Last week I talked with David Young, co-founder and CEO of Joyent, an Amazon rival with 30,000 customers around the world. His criticism of Amazon in this instance is rather harsh. The way the Amazon cloud is built, he said, virtually guaranteed that a service outage such as this would happen. While on one hand he gives Amazon high praise for “evangelizing the cloud computing model,” with the other he disparages it as “the Atari of the cloud.”

“Amazon does not represent the cloud,” Young says. “These guys are booksellers who got in the cloud business. That’s like Nordstrom’s getting into the cash register business,” he told me. “They may be the market leader, but there’s a bunch of us who are building things in such a way that we don’t see these downtimes.”

It’s hard to miss Amazon’s outsize influence. Though Amazon Web Services amounts to just a fraction of the company’s overall revenue, it is the market leader, controlling about 60 percent of the market with Rackspace, IBM, Joyent and Terremark, recently acquired by Verizon.

Joyent, which is privately held and backed by investments from Greycroft Partners and Intel Capital, would never have suffered an outage, Young claimed, because of the way it is built. Amazon, on the other hand, was never designed for what he calls persistent computing that customers need to be available all the time. The problem, he said, started in Amazon’s Elastic Block Storage, which is vulnerable to being overwhelmed by demand, something he likened to a run on a bank, where depositors panic and rush to withdraw the cash from their accounts.

Essentially, he said, Amazon became a victim of its own popularity, unable to meet the demands placed upon the EBS storage infrastructure by the network, causing in the end a cascading failure. The company has blogged about its theory in greater technical detail here.

Meanwhile, there were Amazon customers who managed to keep their services up despite the crash, and they were comparing notes today. Don MacAskill, CEO of the photo-sharing site SmugMug, blogged about how designing for failure allowed its service to remain live during the crash. Others tweeted, like Mathias Meyer of Basho Technologies, who noted that having their service running in more than one Amazon region helped avert failure.

There were others. Donnie Flood, VP of engineering of Bizo, an advertising service aimed at business executives, said that the company used all of Amazon’s regions except its most recently launched one in Japan, and combined that with a global Domain Name Service system that would direct traffic to the nearest Amazon region. When Amazon’s U.S. East region went down, all traffic in the U.S. was routed to its Amazon instances running in Amazon’s Western U.S. data center. “We were able to stay up fully the entire time,” Flood said.

Oren Michels, CEO of Mashery, a cloud-based manager of software APIs, said that his company had additional cloud infrastructure in place from Internap that took over when Amazon failed. Neither Michels nor Flood said he was likely to move the services currently hosted with Amazon to another provider.

Amazon hasn’t made any public statements about what happened, beyond those made in its status dashboard, and it hasn’t responded to any of my messages seeking a comment on any aspect of this. The company reports earnings tomorrow, so expect some questions on the conference call about Amazon’s terrible, horrible day that stretched into nearly a week.

CIO Lars Rabbe says in a blog post that a set of support servers responsible for Skype instant messaging became overloaded, and as a result sent delayed responses. A bug in the latest Windows version of the Skype desktop software failed to process these delayed responses, causing them to crash. About half of the world’s Skype users who were signed on at the time the problem began were using that version of the software, and of those, about 40 percent crashed. Among them were users whose machines were serving as supernodes. Rabbe says as many as 30 percent of the Skype network’s supernodes were among the crashed machines.

Losing those supernodes increased the load on other still-functioning supernodes, which was compounded by all the crashed Windows users trying to restart their software and get back on the network. He says traffic to these supernodes surged to 100 times normal volume for that time of day.

What he doesn’t go into great detail about was why the instant messaging servers became overloaded in the first place. Was this another bug in the server software? It’s a little unclear from this explanation.

Rabbe says Skype is trying to learn from the incident and has instituted new procedures to try to prevent this sort of thing from happening again. But this can’t help but hurt its reputation as it looks for ways to diversify its base beyond the millions of free users it has and make some actual money.

The whole reason Skype is supposed to work as well as it usually does is the strength and resilience of the network, and the fact that the network gets stronger as more people are signed on to it. To say that two bugs in a strange confluence of events could bring that entire network down raises a lot of fundamental questions about Skype.

Rabbe says an investment program to increase capacity to support paid consumers and enterprise customers is underway and will continue into 2011. I’m betting Skype will speed it up.

Offline instant messages and group video chat services remain offline, he said.

Bates said Skype now knows what caused the crash, but he didn’t disclose it. He ruled out the possibility of some kind of malicious attack, and said it’s conducting a detailed postmortem.

This would probably be the worst time for Skype to experience a high-profile outage. Though the Skype service is working today, lots of people who might have used it to call family members heading into Christmas may have made alternate plans.

However, the failure, whatever its cause, is also a reminder that Skype isn’t always in charge of its own ability to stay online. In 2007 an otherwise routine Windows security update issued by Microsoft forced an abnormally high number of PCs running Skype around the world to restart at roughly the same time. A software flaw prevented the Skype peer-to-peer network from compensating properly and the service crashed for two days.

This incident will also hurt its reputation with two key constituencies: Prospective business customers and potential investors. Business customers will rethink plans to deploy Skype. And potential investors will question whether this company has its act together, hurting the potential benefit from its forthcoming IPO.

To its credit, Skype did manage to restore service much faster than it did in 2007, as SkypeJournal notes here.

System failure is one of the risks that Skype admits to in its S-1 filing with the U.S. Securities and Exchange Commission. Of the 2007 failure, Skype says in its filing:

“We experienced significant adverse publicity and lost net revenues as a result of this outage, and any similar outage in the future would likely harm our business. As we increasingly introduce products particularly targeted at business customers, any system failures could have a significant impact on our ability to attract or maintain our relationships with business customers.”

Bates’s video message to customers is below.

Yahoo’s homepage is back up.

An update from Yahoo PR:

“For a brief period this afternoon, Yahoo.com was inaccessible to some users. We have identified the issue and are working to correct it immediately. We know that this may have caused some inconvenience and we apologize to our users who might have been affected.”

No word yet on what caused the outage, although sources close to the situation said it was a crash caused by a routine code push.

There were some odd occurrences on Yahoo’s domain name system (see above) during the outage, but it appears to be cleared up.

He reiterated that notion in his keynote today:

“Guess what? Ninety-five percent of all apps submitted are approved within seven days.”

“What about the ones we don’t approve? Well why is that? What are the reasons?

1: The app doesn’t do what you said it would.

2: It uses private APIs…and if they change the app will break.

And the third reason? They crash.”

“If you were in our shoes, you’d be rejecting for the same reasons. Even with this, 95 percent are approved in seven days. Sometimes you read these articles and you think something is going on….”

Tesla Chief Executive Elon Musk wasn’t on board the plane. In a statement released by the company, Mr. Musk confirmed the deaths and said Tesla is withholding the names of the three as they contact their families. “Tesla is a small, tightly-knit company, and this is a tragic day for us,” Mr. Musk said.

Tesla, which is based in the San Francisco suburb of San Carlos, has around 500 employees. The company said in a securities filing last month that it is planning an initial public offering.

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What’s that, you say? It’s 2010, Twitter is Oprah-endorsed mainstream, and there’s no shortage of Twitter apps that work with BlackBerry?

Well, you’re right, of course. One of Twitter’s core strengths is its open platform, which allows developers to build any Twitter app they want. And there are indeed a whole lot of Berry-compatible apps.

So the fact that RIM (RIMM) is just now–actually, not even now, since the thing is still in invite-only beta–rolling out an officially endorsed client is telling, I think.

And yes, Apple (AAPL), among other mobile platforms, has done just fine without an official Twitter app of its own. But I use both, and I can say with confidence that apps on the BlackBerry are an entirely different experience from those on the iPhone/iPod platform.

Load up an app via iTunes and you can be reasonably sure that it’s not going to crash your phone or chew up your memory. You can’t say that about a Twitter client on a BlackBerry, unfortunately.

So. The good news is that the RIM-endorsed client should resolve that problem. (Right?) The bad news is that this is still a future-tense proposition.

The social-media service–where users send short “tweets” to followers who have signed up to receive the messages–came in handy for Innovative Beverage Group Holdings Inc., whose drankbeverage.com site crashed last month after a surge in traffic following a segment on Fox News for the company’s so-called relaxation beverage, which contains “calming” ingredients like valerian root and melatonin. News Corp. (NWS) owns Fox News as well as The Wall Street Journal.

Innovative Beverage notified consumers on its Twitter feed that it was working to resolve the problem. The company also did a search on Twitter for mentions of the site crash, so it could respond with tweets describing its repair efforts.

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In fact, according to a new $6 million dollar study by the Virginia Tech Transportation Institute, texting while driving increases your chances of crashing by 23 times (see table below; click to enlarge).

Apparently, drivers take their eyes off the road for an average of 4.6 seconds when composing text messages–enough time at typical highway speeds to wreak all manner of havoc.

“Texting should be banned in moving vehicles for all drivers,” the study concludes, adding that it “has the potential to create a true crash epidemic if texting-type tasks continue to grow in popularity and the generation of frequent text message senders reach driving age in large numbers.”

We need a $6 million study to tell us this? Why hasn’t texting while driving been banned already?

Spanfeller’s departure comes amid a flurry of bad news for finance publications. In April, Condé Nast pulled the plug on Portfolio, its business magazine and Web site, after a very expensive two-year run. Earlier this week, publisher McGraw-Hill (MHP) announced that it was shopping BusinessWeek, and observers are floating the notion that the company may end up giving the magazine away to anyone who wants to take on its annual losses.

Time Warner’s (TWX) Fortune magazine has also been battered by the recession, which has been particularly hard on the finance, auto and luxury-good companies that business publications have traditionally relied upon. And Forbes itself has gone through multiple rounds of layoffs since last fall.

In a memo to the company’s employees, Forbes CEO Steve Forbes praised Spanfeller for building out the company’s Web property, which says it receives 18 million unique visitors a month.In the aftermath of the dot.com crash, Spanfeller helped turn Forbes.com, which the family-owned company was close to shutting down, into a powerhouse.

But Forbes’s plan to take the Web property public earlier in the decade never panned out. And once Forbes sold a 40 percent stake to private equity investors Elevation Partners three years ago, plenty of Forbes employees, including me, had speculated that Spanfeller would look for a job that promised a big payout. That said, it wasn’t that long ago that Spanfeller was the victor in a power struggle with Jim Berrien, the former publisher of the Forbes print edition.

The news was first reported by AOL’s Daily Finance. Here’s the company memo from CEO Steve Forbes:

To: All Hands

From Steve Forbes

July 16, 2009

Jim Spanfeller, President and CEO of Forbes.com has decided to step down from leading our website after nine years. In the entrepreneurial spirit that Forbes has always championed, Jim will be setting up his own media management company.

Describing his future plans Jim said, “The world of media has changed rapidly in the past 10 years and the velocity of the change promises only to increase going forward. I’ve had a great run at Forbes and have been deeply involved in the breakthroughs and transformations between traditional and digital media.  Now I see a huge opportunity to have my own media management business that will help other traditional media companies make the most of their enormous prospects in digital venues, taking all I have learned here in the past decade and applying on a wider horizon. Forbes.com has truly been a truly wonderful ride and I am deeply in debt to the Forbes family for letting me be a part of it.”

Jim has done a monumental job of bringing Forbes.com to the lead position in business websites, and secured Forbes.com as the must visit site for not only global business leaders but also anyone interested in the finest business reporting and analysis available. At present Forbes.com has 18 million unique visitors a month.

Along the way, Jim has overseen the development and growth of Forbes Digital, which includes Forbes.com, ForbesTraveler.com, Investopedia.com, RealClearPolitics.com, RealClearMarkets.com, Real Clear Sports, and Forbes Business and Finance Blog Network, which together reach 40 million unique visitors a month.

This immense growth on the digital side of the business was spearheaded, pursed, and led by Jim with enormous success. The digital world is still uncharted with few rules, and Jim’s intellect, creativity, and business acumen helped bring us our number one position. For this the Forbes family is very grateful and we wish him all the success in his future plans.

Since Elevation Partners partnered with Forbes three years ago, Jim has worked very closely with them on the growth and development and vision for Forbes.com.  Commenting on Jim’s departure, Roger McNamee of Elevation said, “Jim did a fantastic job leading Forbes.com. In an era when competitors feared it, Jim embraced and evangelized the internet, with huge benefits to Forbes and its audiences. We are grateful for his contributions over the past nine years.”

Jim will be staying through a transition period at least through Labor Day. Please join me and my brothers in wishing Jim all the best in the future, which he deserves.