And these aren’t the kind of cyber attacks carried out by bumbling troublemakers like the LulzSec gang, which make headlines but really only cause a nuisance for companies like Sony. In these cases, networks were compromised by remote access tools — or RATs, as they’re known in the industry. These tools — and they are tools, because they have legitimate uses for system administrators — give someone the ability to access a computer from across the country or around the world. In this case, however, they were secretly placed on the target systems, hidden from the eyes of day-to-day users and administrators, and were used to rifle through confidential files for useful information. It’s not for nothing that McAfee is calling this Operation Shady RAT.

McAfee says the attacker was a “state actor,” though it declined to name it. I’ll give you three guesses who the leading candidate is, though you’ll probably need only one: China.

Dmitri Alperovitch, McAfee’s Vice President, Threat Research, makes a statement in his blog entry on the discovery that should give everyone minding a corporate or government network pause: “I am convinced that every company in every conceivable industry with significant size and valuable intellectual property and trade secrets has been compromised (or will be shortly), with the great majority of the victims rarely discovering the intrusion or its impact.” He further divides the worldwide corporate landscape into two camps: Those who have been compromised and know it, and those who simply don’t know it yet.

This has been a particularly nasty year on the cyber security front. (I hate to say it, but I told you so.) Prior to this, the big attack whose full impact has not yet been fully sized up was the one against the RSA SecureID system, which uses popular keychain devices that create a constantly changing series of numbers that in turn create a second password for access to system resources. They’re widely used in government and military circles and among defense contractors. Google has been a regular target in recent years.

The RSA attack and Operation Shady RAT are examples, Alperovitch says, of an “Advanced Persistent Threat.” The phrase has come to be a buzzword that, loosely translated into English, means the worst kind of cyber attack you can imagine. Unlike the denial-of-service attacks and network intrusions carried out by LulzSec and its ilk, which require only minimal skill and marginal understanding of how networks and servers work, an APT is carried out by someone of very high skill who picks his targets carefully and sneaks inside them in a way that is difficult to detect, which allows access to the target system on an ongoing basis that may persist for years.

How did these attacks happen? Its very simple: Someone at the target organization received an email that looked legitimate, but which contained an attachment that wasn’t. This is called “spear phishing,” and it has become the weapon of choice for sophisticated cyber attackers. The attachments are not what they appear to be — Word documents or spreadsheets or other routine things — and contain programs that piggyback on the targeted user’s level of access to the network. These programs then download malware which gives the attackers further access. This all happens in an automated way, but soon after, live attackers log in to the system to dig through what they can find, copy what they can, and make a getaway — though they often leave the doors unlocked so they can come back for repeat visits.

Alperovitch notes — correctly, to my mind — that the phrase has been picked up and overused by the marketing departments of numerous security companies. His larger point is that too often those attacked in this way refuse to come forward and disclose what they’ve learned, thereby allowing the danger to continue for everyone else.

Alperovitch says that the data taken in Operation Shady RAT adds up to several petabytes worth of information. It’s not clear how it has been used. But, as he says, “If even a fraction of it is used to build better competing products or beat a competitor at a key negotiation (due to having stolen the other team’s playbook), the loss represents a massive economic threat not just to individual companies and industries but to entire countries that face the prospect of decreased economic growth.” It’s also bad for a target’s national security, because defense contractors dealing in sensitive military matters are often the targets. The best thing that can happen is that victims start talking about their attacks and sharing information with each other so that everyone can be ready for the next one, which is surely coming.

You’ve probably heard a lot about telemedicine over the years. The idea is that since doctors can’t be everywhere they’re needed, particularly when it comes to large yet sparsely populated areas, a good videoconference with a doctor is almost as good as an in-person visit — especially when it’s a routine visit, and the patient or doctor would otherwise have to travel. Obviously, it’s not always the optimal choice. But when you’re not feeling well and need to see a specialist, how much better would you feel if you have to drive 200 miles and back to get to an appointment?

The Canadian province of Ontario is a pretty big place, reaching from the Great Lakes to Hudson Bay. Most of the population is concentrated in the Canadian capital of Ottawa, and in what’s called the “Golden Horseshoe,” reaching from Toronto west to Waterloo (notably the home of Research In Motion) and northeast to Peterborough. But there are a lot of people spread out in smaller communities.

The Ontario Telemedicine Network has 3,000 health care professionals working at 1,175 sites around the province, and its Web site says it will deliver 135,000 patient visits this year. That works out to more than 500 visits per business day. The existing network is built primarily on gear from Cisco Systems and Polycom, and runs on a private network.

The plan is to expand the service so that patients can see a doctor from the comfort of their own homes. And that’s where Vidyo comes in.

One thing that helped Vidyo land this deal, CEO Ofer Shapiro told me, was that it was relatively easy to deploy alongside the OTN’s existing system. Vidyo has a rich set of APIs that allow programmers to marry it up with workflow and scheduling systems already in place. “It’s not just a simple matter of taking a call and connecting the patient with the doctor. It has to be scheduled, it has to be logged, there’s a lot of compliance issues that have to be considered, and it also has to be 100 percent private,” Shapiro told me.

The other thing in Vidyo’s favor is a technology called Adaptive Video Layering. And while it sounds like a bit of gibberish, it’s actually pretty useful. Since not everyone has the same kind of high-quality video network — either in the home or the office, or anywhere else, for that matter — the video stream can be adapted to the network conditions it encounters.

Howard Lichtman, an analyst and consultant specializing in videoconferencing technologies with the Human Productivity Lab, tells me that Vidyo essentially breaks a video stream into three segments, and then, depending on the network conditions, it will select the segment that’s best suited to the network in use. The end result is that even on slower networks there’s not the same loss of quality that’s experienced on other products.

Lichtman tells me this deal was a big one, which all the significant video players had bid on. “It’s one of the biggest, if not the biggest network like it in the world,” he told me. “Everyone was showing up to bid.”

Until recently, Vidyo was focused primarily on the desktop video business, but it has aimed its sights at higher-end office conferencing systems. Backed by $74 million from Menlo Ventures, Rho Ventures, Sevin Rosen Funds, Star Ventures and the Four Rivers Group, it has been going after the higher-end videoconferencing market, hoping to undercut Cisco and Polycom with less expensive solutions.

Just last week, Ricoh, the Japanese office equipment company, said it is using Vidyo’s technology as the basis for its office teleconferencing system. But it’s also showing up in other, more consumer-oriented places: Vidyo is one of the technologies behind Google Hangout on the social network Google+. Suddenly Vidyo is showing up wherever there’s video. Did I say the other guys might be starting to worry? It’s because of stuff like this.

The deal with Industry Canada calls for the sharing of commercial spectrum in the 700 megahertz band as well as some spectrum in the 800 MHz band, while the deal with Mexico’s Secretariat of Communications and Transportation is focused solely on the 700 MHz band.

“These arrangements will unleash investment and benefit consumers near the borders by enabling the rollout of 4G wireless broadband service and advanced systems for critical public safety and emergency response communications,” FCC Chairman Julius Genachowski said in a statement.

That’s an awful lot of money to pay for such a relatively young company, and frankly I expected more skepticism about it from investors and analysts, mainly because I was skeptical about it myself. But I have to admit, it’s growing on me the more I look at the numbers.

First off, there’s the valuation of Radian6. Salesforce said it was on a run rate to deliver $35 million in annual revenue and is expected to bring in $50 million this year. The price paid works out to somewhere between six times forward revenue, which isn’t unreasonable, especially when you consider that Salesforce itself is trading at about eight times the average estimate of its fiscal 2012 revenue.

Unlike the Heroku acquisition, for which Salesforce paid $212 million, Radian6 is going to be bringing in revenue on a cash-flow positive basis right away. Heroku’s annual revenue was much smaller and is going to take a longer time to build up, which has a lot to do with some of the criticism Salesforce has faced over that deal.

Then there’s the issue of Salesforce’s cash. While the balance sheet on Salesforce’s latest 10K shows a combined amount of cash and short-term investments of $497 million, there’s an additional $911 million in marketable securities on the balance sheet with investment horizons of between one and three years. Derrick Wood, an analyst at Susquehanna Securities, tells me these are most likely government Treasury Bills that can be converted to cash relatively easily.

According to the hard accounting rules I learned in business journalism classes in graduate school, anything labeled “long-term investments” can’t be counted as cash. However, it’s clear that Salesforce does, pushing its combined liquid resources to about $1.4 billion, which leaves more than $1.1 billion in the wake of this deal. This makes the price a lot more palatable.

Then there’s Salesforce’s free cash flow. Its biggest product is the Salesforce.com subscription service that generates reliable recurring revenue month after month. Salesforce generates about $400 million in cash each year from operations, and may do $500 million in fiscal 2012. All this means that a good deal of the cash spent on acquisitions and land purchases will be replaced in a fairly short time. All this combines to make it hard to argue that buying Radian6 is a bad use of cash.

A panoply of big media giants sent a cease-and-desist letter today to Zite, the Apple iPad news reader app.

The Washington Post, AP, Gannett, Getty Images, Time, Dow Jones and many other media organizations were part of the action, which you can read all about below.

Zite bills itself as a “personalized iPad magazine that gets smarter as you use it.”

Not smart enough, it seems, to avoid copyright complaints from the content creators the app sucks in.

“The Zite application is plainly unlawful,” said the letter to Zite CEO Ali Davar, noting all kinds of copyright violations.

In a phone interview with BoomTown this afternoon, Davar said Zite would comply with the letter by shifting the content from its “reading” mode to a Web one, which points to publisher sites.

“It’s a bummer that they did this, but we expected it,” he said.

In a comment he posted below, Davar also wrote:

“Zite’s goal is to work with publishers, not to be antagonistic. The few publishers that have contacted us regarding the reading mode view we have complied with their requests and simply switched over to web view. We’re talking to publishers right now to find a win-win for them monetarily and to at the same time preserve the great user experience.”

For now, it’s lose-lose, and the letter is a dramatic shot across the bow of all the many news readers now hitting the market in the wake of the popularity of the Apple iPad tablet.

The social media-focused Flipboard and the news-oriented Pulse are two others, both of which have claimed they are working with publishers.

But Pulse wrangled with the New York Times over misuse of its RSS feeds and copyright issues, which has since been settled.

Zite showed up earlier this month, a product of a machine-learning technology start-up called Worio, which is based in Vancouver, Canada.

The aggregator of personalized content, which has $4 million in angel funding, gets its cues from a user’s interests.

Zite’s technology originated at research at the University of British Columbia several years ago.

In an interview with NetworkEffect’s Liz Gannes a few weeks ago, Davar seemed sanguine about publishers.

Wrote Gannes:

The free Zite app imports a user’s Twitter tweets, follows and Google Reader subscriptions, offers lists of pre-made categories, and then solicits feedback and refines over time a list of topics and sources the user is interested in. It features articles based on their popularity, number of shares from a user’s network and topic relevance. (Davar said he thinks a person’s Facebook network data is too heterogeneous to reliably recommend articles, so it’s not included as an option.)

Flipboard itself is likely to add more personalization features; the company bought real-time social discovery technology from Ellerdale and has yet to implement much of it.

Vancouver-based Zite is well-funded, with $4 million from angels and Canadian grants, but it doesn’t have business relationships with publishers. The app lays out pictures and articles, stripping out everything else, including ads. Davar said he doubted this would be a problem. “It would be shortsighted for publishers to think of Zite as us versus them,” he said.

Short-sighted maybe, but legally lethal definitely, as you can see by this cease-and-desist letter, as well as a video from Zite on how its app works:

Letter to Zite _03 30 11_ –

Zite: Personalized Magazine for iPad from zite.com on Vimeo.

(Full disclosure: New Corp. owns Dow Jones, which owns this site.)

The two have a relationship already. Radian6 is building a key add-on application that Salesforce needs for Service Cloud 3, its big customer support product. But as competitors have pointed out, the Radian6 piece of Service Cloud won’t be ready until August. With monitoring social networks like Twitter and Facebook such a key aspect of Service Cloud, owning Radian6 will put Salesforce in better control of the trajectory of an important product.

Founded in 2006 and based in the Canadian city of Halifax, Nova Scotia Fredericton, New Brunswick, Radian6 offers a cloud-based service to companies to monitor in real-time what people are saying about them and their products on Facebook, Twitter, YouTube and LinkedIn, as well as on blogs and Web forums. Its publicly disclosed list of customers includes AAA, Dell, General Electric, Kodak, Molson Coors, Pepsi, and UPS. Of those, Dell stands out as an enthusiastically public Salesforce customer. It’s backed by investments from a trio of Canadian venture capital firms: Summerhill Venture Partners, Brightspark Ventures, and BDC Venture Capital.

Salesforce says the deal will have no material impact on the current quarter. It expects to increase revenue in the second quarter by $5 million and to reduce per-share by 8 cents on a non-GAAP basis. In fiscal 2012, it expects its ownership of Radian6 to boost sales by $45 million to $50 million and to reduce non-GAAP EPS by 11 cents. Salesforce says it now expects fiscal 2012 revenue in the range of approximately $2.075 billion to $2.1 billion, and non-GAAP EPS $1.24 to $1.27.

The big question that Salesforce is going to get is about the price. Since Radian6 is privately held, I have no idea what its annual sales are, but people are going to wonder why Salesforce is paying so much, and how it determined Radian6′s valuation. The question will hearken back to its acquisition of Heroku late last year, when it paid about $250 million for a company which–if you believe what some people say–had revenue in the neighborhood of $2 million to $3 million. That would work out to a multiple of between 80 and 120 times the trailing year’s revenue.

Expect CEO Marc Benioff to face some tough questions about how Salesforce determined the price for this deal. There have also been some tough questions about other ways that Benioff is choosing to use his cash: In February The Wall Street Journal’s Brett Arends wondered aloud about aggressive hiring and a $278 million real estate purchase. As of the quarter ended January 31, Salesforce had about $497 million in combined cash and short-term investments. This deal is certainly going to make a dent.

For his part, Benioff has said that now is the time to get aggressive against competitors like Oracle and SAP. Salesforce shares are looking up in pre-market trading this morning. Investors, for the moment, seem to agree with him.

“We want to do for the Facebook generation what BlackBerry did for the enterprise market,” INQ Mobile CEO Frank Meehan said in an interview in San Francisco last week. “For someone under 30 this is the stuff you want to see all the time.”

The Cloud line comes in two models–one with a keyboard and the other with a pure touchscreen. The bad news for you Americans (Mobilized is feeling very British here in London) is that the phone is coming to the U.K. in April, with no firm plans yet for when it might arrive stateside. INQ Mobile currently sells phones with Telus in Canada, but its devices are not yet sold in the U.S.

INQ Mobile made their announcement just ahead of Mobile World Congress, the cell phone industry’s big trade show which gets under way on Sunday in Barcelona.

There have been rumors of an INQ-built Facebook phone for some time–rumors that have been conflated with an official Facebook entry into the mobile market. HTC is also expected to debut a Facebook-heavy phone, though it has yet to announce its plans.

For its part, Facebook praised the INQ device.

Facebook mobile head Henri Moissinac said in a statement that the Cloud phones “bring Facebook to people with a single touch while they are mobile and demonstrate the power of socially aware devices.”

Although the selling point of the INQ Mobile phones are the connections to Facebook and Spotify, the Cloud line is pure Android. The Facebook features themselves are just elaborate home screen widgets tied to the social network, while Spotify replaces the default music player.

In doing so, INQ is looking to strike a balance between offering something unique while maintaining compatibility with Android.

“People haven’t had an emotional attachment to Android,” Meehan said, noting that users have such an affinity for the iPhone, and to some extent even the BlackBerry, or at least its messenger program.

The Cloud phones use a modest 600MHz processor from Qualcomm and feature version 2.2 of Android (a.k.a. Froyo), though the devices are designed to be upgradeable to the Gingerbread version. Meehan said that INQ is deliberately keeping the devices low-cost so they can sell for just a fraction of the iPhone’s price tag, making them attractive to a different segment of the market.

“We’ve taken very much a mass market approach,” Meehan said. “We’re going after the LGs, the Samsungs. We’re not going after people who are going for an iPhone.”

He also sees an opportunity to nab some BlackBerry Curve users.

“The Curve market is ripe,” Meehan said. “They have been sitting there with a terrible browser.”

There are also some family ties involved in the phone’s direction. INQ Mobile is owned by Li Ka-shing’s Hutchison Whampoa, which, through a subsidiary, is also an investor in both Facebook and Spotify. INQ Mobile started in 2008 and has grown to more than 200 employees, said Meehan, who also is a member of Spotify’s board of directors.

As for when the company might bring the Cloud line (or any phones for that matter) to the U.S., Meehan said it could be as early as the second half of this year.

“Let’s see how it goes,” he said. “I’m not rushing into it.”

Of course, it might also help if Spotify launched in the U.S., something that always appears to be on the verge of happening “in the coming months.”

]]> http://allthingsd.com/20110209/inq-mobile-friends-facebook-and-spotify-for-new-android-phone/feed/ 0 http://allthingsd.com/20110131/motricity-will-pay-up-to-150-million-for-mobile-marketing-expertise/ http://allthingsd.com/20110131/motricity-will-pay-up-to-150-million-for-mobile-marketing-expertise/#comments Mon, 31 Jan 2011 17:12:46 +0000 Tricia Duryee http://emoney.allthingsd.com/?p=2153 Bellevue, Wash.-based Motricity has agreed to acquire Toronto-based Adenyo, a mobile marketing provider in the U.S., Canada and France. It will pay $100 million in a combination of cash and stock with an additional earn-out of up to $50 million. Motricity–which builds storefronts for wireless operators, including AT&T and Verizon Wireless, that sell and distribute smartphone applications–said it was attracted to the company for its mobile advertising and analytics capabilities. The deal is expected to close by the end of March.

]]> http://allthingsd.com/20110131/motricity-will-pay-up-to-150-million-for-mobile-marketing-expertise/feed/ 0 http://allthingsd.com/20110124/seven-questions-for-ric-telford-ibm%e2%80%99s-vp-of-cloud-services/ http://allthingsd.com/20110124/seven-questions-for-ric-telford-ibm%e2%80%99s-vp-of-cloud-services/#comments Mon, 24 Jan 2011 16:45:15 +0000 Arik Hesseldahl http://newenterprise.allthingsd.com/?p=2177 It wasn’t so long ago that the primary appeal of cloud computing was cost-savings. Companies struggling to slash their operational costs moved their data and applications out of their own back offices and handed them off to cloud providers. Now the question about the cloud is turning in a new direction. CIOs who last year asked, “How much can I save?” are now asking, “What more can I do with it?”

Often they’ll turn to public cloud providers like Amazon or Google or Microsoft. Those are the three names that usually get mentioned in the same breath whenever enterprise cloud services come up. But what about IT giant IBM? It turns out it’s a significant player in the cloud game, offering both public and private cloud services. Last week I sat down with Ric Telford, IBM’s VP of Cloud Services to talk about how Big Blue’s cloud business is going and what its priorities are in the year just started.

NewEnterprise: Ric, let’s start at the top. Tell me how IBM sees the cloud business right now?

Telford: Initially the cloud is all about doing more with less. Suddenly you could deliver the same IT services for less. Fast-forward to today, and it’s not all about saving money. People are realizing they can do things they never could before with the cloud. I was recently met with a small aircraft engineering company, and the guy running it described how he competes with much larger companies for defense contracts. It used to be that doing all the modeling and simulations he needed required buying hardware and software and running it all on premise. Now he can go out to the cloud, pay for what he uses and be done with it. He can now compete for contracts he wouldn’t have been able to go after before. And we’re seeing a lot of examples like that in industry after industry.

Someone said to me the other day that the cloud is going to have to have all the parts of the mainframe. Do you agree with that?

There’s a lot of parallels between the cloud and the mainframe. IBM’s view is that we have a single-reference architecture. It’s the same whether we’re delivering the service or if we build it for you. We did a deal recently with France Telecom where they are going to be a cloud services provider to their clients. They already have the network connections. But they’re not a cloud company. So they’re using IBM’s cloud architecture to give them all the pieces in one easy-to-consume bite. So we have that architecture and we use the same blueprint in all the various permutations of the cloud. For some people it’s confusing, but for us it’s all the same whether you want to have it inside your firewall or outside.

Which do your customers tend to prefer–a private cloud or a public cloud?

We do surveys every year and right now we’re seeing about a two-to-one preference for private versus public. About 60 to 70 percent of respondents say they’re working on a private cloud, and about 30 to 40 say they’re working on the public cloud. To us it’s all the same. We offer a core set of services from the IBM cloud–development, test, compute, storage, collaborations, desktop. But we can also build the same thing inside your firewall.

How big is your public cloud business?

I can’t give you a revenue figure because different business units take advantage of it to deliver different things. We just opened up a delivery center in Research Triangle Park. It’s probably one of the most advanced data centers in the world. And now we’re rolling out a model that we are cloning around the world. We just opened one in Germany and another in Canada. And then we’ll just keep adding them. We manage about eight million square feet of data centers around the world.

How does a company typically get started with the cloud?

Usually I suggest they start with their develop-and-test operations. It’s usually not mission-critical, and there’s usually a lot of hardware that’s not being used. Usually that’s the group that buys hardware long before it’s needed and it ends up sitting idle 90 percent of the time. At IBM we put our whole research division on the cloud because they were the worst hardware hoarders, putting servers under desks and whatnot. They knew that if they needed a new server it would take weeks to get it. Now they go out to the research and compute cloud, and the services they need are usually ready to use in minutes or at most an hour. It just makes a huge difference in people’s ability to get going.

So what you are your priorities for this year?

One of the big things we started seeing last year was an uptake of cloud delivery in industry-specific ways. We’re working not just on the generic things like email and collaboration, but on the specific applications that are used in various industries. Health care, banking and government are a few that have complicated regulatory needs that vary state by state and country by country, and we have the deep understanding required to work with them. We also built a private cloud to help the 29 countries involved in NATO share data on logistics and troop deployments. We also have an initiative with the consumer electronics industry. Utilities is another, and it gets tied in with our Smarter Planet initiatives.

Will IBM be making deals in the cloud this year?

IBM will make a few billion in acquisitions. Cloud is one of the four key growth areas we’re focused on. The others are Smarter Planet, analytics and the growth markets. We’ve said that in those four growth initiatives we’re going for $20 billion in additional revenue by 2014. Four initiatives, five years and $20 billion dollars. That’s certainly not all going to happen organically.

]]> http://allthingsd.com/20110124/seven-questions-for-ric-telford-ibm%e2%80%99s-vp-of-cloud-services/feed/ 9 http://allthingsd.com/20110110/why-verizon%e2%80%99s-iphone-won%e2%80%99t-be-so-bad-for-rim/ http://allthingsd.com/20110110/why-verizon%e2%80%99s-iphone-won%e2%80%99t-be-so-bad-for-rim/#comments Mon, 10 Jan 2011 17:29:28 +0000 Arik Hesseldahl http://newenterprise.allthingsd.com/?p=1537 It was about a year ago I was talking with Charles Wolf, the analyst at Needham and Co. in New York who covers both Apple and Research In Motion. At the time he promised that the day Verizon picked up the iPhone he would downgrade RIM to “sell.” I called him this morning to ask if that were still true. His answer? No, he’s not planning to downgrade RIM even though Verizon is expected to announce its first iPhone tomorrow.

A year ago, when Wolf first made that statement, he was right. An iPhone on Verizon would have been a severe blow to Research In Motion. That it will only amount to a sting this year says a lot about how RIM’s business has improved and how its revenue base has become more diverse in the year or so since.

RIM doesn’t disclose the identities of its biggest carrier partners, but it does disclose how much the top three contribute to overall sales, though it’s not hard to figure out that Verizon has traditionally been its biggest customer. A year ago, Verizon’s sales of BlackBerry devices contributed 25 percent of RIM’s overall sales, while the next two largest customers contributed 13 percent and 10 percent, respectively. At least one of those was AT&T.

Today the picture’s different. RIM’s biggest customer–and it may still be Verizon–accounted for only 12 percent of sales in the quarter ended November, while number two and number three each accounted for 9 percent.

RIM’s growth outside its top three countries–the U.S., the U.K. and Canada–has also picked up. According to figures from IDC, in 2007 RIM relied on North America for more than three quarters of its sales. As of the third quarter of 2010, that figure was down to less than 48 percent. And in a lot of these markets carriers don’t subsidize the phone as aggressively as U.S. carriers do, and so RIM ends up having an advantage on price: $250 or so versus $500 or $600 for an iPhone. RIM is also seeing strong growth in its prepaid business outside North America. During its Dec. 16 earnings call, CEO Jim Balsillie said prepaid sales in the U.K. had grown by 245 percent year-over-year.

Then there’s Android. Verizon threw a lot of weight behind Google’s Android platform last year and has been marketing it heavily all year. The results have been mixed. A study by ITG Investment Research last year suggested that Android didn’t give Verizon the competitive bump it had hoped for versus AT&T. Meanwhile, RIM has in the last year moved closer to AT&T and in August launched the BlackBerry Torch with that carrier, though it didn’t go as well as had been hoped.

It’s not like RIM isn’t going to take some damage from the iPhone. RIM shares are down this morning more than 1 percent. But for RIM it could have been much worse. In June, when Bloomberg News reported that Verizon planned to bring the iPhone to its network, I covered the story of how investors freaked out and lopped more than 6 percent off RIM’s valuation. Now investors seem to understand that it’s likely to hurt RIM’s overall share of the smartphone market, but it won’t be the disaster that it would have been a year ago.

Meanwhile, if you haven’t seen it already, make sure you watch the interview Walt Mossberg and Kara Swisher did with RIM Co-CEO Mike Lazaridis at D: Dive Into Mobile in December.

PREVIOUSLY:

• How Might the Verizon iPhone Differ From the iPhone 4 (Besides Being Able to Make Calls)?
• Tired: Speculating About Verizon iPhone. Wired: Speculating About Verizon iPhone Sales.
• Verizon iPhone to Debut With Unlimited Data Plan
• Apple CEO Likely to Appear at Verizon iPhone Event
• Verizon Event Set for Tuesday–iPhone Time

]]> http://allthingsd.com/20110110/why-verizon%e2%80%99s-iphone-won%e2%80%99t-be-so-bad-for-rim/feed/ 26 http://allthingsd.com/20101223/video-meme-hallelujah-for-flash-mobs/ http://allthingsd.com/20101223/video-meme-hallelujah-for-flash-mobs/#comments Thu, 23 Dec 2010 14:30:28 +0000 Liz Gannes http://networkeffect.allthingsd.com/?p=1587 Flash mobs: They’re no longer elite events for cool kids with secret passwords. This holiday season has seen a remarkable run of flash mobs in North America (and subsequently on YouTube), with both participants and audience members eager to partake in an increasingly democratized art form and then post their experiences online.

One particular highly accessible kind of flash mob, in which local singing groups perform Handel’s “Hallelujah” chorus at shopping malls, has been replicated all over the U.S. and Canada in the last month or so.

Quickly: Flash mobs are traditionally secretly orchestrated performances that play out in public places while bringing a little bit of magic to unsuspecting people in the right place at the right time. If you’ve ever seen those videos of a person breaking into song or dance in a public place, then being joined by hordes of interlopers who somehow know the full routine, you’ve seen a flash mob. (There are also less choreographed variations, like public pillow fights.)

Since flash mobs seem so fun, organic and full of life, they’ve of course been co-opted by marketers who mimic the style right down to camera shots of the surprised and confused onlookers capturing videos of the moment with their own camera phones. But they’ve also recently been adopted by wholesome community groups wanting to spread a little holiday joy. And in many cases, both the performers and the audience know about the event in advance (element of surprise be damned).

One flash mob performance of “Hallelujah” in a Canadian shopping mall, posted on YouTube on Nov. 17, has been seen more than 25 million times. YouTube’s Trends blog recently called it “by far, the most popular video of the season.”

YouTube’s Kevin Allocca also highlighted some 20 other flash mob performances, also of “Hallelujah” and mostly in shopping malls, from Orlando, Cleveland, Chattanooga, Juneau and Winnipeg. Allocca says the meme may actually have been kicked off by the Opera Company of Philadelphia performing “Hallelujah” in a Macy’s as part of the Knight Foundation’s Random Acts of Culture. That video was posted Nov. 1 and has more than six million views.

It’s gotten so bad that on Monday night a mall near Sacramento had to be evacuated after crowds overwhelmed it and the fire department feared for its structural integrity. A planned flash mob by the Sacramento Choral Society and Orchestra and other local congregations had been endorsed by the mall and promoted for weeks, drawing thousands to watch and sing along with their printed-out sheet music.

Would-be flash mobbers broke into impromptu singalongs as they were escorted out of the building and into the parking lot (with their video cameras recording all the while, of course). So apparently spontaneity isn’t dead yet.

]]> http://allthingsd.com/20101223/video-meme-hallelujah-for-flash-mobs/feed/ 1 http://allthingsd.com/20101221/livingsocial-ceo-has-big-plans-now-that-amazon-is-in-his-back-pocket/ http://allthingsd.com/20101221/livingsocial-ceo-has-big-plans-now-that-amazon-is-in-his-back-pocket/#comments Tue, 21 Dec 2010 15:07:27 +0000 Tricia Duryee http://emoney.allthingsd.com/?p=871 Groupon’s co-founder and CEO Andrew Mason has stolen the spotlight recently, by appearing on the “Today Show” and being interviewed on “Charlie Rose.”

But it’s hard not to make news when you turn down a $6 billion buyout offer from Google.

Meanwhile, Tim O’Shaughnessy, CEO and co-founder of LivingSocial.com, has remained relatively quiet. As the head of the second-largest company in the local, group-buying space, it wasn’t because he didn’t have anything to talk about.

Just about 24 hours before Groupon’s rejection leaked out, LivingSocial announced it had secured $175 million from Amazon, and $183 million in total new investments. In that same release, the Washington, D.C.-based company confirmed that it was booking revenues of more than $1 million a day on average and is projected to book well over $500 million in revenue in 2011.

To be sure, Groupon and LivingSocial are pulling away from the pack when it comes to defining the nascent daily-deals market. O’Shaughnessy, who claims that the two have 90 percent market share combined, said: “I think the idea conceptually that you can buy things online and go interact with merchants in offline is starting to take hold and be widespread. But it’s really been less than two years…It’s definitely the first couple of innings right now.”

Here’s our interview with O’Shaughnessy:

eMoney: Give me an update on where your business is today.

O’Shaughnessy: As of yesterday [Dec. 16], we were in 136 markets. We launched five new markets yesterday. We tend to do them in batches, and five or eight will go out at once. Overall, we’ve been averaging a market a day.

What about up-to-date figures on uniques?

We are at more than 10 million, or I think the last number we said publicly was 12 million. That’s primarily Canada and the U.S. that are signed up for the daily deal. We are in five countries today. [LivingSocial is in the U.S., Canada, the U.K., Ireland and Australia.]

What’s the competition like internationally?

Groupon has been acquisitive, and they’ve become established in lots of places. The U.S. is the most mature by a large margin, and there’s some countries with a few players that have established themselves, and finally, there’s some countries out there that’s a fairly green-field environment.

It’s fairly established that Groupon is No. 1, and LivingSocial is No. 2. But there’s a huge debate about who is No. 3?

There’s a pretty big gap. One of the things I’ve said is that it’s a pretty easy business to get into. All you have to do is know how to process a payment, and have a brother-in-law that has a restaurant that is willing to participate. But it’s a hard business to scale.

We have a competitive spreadsheet with 200 names on it, and if you do a couple of filters on how many deals someone has run, starting with 100, the vast majority drop off. And then if you up it to 500, you are up to the top two. It’s a pretty big drop-off.

Six months ago, we [Groupon and LivingSocial] collectively had 90 percent market share, and last month that was still true.

In that time, the market got bigger, and some others have grown for sure, but our market share has grown quite a bit. The signal-to-noise ratio is off, relative to who is doing what.

Is that what gives you confidence?

That’s one data point to look at, but what gives me confidence is what I see and I know we do every day. The degree of effort that goes into it and how many things can go wrong when you are managing merchant relationships, that’s what gives me the confidence.

What about the critics who say there’s no loyalty in this business–a consumer will always go with the provider who has the best deal for the business they want to visit.

There’s some loyalty that’s there, and I think people buy through us pretty regularly. They know that it’s going to be a merchant that’s vetted, and we work really hard at that. We are a good solid legit company that’s able to deliver. People place value on that. The brand matters, and enhancing user trust is an important thing.

What about the critics who say the margin will erode over time?

I think that the erosion of margins is just like any single other business if you stop innovating and do the same thing over and over. If we continue to innovate and provide additional value to merchants, the value per dollar increases. I don’t tend to be hugely concerned about the margin front.

The conduit has been 50 percent off a service, but there’s additional value we can provide to merchant communities and consumer communities. Overall, we aren’t not going to do the same thing over and over.

Can you give me an example?

We’ve started working with merchants in completely different ways, and sometimes we are going and operating events. We just did something called “tubbing and tasting,” where we worked with three merchants.

You could pick 10 to 12 Saturdays, and you’d meet in Midtown Manhattan, where a coach bus would take you to a snow hill, where you’d go snow tubbing. At the lodge, there was a bonfire and s’mores, and a beer tasting with a bunch of microbrews.

In that circumstance, we worked with three merchants–a coach company, a ski mountain and a brewery–in an entirely different way than how they associate with folks. I think it cost $60 and it sold out virtually every Saturday in January and February. I don’t see anyone else doing that, by finding unique hand-picked, curated ways to work with local businesses.

So, how will you be working with Amazon?

Right now, our first step is focusing on getting the relationship from a financial perspective locked down, and we’ll figure it out at a later point.

I assume the funding will go toward expansion?

We will be very aggressive on additional market launches as we build up our brand and user base. It’s very much a global game, and this is a global opportunity. We’ve gone from one country to five, and we’ll likely continue to expand globally.

A lot of this year was laying a foundation and the building blocks, and adding more value for the merchants, like LivingSocial Escapes. It’s on fire right now. It’s a weekend getaway, or a “staycation.” They are curated packages that are within a short driving distance from where you live. We also have LivingSocial Family Edition, which has things parents can do with their kids.

Your plans include tripling your employee count next year to 1,800 and more than doubling the number of cities you are in to 300?

We will continue to be pretty aggressive. Earlier this year, we were in six markets and we added 130 markets this year. We are a little more mature and one would hope that means we could move faster next year. We were around 30 employees, and over 600 now. It’s been a pretty crazy ramp-up.

The timing of your investment was so closely timed to Groupon-Google’s negotiations.

I’m a firm believer that we can’t control what other people do. Obviously, the deal we did with Amazon takes time to put together. We had decided awhile ago, if we want to become the biggest player in local commerce, we should be aligned with the biggest e-commerce company. That’s a lot of [what was] driving it. The timing was very coincidental.

So, no regrets?

No, not at all. We are thrilled and excited and expect to gain more market share over the coming year.

]]> http://allthingsd.com/20101221/livingsocial-ceo-has-big-plans-now-that-amazon-is-in-his-back-pocket/feed/ 1 http://allthingsd.com/20101201/amazon-poised-to-make-a-major-strategic-investment-in-livingsocial-to-counter-groupoogle-threat/ http://allthingsd.com/20101201/amazon-poised-to-make-a-major-strategic-investment-in-livingsocial-to-counter-groupoogle-threat/#comments Wed, 01 Dec 2010 21:15:57 +0000 Kara Swisher http://kara.allthingsd.com/?p=37889

With the red-hot acquisition dance between Google and Groupon sucking up all the attention, it’s easy once again to ignore the No. 2 player in the fast-growing social buying space–LivingSocial.

But not everyone is–according to sources close to the situation, the Washington, D.C.-based company that also focuses on local deals is in advanced talks for a major strategic investment–as high as $150 million–by online retail giant Amazon, at a very hefty valuation of over one billion dollars.

Sources said there will also be a deep operating partnership between the pair, as part of the deal.

Sources said the investment negotiations with Amazon is not complete yet, of course, and could fall apart.

But interest in LivingSocial has heightened of late, given the $6 billion in cash, stock and earnouts that BoomTown has reported that Google is considering ponying up to purchase the category leader, Chicago-based Groupon, and grab ahold of its 12 million users across the globe and $500 million in annual revenue.

But LivingSocial–which has been thriving even in Groupon’s flashier shadow–has 10 million subscribers worldwide in more than 120 markets and five countries, including the U.S., Canada, the U.K., Ireland and Australia.

And, as the start-up noted when LivingSocial announced its acquisition of Jump On It recently, it is currently booking an average of more than $1 million a day and is projected to book well more than $500 million in revenue in 2011.

That is what is apparently attracting Amazon, which has almost no profile in this lucrative local space, despite some attempts at its own solution. It bought a small and quirky daily deals site Woot, for $110 million in June.

But, rather than sell, sources said LivingSocial management wants to keep the company independent, and thinks a sale of Groupon will give it a huge opportunity for growth.

Why? Well, even though Groupoogle or Goopon are fun to say, the inevitable regulatory review could drag on, resulting in a slowing down of innovation in the bigger Google culture and the distinct possibility of newly rich Groupon execs flying the coop (in private planes).

More investment money should help.

LivingSocial announced in April that it had raised $14 million in a Series C round, after grabbing $25 million in a Series B venture financing only a month before. And it raised $10 million on top of that since 2008.

Sources estimated at the time that the valuation for LivingSocial was several hundred million dollars.

The newest round was led by Lightspeed Venture Partners; Earlier investors U.S. Venture Partners, Grotech Ventures and former AOL head Steve Case.

A report of the Amazon interest in LivingSocial was first posted several weeks ago in a in VentureBeat, a day before BoomTown first broke the news of the Groupon and Google discussions.

Both Amazon and LivingSocial declined to comment.

But here is an October video interview I did with LivingSocial CEO Tim O’Shaughnessy on a recent visit to Silicon Valley.

The entrepreneur has worked at AOL, as well as at Case’s Revolution Health in Washington, before moving on to the local deals start-up.

Enjoy:

]]> http://allthingsd.com/20101201/amazon-poised-to-make-a-major-strategic-investment-in-livingsocial-to-counter-groupoogle-threat/feed/ 3 http://allthingsd.com/20101201/the-mobile-os-world-symbian-ios-are-superpowers-android-a-developing-nation/ http://allthingsd.com/20101201/the-mobile-os-world-symbian-ios-are-superpowers-android-a-developing-nation/#comments Wed, 01 Dec 2010 19:43:05 +0000 John Paczkowski http://digitaldaily.allthingsd.com/?p=53458 Some sobering data points for the Droid army and a reminder that the Android onslaught is still largely a domestic phenomenon (for Koreans). Mobile Web usage statistics for the month of October compiled by StatCounter and Royal Pingdom reveal Apple’s iOS and Nokia’s Symbian as the dominant platforms, with Android besting them in a single country.

Unsurprisingly, Symbian is the leading mobile OS worldwide. It’s dominant in some 100 countries and accounts for more that half of all mobile Web usage in 75 of them. It essentially owns the Mideast and most of the developing world, thanks to those regions’ affinity for Nokia’s cheap mobile phones.

Apple’s iOS is the second most used mobile OS worldwide, with its iPhone and iPod touch claiming the most mobile Web traffic in 30 countries. In 21 of them, those devices accounted for more than half of all mobile Web traffic. IOS appears most popular in Canada, Cuba (!), Switzerland and Australia, where it claims over 70 percent of all mobile Web traffic. Interestingly, it’s quite a bit less popular in the United States, where it garnered a little over 35 percent.

Research in Motion’s BlackBerry OS leads four countries, with one–the Dominican Republic–where OS usage is over 50 percent. Shockingly, in its home country of Canada, it accounts for a paltry 3.6 percent of mobile Web traffic.

And Android?

It leads just one country, South Korea, with a 78.3 percent share of all mobile Web traffic. Presumably, that’s thanks to Samsung, which is based in the country and sells a number of Android phones. So while Android is surging ahead, thanks to Google’s strategy of flooding the market with multiple handsets on multiple carriers at a wide range of price points, there’s still a hell of a lot of market share that it hasn’t even come close to touching.

Top countries for iOS	Top countries for Android	Top countries for Blackberry	Top countries for Symbian
1. Canada, 83.7%	1. South Korea, 78.3%	1. Dominican Republic, 57.1%	1. Chad, 94.0%
2. Cuba, 77.2%	2. Austria, 27.3%	2. Guatemala, 45.4%	2. Libya, 93.9%
3. Switzerland, 76.7%	3. Taiwan, 26.5%	3. United Kingdom, 40.4%	3. Sudan, 92.9%
4. Australia, 72.5%	4. Denmark, 25.3%	4. Colombia, 38.9%	4. Iraq, 90.1%
5. Ireland, 69.7%	5. Slovenia, 24.0%	5. El Salvador, 37.54%	5. Oman, 88.3%
6. New Zealand, 69.0%	6. United States, 23.3%	6. United States, 32.0%	6. Jordan, 87.1%
7. France, 67.4%	7. Netherlands, 21.7%	7. Indonesia, 31.7%	7. Egypt, 86.6%
8. Singapore, 64.6%	8. Sweden, 21.3%	8. Saudi Arabia, 30.6%	8. Somalia, 85.2%
9. Denmark, 64.3%	9. Estonia, 16.8%	9. Panama, 29.2%	9. Mozambique, 84.4%
10. Sweden, 61.6%	10. Norway, 16.0%	10. Jamaica, 18.8%	10. Paraguay, 83.9%

[Image credit: Chart and data courtesy Royal Pingdom]

]]> http://allthingsd.com/20101201/the-mobile-os-world-symbian-ios-are-superpowers-android-a-developing-nation/feed/ 0 http://allthingsd.com/20101201/rim-sends-message-to-kik-by-filing-lawsuit/ http://allthingsd.com/20101201/rim-sends-message-to-kik-by-filing-lawsuit/#comments Wed, 01 Dec 2010 19:19:20 +0000 Tricia Duryee http://emoney.allthingsd.com/?p=27 Two weeks ago, a BlackBerry Messenger lookalike was banned by Research In Motion from its app store, and now RIM is sending a more serious message by filing a lawsuit against Waterloo, Ontario-based Kik, claiming patent infringement.

The lawsuit is bad timing for the small start-up, which was quickly gaining momentum. After its debut in November, it took just two weeks to generate two million downloads across BlackBerry, Android and iPhone. The free app allows users to send messages without paying text messaging fees and works across multiple platforms, unlike RIM’s own popular BlackBerry Messenger service, which is restricted to its own platform.

Worse yet, we heard Kik’s overnight success earlier this month drew the attention of several VCs, who were lining up with their checkbooks open and ready. It’s not clear if Kik was able to close that round before the lawsuit was filed on Tuesday in Canada’s Federal Court, but you can be sure that VCs will be über-vigorous in evaluating the company’s technology and any potential patents if a fight against RIM is in the works. To be sure, it will need the cash for legal fees alone.

The lawsuit was first spotted by David Lam, a lawyer in Ontario, Canada, who reported the electronic filing on his blog. Further details about RIM’s claims were unavailable, and we’ve reached out to both RIM and Kik for comment. UPDATE: In a blog post, Kik confirmed that it received the lawsuit yesterday. The company’s founder, Ted Livington, who worked at RIM as a student, writes: “I’m not afraid. I’m not surprised. But I am disappointed.”

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