To be more precise, analysts value the wave of growth of every new product and heavily discount the post-growth phase assuming commoditization. There is no value assigned to Apple for extending market reach to the mass market.

Cliqset, a website that allows users to view and interact with streams of activity data from multiple social networks in one place, is losing its two co-founders after an unsuccessful run at growing the company. Darren Bounds and Charlie Cauthen led what might have been the single biggest show of startup support for bleeding-edge technical standards aimed at building a federated social Web, rich with consumer choice - but the company's business execution was insufficient to ensure its survival.

Leaders of the distributed social Web standards community, the effort to build interoperable competition for the big social networking silos, say that Cliqset's apparent demise is unfortunate, but that they look forward to seeing what Bounds and Cauthen do next.

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Cliqset - Getting started from cliqset on Vimeo.
Cliqset worked with all kinds of different technical standards, but the startup's brightest shining moment may have been in December 2009, when it released an API that transformed user activity data feeds from more than 70 different social websites into standardized Activity Streams data and offered them through a new API.

Standards across sites for user activity data feeds are aimed to act as a common foundation to provide scale for innovation outside the big mainstream social networks. In other words, if all photos, friends and comments are marked up in a common standardized way, those activities can be viewed across all the small social networking startups - giving them more people and content to display than they would if it was just a random startup alone against the big guys like Facebook.

I've compared standards in social networking data to the historical rise of standardized railroad measurements - which allowed trains to ride across different networks and fostered a new era of nation-wide commerce in the United States.

Unfortunately, economic incentive hasn't driven people to engage with interoperable small networks instead of favoring the big players, Facebook and Twitter. Meanwhile, little Cliqset suffered from a substantially unappealing user experience, which it was never able to overcome.

"Darren and Charlie have done an amazing job taking open technologies and distilling them into a consumer experience," Yahoo's Eran Hammer-Lahav said today.
"The problem is that social aggregation no longer offers any significant value with the Facebook/Twitter market consolidation. The biggest loser from the collapse of Cliqset is Google, as their world of potential social federation partners shrinks even further. Cliqset was a strong supporter and early adopter of many of the core social technologies such as Salmon, WebFinger, and PubSubHubbub."

Unfortunately, all those standards are feeling less viable today than they were in the heady times they were introduced. Independent social Web technical leaders have largely joined up with Google or Facebook and standards organizations have grown quieter. Cauthen and Bounds have not announced what they will do next, but it's probably safe to assume that it will include working to move social Web data standards forward.

Startup Challenges

Not everyone agrees that this has anything to do with challenges faced by the larger standards community. "I don't believe this really has anything to do with standards," Chris Saad of Echo and the Data Portability Working Group says. "Lifestreams in the b2c space has long been crowded and has now consolidated around the Facebook news feed."

Cliqset's Bounds appears to agree. "In order to build a community, you need massive differentiation today," Bounds told blogger Louis Gray this morning. "It's fairly obvious in hindsight. Projects I would be working on in the future would be leveraging the existing social graph, and the need for success wouldn't be contingent on relationships and community within itself. In no means do I think Facebook is impenetrable and somebody can't build something to compete with it, but it's not an easy task."

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Despite the availability of efficient online scheduling tools, professionals burn up nearly five hours per week scheduling meetings, according to a study commissioned by Doodle, a company that makes one of those Web-based tools.

By the time the year ends, many have spent the cumulative equivalent of six weeks scheduling meetings, and that doesn't include time spent attending them.

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Doodle surveyed a sample of 1,500 managers and administrative staff members in Germany, France and the United States and found that most of them were still using old school methods like email and telephone calls to try and coordinate a meeting between multiple people.

Doodle, much like competitors Tungle and SkedgeMe, offers a way for groups of professionals to schedule meetings online by picking from a set of various times that work for everybody, thereby eliminating much of the back-and-forth typically required to get something on the calendar.

The vast majority of respondents reporting using desktop calendars, email and telephone to plan meetings. Only 1% said they used online scheduling tools like Doodle, Tungle or SkedgeMe.

The implications are obvious: Insofar as these findings are representative of the larger population of businesses, it's clear that Web-based scheduling tools can save not only headaches (who likes planning meetings?) but also a significant amount of time, which can be freed up for more productive tasks.

About how much time do you spend per week planning meetings? Have you used online tools like the ones mentioned above? Let us know about your experience in the comments.

Images courtesy of Doodle

Discuss

World-changer Evan Williams has stepped down as the CEO of micromessaging social network Twitter, the company announced today, and will pass that role to serial entrepreneur and company COO Dick Costolo. (Above, photo by Joi Ito)

Williams seems to spawn revolutionary publishing platforms with the wave of a hand: Blogger.com, Twitter and, though it didn't work out as well, the podcasting platform Odeo. Costolo is best known to date for his work at Feedburner, the RSS publishing and analytics service bought and squandered by Google. RSS has been widely derided as too hard for consumers and relegated to obscurity "under the hood" - replaced even in the lives of many tech-watchers by Twitter. Costolo is uniquely fortunate to get to steer both of those ships in his career. If his past performance is any indication, his promotion should be very good for Twitter.

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"I generally believe that for many technology companies, you need not necessarily have any idea how you will make money when you get started, and if you show good progress on the product and customer adoption, you need not make any commitments to a business model for some time... When asked about Google's lack of a clear business model when he backed the company, John Doerr is said to have responded 'With this kind of traffic, we'll figure it out'. -Dick Costolo, January 2008
Before There Was Twitter

Trained as a computer scientist at University of Michigan, Costolo worked at the big management consulting firm Accenture for seven years. There's a big gap in his LinkedIn profile between that period and his founding RSS feed service Feedburner. Anil Dash has written a very interesting account of the technologies and ad networks that key Twitter executives helped build years ago, arguing that the best way to understand where Twitter is likely to go in the future is to understand the pasts of the people running it. During that time, Costolo ran a company called SpyOnIt, basically a website scraping and change notification service that was sold to another company in time. The SpyOnIt team later built Feedburner.

Feedburner was a fascinating service, which still continues operating today. Publishers, from the smallest blogger to the biggest media companies, would point their RSS feeds at Feedburner, then get a new URL to offer to readers. The product delivered easy subscription, analytics, email delivery, feed augmentation with programmable meta-data (called Feed Flare) and inline advertising.

The advertising in Feedburner never seemed to work out terribly well, but the potential for it and the incredible customer base Feedburner built lead to Google's acquiring the company in 2007. Google has since neglected the service terribly, reducing it to little more than an under-appreciated part of Google's ad network. I have to stop writing now about the crime that is the general neglect of RSS, for fear that I will lose my temper over the world's apparent preference for celebrity navel gazing in 140-character bites or the crude grunt of the Facebook "Like" to subscribe.

Turning Tweets Into Cash

So now Costolo runs Twitter. It was in September, 2009 that he came on board as COO. The company had listened to years of derision about its supposed lack of a business model while it was piling up loyal users at a pace envied by everyone but Facebook.

In the last entry posted to his personal blog almost three years ago, Costolo wrote:
I generally believe that for many technology companies, you need not necessarily have any idea how you will make money when you get started, and if you show good progress on the product and customer adoption, you need not make any commitments to a business model for some time. You do need to intimately understand where you sit in the proverbial value chain and what your position there means for your company, but you don't need to know precisely how you will extract value. In fact, I'll go farther and say that focusing on business model too early can hurt a company's prospects. When asked about Google's lack of a clear business model when he backed the company, John Doerr is said to have responded "With this kind of traffic, we'll figure it out".

Google, of course, now earns half as much revenue each year as is spent on advertising across all of television.

Twitter has shown signs of fast success with innovative advertising programs as well, thanks in large part to Costolo.

Evan Williams told TechCrunch today in an interview about the new roles for himself and Costolo: "I'm all about vision, he's all about execution."

Costolo is hardly short of vision, though. His leadership in creating advertising products for Twitter has been remarkable.

Promoted trends, the offering that allows brands to pay to push an already widely-discussed keyword to the trending topics list, is downright brave. It puts an advertiser's message at the top of a search results page followed by a completely uncontrolled, uncensored flow of real-time Twitter messages about the brand being advertised. And companies pay for that! Early indications imply that they pay a lot and that they get a lot out of it. These are so much more effective and less obnoxious than standard display or keyword advertising! It's unclear how well it will scale, though.

Promoted trends is downright brave. It puts an advertiser's message at the top of a search results page followed by a completely uncontrolled, uncensored flow of real-time Twitter messages about the brand being advertised. And companies pay for that.Promoted user accounts is the latest Twitter advertising scheme, and it looks quite good as well. Advertisers buy promotion as a person-to-follow for users who have expressed interest in the type of content those advertisers are publishing - like basketball or movie stars. Then users opt-in to subscribing to updates pushed from the advertiser into the indefinite future (great for advertisers) - with the understanding that if the advertiser doesn't continue to add value, they will be unsubscribed from (that's great for users). The new "who to follow" algorithm for personalized recommendations, and offering targeted promotional recommendations there, is a much better idea than Twitter's original Suggested Users List, which was offensive and the company didn't even make any money off of.

@earlybird, the company's account that broadcast daily deals, didn't seem to work out, but two out of three radically new advertising products isn't bad. Even EarlyBird shipped and made sense; that's more than can be said about the Business User accounts that Twitter has been working on without launching for years.

Now that Twitter's user-base has exploded, now that it's seized huge mindshare around the world, it's time to put the man who lead the creation of the company's monetization program in charge of the company. That makes sense.

What's Costolo like to deal with? While Evan Williams is generally aloof, Costolo is one of the most personable executives in the industry. "He's the most incredibly responsive CEO I've ever come across in my life," says ReadWriteWeb founding editor Richard MacManus about his interactions with Costolo as an early blogger using Feedburner. "He's really into it from a customer relations point of view, which is probably going to help Twitter a lot."

Above: Tech luminaries like investor Brad Feld and wireless industry analyst Chetan Sharma line up to publicly congratulate the well-liked Costolo, on Twitter of course.

If you believe that Twitter is of net-benefit for the world, and only someone who hasn't used it much would say otherwise, then what's good for Twitter is good for the rest of us, too. Costolo's adventures with the last world-changing messaging system he lead may have worked out better for himself than for the rest of us in the long run, but his work at Twitter so far has been key at building staying power for this new, more accessible way for people around the world to speak with each other.

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There's an interesting chart making its way around the Net this morning comparing the number of iTunes app downloads to the total downloads of songs. The surprising reveal is that it shows apps are being downloaded much more rapidly than songs. In only 2.2 years, the iTunes App Store has reached the same total downloads as the iTunes Music Store did after five years. And before the year is out, the two curves on the chart will be around the same height - 13 billion downloads each.

Why is this happening? Why are apps becoming more popular than music?

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More Apps Downloaded Than Songs by Year-End

The original chart was posted on Asymco's website, home to a hybrid industry analysis advisory and app development firm. Assuming the data the firm has collected is accurate (they say it comes from statements made by Apple representatives), Apple customers will have downloaded more iPhone/iPod/iPad apps than songs sometime in the near future, either by year end or just a few weeks later.

That's a staggering thought, when you really think about it. After all, the original iPhone didn't even support the development of third-party mobile applications when it launched in summer 2007. It wasn't until March of the following year that Apple released development tools (the iPhone SDK, or software development kit), allowing aspiring developers to begin work on mobile creations that would run on an upcoming version of the iPhone operating system, due out later that summer.

When launched, however, these natively-built iPhone applications quickly became more popular the previously supported "Web applications" in terms of usage. App downloads surged and have been surging ever since.

But why are these apps, popular as they may be, on the path to besting music in terms of sheer download numbers?

Ouriel Ohayon, the creator of mobile application sharing and discovery platform AppsFire, has ventured a few guesses and we think he's right on the money. Here are the reasons he puts forth on the AppsFire blog:

1. Apps Let You Personalize Your Phone

Apps let you personalize your phone in the same way as only ringtones and wallpapers once did. They are the new music playlists, in a sense, he says. In many ways I think that's true - I know the first thing I do when I get hold of someone else's mobile phone is look at what apps they're using. I could care less what their musical interests are. However, I don't think this is the main reason for the trend.

2.Many Apps are Free

Ohayon says that apps are surpassing music in part because so many of them are free. That's hard to argue with. Apps are probably sampled more often because they're free. However, some of those free apps probably aren't used as often as the 99-cent song you knew you liked enough to purchase is listened to. Nor do free apps make up the majority of iPhone apps available for sale - roughly 70% are paid. Free apps cater to our desire to buy things on impulse, but without the guilt of throwing our money away. So what if you only play that game once? It was worth the price - nothing - to kill five minutes of time while in the waiting room of the doctor's office.

3. Apps Provide Downloaded Music Substitutes

Mobile applications like Pandora, Last.fm, Deezer, Spotify, MOG and Rdio provide free and/or paid subscriptions to streaming music. You don't need to download and pay for a song in iTunes if you use one of these applications - you can just listen to it over the Internet instead. Apple itself may have caught onto this trend, too. The company recently purchased streaming service Lala.com, which many suspect will be turned into a subscription-based, Internet music streaming service for iTunes.

In addition, some apps are music themselves. Ohayon points to apps like this Lady Gaga one or this Katy Perry one, for example, that package popular music within mobile applications. Some games also feature music like Katy Perry Revenge or Lyric Legend, which, when you think about it, is actually a new format for listening to music. But there are many, many others beyond the few mentioned here.

In fact, we spotted this trend nearly a year ago, noting the rise of "music-themed" apps that offer tunes and other content from artists. We then cited examples from NIN, Moby and Usher as artists who were using apps to promote their songs. (See: "Forget the iTunes LP, Apps are the New Album"). Still, the most devoted fans will probably buy both the app and the album, since only the latter usually works in playlists and when you go offline.

While no single reason can explain this trend in its entirety, the reasons put forth by Ohayon are reasoned and sound, we think. Asymco's Horace Dediu agrees, responding to Ohayon via the comments of the post, saying "apps are indeed content," referring to how apps can replace other forms of content. "Apps-as-media has implications in the way they are produced, marketed, priced and consumed," writes Dediu. "All the data since has been nothing but confirmation of this."

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Twitter was one of the first to see what happened when traffic to the site came more from the API than the Web.

It now has more than 65 million tweets per day, most coming from services that use the Twitter API.

Twitter has made numerous changes to fix its API. Those experiences have taught providers what mistakes not to make when launching a service.

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But there is still a lot for providers to learn.

Considering this, we asked developers and service providers to help us prepare a list of 10 common mistakes made by API providers. Hopefully, the list will provide some basic insights into what mistakes should be avoided when developing an API.

Our group of commentators include Adam DuVander executive editor at Programmable Web; Mike Pearce, a developer out of the United Kingdom who writes a lot about scrum and Agile; Mashery's Clay Loveless and Sonoa Systems Sam Ramji.

1. Assuming Everything Will Always Work
"Databases fail, backend dependencies get slow, and/or someone somewhere along the line doesn't escape output properly. The result? A nasty stack trace at the top of your API payload, which in some cases may even include production database credentials.

Solution: Before you launch, kick over some dependency and see what your API does. Developers would rather have a predictable (valid XML/JSON) error message they can code for than a surprise invalid payload."

Source: Clay Loveless

2. Poor Community Management

"Sometimes we see providers expecting the API alone to attract developers. You need a good service and must communicate to developers what it is you provide. Also, along similar lines, it's easy to ignore the developer community management, but that communication can make or break your platform. When you get developers' attention, keep it by being responsive and helpful. Treat them like partners."

Source: Adam DuVander

3. Not Anticipating How API Business Processes Will Scale

"APIs are about bringing the scale of the Internet to bear on your business - but what if that scale actually happens? Will a manual review for user on-boarding scale if you surge in popularity? Will auditing and liability processes get in the way of enabling free access to a subset of your data? Governance is less important when the API is less used, but when transaction volume becomes significant, APIs become important to the finance and legal teams. Don't let success lead to failure due to non-scalable processes."

Source: Sam Ramji

4. Putting the API Under Website Domain

"Case in point: twitter.com is now going to api.twitter.com for the API. The result is that they can scale the website and the API independently of each other as needed. I've never heard of anyone regretting the decision to split out API traffic from main website traffic, and nearly everyone to doesn't do that at the beginning wishes they had _and_ endures a lengthy & painful process of migrating developers to the new API location."'

Source: Clay Loveless

5. Lack of Real-World Testing

You can often tell the APIs that have had some real-world use before launching, and those that haven't. For example, an API that lists _some_ information about an object, yet needs a secondary call to get MORE information about that object. If your API requires two calls to find out everything there is to know, you and your devs will hate you for it eventually.

Build a couple of reference apps that might do something useful, even if trivial. You'll quickly get a sense for how sane your API is when you run into those inefficient API call combinations. If you haven't built your website on top of your API, consider doing that -- or at least what it would be LIKE to do that. If your API couldn't reproduce your website, your API needs fixing.

Source: Clay Loveless

6. Not Anticipating Bad Behavior

1)Tactical Bad Behavior

Inefficient client code can call an API too frequently, causing an accidental DDoS attack
APIs can be attacked through the JSON or XML data passed as parameters or attachments;
Attack techniques can include SQL injection, XML bombs, and shell scripts, as well as the usual social engineering and spoofing attacks.

2) Bad behavior "at scale"
When your service is small and you have a hundred users, you may have only two bad actors. These can be pruned manually using firewall rules based on IP address.
When your service is scaling to hundreds of thousands of users, you may have thousands of bad actors. These are placing high levels of "fake" demand on the service and can no longer be pruned manually without adding more staff dedicated just to these issues.
To mitigate this do you apply rate limits to everyone and reduce the value of the service to good users? Do you find a way to apply policies to naturally separate patterns of use?

The anti-pattern we've seen here is the failure to anticipate bad behavior against your service, and then to respond either with draconian limits on use, or with intermittent systems availability as a result of dealing with the bad demand.

Source: San Ramji

7. No Black Box Tests

"Many APIs have no testing at all, and those that do frequently have automated unit tests, etc. Very few have end-to-end black box tests that can be run surrounding releases. Your unit tests may pass, but if your latest push also included a web server config tweak, you want to have an end-to-end test suite to validate those changes."

Source: Clay Loveless

8. Not Recognizing the API as a Core Line of Business.

"The companies who succeed in the new web economy recognize that APIs are a core line of business and essential path to customers and partners. Successful media, retail and web companies often see over 50% of their traffic from their API - and companies must treat it as a product."

Source: SamRamji

9. Not Having Management on Board with the API

Like any new project, business and technology need to be lined up together including having understood and documented goals, metrics, and rewards. What higher level objectives are being met and how do these map into departmental goals for marketing, customer support, and engineering? How will these be reported to senior management and on what cadence will performance be reviewed?

Source: SamRamji

10. Tunneling Errors

"The specific mistakes you see regularly are error tunnelling (sending back a "200OK" response code, even if the body of the response describes an error). GET/POST tunnelling (sending all requests through GET or POST and ignoring the other verbs (PUT, DELETE, etc). And content-types (not allowing the consumer to specify the content type they will accept). Most of the big players get it mostly right. Amazon, for example, sets a good example, whereas Flickr does not. But most API providers miss the more esoteric stuff like hypermedia is the engine of application state and ignoring caching. However, you can use an API without that stuff quite adequately. It's the incorrect tunnelling that will hamstring you and your consumers."

Source: Mike Pearce

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Despite Antenna-gate and Android-boom, it appears as though venture capitalists and angel investors are still pouring money into startups developing iPhone and iPad apps. That's the findings of a recent CB Insights report that examines the investment in the Apple ecosystem over the last 12 months.

According to CB Insights, investment in pure play iPhone and iPad startups has grown over 220% over the last year as compared to the previous year.

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"Pure play" companies are those whose sole focus is building applications for iPhone and iPad. Between 2008 and 2009, there were 11 investment rounds over 10 companies, with almost $38 million raised. This year, over the same time period, there were 17 investment rounds distributed over 16 companies for a total investment of $120.6 million.

The average deal was $7.5 million, up from an average of $3.4 million in the previous year.

Almost 60% of the deals were led solely by VCs and 18% by angels. Interestingly, VCs and angels partnered in about 25% of the investments in pure play iPhone and iPad startups.

The CB Insights report does not give a breakdown of the types of apps these startups make, and as it's focused solely on pure play startups, it doesn't account for developers working across platforms. Nonetheless these figures will be interesting to watch over next few months to gauge how investor dollars (and consumer dollars) react to the smartphone market.

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The much-adored social media management platform HootSuite made clear how it intends to make money yesterday when it announced that the service is moving to a freemium model.

The company says that 95% of its current user base can likely continue to use the basic free account, but many small and medium-sized businesses and organizations will need to upgrade to one of four pro accounts ($5-100 per month) to continue using some of their favorite features like multiple team members and the ability to manage more than five social networks.

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Other perks of the pro accounts include an ad-free UI, prioritized support response time, enhanced stats (including Google Analytics integration) and vanity short URLs.

HootSuite also offers an Enterprise account for a whopping $1499/month, which includes everything that the pro account has, plus follower insights, top-notch enterprise support and VIP staff training.

While the pro accounts are a fraction of the cost of the Enterprise account, this change could represent an added cost of up to $1,200 per year, which may or may not be worth it for smaller organizations, especially those for whom social media does not bring in a substantial amount of business.

What do you think? How much would you pay to use a powerful social media manager like HootSuite? Leave your thoughts in the comments.

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Google has begun opening up access to a new Application Programming Interface (API) called the Places API. Developers building apps that include a "check in at this place" feature can use the Places API to search across all the places users might check in for basic information like business name, address, phone number and other descriptive information. That information will be editable by the businesses listed and no caching of data is allowed, so apps will have to ping Places regularly for real-time data.

Making this data as free and easy to use as Google Maps is today could create a foundation for new location-savvy apps to bloom throughout the mobile web, with far less overhead than such apps have to wrestle with today in order to provide a rich user experience. One catch? All these apps will have to be integrated with Google's Adsense.

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Also available: rating information from the same business review sites that appear in Google Maps search results. So show me the best-rated coffee shop within a mile of me that's described as dog-friendly in user reviews. That would be awesome.

How it Might Be Used

When Google first began discussing the Places API in April, we discussed as an example a pizza restaurant that edited its delivery area on Google and then made that information available to apps that pinged the API for information.

Those kinds of examples are less likely to be implemented at first, since the first developers being allowed access to the API are people building check-in apps. But the possibilities beyond checking in are many and diverse.

Just as Google Maps made it easy for any developer to add a map and display location, the Places API could make it easy for any developer to search up to date information about any location for their application. At least that's what seems to be possible. The Terms of Service favoring search and prohibiting caching may prove frustratingly prohibitive.

That data may be free, but it will come at the expense of integrating with Google's Adsense platform. "Note that in order to be issued credentials for this service," the API documentation reads, "you must provide a valid Adsense publisher id that matches the Google account with which you are currently logged in." That's pretty smart of Google and maybe a little nefarious, but someone's got to pay the bills.

Why is Location so Hot?

Why is location becoming such a hot commodity? From one perspective, the proliferation of smartphones and the development of easy-to-use, compelling applications like Foursquare and MyTown are making it easier than ever for consumers to publish and leverage information about their location. Consumers want to do that for a variety of reasons, from recording their travel history to letting family know where they are to bragging about the hip places they hang out.

For developers, location data is a whole new world to pivot on when looking at feeds of user activity data. Our online activity has to date gone on in the placeless ether. Applications could offer features, highlight content or make recommendations based on things like our interests and social connections - but now any of that and more can be sorted by location. That's a very potent column to add to any spreadsheet, too. We're just beginning to see what all the recombinations of these types of data can look like.

It's an exciting new location-based world, and much of it may be powered by the Google Places API.

Discuss

Take one look at the newly launched Facebook Questions feature and it's clear that things are about to change dramatically on the world's largest social network. Take a second look and it's also clear that the feature isn't working very well yet - but it will be fixed and is going to be a very big deal.

A few million people have been given access this afternoon to Facebook Questions, a social Question & Answer feature built under the leadership of Blake Ross, co-creator of the Firefox browser years ago and now an employee at Facebook. Questions may come closer than anything else has yet to founder Mark Zuckerberg's vision of Facebook as a connector of people around the world, a force for empathy and world peace. I think it's going to be a very important and enjoyable part of the site.

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It might be tempting to assume that Facebook Questions is going to end up a cesspool of idiocy, harshness and partisan tyranny of the majority. But look at it this way: The most successful social software company in the history of the world hired the creator of the Firefox browser who worked for months to build an effective Q&A service and you think it's going to turn into a YouTube dumb-fest? That's not the outcome I'd bet my money on.

The most successful social software company in the history of the world hired the creator of the Firefox browser who worked for months to build an effective Q&A service and you think it's going to turn into a YouTube dumb-fest? That's not the outcome I'd bet my money on.Scale, social software smarts and real identities have the potential to add up to something really magical. Company founder Mark Zuckerberg, wrong as he is about many things like privacy, has said that his goal with Facebook is to build empathy and connection between different people all around the world. If he was in it for the money, he would have taken Yahoo's $1 billion offer years ago and run. That goal of cultural change may very well be served better by Questions than by any other Facebook feature to date.

Facebook as Empathy Engine

Why do people listen to Rush Limbaugh on the radio? Because they are idiots, right? Wrong, according to Grant Fisher, a grad student at St. Mary's University School of Law in Texas. Fisher offered a lengthy, intelligent, insightful and sympathetic answer to that question on Facebook today and his answer has been voted to the top of the question's page. Fisher says people listen to Limbaugh because he has decades of experience researching politics, because he articulates to conservatives what (he believes) liberals are thinking and to liberals what (some) conservatives are thinking and because many people believe he has a good track record of predicting what's going to happen in politics. And because he's entertaining.

That's a good, informative answer and one that has already changed my shallow thinking about Rush Limbaugh fans. I'm a little embarrassed to admit that I would pass judgement on a huge group of people so thoughtlessly and callously, but I know I'm not alone. And neither is Fisher alone in offering a high-quality answer to a controversial question on Facebook.

There are going to be some very interesting questions and answers about peace in the Middle East, the Pro Life vs Pro Choice debate, drug policy, race, gender, the environment - you name it.

Because Facebook Questions are open to the whole world and because answers are voted on, we're going to learn a whole lot about other peoples' perspectives. Most of the Facebook newsfeed is filled with Farmville updates, baby pictures and misspelled drunken rambling. That will never bring me closer to the personal thoughts of a woman in Indonesia, a young boy in Egypt or a Canadian Mounty who rides through the snow-covered hills on a horse all day, thinking about why on earth people listen to Rush Limbaugh on the radio. But the public, voted-on Questions feature will.

Early users of the service are offering long, thoughtful answers. That will change in time, but answers that aren't helpful will not be voted up. Will obnoxious partisan answers be voted to the top in a tyranny of the majority? Even if such an answer were to be at the top, the next one below it would likely be more informative, empathetic and useful. Facebook engineer Beau Hartshorne has also said on the site that users will be demoted if they ask questions that are really assertions. There will be individual Questions that get nothing but terrible answers - but in aggregate, due to the scale of the humanity doing the voting, I think the Questions experience will be on balance strong.

I think we're going to see some really good discussions on Facebook. These conversations aren't going to be like YouTube. They aren't going to be like Wikipedia. They aren't going to be like Yahoo Answers, with millions of questions asked again and again, with no legacy knowledge retained and developed over time. They are going to be like Stack Overflow, and those are some really good conversations.

People will have their hearts and minds changed about controversial matters after using a well-designed social Q&A feature on a sprawling world-wide social network like Facebook. This will be a net win for the human experience. I don't think that's an exaggeration at all.

I think millions of people will end up spending hours browsing through Facebook Questions, learning things. I think it's going to be great. As soon as they fix it and make it work better.

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The benefits of scalability and flexibility touted by cloud computing are rapidly pushing its adoption forward. And while there are still hesitations in some sectors about the emerging technologies - questions about security, control, and interoperability - the majority of tech experts see moving to the cloud as inevitable.

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Nevertheless, it's still fairly common to hear the argument that the public cloud isn't quite ready or quite right for the enterprise. But a recent Forrester report contends that enterprise might not be ready for the private cloud either. Pointing to a survey that found only about 5% of IT shops have the experience internally to make the move to the cloud, the report, authored by James Staten with Christian Kane, Robert Whiteley, contends that many companies simply aren't ready.

Calling virtualization "the yellow brick road to the cloud," Staten recommends companies assess their own technological maturity and their adoption of virtualization in order to ascertain whether private cloud environments are the right move right now.

According to Staten, you're ready for the private cloud if you meet the following criteria:
You have standardized most commonly repeated operating procedures.You have fully automated deployment and management.You provide self-service access for users. Your business units are ready to share the same infrastructure.

Staten notes that preparing your IT operations for Stage 4 will take many years, but says that moving to the cloud doesn't have to wait until then. Rather than a whole-scale switch, he recommends moving smaller projects and investments, such as development and testing, into the cloud. He also recommends outsourcing the internal cloud to an Infrastructure-as-a-Service cloud provider - preferably one that will offer some training.

The "reality check" that the Forrester report offers might not be what some IT departments or cloud advocates want to hear. But as Staten concludes, "The economics of cloud computing is too compelling for you sit on the sidelines waiting for the hype to die down. You need to start investing in IaaS now to understand how best to leverage it. You also need to embrace the fact that your developers and line-of-business leads aren't waiting for you to figure this out."

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I'm a fairly competitive person. I like to win. And thanks to many hours spent in front of the screen, I find myself pretty motivated when I see an opportunity to "level up." But that being said, I still question the rush lately to add "game mechanics" to every new product and experience.

As we've written before, the arguments for doing so are compelling. Game mechanics can be fun and rewarding. They can increase user engagement and can aid user adoption, referral, and retention.

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But does the addition of levels, leader-boards, and virtual trophies necessarily lead to a better user experience? Of course not.

In a recent blog post titled, "Why You Should NOT Integrate Game Mechanics Into Your Service," Gaurav Mishra, CEO of 2020Social points to the ways in which the pressure to add points and badges can obscure some of the other important considerations when developing an application or service. Mishra quotes Pascal Rettig who argues that we are confusing game mechanics - which are really about gameplay - with mechanics meant to change user behavior surrounding the product. "Where you should focus your efforts to avoid launching a dud as we roll through the game mechanics hype cycle," says Rettig, "is on making the core of whatever system you are building more game-like (put simply, fun) and not just toss a thin-veneer of simple game mechanics around the outside."

You don't want any game mechanics you implement to distract your users away from your core service. And you don't want to just bow to the pressure to include badges and mayorships simply because others have incorporated them successfully. And you don't want to assume that just because you've incorporated game mechanics that somehow you've made your app playful and fun.

White label game mechanics service Bunchball respond in the comments on Mishra's post with these insights:
Have good core content. If users have no reason to come back to your site without game mechanics, they're going to have no reason to come back with game mechanics.Have clear business objectives that you're using game mechanics to drive.Apply game mechanics in a contextually appropriate manner for your community. Farmville and Stack Overflow both use game mechanics, but different ones, and in very different ways, that are appropriate for their respective communities.Iterate & Evolve. You're not going to get it right the first time, and you're going to learn from your users.

What do you think? Do you find game mechanics engaging? And if so, which products do you think are the most effective and innovative when it comes to integrating game mechanics into their design?

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Foursquare says it's in talks with all the major search engines to index the startup's location data. We're hearing that Google in particular may be in talks with all the major players in the location-based social networking market. What would a big search engine do with a little startup's check-ins and annotations about locations? Here are some ideas.

The paid partnerships between Google, Microsoft and Yahoo with Twitter, Facebook, MySpace and more that were launched last Fall could provide a model, but location provides new opportunities, as well. Isn't it amazing that on a Web so dependent on Google, there are emergent new kinds of websites so valuable they can charge giant search engines for their content? Here are some things Google might do with that content.

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Related:

Why We Check-in: The Reasons People Use Location-Based Social Networks
Foursquare's Location Layers - This is Big
What Twitter's New Geolocation Makes Possible

Real-time search

Last fall Google started including Tweets, fresh blog posts and more in a live scrolling box on the search results page for particularly hot search queries. Mobile location-based social networks, their comments and tips could help populate those kind of search results for certain keywords or venues.

Searching for the big basketball game? Why not include the notes and tips of people checking in at the game right now in the results? Check-ins in general have a lot of potential. Google-backed social TV app Miso or entertainment check-in app GetGlue could power media check-ins that would make search results much fresher.

Super Social Maps

Why not annotate map search with live and archival location check-in notes, annotations, tips, etc.? Imagine searching for directions to a venue and being told how many people and which friends were currently checked in there on Loopt, Whrrl and Foursquare. Seeing not just restaurant reviews from CitySearch and Trip Advisor but quick tips from location networks? Sounds like a great idea to me.

Mobile Search

No need to go into too much detail about this: Check-in app content would be a very logical addition to mobile search results. The growth of branded layers of content annotating locations means that a Google mobile search could become a search for nearby content published by the Independent Film Channel, the Huffington Post, etc. That makes mobile search and location networks more appealing for everyone.

Privacy, monetization, relevance, personalization, temporal strategies and other matters still need to be figured out. These networks are still very small. The largest among them, Foursquare, has a reported 2 million users. That's less than 25% the size of StumbleUpon, for example, and just over one third the size of curation blogging platform Tumblr.

The potential for location-based social networks is huge, though. And the search engines know it. That's why they are talking to the startups. For these little startups, this kind of monetization could be an important life-line to fund their continued innovation, too.

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Augmented Reality, Internet of Things & the Interplanetary Web

Vint Cerf was one of the key engineers in the development of the Internet, email and more. Since 2005 he has worked at Google as the company's Chief Internet Evangelist. This Spring Cerf gave a talk inside Google called Reimagining the Internet. His entire 80 minute talk is worth watching, but below we've excerpted the 10 minutes we expect would be most interesting to ReadWriteWeb readers. Think some of these ideas are crazy? Vint Cerf thinks they could be the future.

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Internet of Things & Interplanetary Web

In the first clip below, Cerf tells a story about the sensor network he has set up in his house as an example of the expected wave of sensor data making up the Internet of Things. Where there is data, there is the potential for innovation in value-added services. This is a topic very close to our hearts here at ReadWriteWeb. If you're new to the concept, check out this very good intro video.

Next, Cerf discusses the Interplanetary Web, which is something I must confess I knew nothing about before watching this video. It's a long-running effort to get all the space-exploring countries in the world to adopt a space-capable communication standard that would turn spacecraft into communication beacons once they were otherwise decommissioned. It sounds pretty cool, and something Cerf himself is a leading spokesperson for.

Augmented Reality & Neural Interfaces

In the clip below, Cerf talks about ubiquitous connectivity, augmenting our sensory relationships with offline reality and neural/sensory interfaces with the Internet. Google brain implant? Not quite, but getting closer.

How does Cerf's vision of the future of the internet sound to you? What do you think he missed? We're excited to chronicle that emerging future here at ReadWriteWeb, and it's a special treat when one of the key players in building the present internet speaks about what he thinks the future will bring.

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Today marks the fifth anniversary of IP Ventures, Microsoft's program that opens up technologies developed internally at Microsoft to entrepreneurs and new businesses.

The IP Ventures team within Microsoft identifies technology not being used by the company - or that could be used in a different way - and treats this IP as a form of currency that can be invested in other businesses. While the new companies that take advantage of these technologies still need to find financial backing, the Microsoft program helps provide ample technology support and business guidance throughout the process.

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Microsoft's IP Ventures is the subject of a Harvard Business School profile. According to author of the study, Professor Josh Lerner, "We think it's an interesting model and believe that students, as well corporations that invest heavily in research, could benefit from looking into what Microsoft has done." As Microsoft cannot work all the IP it creates into its product portfolio, IP Ventures allows Microsoft to transfer those technologies into the hands of other entrepreneurs.

According to program director Sharieff Mansour, "When you're dealing with new technologies and there aren't established players, it lends itself to starting new ventures and creating tangible job opportunities around the IP. IP Ventures works with entrepreneurs and venture capitalists to get those technologies to market quickly. The program also serves as a vehicle for the venture capitalist community to work with us in a meaningful way."

Over the last five years, IP Ventures has helped support the launch of several new companies including the mobile media company Zumobi, the children's learning game company Sabi, and Inrix, a Seattle-based traffic reporting company.

Pat Brazel, whose company Zignals participated in the program says, "From a technical point of view, frankly it's inconceivable that any small company could build the stuff that we got from IP Ventures. We're standing on the shoulders of giants in terms of the technology we got from Microsoft."

While the companies that IP Ventures has supported are still in their infancy, the end goal of the program is to help develop sizable, stand-alone businesses based on the IP Microsoft provided and according to Mansour, a couple of companies in the IP Ventures portfolio are "nearly at that point."

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When the business review site Yelp added badges and royalty titles to its check-in features earlier this month, it seemed clear that it was doing so in response to those very features made popular by the location-based network Foursquare.

Of course, imitation is the sincerest form of flattery, right?

And in some cases, imitation might be a good business strategy as well: take something your competitor is doing and do the same thing, but (hopefully) better.

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But when it comes to proprietary product features, imitation isn't necessarily flattering. It's cause for litigation.

But is copying necessarily a bad thing?

While copying is often dismissed as a sign of a lack of imagination, some studies have shown that imitation actually leads to better innovation.

Along those lines, in a recent TED talk, Johanna Blakely describes the ways in which one of the industries most lauded for its creativity and innovation - the fashion industry - actually offers very little, if any, IP protection to designers. While fashion designers can apply for trademarks, they cannot copyright or patent their apparel. Blakely says that the courts have decided on multiple occasion that apparel is "too utilitarian" for copyright protection.

Blakely's presentation - and the IP model of the fashion industry - makes a strong case for fewer rather than more restrictions on sharing and copying. Countering the argument that without ownership, there is no incentive to innovate, Blakely says that the fashion industry fosters an open "ecology of creativity." In fact, Blakely points to several of the benefits the fashion industry reaps from copying, including the rapid dissemination of fashion trends worldwide and the acceleration in creative innovation.

Pointing to statistics that show that gross sales from industries with low IP protection far outstrips the sales from sectors with high protection, Blakely argues that the fashion industry's relationship to copyright and patenting might be a model for other industries.

Granted, not all imitation violates copyright or patent law. But even when it doesn't violate the law, it often violates our sensibilities.

What do you think? Should startups be worried about imitation? Or is imitation an important part of innovation?



Photo credits: Flickr user Domain Barnyard

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Entrepreneur and professor Steve Blank authored a blog this morning that expressed his opinion that business plan competitions are useless to startup culture and should be scrapped for business model competitions. Business plan competitions are just what they sound like: students are encouraged to submit a business plan and a winner is selected by a panel of judges, often resulting in some monetary reward for the triumphant student. Blank argues that models, not plans, are much more applicable to the iterative startup atmosphere, but not everyone agrees that business plans are entirely irrelevant.

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Looking at the opposing viewpoints, it seems that those against business plans use an alternative approach to their argument than those in support of them. In his points against business plans, Blank takes aim at the plans themselves, dissecting them as unrepresentative of the startup ecosystem and its needs.

"There is no cheaper way to get a lot of energy and excitement going than organizing a tournament. That is really what a business plan competition is."- Albert Wenger"A business plan is the execution document that large companies write when planning product-line extensions where customer, market and product features are known," writes Blank. "A startup is not executing a series of knowns. Most startups are facing unknown customer needs, an unknown product feature set and is an organization formed to search for a repeatable and scalable business model."

Blank's approach is logical. Business plans are meant for larger companies, yet these competitions still exist for startups. Why not change the competitions to reflect the nature of startups? Blank instead suggests the use of business model competitions, which would judge entrepreneurs on what they learned and how they reacted.

Albert Wenger, a partner at Union Square Ventures, is on the other side of the fence from Blank. Wenger focuses his argument on the competition, stating that the excitement and enthusiasm built around startup culture from these competitions is invaluable.

"There is no cheaper way to get a lot of energy and excitement going than organizing a tournament. That is really what a business plan competition is," writes Wenger. "By offering a meaningful prize to the winner and having a big initial field it is possible to get a large number of students exposed to thinking about startups as an alternative to joining a large company (or worse yet Wall Street)."

His point, like Blank's, is valid. The ability to excite business students about startup culture is a valuable aspect to business model competitions that can't be ignore or tossed out the door. The middle ground on these two arguments would be to keep the competitions, but replace plans with models, as Blank suggests. But are business plan competitions too ingrained in B-school tradition? Would a business model competition garner the same excitement?

Investor and Hunch co-founder Chris Dixon seems to be on Blank's side on this issue. Earlier this month on his Twitter account, Dixon referred to business plan competitions as "a terrible idea," stating that investors care more about the entrepreneur's bio. He also believes that business plan competitions reinforce the "myth of the Eureka moment," which he says keeps entrepreneurs from entering the game. However, Dixon also agrees with Wenger about the importance of exciting young entrepreneurs.

"If it's a choice between business plan contest or nothing I'd take business plan contests," Dixon said in a comment on Wenger's blog. "I just wish they weren't the dominant startup-related activity for students."

Are business plan competitions antiquated business school relics that serve only to confuse young would-be entrepreneurs about founding a startup? Or is their true purpose to get students excited about entrepreneurship despite these conflicts? I find myself siding with Chris Dixon on this matter. They serve a valuable role in recruiting students to startup culture, but they shouldn't be the only way students get excited.

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Offering incentives, goals, and prizes to users through game mechanics is hardly new. Most of us have long been accumulating points towards rewards with various frequent flyer plans, for example.

But perhaps due to the success of companies like Foursquare and Gowalla, it certainly does seem as though every new site, service, and application now includes some sort of game feature in order to encourage adoption and use. In a recent blog post, Mojopages CEO Jon Carder calls game mechanics "the new black" and argues that game mechanics will become more and more ubiquitous as companies realize that customers are drawn to sites that make interaction "fun, rewarding, and even addictive."

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So, will incorporating game mechanics into the design of a new product, service, or application become a requirement for startups?

Although game researchers and designers have more intricate definitions, when most people refer to game mechanics, they mean some sort of rule-based system for scoring, setting goals, and allocating rewards. Rewards and goals can include points or collectibles or bragging rights, but the idea of implementation is often the same -- games are a way to engage and excite users.

According to oneforty Operations Lead Sachin Agarwal, "When most people talk about game mechanics in web applications, they generally are talking about one of two things: karma (which rewards quality engagement, see eBay, Kongregate, or Reddit) and virality (which comes from incentivizing user-to-user referrals, see FarmVille or any other Zynga game).

Agarwal argues that good game mechanics can do four things for your service - four crucial things when trying to attract and retain new users:

1. Retention: Games provide a "hook" so that users want to return to a site to keep playing and to reach rewards.

2. Referral: Users want to be able to play the games with their friends and will invite others users to the site or service in order to do so.

3. Education: Game mechanics can incentivize new customers to complete their profiles and to learn how to use the service and rewards them for doing so.

4. Engagement: Game mechanics provide ways in which users can participate and interact with a site or service.

Agarwal argues that it is important to design your service and the game mechanics in parallel, so that badges and stickers and the like do not seem like an afterthought. However, it's worth noting that the time you spend developing the game mechanics is time not spent on the product itself.

And despite the popularity of game mechanics right now, it remains to be seen if these games are sufficient motivation to keep people "playing," or if, as Dave McClure suggests, the emphasis really needs to be on the reward, not on the "game" itself.

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It's been a given for some time that businesses, including startups, should have a presence on and connection with Facebook. With over 400 million active users, chances are your potential investors and customers are already there.

Fan pages have been a simple way to generate interest and engage customers, and Facebook Connect has quickly become a standard in signing up and signing in users. In his keynote at f8 yesterday Facebook CEO Mark Zuckerberg actually mentioned startups in his opening remarks, stating that they "are requiring that their users use Facebook Connect. We want to make it simple to create these personalized experiences."

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Whether or not Facebook is a "requirement" for startups, there are some things new businesses should think about based on yesterday's announcements.

"Facebook Connect On Steroids"

Facebook announced a major overhaul to its API and introduced three new components yesterday: social plugins, the Open Graph protocol, and the Graph API. By using the tags specified in this protocol, any website can now become part of the Facebook ecosystem.

If a Facebook user visits your site and Likes your page, you have the ability then to publish information into that user's stream. In addition, implementation of the code on your site will give you access to administrative tools and analytics just like any Facebook fan page owner. As we wrote yesterday, this will take analytics to the next level, providing an incredible amount of demographic data about users who like and link their profiles to your site. However, this information will reside with Facebook, not on your own website, making them a de facto owner of your visitors' social data.

Applications & Virtual Currency: Where the Money Is?

While many businesses will likely integrate their websites into the expanding Facebook ecosystem, there is likely still room for growth within the platform itself, namely with application development. There are over 550,000 applications on the site, a number that continues to grow - and to encourage return visitors.

To coincide with the growth of the application market, particularly in the area of social gaming, Facebook also announced the expansion of its official virtual currency, Credits. Last year Paypal processed over $500 million in virtual goods last year, with social gaming company Zynga becoming Paypal's second largest merchant (following eBay). Clearly Facebook seeks to stake a claim in the virtual currency market.

Facebook Credits are currently in beta with over 100 applications, and will roll out to the entire network soon, Zuckerberg said yesterday. Credits will allow users to purchase one currency for all transactions on Facebook, rather than have to enter their credit card information with each purchase. By facilitating online payments, Facebook hopes to increase the percentage of users willing to purchase virtual goods to between 8% and 20%

David vs. Goliath?

Despite repetition at f8 yesterday that these changes were meant designed "for developers," it remains to be seen how the announcements will play out for developers and for users alike, the latter of whom are notorious for protesting changes to the site. In particular, continued concerns about privacy might not be well received, particulary given Facebook's past history with opening user data.

Privacy concerns might not be the only thing that gives some businesses pause about Facebook's direction. Facebook also announced yesterday "instant personalization" yesterday, giving three "preferred partners" - Yelp, Pandora, and CNN - instant and additional access to Facebook profile information when users visit their sites. For startups in these areas, namely restaurant recommendation, music sharing, and news delivery, the "preferred partner" program might make industry in-roads more difficult and could adversely impact user adoption. As the "preferred partner" program expands beyond the three selected for launch, it remains to be seen the effect of being sanctioned - or not - by Facebook.

The buzz yesterday was that Facebook had just "seized control of the Internet." Comments on how you think the f8 announcements might play out for startups welcome!

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