Funny Way to Launch a Product
In this episode: Psystar causes commotion, confusion; Intel offers favorable outlook; IBM, eBay increase revenues; GAO finds military gear for sale online; Windows gains a few pounds; mobile heavies team up on 4G royalties; Apple angles to sell iPhones in China; Gawker Media sells off three blogs; senators push to eliminate e-filing fees for taxes; student journalist twiters his way out of jail.
04/18/08 10:32 AM PT
On any given Monday, a half a million new startups come into the world -- tiny, brand-new companies, sometimes operating out of a garage. Most of them have about as much funding as the CEO/CFO/janitor can ring up on the MasterCard.
A few will grow into successful enterprises -- most will die within a year -- but once in a while one comes along that behaves so oddly under the spotlight of publicity that you start to wonder whether it's a business, a scam or a flat-out hoax. I'm talking about Psystar. Its launch strategy was apparently to walk straight up to one of the most powerful tech companies in America and spit in its face.
That's one way to get noticed. It started off by putting up its Web site, which offered a computer called an "Open Mac" -- a tower PC completely unlicensed by Apple but running the Mac OS X Leopard operating system. That violates Leopard's end-user licensing agreement, which clearly says you can only run OS X on Apple hardware. Lots of people violate that and never get sued by Apple, of course, but they usually don't try to sell what they make, and if they do, they try to keep it kind of under the radar.
Not Psystar. Later that morning the site went dead. Pystar said its servers were knocked out by heavy traffic, but when the site came back a day later -- this time offering the same thing, only now called "Open Computer" instead of the Open Mac -- it started looking like Apple might have had something to do with it, at least in the form of a strongly worded letter.
Listen to the podcast (13:27 minutes).
But Wait, There's More
The fun didn't end there. The site kept listing different physical addresses for the business, going from a suburban neighborhood in Miami to a more industrial building. Then Psystar stopped taking credit card orders, saying its provider, PowerPay, had "dropped the ball." It moved to PayPal instead. PowerPay countered that in fact it dropped Psystar.
Reporters, bloggers and pundits have been all over the company, trying to get interviews, speaking with people who won't give their last names and accuse Apple of antitrust violations, talking to neighbors of the building that Psystar says it inhabits. As of this recording on Friday morning, the site was down yet again. Some people think the company is nothing but a giant credit card scam; others say it's legit, just really bush league.
If the company is for real, we might not know for about 10 days -- that's how long Psystar says it takes to fulfill an order due to high demand. Maybe all this commotion is a crafty way to launch a startup, maybe it's embarrassingly dumb, but whatever it is, it sure is getting noticed.
Call to Arms
Looking for a pair of military-grade night vision goggles or some serviceable body armor? If so, you're in luck. You and any Tom, Dick or terrorist who knows how to do a Google search.
Slightly used military gear is showing up for sale online, and I'm not talking about some obscure Web site run by Blackwater rejects. I'm talking eBay and Craigslist. In response to a House subcommittee request for an investigation, the Government Accountability Office reported that it found a whole bunch of sensitive military equipment for sale on the Web.
Now here's where it gets interesting: It's not illegal to resell some military items within the U.S., said the GAO. The cannons are loose, so to speak, because of breakdowns in the Department of Defense's handling of excess and outdated sensitive defense-related items. Hey, there's a war going on -- whose got time to keep track of weapons?
Twitter for Freedom
An American student working on a graduate journalism project in Egypt found himself arrested recently, and his ticket to freedom was Twitter.
James Karl Buck was grabbed by police in the Egyptian industrial city of Mahalla El-Kobra while photographing a noisy demonstration. As he was being hauled away by Egyptian police, he managed to send a one-word tweet to his Twitter account: "Arrested."
His friends sprung into action, calling UC Berkeley, the U.S. Embassy and the media. Soon Buck had a lawyer and was released. He also had his own personal extraction team, which he described as "burly."
Putting the Hammer Down
eBay is going out of the live auction business -- that is, it's leaving the old-fashioned, fast-talking, in-real-life auction biz.
You didn't know it was in it, you say? eBay Live Auctions is a very different animal from the typical Web-hosted auctions that eBay has become famous for. It provides a real-time connection for people who want to participate in auction house events while they're going on. They just sign onto the Internet instead of traveling to the place where all the people are gathered, holding up their little cards on sticks.
eBay's dropping out as of Dec. 31, but people hoping to get in on the action at live auctions will still have opportunities to hook up online. LiveAuctioneers.com, which partnered with eBay on Live Auctions for more than five years, will launch its own platform for the sale of art, antiques and collectibles.
Packing On the Pounds
Like all of us, Windows is aging. It's perfectly normal to put on a few more pounds as you get older; however, Windows is becoming dangerously obese, according to analysts from research firm Gartner, and the operating system is in need of an intervention before it collapses.
At Garner's Symposion/ITxpo in Las Vegas, Michael Silver and Neil MacDonald called Windows' growing glut of code "untenable," and said that in the future, the OS will be less and less important in the face of Web-based applications that operate through the browser.
Meanwhile, Microsoft keeps adding code to an increasingly burdened kernel, resulting in bigger OSes that deliver fewer new benefits. Microsoft used to be able to get away with that, because people kept buying the latest and greatest hardware. Now, though, a decent computer can be had for a few hundred bucks -- and by decent I mean one that can surf the Web, play video, play music -- all the important things.
If this is all a consumer wants to do, buying a more expensive machine just for the sake of running a new operating system is pretty pointless. Meanwhile, a grassroots petition has started among people who don't want to see XP go and feel pushed around by Microsoft's insistence that they move on to Vista. We all know how that whole Vista Capable thing went down.
Band of Brothers
Seven tech giants are banding together to encourage the advancement of fourth-generation wireless technology. Nokia, Sony Ericsson, NEC, Alcatel-Lucent, NextWave Wireless, Nokia Siemens and Ericsson have agreed to limit the royalties they charge each other for the use of patents related to LTE, or long-term evolution.
A variant of W-CDMA -- and you don't care what that stands for, trust me -- LTE is headed for a showdown with WiMax over which standard will dominate a 4G wireless world. WiMax is backed by Sprint, Clearwire and Intel.
Notably absent from the magnificent seven is Qualcomm, which holds several patents related to LTE. Qualcomm, you may recall, has been locked in bitter patent battles with Nokia, so maybe joining Nokia's little club isn't a priority. Or maybe Qualcomm just wants to charge higher licensing fees. Hey, it's a free country. Sort of.
Apple's China Adventure
Apple and China Mobile say they're coming close to a deal on sharing revenues for the iPhone in China. There are only two problems: Apple and China Mobile.
Both companies say they're interested in negotiating, but they haven't managed to sit down together for official talks because they're too far apart on some of the major issues. One news report had China Mobile balking after Apple asked for 30 percent of the monthly revenue from iPhone subscribers.
Despite its insistence on such a large cut, Apple has set its sights squarely on China -- a developing market where Research In Motion's rival BlackBerry device is already established.
Bucking Economic Trends
Investors cheered IBM after the company delivered its first-quarter earnings. Big Blue not only posted robust quarterly results but also raised its guidance for the year. The tech bellwether beat expectations for the quarter, with a 26 percent jump in profit and a an 11 percent increase in revenue, in part due to strong overseas sales.
Meanwhile, eBay also posted hardy first-quarter earnings despite weaker-than-expected growth in buying activity in core markets such as the U.S. and the UK. eBay's net income rose 22 percent while its revenue soared 24 percent in the quarter.
However, although the U.S. economic slowdown doesn't appear to be catching up to IBM, it might sneak up on eBay, with the company's CFO noting that the Web auction giant saw a slowing in the buyers' propensity to buy towards the end of the quarter."
Blockbuster's Bold Move
Blockbuster prompted more than a few raised eyebrows with its bid to buy Circuit City for US$1.3 billion.
Circuit City's board isn't keen on the offer, though. It advised shareholders to give it a pass, expressing doubt that the movie rental firm could raise the cash to close the deal -- especially given the turmoil in the corporate credit markets and Blockbuster's relatively low stock price. The Circuit City board actually sat on the offer for about three months, unresponsive to Blockbuster's requests for due diligence data.
The offer represents a premium of at least 54 percent on Circuit City's recent stock price and comes at a time when sales have fallen amid competition from the likes of Apple, Best Buy and discounters like Wal-Mart.
Gawk at This
Lovers of cheeky political commentary, spicy urban travel tips and saucy music industry scoopage may soon find their favorite sites under new management.
Nick Denton, the publisher of Gawker and its network of blogs, sees lean times ahead for online ads, so he decided to slim down a little and put a few assets up for sale -- namely the blogs Gridskipper, Idolator and Wonkette, the latter of which is one of Gawker's most recognizable properties.
In the recent past, online ads have seen enormous growth, ballooning 25 percent to $21 billion in 2007, according to the Internet Advertising Bureau. Still, it's getting cold out there, Denton said -- and even if it's not, it's "better safe than sorry, and better too early than too late."
Now that another tax filing deadline has slipped into the past, two democratic senators want to make our next experience with the IRS a little less painful.
However, their proposal could cost software makers like Intuit millions in annual revenues, so not everyone's jumping up and down in glee. Senator Charles Schumer of New York and Senator Daniel Akaka of Hawaii plan to introduce a bill that would eliminate e-filing fees for everyone.
Currently, taxpayers who earn $52,000 or less can e-file a simple return for free. If e-filing fees were eliminated for all taxpayers, it would save Americans $1.2 billion per year, according to a recent report. And e-filing saves the IRS big money. It costs $2.50 to process a paper return -- but just 30 cents to process one filed electronically.
The Good and the Bad
Intel met or slightly beat expectations with its Q1 report, posting record revenue of $9.7 billion during a typically slow season. The company also issued a stronger second quarter outlook than Wall Street analysts expected. Now for the bad news.
Intel's net income was down 12 percent from a year-ago to $1.4 billion, with sharp losses in its flash memory business dragging down profits. Still, the results were good enough to count as a win for the tech sector. Investors drove Intel shares up about 6 percent the day after it posted the numbers.
CEO Paul Otellini downplayed any impact a U.S. economic slowdown or recession might have on Intel, because three-quarters of its revenue comes from international sales.
Also in this episode: Six Apart gives blogs blastability, MySpace TV goes international, netizens gobble up online video.