大象传媒

Two days in PC World

• Rory Cellan-Jones
• 29 Oct 08, 10:25 GMT

I've just spent a couple of days in a strange country - let's call it PC World, though it has nothing to do with the store of that name.

It has 6,000 inhabitants who at 0800 march into a vast hall for a breakfast organised with military precision. Then at 0845 they all march into another gigantic room to hear inspirational speeches. The rest of their day is occupied attending more educational sessions, though a lot of their time seems to be spent just staring at their laptops. Who are they? Well the clue is in the slogan many sport on those laptops and their t-shirts - "I'm a PC".

This is - quite possibly the geekiest event I've ever attended - and you would struggle to find a collection of people more devoted to the world of Windows. Some are Microsoft employees, the rest are developers who've paid to come here and learn about everything from Windows Azure to "Parallel Programming for C++ Developers in the next version of Microsoft Visual Studio." Sorry, that was one session I missed.

It's the kind of place where if a speaker announces he is going to do some live coding on stage, he's met with a smattering of applause rather than a rush for the exits. These speakers range in quality from the mildly inspired to the deadly, and those from Microsoft sport a variety of extraordinary titles. I loved "Director of Platform Strategy in Developer and Platform Evangelism." The audience is mostly quietly enthusiastic, sometimes cheering "awesome" new software features - the loudest applause was for a Tesco executive presenting a new online shopping application hosted in the cloud. But there's not quite the revivalist meeting atmosphere of a Steve Jobs keynote.

This is also a crowd that has faced intense - and perhaps unfair - mockery over recent months, as the butt of all those "I'm a Mac, I'm a PC" adverts. They know they're not cool. But guess what? I don't think they care, and they may be a more tolerant group than the more fanatical members of the Apple crowd.

At this totally PC conference, there was a surprising number of Macs on show - mainly in the media room but also in some developers' hands. But nobody seemed to mind. I'm not sure you would get the same reaction if you walked into MacWorld sporting a Dell.

Many of the innovations unveiled here - from Windows 7, to Azure and the Office web products - appear to show Microsoft following trends rather than leading. Multi-touch on Windows 7? First, seen on the iPhone. Online documents? Google Docs has been around for a while. Azure? As Ray Ozzie conceded, Amazon has a head start in the cloud.

But then a Microsoft internal blogger showed me two products - the 3-d photo mosaic service Photosynth and Worldwide Telescope which allows you to explore the stars. Both the products and the blogger were very impressive. Microsoft is a bureaucratic, sometimes overbearing, often unimaginative company. But it is still home to some smart, creative people, full of enthusiasm about the possibilities that software can offer. All it needs to do now is convince us that it really is cool to be PC.

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Ray Ozzie and the business of clouds

• Rory Cellan-Jones
• 28 Oct 08, 10:30 GMT

Is there anyone out there who feels neutral about Microsoft? When I interviewed Steve Ballmer last month, an old friend argued that my encounter with Microsoft's chief executive was a complete waste of time. The friend - he's the kind of guy who writes "Micro$oft" - believes that Mr Ballmer's business is increasingly irrelevant to the future of the internet, left in the dirt by the likes of Google.

So I'm expecting a lot more flak from that direction over our coverage of Microsoft's move into cloud computing, and our interview with . But I make no apologies for covering a major shift in strategy by what is still an incredibly powerful and important company, What's more, Mr Ozzie is a serious figure, the creator of Lotus Notes, and a quiet, but passionate, evangelist for Microsoft's cloud strategy.

Whether his cunning plan will work is another matter. Microsoft is hardly the nimblest of companies and others - notably Amazon and Google - are ahead of the game. When I met Ray Ozzie shortly after the keynote where orm, he was keen to differentiate between Google and Amazon as potential competitors. He said it was Amazon that had been the real pioneer, insisting that Google just wasn't in cloud computing.

I pointed out that the one cloud application with which I was familiar was Google Docs - in fact, this blog post is starting life as an online Google document. But it turned out we were looking at the cloud from different sides. Mr Ozzie was focussing on it as something you rented out to businesses so they could use the vast computing power in your data centres to create applications which could scale up in a hurry - an approach where Amazon is enjoying plenty of success. I was thinking of the cloud as a place where millions of users could store their data and use simple online programmes, mostly for free.

You can see why Microsoft would be keener on the former interpretation. It involves creating a new business of a traditional kind, where business customers pay you real money for a service.

Whereas offering online services to consumers - which, to be fair, Microsoft is doing through Live Mesh - is tricky to turn into a profitable enterprise, and could cannibalise your existing business. Do you really want to start pushing the idea that software can be free, flexible and supported by advertising, when you're still reaping huge profits from Office?

(Mind you, I have a hunch Microsoft may be planning some kind of cloud version of Office, because when I suggested something of the kind to Ray Ozzie, he prevaricated, as if an announcement were imminent.)

Microsoft certainly appears to be taking its cloud venture seriously. In Los Angeles it felt like a small army had been working on "Azure" for years, where as Sam Schillace of Google Docs boasts that his entire team costs about the same as the cafe where they eat. Mr Schillace feels that's an advantage, claiming that nimbleness, openness and velocity are the watchwords of the cloud era. Microsoft believes its superior firepower in the enterprise world, where as Ray Ozzie put it "most major companies don't want software updated every day" will give it the upper hand.

Last month Steve Ballmer described Microsoft as a David in search compared to Google's Goliath. Now, in the battle of the clouds, the Goliaths of Redmond seem to have decided that Google isn't even in the game.

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The town in the cloud...

• Rory Cellan-Jones
• 27 Oct 08, 09:15 GMT

I'm in the United States to report on several stories, including the whole phenomenon of cloud computing. More on that on the television and radio on Tuesday, but in the meantime, let me take you to one of the places we've filmed, the town with its head in the cloud.

We've been to Quincy, a remote farming town of 5,000 inhabitants in the middle of the state of Washington, where just about the only activities until recently were either planting potatoes or turning them into chips - or rather French fries. Now it's home to three giant data centres.

The biggest belongs to Microsoft, which completed its brutally ugly building on a former bean-field last year, to be followed swiftly by Yahoo and now the financial software firm Intuit. We were allowed access to Microsoft's centre - the first TV crew to get inside - and after passing through several layers of security found ourselves in one of the server rooms.

There are 10 of them, with up to 30,000 servers in each, an almost unimaginable amount of computing power. Walking around, deafened by the roar from the cooling systems needed to keep the computers chilled, you feel you're right in the belly of the modern internet.

What are these places for? Well they currently handle everything from search queries and instant messaging to the storage of digital photos. But in the future, much of the computing power here and at similar centres will be leased out to companies wanting to engage in cloud computing - running applications on Microsoft's servers rather than their own. Consumers will also be encouraged to put more of their data into Microsoft's cloud, so that it can be accessed anywhere, from any device. It's a fashionable new business where the likes of Google and Amazon are already well entrenched.

Why Quincy? Well these places use an awful lot of energy - 50 megawatts at the Microsoft centre - and nearby on the Columbia river there's a series of dams providing relatively cheap hydro-electric power. The people we met at the Microsoft centre talked like power generation specialists rather than software types. When they kept mentioning redundancy I thought they were worried for their jobs. It turned out they were describing two back-up power systems, generators and batteries, which are supposed to ensure the place never goes offline, even if the Columbia river stops flowing.

Places like Quincy tell us a lot about the way economic power is shifting - as Detroit became Motown, so Quincy may become Dataville. Land values in the area tripled after Microsoft moved in, and one young security guard told me he was grateful for his job, the best paid work he could find round here. But let's not exaggerate the local impact - few people are needed to run these vast buildings and the computers inside them, and the numbers are going to fall as processes become ever more automated. Eventually, it may be just the security guards who are left.

It's the power these data centres give to their owners which is more likely to give pause for thought. Only a few very wealthy businesses will be able to afford a global chain of data centres (Microsoft will only say it has "more than 10 and fewer than 100") and we could all end up entrusting our data to one of these competing "clouds".

We used to think the internet was a kind of commonwealth we all owned, with the telecoms companies looking after the basic infrastructure but data free to flow wherever we wanted. But if so much of the world's computing power - and data - ends up in the hands of Microsoft, Google or Amazon, won't they end up ruling the internet?

As I left the server room in the Quincy data centre, I noticed a big red button on the wall, with a notice above saying: "Pressing button will switch off computer room". For a moment, I was tempted...

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An apology (in fact several)

• Rory Cellan-Jones
• 24 Oct 08, 09:20 GMT

Looking back over various blog posts I've written in the last couple of weeks, I realise I owe certain people an apology.

First, members of . A number of you took offence at my dig that your social network was "Facebook for losers". You were right to be cross - and now you can laugh at my lack of foresight after LinkedIn closed a with the likes of Goldman Sachs. An arctic winter is blowing through Silicon Valley - and Wall Street - so it's quite an achievement to raise that kind of money.

It's also a marker that we are entering more serious times, when a social network has to be about more than poking, vampires, and other assorted tomfoolery - it needs to be useful in getting you a job or helping you make business contacts. I've taken note and might even go and refresh my untended LinkedIn page.

Then, there are all of those people who make a great contribution to this blog in their comments, and are then frustrated when the conversation just stops. It was put rather well by someone who responded to my post on "Is blogging dead?":

"...much as I enjoy reading many of the blogs by 大象传媒 journalists, I do find it a little disappointing that it tends to be a rather one-way exchange. True, most of the responses to blogs are inane drivel, but some of them are witty and insightful, and more to the point, deserving of a response. That response is seldom forthcoming.

I'd enjoy the 大象传媒's blogs a bit more if the owners of the blogs read their responses and replied to the interesting ones more often."

We try to answer specific queries, but I think we do need to make more of an effort to respond to responses, and so prove that our blogs are not just one-way streets.

Finally, I need to apologise to my teenage son. I accused him of excessive use of our domestic bandwidth when he downloaded a 2Gb patch for World of Warcraft the other day. Fellow gamers were quick to leap to his defence, pointing out that a patch like that only comes once a year and deriding my estimate of 120Mb for four hours' solid WoW play - given to me, I hasten to add, by one of the ISPs.

Well, earlier this week I was away from home for a day or so - and therefore not online - and our bandwidth use dropped from over 1Gb to 200Mb. So it looks as though I'm the one chewing through our broadband usage quota, though I can't quite work out how my computer is leaking so much data. Sorry, Adam.

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Is blogging dead?

• Rory Cellan-Jones
• 22 Oct 08, 18:12 GMT

As I was walking the dog this morning, I checked Twitter on my phone and saw that it was alive with comments about "the death of blogging." According to an article in , Twitter, Flickr and Facebook make blogs look "so 2004". Oh dear. My response was to go straight home - and write a blog post.

The Wired article argues that fresh, genuine voices have been drowned out by a "tsunami of paid bilge", that blogs attract too many comments from net lowlife, and that the action has moved elsewhere. So is there any truth in the notion that blogging is dead? Well, in the words of the Brains Trust - a kind of 1950s radio blogosphere - it all depends on what you mean by "blogging", and by "dead".

If, by blogs you mean any online article or diary which allows interaction with its audience, then it's a phenomenon that is far from moribund - indeed it is growing every day. But its nature is changing. When blogging first entered the public consciousness it seemed the whole point was that it was amateur, a medium where anyone and everyone could distribute their thoughts, profound or banal. Now every major media organisation, most political parties and lobby groups, and a growing number of businesses have decided that a blog is a good way to communicate.

If I were asked to name the single most influential journalistic product of the moment - in the UK at least - it would be a blog written by a 大象传媒 colleague. Robert Peston's Peston's Picks has been the essential guide to the current financial crisis, and is read avidly in the City and at Westminster. It gets an audience of more than 650,000 on some days, and hundreds of comments from readers.

But the very success of the professional bloggers may be draining traffic - and attention - away from the amateurs of the "real" blogosphere. Does that matter? Well it certainly makes it harder for fresh new voices to be heard - can you name a blogger who's burst onto the scene in the last year?

But the argument that it's all getting far too noisy seems a little bizarre. If blogging is supposed to be a conversation, does it really make sense to take fright when too many of those taking part in the dialogue turn out to have little to say that is either articulate or polite?

The more powerful argument is that we are now moving beyond blogging - from the blogosphere to the Twitterverse. In other words, short-form social networking is proving a more useful way of communicating than the more long-winded and less intimate form of the blog. It follows on from the recent "Google is making us stupid" argument, that our attention span is now so short that we can't read more than the 140 characters in a Tweet or the one line status update you see on Facebook.

I do think that there is evidence that early adopters from the tech crowd have moved on, perhaps disappointed that their blogs are not reaching a mass audience - or discovering that it's easier to have a conversation in a smaller space, where the madding crowd doesn't keep butting in.

But what I think we're seeing is the development of a mixed economy, where blogging has many forms, professional, amateur, micro and mega. I started thinking about this post by sending out messages to my Twitter friends, who responded speedily:

"people will continue to blog in the same way that some still use typewriters, but Twitter, Facebook etc will kill blogging".
"social networking is *really* about community ... & the mega-blogs don't foster community in their 1000s of comments".
"I blog more now as twitter and Facebook has given my blog much more traffic."

But, of course, I've ended up blogging - and, with a bit of luck, thousands more will read this than will listen to me on Twitter or Facebook. Let me know what you think - if blogging really is still alive, then we can prove it by having a healthy debate right here.

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Apple shines, Yahoo slumps

• Rory Cellan-Jones
• 22 Oct 08, 09:23 GMT

Two of the best known names in technology reported their latest results last night, with Wall Street anxiously scanning the figures for clues as to the impact of an economic downturn. And what a contrast. One firm used this kind of language in its statement:"disappointed", "challenging", "softening advertising demand". The other spoke of "spectacular performance", "the strongest product line in our history", "zero debt" and "one of the best quarters". The , , and the funny thing is that both companies delivered better than expected results and may see their shares rise in the short term.

What's most frightening about Yahoo's statement is not the 53% drop in profits compared to last year (it made $70 million in the quarter compared to Apple's $1.14 billion profit) but its gloom about advertising. It seems only days ago that every web company I met was assuring me that they were not seeing any downturn - and even if advertising budgets did come under pressure they would be fine because canny customers would just shift even more of their spending online. Now what do we hear from Yahoo? "Online advertising softened in the third quarter."

So either those other companies were being economical with the truth - or Yahoo is underperforming the rest of the industry. I suspect, though, that a host of Web 2.0 companies with a business model entirely dependent on advertising are facing a battle for survival. For Yahoo staff, the outlook is particularly grim - the company is planning to lay off 10% of its workforce. Mind you, it promised similar surgery earlier this year, only to recruit more people than it had laid off. But the analysts seemed cheered by the promise of cost-cutting and relieved that the results weren't even worse - a measure of how low expectations of this former star performer have fallen.

Apple, by contrast, was resolutely cheerful about its current state - while cautious about predicting how many iPods, iMacs and iPhones consumers will want as the economic gloom deepens. The iPhone results, in particular, look stunning. 6.9 million 3g phones went in their first three months on sale - that compares to the 6.1 million first generation iPhones sold over the 15 months it was in the shops. Steve Jobs boasted that his phone had even outsold Blackberry, and it looks as though Apple's entry into the smartphone market can now be judged a major success, though it will be interesting to see how it fares as rivals like the G1 jostle the iPhone in the Christmas market.

Perhaps even more significant is the 2.6 million Mac computers shipped in the quarter - more evidence that the halo effect from the iPhone and the iPod is persuading consumers to switch from PC to Mac. And with over $25 billion in the bank and no debt, Apple looks well placed to weather a recession - and perhaps snap up a few juicy businesses at bargain basement prices.

With two such contrasting corporate stories, you would think that their share prices would have gone in different directions over recent months. But Yahoo' share price has dropped from $26 to $12 in the last six months, while Apple's has fallen from $180 to $91 - so the market has decided that each of them is worth about half as much now as they were in May.

Later today, analysts are predicting that shares in both will rise - a relief rally for Yahoo, and a reward rally for Apple's spectacular figures. In the longer run (which in stock market terms means a few weeks) they will probably both fall back again, with Yahoo falling much further than Apple. So what's the moral? Markets may eventually get it right - but in the short term, terrified investors just have no idea what a technology firm is worth.

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Technology - lessons from history

• Rory Cellan-Jones
• 20 Oct 08, 09:10 GMT

Imagine a decade of unprecedented technological advance. It's a time when a new form of communications technology transforms the way consumers live their lives, where the number of scientists working in R&D in American labs more than doubles, and investors rush to put their money into the smartest new firms. Then there's the kind of stockmarket crash we haven't seen in decades.

Or think about an earlier period, when another newly invented industry attracts a wave of money from an eager new class of middle-income investors, after the government relaxes stock market regulation put into place to stop a previous stock market bubble. The industry itself is almost totally unregulated, and MPs, many of whom are keen investors themselves, act as cheerleaders rather than watchdogs. Again, there is an extraordinary boom, followed by a terrifying bust, in which many of the new middle-class investors lose their shirts.

The decade I describe in the first paragraph is the 1920s, when radio was the technology which helped inflate a bubble which burst with the Wall Street crash, and was followed by the great depression. And the second bubble was the Railway Mania which swept Britain in the 1840s, aided by the removal of restraints imposed after the South Sea Bubble. So what we are experiencing right now has depressing echoes of the past. But if we look at what happened to technology after those two great crashes, we can find reasons to be cheerful - about the prospects for continued innovation, if not for stock market investors.

First the 1920s. An by an American economist Tom Nicholas looks at how the stock market valued technological advances, as measured by patents, before and after the crash. He stresses what an extraordinary period this was - the time when electricity first surpassed steam as a source of power, when new materials such as nylon were invented, and when refrigerators became common in American homes. But it was radio which caused most excitement - at the start of the 1920s nobody had a radio set, by the end they were in 12 million American homes.

But Mr Nicholas finds that after the crash innovation did not stop, although as he puts it "high technology firms did not earn significant excess returns over low technology firms." Indeed, there was twice as much spent on research and development as in the previous decade, General Electric registered twice as many patents in the thirties as in the twenties, and the radio business RCA, which had been the "dotcom" stock of the 1920s was back in profit by 1934. The thirties was a disastrous decade in many ways but it was also a period of rapid technological change.

And what happened to the development of the railways after 1846, when the market fell to earth? Well luckily so much money had been poured in, that they continued to grow. By 1855, there were over 7000 miles of railway in Britain, compared to 1500 miles in 1840. And while the rate of investment slowed right down, passenger numbers really took off, from 30 million in 1845 to nearly 240 million in 1865. In other words, all that money thrown at the new technology by the mug punters of the 1840s ended up transforming Britain's transport system and changing the social fabric of the country.

I am writing this on a train, using an online document, and connecting to the internet via a 3G dongle. Which would not have been possible had the mobile operators - the mug punters of 2000 - not poured billions into 3G licences and the cost of rolling out new networks. So the investment in technology that we've seen in the good times may slow down a bit, but its effects will continue to be felt.

Mind you, the journey from London to Wrexham is taking me four hours and involves two changes. Have we really made that much progress since the 1840s?

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The cost of Warcraft

• Rory Cellan-Jones
• 17 Oct 08, 16:07 GMT

If you've got any bandwidth limit on your internet use, you may have bust through it this week, especially if you have a teenage son. Why? Well it could be the cost of war - or rather .

I've been keeping a close eye on my bandwidth use at home because I keep breaking through my 25gb per month limit. When I signed up to my ISP I thought that would be ample, but then found that we were using as much as 1gb a day, which seemed a lot. Then on Wednesday this week we broke all records, with more than 2gb downloaded. I was away from home, my wife's surfing habits are mostly limited to reading obscure economics blogs, so the spotlight fell on our teenage son, who spends a certain amount of time online in his room in the loft.

He was quick to come clean: "I did use a lot yesterday because a big patch for a game came out," he told me. The game was World of Warcraft - and, according to a colleague who is another WoW fanatic, the patch was around 2gb and took him almost a day to download, even on his reasonably fast connection. The online multiplayer game is about to release an expansion pack, a huge event for warcrafters, and this patch is apparently essential for those gearing up for the next version.

Now I don't resent my son's gaming habit - he does do his homework in between battling orcs and he's an invaluable source of information about a subculture which is a bit of a mystery for a man of my age. Reading through the notes about the patch, I realised again just how little I understand. It promises, apparently, "a hunter pet skill revamp, new talents and spells for existing classes, and the implementation of barber shops for players."

Err, right. But it's all set me thinking about the extraordinary impact that online gaming is having, both as a business and as a user of consumer bandwidth. We hear a lot about another virtual world, , but that's more of a media phenomenon than a commercial success. World of Warcraft, on the other hand, has around 11 million subscribers paying around 拢9 per month to play the game. That's one very lucrative business, and something that other game franchises are seeking to emulate.

But World of Warcraft - and other online games - are also sending a lot of data back and forth across the internet, even when they are not issuing 2gb patches. How much is difficult to tell. I've just read a technical paper by Austrian scientists called (pdf link), and I'm none the wiser, though I think what they're saying is those gamers use a lot of bandwidth. My ISP said they'd seen the effect on traffic of the patch, but did not know how much impact normal gaming had.

When I spoke to Neil Armstrong from another internet service provider PlusNet, he confirmed that the World of Warcraft update had certainly been a major event: "It's a very big patch... we've seen a very significant increase in traffic." And he said online gaming in general did use up quite a bit of bandwidth - around 120Mb for a four-hour session. Not as much, though, as streaming video services like the iPlayer, which Plusnet's tells me uses 250Mb an hour.

But it's clear that together online gaming and video streaming are having a dramatic impact on the amount of bandwidth consumers use - and they are increasingly having to pay for that. Mr Armstrong told me that a couple of years ago his average customer would rarely use more than 2gb a month, whereas now that's up to around 7gb. He said a third of customers using Plusnet's 15gb a month service were now finding they needed to top up, at 75p a gigabyte, for extra bandwidth. In other words, without really noticing, we're now paying more to go on a Warcraft quest or catch up on that missed episode of Strictly Come Dancing.

In my case, it means I'm going to have to shell out to raise my 25gb service with another ISP to 50gb a month. Ah well, I suppose it's worth it as long as World of Warcraft is quite as educational an experience as my son claims. It's certainly taught me a bit more about internet economics.

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Pitch perfect? Start-ups in Stockholm

• Rory Cellan-Jones
• 16 Oct 08, 16:35 GMT

In Stockholm this week all sorts of smart young technology firms have been pitching their wares to venture capitalists at ETRE, the European Technology Round Table. They each were allowed to present for around 10 minutes, and then took questions. Among the fashionable technologies were semantic search, mobile gaming and all kinds of new ways to use video online.

I decided to make life even harder for the entrepreneurs. I picked four companies and asked them to do what I called the 30 second pitch, explaining their business in language that everyone, not just potential investors, might understand. As you'll see not all of them achieved that - or kept to time

First to take the test was Jonas Homber from Jaycut, an online video editing tool. The idea is that you and your friends upload your video footage onto the service then collaborate to edit the rushes together into a short movie. As someone who uses free desktop editing software - and has no desire to collaborate - I don't quite get the point, but Jaycut has already signed up the retailer Ikea, which is using the service to let customers edit videos about their home decoration projects.

Another player in the increasingly crowded "smarter search" field, Semanti aims to give you better results by developing an understanding of the pages that you visit. Rather than expect searchers to abandon Google for a new site, Semanti is a plug-in that sits on top of the search engine, and interprets your search terms as you type them in. It's multi-lingual so will understand, for instance, that "pomme" and "apple" are the same thing - but could also be either a fruit or a computer firm.

This is a business which is convinced that casual, multiplayer, cross platform gaming is the route to riches. It offers a range of very simple (or at least low graphics) games such as Sudoku, poker and chess, which can be played on mobile phones, on a PC or on interactive television. From its base in Prague, it's built an audience of around a quarter of a million daily players, and claims that it will have 2.5 million by the end of next year, thanks to a new platform it's building. Like so many online businesses, it's dependent on advertising for revenue. I suppose it all depends on whether you think that many people want to a) play Sudoku on their mobile b) watch adverts before they get their gaming fix.

Speaking of adverts, Video Plaza aims to tackle what is becoming a huge problem for the economy of Web 2.0 - how to make money from online video. This company thinks it has the answer, devising ways of serving up adverts in and around video content, without apparently driving away viewers. It highlights a deal with Sweden's biggest commercial television channel, which it claims has tripled the revenue the channel earns from advertising around its web video. The answer seems simple - more adverts, with some popping up during videos as well as before they're played. Not something you will see on this page.

So four companies, and four pitches. I've got no money to throw at them - but let's hear from you. Which of these ideas merits investment in these troubled times?

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MySpace the moneymaker

• Rory Cellan-Jones
• 15 Oct 08, 14:48 GMT

They're the forgotten company of social networking - less fashionable than , less techie than , less useful than . But maybe is the only one of them that's making money. That at least was the message I took away from a meeting at Stockholm's European Technology Round Table with Travis Katz, who runs all the network's activities outside the United States.

He's quite a contrast with Mark Zuckerberg of Facebook who I met last week - and that tells you something about the difference between the cultures of the two businesses. Mr Zuckerberg seems like any young developer you might meet in college or at a Silicon Valley start-up. He's shy, focussed on coding rather than commerce, and passionate about making his product better - though he finds that passion hard to communicate.

Travis Katz is older, more at ease with a crowd - I met him as he got off the stage after a pretty fluent half-hour chat in front of the banking and technology audience of ETRE. He studied politics at college and was amused by the spat that we'd just seen on stage between market fundamentalist Tim Draper and democrat donor Rob Glaser, without ever revealing his own politics. He is just as passionate about MySpace as Zuckerberg is about Facebook - but far more comfortable about talking about the business as well as the user experience.

MySpace has of course been in the warm embrace of the Murdoch empire since 2005, and Mr Katz indicated that this wasn't a place where you just got on with growing the audience size and let the bottom line go hang.

He was keen to point out that MySpace had been profitable from the start, and had achieved revenues of $850m last year: "That's phenomenal for a company that's only five years old...it took Google and Yahoo eight years to get that far...we're monetising faster than almost any company that's come before us on the internet."

I wondered whether, in the harder times we're now facing, there was going to be room for as many Web 2.0 companies as there are out there right now. Here's what Travis Katz had to say - in an audio interview rather than the video version you'll see above:

"Some of these guys are going to fail. If you haven't figured out your business model by now and you're heading into these tough economic times I think you should be worried. If you don't have money coming in, you're going to burn through your cash."

Just about all of these social networks and other Web 2.0 companies have actually figured out that their business model depends on advertising - the trouble is they haven't really convinced their audiences of that. And while online ad spending continues to grow it's bound to flatten out if we have a serious recession.

So MySpace may look pretty annoying to the jaundiced eyes of an older networker - but, with a core audience that has grown used to seeing adverts it may have a better chance of coming out the other side of a downturn than some of its rivals.

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Hope and fear in Stockholm

• Rory Cellan-Jones
• 15 Oct 08, 10:30 GMT

Here's one new company that wants to offer a whole operating system in the internet "cloud", then there's another with a system to help you manage all of your online passwords - oh and here's someone who has found a clever new way to navigate web pages.

They're all trying to impress a room full of investment bankers and venture capitalists. This is ETRE, the European Technology Round Table, holding its nineteenth annual event which tries to put tech companies together with the financiers who might fund them.

But the gathering at a Stockholm hotel could not come at a worse time. There has not been a single new tech company launched on the stock markets in New York or London this year, and everyone in the world of finance is in a state of shock, reeling from events which have made them question all the accepted wisdom of the last twenty years.

The crowd gathered at a Stockholm hotel from across Europe and from the United States seemed divided, rather like passengers on the Titanic, between desperation and hope. You could have excused the European crowd for being confused because the event opened with an extraordinary series of speeches from American speakers with very different views of the world.

If you believe Tim Draper, CEO of the venture firm Draper, Fisher, Jurvetson, our present predicament is all the fault of the "the government, the lawmakers, and the media." Mr Draper, whose impressive track record includes backing firms like Skype, Hotmail and Baidu, told the audience that there had been a century long battle between communism and freedom, suggesting that the current round of government intervention was a victory for communism, but went on to proclaim huge optimism about the future of markets and technology.

He also revealed that he had sent his DNA into space in the hope that aliens would find it and "grow entrepreneurship forever", and tried to lead the crowd in a song he'd written called "Endeavour Forever".

Rob Glaser, the CEO of Real Networks, then took to the stage to say this was "one of the most insane weeks ever to preach market fundamentalism," and insisted that recent events showed that some government regulation was necessary.

While he took a much more gloomy view of the market and the prospects for start-ups than Mr Fisher, he still believed that well-funded companies could continue to thrive - though firms which had entered the downturn with good technology but little cash might struggle.

Next, a series of hopeful technology entrepreneurs got their chance to shine in a session called "Show Me The Money". In a crueller version of Dragons' Den, they had to give a two minute pitch to a panel of investors explaining why they were worth backing.

Most got the thumbs down, with the panel chairman Alex Vieux of Red Herring being particularly savage. He interrupted a nervous Swede to tell him that he'd already fouled up by going over his allotted time, and then told a woman who'd joined with her husband to start a business that "husband and wife businesses never work. No investor wants to be the third in the bedroom."

You might have thought the start-ups would be shell-shocked but as they gathered for an evening reception in Stockholm's maritime museum, many told me they were still hopeful that the money they had spent to be at this event would not be wasted. Like all entrepreneurs, they appeared convinced that the merit of their ideas would shine out amid the gloom. Meanwhile in another corner financiers talked of the letter sent out last week by Sequoia - one of Silicon Valley's leading venture firms - warning its early-stage firms to bunker down, cut costs, and try to sit out the storm.

Over all of them loomed the magnificent centrepiece of the museum, a giant warship built for the King of Sweden in the 17th Century. It was more expensive and more advanced than any ship of its era - but sank in a hundred feet of water in Stockholm harbour a few minutes after it was launched, and was only recovered from the water in the 1950s, almost perfectly preserved. In other words, a technological triumph which turned into a disaster...make of that what you will.

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Is music winning the digital war?

• Rory Cellan-Jones
• 13 Oct 08, 09:20 GMT

Is there finally some good news to cheer up the music industry? The people behind a major piece of - the - would certainly have us think so.

Their press release is headlined: "Light in the tunnel for the music industry: revenue opportunities are increasing, illegal downloading is down." The truth is, it's still a mixed picture. There are signs that threats of action against illegal downloaders may be having an effect, but there's also evidence that the music-buying (or sharing) public is still pretty underwhelmed by the legal digital offerings.

The figures showing a fall in illegal downloading are pretty inconclusive - down from 43% of the 1500 sample last year to 39% in 2008. But look at the figure for teenagers, tomorrow's potential music buyers. A shade up at 58%, and this was also the group which said it was most likely to carry on swapping music for free. There was also a belief that legal download services just weren't good enough - two in three said that legal sites couldn't offer the range of music that they could get by file-sharing.

But there's vindication in this survey for the music industry's campaign to get Internet Service Providers to join their campaign against piracy. In July the big ISPs agreed to send warning letters to persistent illegal downloaders and it looks as though that may have had more success in putting the frighteners on the pirates than the threat of legal action by the music industry. 61% of illegal downloaders said they believed they were being monitored by their ISPs and 72% said they'd stop if they got one of those scary letters.

After years of snail's-pace innovation by the music industry, consumers suddenly have an embarrassment of choices when it comes to legal digital services. But this report shows they are often more conservative than we might expect. Radio was still by far the most important way of discovering new music, and, when it comes to acquiring music, there's still a degree of wariness about digital options.

The survey respondents were asked to rank different methods in order, including buying CDs, subscription services, free music supported by ads, downloading to a PC, buying a Nokia Comes with Music phone and downloading to a mobile. And, you've guessed it, buying CDs was number one by a mile.(A friend who dropped by while I was writing this has told me he has just spent over 拢80 on a Bob Dylan three-CD collection, after scouring London to find it. But that may say more about my friends than the state of the music business).

That doesn't mean that CD sales won't keep on falling, and what will worry the music industry is the lack of enthusiasm for one of its big new ideas to replace those lost sales, mobile music. The numbers downloading to their mobiles had actually fallen, and over half said they were just not interested in trying it out.

But let's not assume that this revolution has been stopped in its tracks - or that consumers aren't changing. One fascinating part of the report deals with social networking and its growing importance for music fans. So which was the top music network? YouTube. Yes, the site which started as a simple way to share your favourite video clips, was cited by 41% of the respondents as the most important network for music, sweeping past MySpace which was number one last year. Why? Because they've found that just about any music video ever made is on the site.

The next challenge for the music industry is to turn all that passion about music on YouTube and MySpace into cash. The survey floats an interesting idea, asking whether people would be willing to act as sellers of music on sites like YouTube and MySpace, promoting bands they like and then getting a commission for each sale. 43% of those asked warmed to the idea, so when your friends start boring on about some fantastic new album you need to buy, you may have to question their motives.

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Facebook's founder - too late to cash in?

• Rory Cellan-Jones
• 10 Oct 08, 18:58 GMT

The door opened and a tired-looking man in jeans, t-shirt and trainers walked into a cavernous room at London's Excel centre. He seemed pleasant, if shy, and younger than his 24 years - but this was the founder and chief executive of a business valued at 15 billion dollars last year.

It's quite sobering to meet a billionaire (on paper at least) who is half your age, and I was a little concerned about how our interview with Mark Zuckerberg might go. He's halfway through a whistle-stop tour of Europe and I'd been warned that he was jet-lagged and had been irritated by questions from German journalists about his youth, the way he dressed and his huge wealth.

And once we got underway another terrible thing became clear - he'd been media-trained. So at first his response to just about any question sounded the same. "We're all about new ways to share information...." The only answer was to interrupt, and that seemed to wake him out of his media-trained trance.

It was when we got down to the question of money that I really thought we were getting somewhere. When I interrupted him to ask whether he shouldn't have sold up and retired last year, when Facebook was being offered billions by the likes of Yahoo, he laughed. "What would I do?", he asked, obviously incapable of imagining a life of idle luxury, rather than one spent staying up all night coding and eating pizza.

He wouldn't tell me whether Facebook was now profitable - and one can assume it isn't - but insisted that the priority was to keep on building membership rather than worry too much about revenue. That sounded to me like a worrying echo of those dot com days of the late 90s when the accepted wisdom was that you worried about "eyeballs' on your site, rather than dollars in the bank.

Earlier this year, Bebo's founders, who'd once seemed equally determined to stay independent, sold up to AOL for $850 million, netting a fortune for Michael and Xochi Birch. That now looks like a fantastic deal - and in the deepening economic gloom, there won't be many more where that came from.

What came across though was Mark Zuckerberg's enthusiasm for what he did - he kept telling me how "psyched" he was - and his focus on the technology rather than the commercial side of the business. But you can't help wondering whether this time next year Facebook's founder will be a little less confident about the wisdom of staying solo.

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Facebook - still in fashion.

• Rory Cellan-Jones
• 9 Oct 08, 17:53 GMT

Remember Facebook? You know, that site that everyone was talking about last year? Hopelessly fashionable, and if you weren't on it and friends with about 500 other Facebookers you really felt out of the loop. Of course, that was before the credit crunch came along, sweeping away the London media obsession with the social networking site.

The tech crowd migrated to Twitter, which quickly became the medium of choice for everything from idle chatter to self-promotion to research. I use it for all of those myself and when I used it to asked Twitterers "do you Facebook too?" I swiftly got a rash of answers. Some were still keen, stressing it had a different purpose from Twitter and a different audience, but many expressed a certain weariness with Facebook:

"Twitter is much simpler,,, And I prefer the community feel with Twitter.

"I have a Facebook account but it is never used. I am pretty much exclusively Twitter these days."

"I've used FB for ages. Bored of it now tho"

"I've issues re the fact everyone is yr 'friend' regardless of relationship".

But guess what? While the eary adopters may have moved on, the rest of the country has kept on coming to Facebook. Some recent figures from Nielsen show it has 14 million users in the UK, spending an average of four hours and twenty three minutes a months with the site. That compares with 5.6 million for MySpace, and its users spent just 55 minutes a month there.

Now a year ago the two were neck and neck on around 6 million, so just at the very point when the media decided that Facebook was old hat, it was really beginning to take off. Which goes to show just how easy it is for journalists to assume, wrongly, that everybody is like them. And while Twitter, according to one report, has grown its UK audience fivefold this year and is more popular here than in the US, it's still very much a minority sport.

Facebook is definitely pulling in the crowds - but is it making any money? MySpace may be less popular outside the US but claims that it has been a profitable business since day one, by focussing on boosting advertising rather than membership. But Facebook - which appeared to be poised to win loads of advertising revenue through a host of new applications - may be struggling to deliver on that promise.

I spoke to a UK web developer this week, one of those who'd rushed to create new Facebook applications when the site opened up its platform. He admitted that he'd not made any serious money so far, and wondered whether the network itself was prospering. "The Facebook guys have had to work very hard to convince people to buy their ads," he said. "They're struggling to monetise it."

We hope to find out a bit more about this and other aspects of Facebook when we meet its founder on Friday. We'll be interviewing Mark Zuckerberg, the 24 year old who dropped out of Harvard to build a business that has been valued at as much as $15 billion, when he passes through London. If you've got any questions you think he shoud hear, let us know.

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Technology - the party really is over

• Rory Cellan-Jones
• 8 Oct 08, 12:50 GMT

On Monday last week I wrote here that the technology party might be over, and that the gloom pervading the financial sector could begin to affect high-tech firms. Since then - gosh, it seems a long time ago - a few things have happened.

Banks have tottered, an entire country has gone to the brink of bankruptcy, the London Stock Exchange has suffered its biggest one day fall for more than two decades, and the UK government has unveiled a 拢50bn rescue plan for the banks. As Torrid Tuesday has followed Manic Monday, the 大象传媒's crack alliteration team has been under enormous pressure.

And, almost unnoticed, technology companies have been sucked into this vortex of gloom. Let's look at a couple of companies beginning with A. Last Monday, Apple's shares opened at $128. Last night, they closed at $89 - and remember they had briefly topped $200 earlier this year. There has not been a shred of bad news about the iPod, the iPhone, or the iMac - but investors appear to have decided that these are just the kind of goods that hard-pressed consumers will now be more reluctant to buy.

On this side of the Atlantic, one of our more interesting technology businesses Autonomy, which specialises in search technology for big businesses, has recently entered the FTSE 100. But over the last week its shares have been tumbling as rapidly as the index as a whole. They started above 拢10, and last time I looked they were around 拢7.60. This despite a trading update in which the chief executive said Autonomy expected its third quarter results to be "significantly ahead of expectations".

The market has decided that the big enterprises which are Autonomy's customers will be trimming their spending too. And it's not just a few companies suffering - the New York Nasdaq and London Techmark index have been sailing steadily lower over the last 10 days.

So much for the big technology businesses - what about the fledglings? Bad news there too, I'm afraid. Not a single new technology firm has come to the stock market this year, according to the British Venture Capital Association. And further back the evolutionary chain, venture capital investment in start-ups is now stalling in the US, and it's hard to see that pattern not being repeated in the UK.

The reaction to this state of affairs by some is to decide that technology no longer matters and that the process of change will now go on hold for a few years. Or, as a colleague put it after overhearing me discuss some new smartphone: "The world is falling about our ears and all you can talk about is your silly little gadgets."

I think that is short-sighted. We are right in the middle of some fascinating shifts in the way we use technology - from the rise of social networking, to the mobile internet and the advent of cloud computing.

Last time we had a serious downturn in technology investment at the beginning of this decade, the world did not stand still. In a harsh climate, smart new ventures - from last.fm to Skype - were born, and consumer behaviour was transformed by the arrival of broadband.

So investors and entrepreneurs may be entering a chilly period when making money from new ideas becomes that much harder. But I think "silly little gadgets" will continue to transform our lives - and the visionaries who can look to the long-term and spot the Googles of the future may find that this is a profitable time to do business.

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Can LinkedIn win from losers?

• Rory Cellan-Jones
• 6 Oct 08, 12:09 GMT

If we are heading for a recession, there will be many losers, but a few companies will actually benefit from a downturn. They will include insolvency practitioners and pawnbrokers - but could a social network also be one of the winners?

When I was experimenting last year with all of the big networks and joined everything from Bebo to Facebook, from MySpace to SagaZone, a friend cautioned me against one particular site. "Don't bother with LinkedIn," he said,"It's for losers. People only join it when they fear they're about to be made redundant, and want to put their CV out there." My friend, a middle-aged advertising executive, is wise about the ways of the world, and while I had already signed up to , I mostly ignored it from then on, failing to respond to requests to join other people's networks.

Late last year I met LinkedIn's irrepressible founder Reid Hoffman at a Cambridge Union debate, where I got a few cheap laughs by describing his product as "Facebook for losers". But Mr Hoffmann - a charming, portly figure from the West Coast who was wearing a suit for the first time in his life that night - is the one laughing now.

His business appears to be going from strength to strength, winning plenty of funding from investors, doing advertising deals, and attracting new members. In recent days, the business sent me a very excited press release claimig that 28 million people - or "professionals" - have now signed up. And where are they coming from? You've guessed it, the finance industry.

The numbers joining from investment banking have doubled, and it's pretty clear why. LinkedIn conducted a poll and found out that 42% of its members felt that the current economic climate made their jobs less secure. In other words, they fear the axe is about to fall and they think that being part of a professional network could help them find another job. It sounds pretty desperate to me - and I still fail to see the attraction of a network where everyone is only interested in what you can offer them, rather than what you have to say.

Still, just in the last 48 hours I've received invitations to connect on LinkedIn from people who I already know from other networks such as Facebook and Twitter. What are they trying to tell me? That their jobs are in danger - or that mine may be soon?

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CNN, Steve Jobs, and a dodgy rumour

• Rory Cellan-Jones
• 3 Oct 08, 18:01 GMT

To what degree are mainstream media organisations responsible when they publish reports from bloggers or comments from viewers which turn out to be untrue?

The dangers of citizen journalism were graphically illustrated today when CNN published an inaccurate report from someone who claimed that Apple's boss Steve Jobs had been rushed to hospital after suffering a heart attack. Apple's shares dived in the minutes after the report was published. Here's what the piece said:

"Steve Jobs was rushed to the ER just a few hours ago after suffering a major heart attack. I have an insider who tells me that paramedics were called after Steve claimed to be suffering from severe chest pains and shortness of breath. My source has opted to remain anonymous, but he is quite reliable. I haven't seen anything about this anywhere else yet, and as of right now, I have no further information, so I thought this would be a good place to start. If anyone else has more information, please share it."

The report was not on CNN's TV channels or on its website but on iReport.com, which the cable news channel runs as a forum for anyone who wants to come and give news and views about anything.The slogan at the top of the site reads: "Unedited.Unfiltered.News."

When I contacted CNN, a spokeswoman was keen to stress that this was not their content - and it had been removed as quickly as possible. Here's the statement they sent me:

"iReport.com is an entirely user-generated site where the content is determined by the community. Content that does not comply with Community Guidelines will be removed. After the content in question was uploaded to iReport.com, the community brought it to our attention. Based on our Terms of Use that govern user behaviour on iReport.com, the fraudulent content was removed from the site and the user's account was disabled."

This kind of rumour would never be published or aired without checking by a major newspaper or broadcaster. But mainstream media organisations - including the 大象传媒 - are all under pressure to have a more open relationship with their readers and viewers, to prove that they "get" the Web 2.0 world.

The border between professional and amateur journalism is getting more blurred. But if a professional news organisation publishes an inaccurate piece by an amateur journalist, whose reputation suffers?

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Free prizes? Not quite

• Rory Cellan-Jones
• 3 Oct 08, 12:23 GMT

As Steve Ballmer made clear in our , Microsoft isn't giving up on search, despite being as he put it David to Google's Goliath.

But is the latest marketing idea for just a little bit, well, desperate?

Search with us and get free prizes appears to be the idea behind the competition that has just been launched. The top prize is a wireless Xbox 360 controller.

But we've worked out that even if you did 25 searches a day (the maximum permitted in the competition rules) for the 197 days until the promotion ends you still wouldn't amass enough points to win that prize.

Sorry Steve - you're going to have to try a bit harder if you're really going to win the search contest with Google.

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Who will be humming Nokia's tune?

• Rory Cellan-Jones
• 2 Oct 08, 21:28 GMT

It's supposed to be the biggest launch in digital music since Apple opened the iTunes store but until now we've been missing some key facts about Nokia's plan - such as what it will cost. Now we've got those details and can work out whether it will really change the world - or at least give Apple a run for its money. For that to happen, the service needs to satisfy three sets of people with very different interests - the record labels, the mobile phone industry and the music buying public.

The consumers

Let's start with the most important group. They are being told there's now the promise of "free" music with a mobile phone, as many tracks as they can download in a year - and a music collection they can keep forever. None of that of course is quite true.

The to feature "Comes With Music" will cost 拢129.95 and will be sold just as a pay-as-you-go phone - indicative of the audience it's aimed at. But without the music the Nokia 5310 can be got for around 拢70 - so in effect you're paying 拢60 for a year's downloads. Not bad - but your collection will be hedged around with restrictions. It will come wrapped in DRM, which means it can't be played on an iPod if that is your music player of choice. It will be restricted to two devices, your phone and a computer which both have to be registered with Nokia.

Once the year is up, you keep the music - but on those devices. If you buy a new computer - or Nokia handset - within two years you can transfer the music to them. What you don't have is the real ownership that you get with DRM-free music. Still, parents who are worried about their teenagers file-sharing may decide that buying them a mobile with music is quite a cost effective way of keeping them the right side of the law.

The music industry

Desperate for an alternative to Apple, the big record labels have been doing deals left, right and centre, but they must be hoping that mobile music is their best hope of a new business model. Nokia has far more customers worldwide than Apple, and many of them are from the generation which has grown up with the idea that music is something you get free from the internet. What we don't know is what kind of bargain has been struck with Nokia and the mobile operators - in other words, how that 拢60 will be shared out between the labels, tthe retailer, and everyone else who wants a bit. And will artists be rewarded for each free donwload - or will the DRM reveal how often every track is played, with bands getting a share related to their popularity? As Apple's current row over royalties from iTunes shows, there's plenty of scope for discord.

The mobile industry

For the handset makers the network operators and the retailers, what's not to like about the idea of building the digital music platform of the future? Nokia's plan doesn't allow users to download direct to the phone, so there's no extra data traffic for the networks to "monetise", but then again they will presumbly get their cut from the extra cost of the phone. Now that 5Mp cameras have become old hat, music will become the key marketing tool for new handsets, and a way of tieing customers in to a longer relationship. And don't you bet that all those dull old telecoms executives have cast envious looks at the way Apple has become even cooler by its association with the music business? Watch out for the Brit awards next year - the event will be packed with men in suits talking about ARPU, HSPA and MVNOs. Very rock'n'roll.

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A meek new Microsoft?

• Rory Cellan-Jones
• 2 Oct 08, 09:20 GMT

For years he has lived in the shadow of Bill Gates - in the public's mind at least - but the man who bustled into a room at Microsoft's London offices for our 20 minute interview was certainly no shrinking violet.

is a confident, extrovert character, and a more natural communicator than Microsoft's founder - but the most arresting line from our interview seemed to reflect a new humility at a company seen by some as the playground bully of the software world.

"We may be the "David" on this particular battle with "Goliath," he said, referring to the contest between Microsoft and Google in the field of search. He went on to admit that Microsoft had a "single-digit" share of the search market, that it had started investing in search too late, and talked with envy of Google being the "cute darling" of the technology world, just as Microsoft had been years ago before it ran into what he described as "legal things".

Later, when I asked whether it worried him that consumers didn't seem to love Microsoft he even went as far as talking of people having a "love/hate relationship" with Windows PCs, though he insisted they loved what their computers did, even if they lacked affection for the company behind it.

So does this mean that Microsoft has been transformed into an ever so humble little business, happy enough to tick over, and with no great ambitions to grow further? Not a bit of it. Mr Ballmer went on to explain that he was aiming Microsoft right at Google's search and advertising heartland - and even suggested that search was in desperate need of a bit of innovation.

He pointed out that it worked now much the same as it did five or six years ago, and it was time to move on. "Search is my favourite business," he said, explaining that when you had virtually nothing the only way was up: "Everything is possible, we have nothing to lose."

When I suggested that this plan had gone "pear-shaped" (does that expression work on the West Coast, I wonder?) when he'd failed to buy Yahoo earlier this year, Mr Ballmer said that deal had been "a tactic not a strategy". What the strategy is that will turn Microsoft into a force to be reckoned with in both search - and more importantly for the bottom line - online advertising, remains to be seen. But to underline those ambitions, Microsoft today unveils plans to invest in new R&D in the search field in Europe.

And there was nothing humble about Steve Ballmer's plans in the mobile field. Here there was a sideswipe at Google's Android operating system - a version 1.0 and it looks like it, was the verdict - and a dismissal of the idea that handset manufacturers would prefer an open-source solution to Windows Mobile. And where would Microsoft be compared with Android, Blackberry and Apple's iPhone (I left Nokia out of it) two or three years from now? Number one, according to Mr B.

Later this month at its in Los Angeles, Microsoft will outline ambitious plans to move its business away from what Mr Ballmer described as the "software on a DVD" model towards "cloud computing", where applications and user data are stored on huge server farms. It's another area where Google appears to have moved more nimbly.

Microsoft could just sit and watch the billions flow in from Windows and Office for years to come. But this Goliath of the software world has obviously been wounded by Google's search slingshot - and is promising to hit back.

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