Guest post: Chris Matyszczyk investigates the power of Nintendo’s Wii and virtual gaming to improve the health and well being of society.

Depending on whose statistics you prefer to disbelieve, between 15 and 25 percent of American children are overweight.

The causes seem evident to all commentators: too many Whoppers and Gorditas, too many days moving less often that Mitt Romney’s face and too many hours watching “Desperate Housewives” and killing people through the thrilling medium of “Grand Theft Auto” and its ilk.

The sad fact is, though, that educators have found it rather hard to persuade children to leave these wonders behind and embrace gyms, football fields, nature walks and steroid-free baseball. (Chasing celebrities with a camera has still not been approved by any Board of Education.)

However, five schools in Worcestershire, (pronounced Wuss-tersha) England have created a new form of class. They have named it Virtual PE, and it consists of talking the kids into playing on a Wii console.

Nintendo’s stellar success with the Wii brings with it the strange byproduct that, unlike most other video games, players have little choice but to move.

In a bizarre philosophical twist, the fact that players have demanded more realism in their games has caused them to do the one thing for which they have shown little enthusiasm– move.

The Worcestershire schools have used heart monitors to measure their students’ fitness. The program has been such as success that the “British Medical Journal” declared that games like Wii “significantly increased participants’ energy expenditure.”

This latest success follows the revelation that surgeons apparently slice more accurately after a Wii warmup. Kanav Kahol and Marshall Smith of the Banner Good Samaritan Medical Center in Phoenix, Arizona found that surgical residents improved their scores on a virtual surgery training tool by 48 percent.

But it isn’t swinging a virtual club or bat that improves their skills. Marble Mania, a game that requires minute wrist-flicking to propel a marble through a maze, is apparently the perfect hors d’oeuvre for the main course of an appendectomy.

It is clearly a sign that humanity has turned a corner when apparently mindless entertainment can have such positive effects on the world’s health.

Perhaps the makers of Wii should consider creating a game that mimics one of America’s greatest sporting traditions. The Nathan’s Hot Dog Eating Championship is held every year, naturally on the 4th of July. It seems always to be won by someone with a large epiglottis and a mass not exceeding 110 pounds. I can just see America’s children becoming hooked on the repeated motion of hot dog being stuffed down throat.

No child would want to be left behind in that game.

Amazon has issued a statement that adds a little more clarity to its Web services outage on Friday.

Here’s Amazon’s explanation of the S3 outage, which wreaked havoc on startups and other enterprises relying on Amazon’s cloud.

Early this morning, at 3:30am PST, we started seeing elevated levels of authenticated requests from multiple users in one of our locations. While we carefully monitor our overall request volumes and these remained within normal ranges, we had not been monitoring the proportion of authenticated requests. Importantly, these cryptographic requests consume more resources per call than other request types.

Shortly before 4:00am PST, we began to see several other users significantly increase their volume of authenticated calls. The last of these pushed the authentication service over its maximum capacity before we could complete putting new capacity in place. In addition to processing authenticated requests, the authentication service also performs account validation on every request Amazon S3 handles. This caused Amazon S3 to be unable to process any requests in that location, beginning at 4:31am PST. By 6:48am PST, we had moved enough capacity online to resolve the issue.

As we said earlier today, though we’re proud of our uptime track record over the past two years with this service, any amount of downtime is unacceptable. As part of the post mortem for this event, we have identified a set of short-term actions as well as longer term improvements. We are taking immediate action on the following: (a) improving our monitoring of the proportion of authenticated requests; (b) further increasing our authentication service capacity; and (c) adding additional defensive measures around the authenticated calls. Additionally, we’ve begun work on a service health dashboard, and expect to release that shortly.

Sincerely,
The Amazon Web Services Team

Nick Carr has more. A few takeaways:

• Amazon is creating an uptime dashboard. That’s a positive development.
• For now, you can chalk this outage up to growing pains at Amazon’s Web services.
• Amazon needs to work on its customer communication.
• These cloud services are really an expectations game. As some talkbackers have noted electric service also goes down from time to time too. Do we hold computing power to a higher standard than the electric grid?

The customer reaction to Amazon’s explanation verified those aforementioned takeaways.  This post summed the customer perspective up well.

Thanks for the update. As to your longer-term plans to handle this, your plan to provide a “service health dashboard” is a particular good idea!! However to provide a truly excellent service health solution, Amazon need to provide machine-readable management data that we can integrate in our infrastrucure so that we in turn can tell our customers what is going on! Besides machine-readable info, aws blog-updates, RSS feeds and email notifications of major service health issues is a must! In addition customers like us need to be able to setup a error page redirect for if EC2 is down (so that users trying to access a web server hosted on EC2 will get a decent error if your normal EC2 infrastructure is down).

BTW: Our company’s biggest complaint is not that your servers where down but that we had to do quite some detective work to find out why (an error on our own servers?, a recent code update we did ? or the amazon aws itself ?). In this case lack of information from Amazon cost us more trouble/money that the actually outage. It is simply NOT good enough that you require your customers to browse through forum threads to find out what is wrong. There was NO info you your front page, no email notifications, no updates on your blog.

Alibaba, Yahoo’s stronghold in China, is reportedly wary of the Microsoft’s $44.6 billion bid for the Internet portal. Alibaba is so wary of Microsoft that it is looking for more management independence from Yahoo.

According to the Wall Street Journal, Alibaba management is worried that a Microsoft purchase of Yahoo would hurt its links to the Chinese government. Alibaba, a B2B trading site, is a national champion in China and Chinese regulators are already sniffing around about how a Microsoft purchase would affect the company.

This is bad news for Yahoo. Really bad. Why? If Yahoo wants Microsoft to raise its bid, say to $34 a share or even $40 a share, the company has to argue that its core business and holdings in Alibaba are worth more. That case gets a lot harder if Alibaba further distances itself from Yahoo and ensures its independence. Alibaba is prime real estate that Yahoo could even have to divest if Microsoft acquired the company.  Yahoo owns about 39 percent of Alibaba.

Good luck getting to $40 a share from Microsoft with those moving parts.

Yahoo CEO Jerry Yang made it clear in his recent shareholder letter that the company views its holdings abroad as one of the reasons it is worth more. In the letter, Yang said:

We have the added value of our substantial, unconsolidated investments in Japan and China. We have substantial positions in Yahoo! Japan, the leader in its market, and Alibaba, which is strongly positioned in China, a market with enormous growth potential.

If Alibaba arranges more independence from Yahoo in the event of a Microsoft merger a nice chunk of that added value goes kaput. And along with it goes the argument that Yahoo is worth more than $31 a share.

Robert Scoble posted about a Microsoft product that he couldn’t disclose in the works that brought tears of joy to his eyes. He wrote:

Yesterday was one of those days. Curtis Wong and Jonathan Fay, researchers at Microsoft, fired up their machines and showed me something that I can’t tell you about until February 27th. I’m sure you’ll read about his work in the New York Times or TechCrunch, among other places. It’s too inspiring to stay a secret for long.

While watching the demo I realized the way I look at the world was about to change. While listening to Wong I noticed a tear running down my face. It’s been a long while since Microsoft did something that had an emotional impact on me like that.

My guess is that virtual space travel makes Robert cry. Wong and Fay have been working on software like Microsoft Virtual Earth that applies to the heavens. Fay gave a talk last year at the Table Mountain Star Party Association (TMSPA) titled, “The WorldWide Telescope, bringing the Universe to a PC near you.”

According a bio on the TMSPA site, Fay is Principal Research Software Design Engineer in the Next Media Research group at Microsoft, and “an avid amateur astronomer who has designed and built his own robotic domed observatory and he has created software that many DSLR owners use for astrophotography.”

Spiral galaxy Messier 90 and its companion IC 3583 from the Sloan Digital Sky Survey

From what I can gather, the software enables a virtual observatory that can integrate different sources of astronomical data, such as live feeds from Hubble telescope and archived information. In addition, users can create and share virtual space tours, complete with music tracks, and register astronomical images for viewing them in the context of the virtual sky.

Those with firsthand knowledge of the project say that it will change the way people think about the sky.

Following is the description of the talk Fay gave at TMSPA:

“The WorldWide Telescope, bringing the Universe to a PC near you”

Jonathan Fay

The WorldWide Telescope (WWT) project is designed to be an extensible learning and exploration environment which integrates hyperlinked rich media narrative with a seamless multiple survey virtual sky to enable guided and unguided exploration of the universe. WWT is a collaboration between Next Media Research (Principal Researcher and group manager Curtis Wong, Principal Research Software Design Engineer Jonathan Fay and Jina Suh Research Intern), Alex Szalay at Johns Hopkins University, Alyssa Goodman at Harvard’s Center for Astrophysics, and Frank Summers at Space Telescope Science Institute.

The vision for WWT began in 1993 Curtis’ production of a CD-ROM called “John Dobson’s Universe” which was never completed but featured a number of narrated tours within a virtual sky and included a talk that John Dobson recorded at Table Mountain in 1993. Curtis worked closely with Jim Gray and Alex Szalay in 2002 to develop the SkyServer Website to facilitate public access to the images and data from the Sloan Digital Sky Survey. SkyServer was always conceived of as the foundation towards building the World Wide Telescope. In early 2005 Curtis developed the collaborations with Harvard and STSCI and hired Jonathan Fay in late 2005 to utilize his experience in astronomical imaging and building interactive visualizations for TeraServer to architect and build the technology for WWT.

This week on the BTL podcast Larry and I discuss the dark cloud around Amazon’s S3 on demand infrastructure. The service suffered an outage for a few hours that brought home the reality of on demand services, whether infrastructure or applications. In addition, salesforce.com suffered some service interruptions this week as did RIM of Blackberry fame. Facebook can be slow at times and Bebo downtime increased ten fold. What does it all mean? Just like on premises infrastructure, stuff happens.

But the expectations for Amazon’s infrastructure service for uptime may be unrealistic. Amazon is not enterprise-ready–99.99 (52.6 minutes of downtime annually) or 99.999 (5.26 minutes of downtime annually). At least Amazon has a service level agreement. The SLA states that Amazon will “use commercially reasonable efforts to make Amazon S3 available with a Monthly Uptime Percentage (defined below) of at least 99.9% [8.76 hours of downtime per year] during any monthly billing cycle (the ‘Service Commitment’). In the event Amazon S3 does not meet the Service Commitment, you will be eligible to receive a Service Credit as described below.”

We also discuss the major management shuffle at Microsoft (Mary Jo Foley has the line up, complete with photos), the latest twist and turns in Microsoft’s pursuit of Yahoo and the adoption of Enterprise 2.0 technologies in corporations.

You can download the podcast directly to your desktop or MP3 player if you’re subscribed to our podcasts (See ZDNet’s podcasts: How to tune in). For more the topics covered during the show, search our blog. You can also search the audio by entering a keyword in our podcast player.

Update below: Cloud services sound great. A company can host their infrastructure with a large player like Amazon and Google, spend little and grow the business. Data center investment? Why would you do something like that?

Those theories are being tested today as Michael Krigsman is on the case of a major Amazon Web services outage. Amazon recently installed an SLA promising 99 percent uptime so any financial hit will be determined later. For now, customers are getting a lesson in backup options (Techmeme discussion).

As Michael notes this outage could have big implications since Amazon is increasingly hosting enterprise-class software such as Red Hat Enterprise Linux. Amazon is even rumored to be in the sweepstakes to host SAP’s BusinessByDesign.

For now your best bet is to monitor Amazon’s message board to see what happens when the cloud goes awry. A few choice excerpts:

• Hi, what is the deadline to fix this inssue, because i have many clients using the S3 service.
• And this is why you have to setup a fail-safe. My new sites hosts over 25,000 images on Amazon and I wake up to notice major issues this morning. I switched over to using my local server and everything is back up…I really need to set something up so it does this automatically. The s3 service is great but this just proves you can’t rely on it, this is a major issue especially since it’s been down for so long. Way to go Amazon.
• This is really a severe blow to confidence in trusting AWS services.

Update: Amazon has resolved the issue, adding in a post.

We’ve resolved this issue, and performance is returning to normal levels for all Amazon Web Services that were impacted. We apologize for the inconvenience. Please stay tuned to this thread for more information about this issue.

The question now is whether folks view this spell as mere growing pains or something larger to worry about.

Update 2: Suggestion of the day from an Amazon customer:

A health monitor would be useful — something to show what amazon thinks the status of the services are and to post official information. Maybe even proactive alerts or something I could tie our other infrastructure notifications into so I could be proactive in alerting our downstream affected users.

That idea isn’t original, but is pretty handy. After a series of outages, Salesforce.com created a similar dashboard.

Best Buy–a proxy on consumer technology demand–said Friday that January sales slowed enough to force the company to lower its earnings and revenue projections for the fiscal year ending March 1.

By the numbers, Best Buy said it expects fiscal 2008 earnings to be $3.05 a share to $3.10 a share, down from its previous outlook of $3.10 a share to $3.20 a share. Best Buy says revenue will be $40 billion for fiscal 2008, up 2.5 percent to 3 percent from a year ago. Best Buy was projecting growth of 4 percent.

As for the demand picture, here’s Best Buy’s outline:

• Home theater, MP3 players; digital imaging (cameras mostly) and video gaming sales were soft. Video games had inventory shortages in January that didn’t help.
• On the bright side, notebook computers were selling well.

In its statement, Best Buy noted that customer traffic slowed after the holidays into January. December same store sales were up 1.5 percent, but Best Buy is projecting a small decline for the fourth quarter due to January’s shortfall.

Other odds and ends from Best Buy:

• Best Buy is planning to have more than 600 stores with Apple products in fiscal 2009.
• Best Buy plans to open 85 to 100 new Best Buy stores in the U.S.

The company didn’t detail small business sales categories–PCs, printers and other tools.

A Kyoto-based outfit by the name of Fujikata is preparing to launch 10,000 smart cigarette vending machines, each equipped with a face analysis system designed to determine whether you’re over 20 years of age (the legal minimum in Japan). If you’re deemed too young, you’ll have to swipe your driver’s license to get your smokes, at which point the machine will presumably 1) dispense the goods and 2) congratulate you on being so well-preserved. One test found the system to be 90 percent accurate.

So What?
Read the rest of this entry »

Robert Scoble dropped some big hints about Microsoft’s latest technology and it’s so big that it brought a tear to his eye. Long Zheng tossed in that Microsoft has a site called Open Source Hero, indicated it might be related to Scoble’s riff and then backtracked.

Frankly, Zheng’s tidbit is more intriguing to me.

But the only real solid thing here is that Microsoft–and its Next Media Research Group–is doing something on Feb. 27–and given this advance billing and embargo-go-round it’s bound to be a let down.

Why is that? Given the speculation on Techmeme, we’ll be expecting something so huge that it won’t live up to hype. And then there’s the myth that Microsoft can’t possibly cook up anything cool and innovative so the software giant could reinvent computing and still get panned.

In any case, something potentially big is coming from Microsoft and a lot of folks have been briefed already. At this point, let’s hand this pup off to Mary Jo Foley to figure out. By the way, there’s no way that this new technology from Microsoft will stick to Feb. 27. Someone will break these NDAs and embargoes.

Google is reportedly going to test visual ads in its search results instead of the usual small text ads. The big question is what the reaction will be?

According to Saul Hansell at the New York Times’ Bits blog, Google has begun experimenting with video ads on some search results pages. “Some” is the operative word here–I’ve been conducting a bunch of searches and haven’t spotted one yet.

These newfangled ads will have images, interactive maps and other features. These visual ads will turn up in video and image searches. Add it up and Google is putting display ads in its search results. Maybe these video/interactive things will be in snazzy formats, but it’s essentially a display ad. If this works it’s likely display-type ads will make it to its text-based search results.

From a business perspective, Google’s move makes total sense. After all, Google has acquired DoubleClick, which serves up display ads. Meanwhile, Google has been tinkering with video advertising–especially on YouTube. But if Google wants scale, these ads will have to hit search results at some point. Google reassures folks that it’s not going to go banner ad happy.

The big question is whether folks will stand for these little experiments. Unless Google goes super garish I doubt people–beyond a few outspoken bloggers–will really care much after the initial shock.

I’m awaiting the broader rollout and Wall Street chatter about how this move will impact revenue growth.

Notable headlines:

Mary Jo Foley: Review: Microsoft’s Hyper-V puts VMWare and Linux on notice

• Dana Gardner: Merger target suspect Citrix assembles virtualization products as Delivery Center
• Dan Kusnetzky: Why is the concept of virtual machine software so sticky?

Former Microsoft mobile chief joins Vodafone

Microsoft reorg: Who’s in; who’s out

Slideshow on Microsoft’s Valentine’s Day Reorg: Who’s Hot and Who’s Not (right)

Dennis Howlett: NetSuite bullish on SaaS, swipes at SAP, Microsoft and Sage

• NetSuite’s earnings on target

Phil Wainewright: Microsoft in a twist over SaaSy Office deal

• SaaS vendors, eat your own dogfood, or die

Larry Dignan: Cisco patches multiple vulnerabilities in IP phones Exploit code surfaces for Microsoft Works, QuickTime

Richard Stiennon: Ben Edelman targets C-NetMedia

Christopher Dawson: RIAA gets student names, can’t do much with them

Jason O’Grady: MacBook Air Diary-Day 15: Temperature benchmarks

Matthew Miller@Mobile World Congress: The XPERIA X1 is one slick Windows Mobile device

• Nokia adds Google search to Nokia Search on new handsets
• The modu unleashes you from a single phone form factor
• Yahoo oneConnect aggregates all your social networks and more
• Dennis Howlett: Yahoo!’s oneConnect: who will use it?
• John Morris: More 3G options for HP, Lenovo laptops
• Mapping medieval streets using GPS
• Photos: Touring Barcelona with help from Nokia (right)
• David Morgenstern: Smartphone makers, mobile operators still baffled by iPhone

Ed Bott: More Vista SP1 answers

Janice Chen: What to do with your old digital camera–reuse, reduce, recycle!

Roland Piquepaille: Hydrogen-powered cars with zero-carbon-emission?

Russell Shaw: Flippin’ off Microsoft: Patent app describes fingerflip-powered document navigation

• Newly downloadable Skype for Linux 2.0.0.43 beta has 68 bugfixes
• New Skype for Mac available for download: here are the 38 bugfixes
• Comcast, other cable IP phone providers complain to FCC over Verizon’s “retention marketing” tactics

Robert Scoble: Microsoft researchers make me cry

Michael Krigsman: Three risk categories that explain IT failure

Larry Dignan: SAP-Oracle case headed to mediation

Cable vs. FTTP competition may mean 42 cents off your bill

Seesmic raises $6 million in funding

Rik Fairlie: Build your own Windows Home Server for only $380

Harry Fuller: Damn the recession, full speed ahead for a green tech IPO? Happy Valentine’s Day: your home is toxic

Paula Rooney: Red Hat launches JBoss Enterprise SOA Platform, 3 new open source projects Joe McKendrick: Now raging: battle for the soul of JBoss

Dana Blankenhorn: The scaling problem and open source

Who gave SCO that $100 million lifeline?

RIM: BlackBerry’s future lies in social networking Dan Farber: 2009: The year of enterprise social networks

Gallery: New Android UI (right)

James Farrar: US Productivity Slip, A Threat to Sustainability?

Electronista: PS3 sales to outsell Xbox in 2008

Ryan Stewart: Zimbra’s Prism client - a great use case for RIAs on the desktop

Dave Greenfield: Join Me for Team Building in SecondLife

Mobile industry sees new security risks

BT, Carphone, Virgin Media sign on to ad exchange

Oracle’s lawsuit against SAP over trade secret theft is headed toward mediation.

On Feb. 12, a judge in the U.S. District Court for the Northern District of California ruled that the case should be scheduled for mediation at a yet-to-be-determined date.

Mediation would mean that we won’t get to hear all the testimony in a jury trial and chatter about contracts and other key documents. I’m a bit disappointed, but for Oracle and SAP it’s best this spat gets settled behind closed doors.

As indicated earlier, it’s highly doubtful these two rivals will let this case go to trial. The dirty laundry that could be aired is simply too great. As background, Oracle sued SAP March 22 and alleged corporate espionage. SAP responded on July 3, admitted illegal downloading of Oracle property, but shot down most of Oracle’s claims.

An SAP spokeswoman said: “We think this direction is appropriate as it makes sense for the parties to seek resolution.” SAP had been advocating for mediation.

While some companies are trying to keep Facebook and MySpace out of the office, Research In Motion co-chief executive Jim Balsillie thinks that the social networking phenomenon is coming soon to an enterprise near you. “Once social networking becomes a B2B phenomenon–not unlike IM and texting–I believe every single social-networking user will want a data plan,” Balsillie said during a presentation at the GSMA Mobile World Congress.

RIM sees dollar signs in social networking, but the cash from more data plans won’t flow overnight. As Enteprise 2.0 guru and Harvard Business School professor Andrew McAfee said in November 2007:

We need to keep in mind that most E2.0 tools are new, and that their acceptance depends on shifts in perspective on the part of business leaders and decision makers, shifts for which the word ‘seismic’ might not be an overstatement. Enterprise 2.0 tools have no inherent respect for organizational boundaries, hierarchies, or job titles. They facilitate self-organization and emergent rather than imposed structure. They require line managers, compliance officers, and other stewards to trust that users will not deliberately or inadvertently use them inappropriately. They require these stewards to become comfortable with collaboration environments that “practice the philosophy of making it easy to correct mistakes, rather than making it difficult to make them” as Jimmy Wales has said. They require, in short, the re-examination and often the reversal of many longstanding assumptions and practices. It is not in the least disrespectful or contemptuous of today’s managers to say that it will take them some time to get used to this.

A recent Forrester survey indicated little interesting in spending on social networking among enterprises and SMBs:

I have a feeling that social networking adoption will sneak up on companies, as IM did in the past decade, faster than Forrester’s survey indicates. It will happen in pockets rather than as large scale deployments, which will happen when the large enterprise vendors that corporations like to deal with build it into their platforms. It will be driven by those “stewards” mentioned by McAfee who viscerally get the value of a social Web in business. I’ll predict 2009 as the year of enterprise social networks.

Forrester’s Jeremiah Owyang has some advice for managers who want to unleash the potential of social networking.

“Enterprise content management systems are already showing signs of ’social features’ and modules being bolted on to their experience.  Also, business groups or smaller teams are using application service providers to manage products, calendars, and to share documents with tools like Google Docs, 37 Signal products and others.  Companies that limit the access of social networks within their workplace are often cutting off works from the marketplace where customers, prospects, partners, and competitors are already exchanging information.  Companies should treat enterprise social networking like all other enterprise communication tools, have governance, set a process, and train and entrust employees to communicate well online as well as in the real world.”

Comcast reported its fourth quarter earnings and the results were just fine although the outlook was a little light. But the big number that’s worth watching is $42.44.

That sum, which was disclosed in Comcast’s fourth quarter earnings (Techmeme), is the company’s monthly average revenue per subscriber–a metric that would indicate pricing pressure from the likes of Verizon and AT&T, which are offering their own TV and Internet services. As many of you know, I bailed on Comcast for Verizon’s FiOS service a few months ago.

The thought of a price war between cable incumbents and telecom companies just warms my heart, but the competition is mostly a mirage. Once the introductory offers wear off both the telecom and cable companies will hit you with price creep. To wit: Comcast’s fourth quarter average revenue per subscriber was down from $42.86 in the third quarter and $42.89 a year ago. Simply put, increased competition has cost Comcast 42 cents in lost revenue on average. Perhaps, that saved you about 42 cents off your bill in the last three months. I feel better how about you?

Part of the reason for this minimal impact is that AT&T and Verizon’s fiber to the premises (FTTP) aren’t passing nearly as many homes as the cable players. Another reason: Verizon (and presumably AT&T) will raise its prices too–they have incentive to give you a great deal when you sign up, but after that you’re locked in. After that the price list gets inflated–I got a notice from Verizon price increases a few weeks ago. There’s a lot of nickel and diming going on. Consider:

• FiOS TV premier service as of Feb. 15 will go up to $47.99 from $42.99.
• Service repair visit charges were free–for the setup in 2007–but will increase to $79.99 in 2008.
• A cable card that cost you $2.99 in 2007 will cost you $3.99 in 2008.

You get the idea. The point: These dollars add up and neither cable companies nor telecom companies can resist these increases.

That’s why despite consternation about Comcast’s fourth quarter from Wall Street types, who were worried going into earnings, the cable giant will remain quite the cash cow. Comcast raked in 2007 revenue of $30.9 billion, up 24 percent from a year ago, and net income of $2.58 billion, up 5 percent from a year ago.

Video startup Seesmic has raised $6 million in series A funding as its video conversation experiment continues.

Seesmic, now in closed beta, is led by Loic Le Meur and has backing by some big names–including Michael Arrington at TechCrunch, Steve Case of AOL fame, Michael Parekh, managing director at Goldman Sachs and Red Hoffman, founder of LinkedIn. Those names are nice, but Atomico, an investment group founded by Niklas Zennstrom and Janus Friis–those peer to peer experts behind Skype–led the investment with $5.5 million of funding. Le Meur goes into more detail on his blog and statement.

Seesmic is in closed beta and I’ve been playing with it as an observer for a few weeks. The gist of Seesmic is to make online conversation–IM, Twitter, email etc.–more video friendly.

Here’s a screen shot of what Seesmic looks like:

And another:

The general idea is to enable personal broadcasting and loop in a community of Seesmic users. Where is this Seesmic experiment headed? I have no idea, but it’s an experiment worth watching.

Notable headlines:

Mary Jo Foley: Office 14 to add more online document sharing

MSDN subscribers: Vista SP1 to hit by the end of this week

Robin Harris: Protein nanotech in next gen storage

Adrian Kingsley-Hughes: First Look at Firefox 3.0 Beta 3

Screenshots: First Look at Firefox 3.0 Beta 3 (right)

Paula Rooney: Firefox 3 beta 3 has more Vista, Mac, Linux look-and-feel

Larry Dignan: Why a Yahoo-News Corp. deal makes sense

• Dan Farber: Dear stockholders: Please believe us, Microsoft undervalues us
• Mary Jo Foley: Yahoo layoffs: ‘The ultimate poison pill’?
• Microsoft’s latest reorg to set the stage for Yahoo merger
• Techmeme
• Investor says Microsoft’s Yahoo offer high enough
• Memo to Microsoft: Yahoo’s A-list

George Ou: FCC takes up Comcast traffic control

• Richard Koman: Comcast: BitTorrent blocking is a good thing
• Russell Shaw: Comcast fesses to FCC: Yeah we mess with some P2P packets
• Techmeme

Dana Blankenhorn: New majority loses nerve on net neutrality

• In LiMo-Android battle the winner is Linux

Garett Rogers: Introducing the newly designed Android OS

Ed Burnette: Android SDK update M5 has big changes for developers

Dan Farber: JBoss sets goal: Capture 50 percent of enterprise middleware workloads by 2015

Larry Dignan: Adobe warns of Flash Media Server, Connect Enterprise Server vulnerabilities

Dennis Howlett: Mobile enterprise? you gotta be kidding!

EchoSign 3.0 arrives, but will it take in the enterprise?

• Michael Krigsman: NakedIT: JP Rangaswami says, ‘Don’t call them IT projects’
• How to design a system that everybody hates

John Morris: Acer plans new, low-cost laptop

Steve O’Hear: How to delete your account: Facebook responds (half heartedly)

Jason O’Grady: MacBook Air Diary-Day 13: Installing 10.5.2 upgrade

Matthew Miller: Hands-on with the Readius eInk mobile device (right)

David Morgenstern: Stop the Kindle hype!

Larry Dignan: Vonage: Some signs of life, but credit crunch looms

3Com may divest TippingPoint to seal takeover with Feds

HP lands $675 million outsourcing pact with Unilever

Robin Harris: Is Blu-ray worth it?

Christopher Dawson: New Microsoft copyright education initiative sounds neat-o!

PaidContent.org: Bidu earnings soar

Reuters: Nvidia profit up on brisk sales of GeForce chips

Going back to school on security

Rush Limbaugh’s appeal to Steve Jobs Fake Steve responds

Mossberg: Super-slim ThinkPad sneak peak

Study: Microfiber fabric makes own electricity

Russell Shaw: Why so few Skype WiMAX phones? Here’s the answer

Richard Stiennon: 404 and DNS re-directs are evil

Dana Blankenhorn: Microsoft releases hospital IT system as Amalga

Christopher Dawson: I love Google…don’t tell the librarian!

Roland Piquepaille: A pharmacy in a nanotechnology-based thin film

Joe McKendrick: Wanted: new term for SOA ‘governance’

Yahoo’s latest move in the end game with Microsoft is a letter to stockholders, explaining why the company is worth more than Microsoft is offering. The global online advertising market will grow from $45 billion in 2007 to $75 billion in 2010, the letter stated, and Yahoo is poised to intercept a major share of the demand. The question is will shareholders vote for Jerry Yang or another candidate to lead the company into the future.

Following is the text of the letter:

Dear Stockholders,

On February 1, 2008, Microsoft made an unsolicited proposal to acquire your company. As much has been reported in the press recently, I wanted to reach out to you personally to let you know why your Board of Directors, after a careful review by Yahoo!’s management along with our financial and legal advisors, believes that Microsoft’s proposal substantially undervalues Yahoo! and is not in the best interests of our stockholders.

Most importantly, I want you to know that your Board is continuously evaluating all of Yahoo!’s strategic options in the context of the rapidly evolving industry environment, and we remain committed to pursuing initiatives that maximize value for all our stockholders.

We have a unique combination of strengths

– Yahoo! is one of the most recognizable and admired brands in the world. We have over 500 million users (nearly 1 out of every 2 internet users worldwide). In the U.S., we are # 1 in many of the most used online services including personalized home pages, mail, news, music, shopping and travel. Because we have leadership positions in so many indispensable online services, users spend more time on Yahoo! sites than anywhere else online.

– Yahoo! is an attractive partner for marketers. Yahoo! is #1 in online display advertising, which represents 90% of the advertising inventory on the web, and we are also a leader in search marketing and a pioneer in the growing fields of mobile advertising and online video advertising. Through Yahoo!, advertisers can now connect with consumers on our owned sites as well as those of our growing network of partners including eBay, Comcast, AT&T, a consortium of over 600 newspapers, Forbes.com, Cars.com, WebMD and more.

– Yahoo! has the financial flexibility to execute our plans, thanks to our healthy cash balance, which exceeded $2 billion as of December 31, 2007, and our substantial operating cash flow, which we expect to grow double digits in 2009.

– Yahoo! has made important investments in our core computing infrastructure enabling us to dramatically increase the speed of our search engine updates even while handling vast and growing quantities of data.

– In addition, we have the added value of our substantial, unconsolidated investments in Japan and China. We have substantial positions in Yahoo! Japan, the leader in its market, and Alibaba, which is strongly positioned in China, a market with enormous growth potential.

These assets–our brand and its audience, our relationships with marketers, our financial strength, our technology, and our strategic investments–are the core of our value and our leadership position in the industry.

We have a huge market opportunity - and are uniquely positioned to capitalize on it

The global online advertising market is projected to grow from $45 billion in 2007 to $75 billion in 2010. And we are moving quickly to take advantage of what we see as a unique window of time in the growth - and evolution - of this market to build market share and to create value for stockholders.

We are executing our strategy - and making headway

We have taken significant but disciplined steps to refocus our business on our objectives to become the starting point for the most consumers and the must buy for the most advertisers and enhance Yahoo!’s long-term performance.

Starting Point Objective: Our goal is to grow visits to key Yahoo! starting points and properties, where users enter the Internet, by 15% per year over the next several years. We are the most visited site in the U.S., and we continue to grow - we experienced double-digit growth in U.S. users in 2007 on our Yahoo.com home page.

In addition to traditional starting points on the PC - including our home pages, mail, My Yahoo! and search, we are particularly excited about our growth prospects in mobile, the biggest emerging starting point in the world. Globally, there are twice as many users of mobile devices as users of personal computers, and mobile advertising is projected to grow substantially in the coming years. We have an important competitive edge as the number one mobile destination in the U.S., and we are building a superior mobile experience for Yahoo! users globally so we can further capitalize on this opportunity.

Must Buy Objective: We are working to make online advertising easier and more effective for marketers, opening up new ways for them to connect with consumers. We’ve successfully completed the global roll-out of our search marketing system, Panama, which improved the search experience for our users, boosted returns for our advertisers, and increased revenue for Yahoo!. Last year, we bought Right Media, an exchange that enables buyers and sellers of online advertising to come together. Another 2007 acquisition, Blue Lithium, brings us best-in-class performance marketing capabilities, complementing Yahoo!’s existing offerings for advertisers. We also integrated our search advertising and display advertising sales forces, creating a one-stop shop for all of advertisers’ online marketing needs. All of these - Panama, Right Media, Blue Lithium, and our combined sales efforts - complement and enhance Yahoo!’s existing capabilities and will make it easier for advertisers and online publishers to buy and sell advertising online.

We are also creating a unique and valuable network of premium websites to serve our advertisers. We are making it easier for our advertisers to provide interesting and relevant offers to our users by combining advertising space on Yahoo!’s owned sites with that from a growing group of premium partners including eBay, Comcast, AT&T, a consortium of over 600 newspapers and many others.

As we reach more users both on our own websites and on the sites of our premium partners, and better monetize the ad space on Yahoo!’s owned and operated sites, we are striving to increase the percentage of total online advertising demand we touch from an estimated 15% in 2007 to 20% over the next several years.

These key strategies will be enhanced by our adoption of new, more open technology platforms that will encourage the development of new applications and the involvement of third-party developers - and help enrich the user experience.

We have accomplished a great deal in a very short time - and we are focused on building this momentum

Today, Yahoo! is a faster-moving, better-organized, more nimble company than it was just a few months ago. We have redeployed our resources to drive Yahoo!’s key strategic priorities - taking important steps to streamline our organization and close down or scale back businesses that don’t support these critical growth initiatives. The fact is that we are well on our way to transforming the experiences of Yahoo!’s users, advertisers, publishers and developers - an important shift that is at the heart of our plan to create stockholder value.

I want you to know that the Yahoo! Board of Directors and management team remain committed to pursuing initiatives that maximize value for all our Yahoo! stockholders. This is a great company and we are moving quickly to make it even better.

Jerry Yang

About Yahoo! Inc.

Red Hat has big plans for JBoss. With its “Enterprise Acceleration” initiative, the company hopes to gain 50 percent of enterprise middleware workloads by 2015.

Red Hat points to rising adoption of open source solutions, support from system integrators and a customer, the Swedish Police Board, as evidence that it will decisively own half the market in seven years. In addition, the company expects to add to its JBoss Enterprise Middleware stack with new platform components and is funding an Enterprise Acceleration Center for consolidating best practices and working on performance, migration and interoperability issues.

Certainly open source is becoming more broadly adopted in enterprises, but Red Hat’s stated goal is purely aspiration. In essence, Red Hat is waving a red flag in front of IBM and Oracle, which just spent $8.5 billion to add BEA’s middleware to its portfolio of middleware. For IBM and Oracle to cede 50 percent of the enterprise middleware market to Red Hat over the next several years would mean that the incumbents commit handfuls of forced errors, which is not likely.

News Corp. is reportedly talking to Yahoo about an arrangement that would look a lot like a joint venture. It’s unclear how these talks will play out, but the structure of the deal is far superior to Microsoft’s proposed integration go-round.

The Wall Street Journal, AP and others have all followed blog reports from TechCrunch and Silicon Alley Insider noting that News Corp. is talking to Yahoo about a deal (see Techmeme). This deal would leave Rupert Murdoch with a 20 percent of Yahoo. News Corp. would toss in the Fox Interactive properties–MySpace, AmericanIdol.com and others–and some cash with a private equity player to get a beefed up Yahoo.

The more I think about this arrangement the better it sounds. Here’s why:

Yahoo would have clarity of mission. If this News Corp. deal were consummated Yahoo would become what it’s supposed to be–a media company. Yahoo is a sort-of-technology company, but it’s no Google. Microsoft would give Yahoo technology, but not the type it wants. Almost instantly you’d have a Windows (Microsoft) vs. open source (Yahoo) on the backend technical infrastructure. Who needs those religious wars? Yahoo is about entertainment, splashing American Idol on Yahoo.com and being a mainstream network.

A joint venture would be more nimble. Let’s face it a Microsoft-Yahoo deal would take years to get right. There would be integration squabbles. Meanwhile, Google would grab more market share.

I can understand the deal. Ok, I understand the concept of clean teams and all of that other integration mumbo jumbo from covering the Hewlett-Packard-Compaq merger. But those moving parts are messy. This deal is simple–swap some properties and cash and poof you’re done.

Yahoo would have a social networking strategy. MySpace would take care of that. Add in Flickr and you have some mojo.

News Corp. gets distribution for its properties. WSJ.com and Yahoo Finance–a match made in heaven.

Yahoo gets rid of Microsoft. No matter how much Microsoft bids it appears it will lose talent in a hostile Yahoo takeover.

Media companies should be owned by egomaniacs. I have a working theory: Media companies shouldn’t be publicly traded. And they should have some nut job at the top. Conde Nast can launch things like Portfolio magazine because Si Newhouse wanted to. Murdoch is in the same mold. Contrast that approach to Time Warner.

Will this deal happen? Who knows? But News Corp.-Yahoo is sounding better all the time.

Vonage’s fourth quarter had a little something for everyone. Optimists could say Vonage’s loss was better than expected and the company isn’t being sued anymore. Pessimists could say that the company still has a churn rate of 3 percent and is facing a credit crunch.

Advantage: Pessimists. That said, Vonage’s current standing has improved somewhat. I have more than a passing interest since I’m a Vonage customer, but do wonder what would happen if Vonage disappears.

For the fourth quarter, Vonage reported a net loss of $11 million, or 7 cents a share, on revenue of $216 million. The loss was 3 cents a share better than Wall Street estimates, but revenue was light. The best news is that Vonage isn’t lawsuit fodder anymore. The bad news is that Vonage has burned more than half its cash position on settlements.

To wit: Vonage had $190 million in cash, marketable securities and restricted cash as of Dec. 31. A year ago, Vonage had $508 million on that same basis. Forking over more than $200 million in settlements hurts–especially when you lose 3 percent of your subscriber lines each quarter. Vonage ended 2007 with 2.6 million lines total.

However, Vonage isn’t out of the woods by any stretch. The company disclosed it has $253 million in convertible debt, which can be cashed in at the end of 2008. That math doesn’t quite work since Vonage only has $190 million at its disposal–actually $151 million excluding restricted cash.

Vonage said it is trying to refinance this debt, but if it doesn’t auditors are likely to question the company’s ability to “continue as a going concern.” That’s shorthand for Vonage could go under if that debt isn’t refinanced.