoo involvement. One Tumblr user-generated photo shows a purple, spammy nightmare of what many bloggers fear Tumblr may soon become. 

Via the castielmalotovedlucifer Tumblr

These concerns aren’t exactly unfounded, either: Yahoo has a track record of botching its acquisitions. It’s telling that Yahoo’s press release on the acquisition notes that it “promises not to screw it up.” (You read that correctly — that's in the press release.)

(See also: Buying Tumblr Will Leave Yahoo With The Same Old Identity Crisis)

Tumblr CEO David Karp assured users in an announcement that “We’re not turning purple.” (Of course, Tumblr has been purple before — back in 2010, it went purple for Pride Day. When it reverted to traditional blue, well, users complained about that, too.)

There are some obvious conflicts a-brewin'. Yahoo is a self-described family friendly brand while Tumblr is infamous for its uncensored pornographic content. As a result, some users worry about a culture clash. "Yahoo buying Tumblr is like having a house party supervised by your Grandma," one user blogged.

Yahoo is already working to defuse such fears, though it's far from clear how successfully. In addition to the company's promise "not to screw it up," CEO Marissa Mayer made a point of offering this reassurance on a call with analysts and press shortly after the acquisition announcement: "We really want to let Tumblr be Tumblr and let Yahoo be Yahoo."

Via thefrogman.me Tumblr

Some of Tumblr's competitors say they smell blood in the water. WordPress CEO Matt Mullenweg, for instance, wrote on his personal blog Sunday that “normally we import 400-600 posts an hour from Tumblr, last hour it was over 72,000.” (Full disclosure, I’m currently a trial employee at WordPress.com.)

Of course, social-media outrage is often transitory. On Quit Facebook Day in 2010, organizers planned to lead a mass exodus from the site in protest of Facebook privacy policy. In the end, fewer than 2% of American users left after all.

Mayer has already begun addressing the culture clash on her brand new Tumblr, which spells “Mayr” without the “e” as a nod to Tumblr’s quirky spelling. Her latest post speaks Tumblr’s language — a spot-on GIF that depicts Mayer and Karp battling it out through netspeak. Mayer's rallying cry: WFH [Work From Home]. Karp's? NSFW [Not Safe For Work].

When Karp announced the acquisition, he signed it with a nod to one of Tumblr’s most viral (and NSFW) memes, “Fuck Yeah.” Even if Yahoo is planning to change an aspect of the site, Tumblr’s salty language and aversion to censorship don’t seem to be one of them.

Lead image via the tinsoftware Tumblr

Chinese Army Cyberunit Apparently Attacking U.S. Targets Again

20 May 2013 - 4:48pm

Getting called out by the Obama administration wasn't enough of a deterrent for Unit 61398, the cyberattack unit of the People's Liberation Army of China, because apparently they're at it again, working to pilfer information from private company and public government data stores.

The New York Times is reporting that Unit 61398 has resumed operations and is actively engaged in hacking into any U.S. systems that might hold information considered to be of use for the People's Republic of China.

Security firm Mandiant told the Times "that the Chinese hackers had stopped their attacks after they were exposed in February and removed their spying tools from the organizations they had infiltrated. But over the past two months, they have gradually begun attacking the same victims from new servers and have reinserted many of the tools that enable them to seek out data without detection.

"They are now operating at 60 percent to 70 percent of the level they were working at before, according to a study by Mandiant requested by The New York Times," the article reported.

If accurate, then it's clear that the U.S. is going to have to step up its game when it comes to cybersecurity, particularly organizations that have data related to trade secrets or, more disturbingly, infrastructure plans - both targets of Chinese hackers.

Even if this isn't the PLA, someone is hacking these systems, and it's time to stop treating cybersecurity like a game.

Image courtesy of Shutterstock.