Ford (F) recently released SYNC, a voice-activation package on some models that integrates the content and functionality of mobile devices with the car itself. SYNC also adds apps to the car, though it’s not clear what these features will mean for the future of American automakers.

Liveblog

Mullaly appears onstage wearing a very bright red vest. Vibrant!

At Walt’s request, Mulally shows off a piece of paper with handwritten notes that purport to explain Ford’s interest in all things digital. Lots of computers are involved in the creation of your Taurus.

12:30 pm: Kara wants to know why cars have been basically digitally ignorant for a long time. Walt: You open the door to you car and it’s 1957 again. Why is that?

For the record, Mulally doesn’t think you should text and drive.

He also wants you to keep your hands on the wheels and eyes on the road. So there’s lots of digital stuff being built into dashboard and console. Like the SYNC iPod/phone, etc., manager.

Ford is playing around with features like allowing drivers to have their text messages read to them. But safety is paramount. All of our data says your safest operation is when you have your hands on the wheel and eyes on the road. But right now, we feel that listening to email and text is a good first step. But we don’t want you sending email and text via voice, at least for now.

12:35 pm: Kara–Why is this taking so long? [i.e., "where is my jetpack?"]

Walt: Yeah! Even fancy German and Japanese cars don’t do it well. It’s pathetic!

Mulally: Don’t blame me! I just got here. Part of the problem is that car development is much slower than consumer electronics R&D cycle. For instance, a lot of competitors have embedded a phone in the car. We’re avoiding that and focusing on interface, so as consumers exchange and swap devices, they can do that.

12:38 pm: A pitch for “My Ford Touch,” which seems to have lots of bells and whistles, but sounds confusing to this frequent walker and subway-taker.

12:39 pm: Walt tries explaining it. “The instrument cluster, which has been on steering wheels forever, is now going to be a on a screen.”

Mulally: Right. We want to make it intuitive. Etc.

12:40 pm: Still trying to explain it. Screen goes on steering wheel and allows customizable controls for operating car, as well as extras.

12:41 pm: Kara–what is that people want to do, anyway?

Mulally: Good question. We watch what people do in cars and try to help them do it, because they’re going to do it anyway. For instance, we’re building in Pandora to our cars. You’ll get the music via the Web, from your cellphone, but you’ll operate it on our panel. Also Stitcher, Open Beak, etc.

A lot of people here are using apps. You’ll get to use them in the car.

12:43 pm: Walt–Will you need a special Ford version of these apps?

Mulally: Yep. You use our API

12:44 pm: Kara wants better navigation services. She doesn’t want to hear a mean German lady giving her directions though.

Walt: Yeah! All of your GPS systems are lousy! The ones on phones are better!

Mulally: We’re with you. That’s why we want to rely on developers to build the good stuff, via our API.

12:47 pm: Let’s talk about the car industry, period. You just got here. You were in aerospace, before. Also, the whole oil spill thing does change the way we look at cars, right?

Mulally: Before I left Boeing (BA), I thought about where the car industry was going. What I decided was that the industry is the soul of Manufacturing–“big M”–all around the world. Lots of stuff goes into this, no matter what country or region. It’s also part of the solution to economic growth, energy independence and environmental sustainability.

On that note: Clearly, the internal combustion engine is going to be around for a while. But we can make them operate more efficiently, etc. Take a v6 and make it run like a v8m, etc. Meanwhile hybrids are tough because you have two different systems: Batteries and internal combustion. Then in the future, we need to move to all-electric. We have a great road map for all of this. First all-electric cars launch this year. Hydrogen is farther out, don’t have the tech for it yet.

12:52 pm: Mulally describes challenges of electric car–need to figure out how and where to get the juice to cars.

12:53 pm: Kara–What about health of business?

Mulally: I like being here much better than testifying in front of Congress.

Kara: How did you get here?

Mulally: I flew! That’s why we have airplanes. For long-distance travel.

12:53 pm: A Zuckerberg hoodie joke.

12:54 pm: Mulally–Time goes fast. Last year, I was testifying on behalf my competitors, who were bankrupt. Now I’m a capitalist. But if GM and Chrysler went away, they’d take the supply base along with them, and they’d probably have put the U.S. into a bona fide depression.

I was asking for temporary help. I didn’t think all of us would end up owning our competitors.

12:57 pm: Mulally–Recovery is coming, by the way. We’ll have 3.5 percent expansion of GDP this year. And Ford is doing well. We’ll have market-share increases.

Kara: What kind of car do you drive?

Mulally: A different one every night.

Q&A

[I hope someone asks about the New York Times series that said that anything you do in your car besides driving is a safety risk. Anyone?]

Q: Please talk about the Mercury situation.

A: We had too many brands. Ford, Mercury and Lincoln. Mercury was supposed to be a gap-bridger between Ford and Lincoln. But the Ford line expanded, so we didn’t need Mercury. “Everybody’s got great options in Ford.” It’s also good news for Lincoln–because we don’t have other premium brands anymore, we’ll refocus on Lincoln for luxury.

Q: Proud Tesla owner Jason Calacanis wants to know why electric isn’t everywhere already.

A: We can make electric cars, but as you know, we can improve them, like battery life.

Calacanis: No. It’s not a problem. Batteries are great at Tesla.

Mulally: Nope. Most of them are too big, too heavy. There’s a lot of room to improve the batteries.

Other point is that the infrastructure has to get there. You need charging stations for people in apartments, in rural areas, etc. When we get there, Ford will be there.

Kara, and Walt want Jason to tell us how much his Tesla cost. Astonishingly, he goes mute.

Q: Did you really say you don’t intend to get a revenue stream from connectivity of cars to data? You don’t want a piece of money made by Yelp, Garmin, etc.?

A: You heard me correctly. We’re laser-focused on safe and efficient transportation. So there’s no conflict of interest.

Q: Walt wants to if these electronics actually sell cars.

A: I demoed this stuff for you, and you’re a tough critic, and you said “whoa!” This technology is absolutely a differentiator.

Q: You’re talking about innovation in cars. Does dealer network have to change too?

A: Absolutely. We’ve been right-sizing the dealer network to match demand for five years. Once you do that, throughput goes up, profitability goes up, interest in improving facilities goes up, etc. Then we can improve consumer experience.

Walt: Because it’s terrible right now.

Mulally agrees without saying so.

Q: China is pushing hard for electric cars. What does that mean for you?

A: I think China is going to continue to take a real leadership position on this. Big population, and they have a chance to really make a difference and maybe leapfrog the past.

Q: There’s that great Ford quote about not listening to his customers, because if he did he’d be in the horse business. So how you do innovate?

A: Stay closet to innovation. And have a point of view about how the industry is going to progress.

Q: Ah! Someone asked about focusing while you drive.

A: Eighty percent of accidents involve taking your eyes off the road. So we’re convinced that the mind has the cognitive ability to do other things while driving as long as you continue to watch the road. So we minimize anything that’s a distraction: Keyboard, certain confusing apps, etc. We are definitely going to be a gatekeeper with regard to apps, because it’s crucial that you not be distracted.

We’re done! Thanks for sticking around. See you in a year!

A note about our coverage: This liveblog is not an official transcript of the conversation that occurred onstage. Rather, it is a compilation of quotes, paraphrased statements and ad-lib observations written and posted to the Web as quickly as possible. It is not intended as a transcript and should not be interpreted as one.

BoomTown did an interview last night with outgoing RealNetworks (RNWK) CEO Rob Glaser after the announcement yesterday of his departure from the company he founded and led for 16 years.

That will be posted later today, but here is a profile of Glaser I wrote after spending time with him in Seattle, when I was covering the Internet for The Wall Street Journal.

It’s from Feb. 12, 1998–yes, that means Rob and I are genuine Web antiques–and focuses on Glaser’s decidedly complicated relationship with his former employer, Microsoft (MSFT).

As you will see, it comes from a much different era of the Internet, when Microsoft was much scarier, RealNetworks represented innovation and the medium was still in its infancy. My favorite line is a description of Glaser as “radiating so much intensity that his face resembles a clenched fist.”

Here it is:

Rob Glaser learned the software business as one of Bill Gates’s most aggressive proteges at Microsoft Corp. So he knows all too well the anguishing strategic decision that most software entrepreneurs inevitably confront: Go head-to-head against Mr. Gates and risk annihilation. Or cooperate with him–and risk annihilation.

Now an Internet entrepreneur himself, Mr. Glaser thinks he has another strategy: A delicate dance with Microsoft that combines a little bit of competition and a little bit of cooperation.

His newly public company, RealNetworks Inc., popularized the use of realtime audio and video on the Internet’s World Wide Web. It already has more than 18 million registered users of its free “streaming” software for receiving multimedia over the Net. It also has a rapidly growing business selling server software for transmitting audio and video to Website operators.

But it stands squarely in the path of the strategy that has drawn Microsoft into trouble with antitrust regulators: Emulating innovative products, integrating them into its operating systems and then giving them away free. RealNetworks’ daunting task is to prove it can do a better job of outmaneuvering Microsoft than Netscape Communications Inc., the browser pioneer whose market share and profitability have been devastated by Microsoft’s integration strategy.

Mr. Glaser insists he and the software giant can coexist. “I learned an amazing amount from Bill,” he says, speaking in staccato bursts and radiating so much intensity that his face resembles a clenched fist. “We knew we could either compete head-on like Netscape or do something a lot more interesting.”

His strategy is known internally as “coopetition.” Out of mistrust, Netscape two years ago rejected an unsolicited offer from Microsoft to become a partner and investor. But Mr. Glaser approached his former colleagues last summer seeking just such an alliance. In July, he sold a nonvoting 10% stake to Microsoft for $30 million, and licensed RealNetworks’ technology to the software giant for another $30 million. Microsoft also agreed to bundle RealNetworks’ software with Internet Explorer.

In making the deal, Mr. Glaser helped himself to Microsoft’s cash and prestige and calculated that Microsoft wouldn’t consider streaming technology to be as strategic to its future as the browser.

“What we were trying to do in the partnership is to set it up so that our success would not disadvantage their core business,” Mr. Glaser says. “Microsoft is a very paranoid company and so we have tried to create an environment where while they might be covetous of some of our success, analytically they would not fear it.”

The deal gave Mr. Gates the opportunity, if he so desired, to clone RealNetworks’ products during the period when they were licensed to Microsoft. “There’s no question they could use our own technology to become extremely vigorous competitors and try to put us out of business,” says James Breyer, a director and member of Accel Partners, a venture-capital firm that helped finance RealNetworks.

So Mr. Glaser needs to stay ahead of Microsoft by rapidly improving his software, accumulating enough customers to become the standard for sending audio and video over the Internet and diversifying into related businesses.

Last month, for example, he announced an agreement with one of Microsoft’s archrivals, Sun Microsystems Inc., to finetune his software to perform better on Sun’s popular Internet servers than on Windows-based servers.

“They are neither friend nor foe, but Microsoft is most certainly the environment we live in,” says Mr. Glaser, now 36 years old. “It’s how we work within that environment that will make all the difference.”

Mr. Glaser’s own personality seems suited to the relationship’s contradictions. He has been a committed liberal since his days at Yale University, where he wrote a column called “What’s Left” for the student newspaper. He initially named his company Progressive Networks to reflect his politics. And he donated 700,000 RealNetworks shares to causes related to freedom of speech and environmental issues after the public offering, and promises to contribute 5% of the company’s future profits as well.

But he became a notoriously hardcharging and sometimes arrogant manager after he joined Microsoft in 1983, at the age of 21. Some colleagues dubbed him a “screamer.” When deadlines approached for projects, several former colleagues at Microsoft say he became increasingly revved-up, downing one Diet Coke after another and erupting at even tiny mistakes. “My intensity sometimes manifested itself in less positive ways,” Mr. Glaser concedes.

“Like Microsoft, Rob was smart, young, perhaps a little hard to take, and convinced he was absolutely right about a lot of stuff,” recalls Mike Slade, a friend of Mr. Glaser’s at Microsoft who now runs an Internet publishing company, Starwave Corp. “But that was what was rewarded at the company and everything was going too fast there for a lot of management training.”

The pace did take its toll. Even though Mr. Glaser rose to become vice president of multimedia systems and one of Mr. Gates’s favorites, his last years at Microsoft were rocky. Some at the company point to an internal power struggle with Microsoft’s head of technology, Nathan Myhrvold. “They both wanted to be Bill’s boy genius and visionary for the company,” says a colleague. “Obviously, Nathan won.”

Mr. Glaser dismisses tales of infighting, blaming his departure on a diminishing feeling of “joy” in his work. “I began to think that Bill had the best job of all,” he says. In 1993, at the age of 31, he resigned, with about $15 million of stock in his pocket.

His retirement didn’t last long. Soon after, he saw a version of the Mosaic browser, the first graphical interface software for navigating the Web. He had an epiphany, he says, realizing that the Internet could eventually become a major purveyor of audio and video.

Mr. Glaser sank about $1 million of his own money into a start-up that would first produce software for compressing and transmitting sound. With additional funding from friends, such as Lotus founder Mitch Kapor, RealAudio 1.0 quickly made its debut in April 1995.

RealAudio was greeted with more than a little disdain from the Internet elite because it was a tinny and unsatisfying experience for most users. But it gave the Internet a voice, and Mr. Glaser kept plugging away, improving fidelity and striking deals with more content providers to use it on their Web sites. The hook: Free player software for consumers.

He is attempting to repeat the process with RealVideo. It currently provides small, jerky moving pictures but will, he believes, someday transform the Internet as data transmission speeds increase. In a recent demo of the player, Mr. Glaser selected a music video by the languid singer Jewel, he joked, “because she doesn’t move around too much.”

Meanwhile, Microsoft has been developing its own Media Player and NetShow streaming software, partly with technology acquired by purchasing VXtreme, a RealNetworks competitor.

The Microsoft products are now free. But the company may decide to charge for the latest version of NetShow coming out this year, which would be good for RealNetworks. Meanwhile, Microsoft will continue to bundle RealNetworks’ player software with the Microsoft browser, also good for RealNetworks. And the day after RealNetworks’ Sun deal, Microsoft announced an agreement to make its own Media Player compatible with RealNetworks’ server software, yet another positive development for RealNetworks.

“The user only wants it to work,” says Rich Tong, a Microsoft marketing vice president. “So it is good business to work with RealNetworks to set standards for compatibility and expand the market for all of us.”

Skeptics assert that RealNetworks has forged only a temporary truce with Microsoft. Like Netscape, it must continually confront the challenge of trying to make money on technology that Microsoft gives away. RealNetworks charges $29.95 for an enhanced version of the player it gives away free, and $695 and up for its most powerful server software.

Some large companies are snapping the products up. Mercedes Benz, Eastman Kodak and Lockheed Martin are buying RealNetworks’ latest software, RealSystem 5.0, to bring their internal networks to life. Boeing Co., for example, uses RealNetworks’ software to communicate with employees world-wide and conduct training sessions. A variety of media concerns such as Metro-Goldwyn-Mayer, the Public Broadcasting System, AOL, Fox News’s 24-hour newsfeed and Paramount Pictures use it as well.

Mr. Glaser recently cut a deal with Macromedia Inc., the largest provider of animation-editing software, to transmit animated material over the Internet. RealNetworks is also operating multimedia Web sites for other companies, and has a joint venture with MCI Communications Corp. to create a broadcast network on the Web.

All these initiatives are running up big bills. Earlier this month, RealNetworks reported that revenue more than doubled for 1997, to $32.7 million from $14 million the year before. But heavy research and development spending tripled losses to $11.2 million, or 40 cents a share, from $3.8 million, or 14 cents a share. The company’s high costs, plus the looming threat of Microsoft, have depressed the stock, which hovers at around $16 a share, only slightly above the $12.50 a share it opened at when it went public in November.

But Mr. Glaser exudes confidence. His intense personality seems calmer these days. Once divorced, he now has a steady girlfriend and is traveling more frequently, including a summer trip to New Zealand, Australia and French Polynesia, where he made the decision to take RealNetworks public. His 13.5 million shares are worth $218.5 million. And he thinks he has Microsoft figured out. “People in Silicon Valley see things unnecessarily in black and white: You either hate Microsoft or you are a vassal of them. I am saying there is a third way.”

The company noted that the jury awarded ICO another $91.6 million from Boeing Satellite’s parent company for “tortious interference.” ICO said whether it can collect $91.6 million from Boeing in addition to the $371 million from BSSI will be the subject of further proceedings.

The award does not include any prejudgment interest to be applied by the judge in the case under California law. The jury also has yet to decide whether to award any punitive damages; a hearing on that question will begin Oct. 28.

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Larry Page and Sergey Brin are not your typical billionaires. In fact, if you type billionaire into Google, the picture that emerges–fancy cars, private jets, mansions, jewels, supermodel girlfriends–isn’t anything you’d find in the lifestyle of the Google guys. Page drives a Prius, which costs around $21,000. Brin gets around for the most part on in-line skates, and he still lives in a rented apartment.”

–ABC News, 2004

With its onboard hammocks, full-size sofas and California King beds, it’s a wonder Google’s “party plane” has room for scientific instrumentation befitting the National Aeronautics and Space Administration, but apparently it does. Google and NASA’s Ames Research Center signed a unique deal last month that allows the agency to “regularly collect Earth atmospheric and terrestrial observations in support of science research and analysis” on some of its flights.

In exchange, Google gets to park its customized wide-body Boeing 767-200, as well as its two Gulfstream Vs, on Moffett Field–a NASA-managed airport that is generally closed to private aircraft–for $1.3 million a year. “It was an opportunity for us to defray some of the fixed costs we have to maintain the airfield as well as to have flights of opportunity for our science missions,” Steven Zornetzer, a NASA official, told the New York Times. “It seemed like a win-win situation.”

For Google, certainly, but not for local residents, who’ve long opposed commercial use of the federally owned airfield and who worry that the deal could open Moffett up to other private flights. “The Google flights represent the possibility that the camel’s nose is under the tent, and that NASA is looking at opening up the use of the runways to help pay for it,” said Lenny Siegel, director of the Pacific Studies Center. “The majority of the people in the community are against that. If they are doing science missions, that’s OK. If they are doing it just because they are rich and popular, it is not OK.”

Larry Page and Sergey Brin are not your typical billionaires. In fact, if you type billionaire into Google, the picture that emerges–fancy cars, private jets, mansions, jewels, supermodel girlfriends–isn’t anything you’d find in the lifestyle of the Google guys. Page drives a Prius, which costs around $21,000. Brin gets around for the most part on in-line skates, and he still lives in a rented apartment.”

–ABC News, 2004

With its onboard hammocks, full-size sofas and California King beds, it’s a wonder Google’s “party plane” has room for scientific instrumentation befitting the National Aeronautics and Space Administration, but apparently it does. Google and NASA’s Ames Research Center signed a unique deal last month that allows the agency to “regularly collect Earth atmospheric and terrestrial observations in support of science research and analysis” on some of its flights.

In exchange, Google gets to park its customized wide-body Boeing 767-200, as well as its two Gulfstream Vs, on Moffett Field–a NASA-managed airport that is generally closed to private aircraft–for $1.3 million a year. “It was an opportunity for us to defray some of the fixed costs we have to maintain the airfield as well as to have flights of opportunity for our science missions,” Steven Zornetzer, a NASA official, told the New York Times. “It seemed like a win-win situation.”

For Google, certainly, but not for local residents, who’ve long opposed commercial use of the federally owned airfield and who worry that the deal could open Moffett up to other private flights. “The Google flights represent the possibility that the camel’s nose is under the tent, and that NASA is looking at opening up the use of the runways to help pay for it,” said Lenny Siegel, director of the Pacific Studies Center. “The majority of the people in the community are against that. If they are doing science missions, that’s OK. If they are doing it just because they are rich and popular, it is not OK.”