With AsiaD just a little over a month away, Walt Mossberg and I are adding even more speakers to the list, for what we hope will be an awesome event in Hong Kong.

Taking place from Oct. 19 to 21, the conference lineup is already impressive, with a mix of speakers from China, Japan, Korea and Taiwan, as well as Silicon Valley and more.

The previously announced speakers include: Alibaba’s Jack Ma; Google Android head Andy Rubin; Twitter inventor and product guru, as well as Square co-founder and CEO, Jack Dorsey; Nvidia founder and CEO Jen-Hsun Huang; Asus Chairman Jonney Shih; Sony president and second-in-command Kazuo “Kaz” Hirai; Google+ guru Bradley Horowitz; Hollywood big shot Peter Chernin; Huawei’s North American R&D head John Roese; Microsoft’s Windows Phone head Andy Lees; and a panel of start-up stars — Joyus’ Sukhinder Singh Cassidy, SurveyMonkey’s Dave Goldberg and Airbnb’s Brian Chesky.

Now, to add to the kitty:

Yahoo co-founder and former CEO Jerry Yang, who will appear with the Internet giant’s Asia head Rose Tsou. For all of the noise around the company these days, Yahoo has a huge footprint in the region, maintains a big e-commerce business there and holds massive stakes in key firms, such as Yahoo Japan and China’s Alibaba. One of Yahoo’s first big investments came from Asian investor Masa Son, in fact, way back when.

Also on deck is LivingSocial’s CEO and co-founder Tim O’Shaughnessy, who will appear with Daniel Shin, the CEO and co-founder of South Korea’s Ticket Monster, which the daily deals site just bought as part of its aggressive move into Asia. Competing there with its U.S. rival Groupon, as well as a myriad of local social buying services, the market is a tough one.

Because of Samsung’s increasing importance as a global player in smartphones and tablets, we thought it was important to have Dr. Won-Pyo Hong. He heads global product strategy for Samsung’s mobile business, which has surged in the past year to make the Korean tech giant a leader in Android-based phones and tablets, and a significant challenger to Apple.

Also key in the mobile arena is Cher Wang, the chairwoman of three Taiwan companies, including HTC, the important and innovative handset and tablet maker which has been a key player in Android’s success story. But just this week she talked about the possibility of HTC buying an operating system, which would further strengthen its hand in the competitive market.

That’s it for now, but we will have more big names to come, as well as some pretty cool demos we will be putting onstage at AsiaD. So stay tuned.

The Facebook Deals product, which offered discounted coupons for local businesses, had launched only four months ago. Its shutdown follows Facebook’s discontinuation earlier this week of its location-based check-in feature for mobile users in favor of broader place-tagging tools.

Here’s Facebook’s statement:

After testing Deals for four months, we’ve decided to end our Deals product in the coming weeks. We think there is a lot of power in a social approach to driving people into local businesses. We’ve learned a lot from our test and we’ll continue to evaluate how to best serve local businesses.

Deals was one of Facebook’s particularly undifferentiated products — it was an almost perfect replica of offerings from Groupon, LivingSocial, Google and others. Facebook’s attempt at a novel twist was that its deals were things users could do with their friends, and that it syndicated deals from other providers including Gilt City, HomeRun and OpenTable. Users could also pay for Deals using Facebook Credits, though Facebook has maintained that its payments product is primarily for games on its platform.

Please see the disclosure about Facebook in my ethics statement.

Facing a barrage of negative press about its upcoming IPO, Groupon CEO and co-founder Andrew Mason took up a pen to counter critics of the social buying service.

Especially under scrutiny has been the Chicago-based Groupon’s accounting of its finances — along with worries that its torrid growth is slowing — both of which Mason addressed in detail in a pugnacious email memo to his thousands of employees.

Specifically referencing a recent article speculating that the daily deals site was running out of money, Mason said, in part:

“While we’ve bitten our tongues and allowed insane accusations (like in the article above) to go unchallenged publicly, it’s important to me that you have the context necessary to brush this stuff off.”

Mason also took on the controversial ACSOI — or adjusted consolidated segment operating income — metric that Groupon used in its initial filing and later stepped back from.

“The reason we didn’t realize everyone in the world would hate ACSOI (no, it’s not the same reason we didn’t realize everyone in the world would hate our Superbowl ad), is that we think it actually does a pretty good job at describing our marketing expenses in a steady state — we just didn’t realize there would be so many skeptics,” wrote Mason.

Mason also took some aim at competitors, such as LivingSocial and Yelp, in the email.

As for the public offering, which is expected next month:

“If there’s a silver lining, it’s that we’re almost on the other side, and the negativity leaves us well-positioned to exceed expectations with an IPO baby that, having seen the ultrasound, I can promise you is not one of those uglies.”

Then again, that is exactly what a dad-to-be would say about his baby, whatever it looked like.

Mason, when asked about the memo, declined to comment.

There is a lot more than that, so here’s Mason’s full email for all you pencil pushers to peruse:

Dear Groupon,

This weekend, I did a Google News search on our company — my first in awhile. The first story that popped up was called The Fall of Groupon: Is the Daily Deals Site Running Out of Cash? I laughed when I read the headline (in the car by myself, weirdly). First — with this article, the degree to which we’re getting the shit kicked out of us in the press had finally crossed the threshold from “annoying” to “hilarious.” Second, I was struck by the irony — I had just finished a board meeting last Wednesday saying this to myself: I’ve never been more confident and excited about the future of our business.

I realize that this sounds like the kind of thing that CEOs say when they’re trying to pep people up. First of all — I’m all about not pepping people up. If you don’t believe me, just ask my fiancée, Jenny “why don’t you ever say anything nice about me” Gillespie. Want another example? Look at the magazine covers in our lobby, which are there to make you sad by reminding you of the impermanence of success.

I’m going to spend the rest of this email explaining why I’m so excited. You need some ammo to argue back against your blog-reading “friends” (silently argue in your mind, that is — you can’t actually say any of this yet), and I’ve been told that the “what have you ever done with your life that’s so great?” rebuttal isn’t working as well for you guys as it has for me.

While we’ve bitten our tongues and allowed insane accusations (like in the article above) to go unchallenged publicly, it’s important to me that you have the context necessary to brush this stuff off.

I’ll summarize my excitement with four points: 1) Growth in our core business is strong 2) Our investments in the future — businesses like Getaways & NOW — look great, 3) We are pulling away from competition, and 4) We’ve built a great team that I would pit against anyone. In other words, all the stuff that one would want to look good? It looks good.

Many of the long-term unknowns of our business are becoming known, and we like the answers. I will now elaborate in a level of financial detail that will give Jason Child a stomach ulcer.

1. GROWTH IN THE CORE BUSINESS

Thanks to a tremendous effort by our sales team, August in the U.S. is shaping up to be a pivotal month. It appears that will revenues grow by about 12% over last month (which is a lot), while we cut our marketing expenses by 20% in the same period.

Beyond their obvious goodness, these numbers are important because they answer one of the main criticisms thrown at us in the past few months, relating to a metric we put in the S-1 called ACSOI (adjusted consolidated segment operating income) to help people understand how we think about marketing expenses. The reason everyone in the world seems to hate ACSOI is that it makes us look magically profitable by subtracting a bunch of our customer acquisition marketing costs from our expenses. The reason we didn’t realize everyone in the world would hate ACSOI (no, it’s not the same reason we didn’t realize everyone in the world would hate our Superbowl ad), is that we think it actually does a pretty good job at describing our marketing expenses in a steady state –we just didn’t realize there would be so many skeptics. I think it’s worth going deep on this one more time — brace yourself.

Our internal forecast shows two different types of marketing: what I’ll call “normal marketing” — which is NOT excluded from ACSOI — and “customer acquisition marketing,” which is. The way Groupon spends on marketing is unique in three ways:

1. We are currently spending more than just about any company ever on marketing — in Q2, we spent nearly 20% of our net revenue on marketing, while a typical company spends less than 5%. Why do we spend so much? The simple answer is “because it works.” But thats only part of what makes our situation special.

2. Our marketing — at least the customer acquisition marketing that we remove from ACSOI — is designed to add people to our own long-term marketing channel — our daily email list. Once we have a customer’s email, we can continually market to them at no additional cost. Compare this to Johnson and Johnson, McDonald’s, or most other companies. If I’m a Johnson, and I’m trying to sell you a box of Band Aids, I have to keep spending money on commercials and magazine ads and stuff to remind you about how sweet Band Aids are, even after you’ve bought your first box. With Groupon, we just spend money one time to get you on our email list, and then every day we email you a reminder of the sweetness of our metaphorical Band Aid. There is no cost of reacquisition — that’s unusual (and we created ACSOI to point that out). If Johnson wanted to follow the Groupon strategy, he would have to start a free daily newspaper about bandages and then run Band Aid ads in it every day.

3. Eventually, we’ll ramp down marketing just as fast as we ramped it up, reducing the customer acquisition part of our marketing expenses (the piece that we remove in ACSOI) to nominal levels. We are spending a ton now because we’re acquiring as many subscribers as we can as quickly as we can. We aren’t paying attention to marketing budget (just marketing ROI) in the way a normal company would, because we know that even if we wanted to continue to spend at these levels, we would eventually run out of new subscribers to acquire. So our customer acquisition spend drops severely to reflect the fact that eventually we’ll run out of people we can add to our email list. We view this internally as a very large one-time expense and then our job forever after will be to continually convert these subscribers into customers and to make sure our customers keep buying from us. Ongoing, the normal marketing dollars we spend are not something we would remove from our internal calculation of ACSOI.

I tried my best to explain this simply, but it’s not lost on me that if you actually understood this, you probably had to read it three times. It’s not easy stuff. It’s much easier to assume that we’re goons. So people can be forgiven for being suspicious. In fact, feel a little bad about how downhearted the critics will be when we don’t turn out to be a Ponzi scheme — those are good impulses for journalists to have, and I hope our non-evil ways don’t destroy their spirits.

Anyway, there’s a reason that I just went on about ACSOI. One of the questions that skeptics ask is, “when you ramp down marketing, won’t revenues stop growing as well? Aren’t you just buying growth?” Over the past several months we’ve been consistently reducing our marketing spend and yet revenues are still increasing at a significant pace. In Q1 of this year, marketing represented 32.3% of our net revenues. By the end of Q2 it had fallen to 19.4%. And it has continued to fall over the past several months all because we’ve been investing in our own long-term marketing channel — our email list.

Internationally we see the same trends — marketing is down, but revenues are up — every country is either losing less or making more. Even in young markets like Korea, where we’re still making massive investments, we’re seeing unprecedented growth. We started building our Korean team this January, despite the presence of two competitors that were larger than any we’d previously battled from behind. Thanks to the brilliant execution of the Korean team, we are set to be the market leader within months. We’ve never had a country grow as fast as Korea!

What about our joint-venture with Tencent in China? Did you read the article that Gaopeng’s CEO has kidnapped the first born children of all our employees and is putting them to work building a laser beam he’ll use to slice the moon in half? It turns out that that one isn’t true either. China is definitely a different market, but every month we inch closer to profitability. As has been our strategy in launching other countries — Germany, France, and the UK, included — our China growth strategy was to hire quickly and manage out the bottom performers. So far, that strategy has improved our competitive position in China from #3,000 to #8. Will we one day reach the dominant status we enjoy in most (come on, Switzerland!) other countries? It’s too soon to tell, but there’s no question in my mind that we’re building a business that will be around for the long haul.

2. NEW BUSINESS LINES ARE BOOMING

Travel and Product are enormous opportunities. After only a few months, they’re already making up 20% of revenue in some countries. We sold $2M worth of mattresses in the UK — in one day! Groupon Getaways will do $10M in its first calendar month — which you might think is awesome, but we’re actually disappointed with those results because we know how much better we’ll be doing soon.

While there’s still a ton of work to do, Groupon Now! continues to see weekly double digit growth. The model works and I believe it will play a major part in the future of our global business as more merchants and customers join the marketplace.

3. WE ARE PULLING AWAY FROM COMPETITION

If there’s a question I’ve received from Groupon skeptics more than any other, it’s, “how will you fend off the competition — especially massive companies like Google and Facebook?” I could give a dozen reasons to bet on Groupon, but it’s impossible to predict the future or the actions of others. Well, now the sleeping giants have woken up — and the numbers are showing that what was proven true with literally thousands of other competitors is just as true with the incumbents of the Internet: it’s kind of hard to build a Groupon. And since anyone with an Internet connection can track the performance of our competitors, I can be more specific:

Google Offers is small and not growing. In the three markets where we compete, we are 450% of their size.

Yelp is small and not growing. In the 15 markets where we compete, our daily deals are 500% of their size.

Living Social’s U.S. local business is about 1/3rd our size in revenue (and smaller in GP) and has shrunk relative to us in the last several months. This, in part, appears to be driving them toward short-sighted tactics to buy revenue, like buying gift certificates from national retailers at full price and then paying out of their own pocket to give the appearance of a 50% off deal. Our marketing team has tested this tactic enough to know that it’s generally a bad idea, and not a profitable form of customer acquisition.

Facebook sales are harder to track, but are even less significant at present.

My point is not that our competitors will fail — some may actually develop sustainable businesses, or even grow — after all, local commerce is an enormous market. The real point is that our business is a lot harder to build than people realize and our scale creates competitive advantages that even the largest technology companies are having trouble penetrating. And with the launch of NOW, I suspect our competition will have an even harder time in light of the natural barriers to entry that are needed to build a real-time local deals marketplace.

4. OUR TEAM

This is the fluffiest of the four points, but maybe the most important — we’ve built a global team of hungry entrepreneurial operators and seasoned executives that rivals any team I know of. Almost every day, I find myself in a scenario where I silently think, “I can’t believe I got this person to work for me — that failure of judgement is perhaps their single flaw.”

I point out the team because while today the business is strong and it appears we must endure success for awhile longer (despite its impermanence), we will inevitably be challenged with issues we didn’t predict — and when that happens, the quality of our team will be a deciding factor in our ultimate long-term success.

FINAL THOUGHTS

I wrote this email because when I read some of the press this weekend, I realized a rational person could read this stuff and wrongly conclude that we’re in trouble. The irony is hopefully clear: We’ve never been stronger.

And while we’ve refrained from defending ourselves publicly, you’ve continued to create our best defense, with every department innovating new practices that are taking our business to the next level. Thanks for staying tough, determined, and agile throughout this process. For now we must patiently and silently endure a bit more public criticism as we prepare to birth this IPO baby — a breed for which there are no epidurals. If there’s a silver lining, it’s that we’re almost on the other side, and the negativity leaves us well-positioned to exceed expectations with an IPO baby that, having seen the ultrasound, I can promise you is not one of those uglies.

I’ve been as candid as possible — hope this sheds some light on things. Reply with your questions if anything remains unclear. Amidst all this, I hope you remember what we’re doing here — we are making history together. I guess you don’t get to build something that reshapes the local commerce ecosytem without getting a few bruises. I’m so proud of the work we’re doing, and I feel extraordinarily lucky to work on what I think is the best thing that’s happened to small businesses since the telephone We’ve invented something that is catalyzing millions of dollars of local commerce every single day in 45 countries and fills the lives of millions of customers with unforgettable experiences — it’s pretty remarkable.

Looking forward to getting this behind us!

Andrew

P.S.: I almost forgot to address the nonsense about us running out of money in the article above. If you apply the same logic used in the article, you’d have concluded long ago that companies like Amazon and Wal-Mart were running out of cash too. Both have often had payables far in excess of their cash. Finance geeks call this a working capital deficit. It’s normal, manageable and a lot of folks actually believe it’s good thing and would kill to get paid from their customers long before they have to pay their suppliers. We are generating cash, not losing it — we generated $25M in cash last quarter alone, adding to the $200M we had before. In other words, we’re doing the opposite of running out of money.

Speaking of “it looks good,” here is Conan O’Brien with a Tourette’s version of Mason’s new catchphrase:

The two parties were negotiating the final agreement Sunday and a deal could be announced as early as Monday, the people said.

The deal would join two of the 10 largest U.S. cable operators by subscribers, continuing consolidation in a business facing competition for TV subscribers from satellite operators and telecommunications companies, as well as Internet-based upstarts.

href=”http://online.wsj.com/article/SB10001424053111903480904576508940634540716.html?mod=WSJ_qtoverview_wsjlatest”>Read the rest of this post on the original site »

Groupon coupons — both daily deals and Groupon Now deals — started appearing today within the Foursquare “Explore” tab in its mobile apps, which helps users find interesting things to do nearby. They seem to have been first noticed by the independent blog About Foursquare.

A representative for Foursquare said the Groupon deals are available in Chicago today, and should be available for the rest of the U.S. and Canada by Sunday.

Earlier this month, Foursquare added five other daily deal sites: LivingSocial, Gilt Groupe, AT&T, Zozi and BuyWithMe.

Time will tell, but it seems likely users will be compelled by deals that are timely, targeted to their tastes and nearby.

The fast-growing website, which specializes in mass-emails touting daily coupons, plans to unveil a promotional tie-up with a Hollywood studio Wednesday. It is the first of many offers the site says it is planning with media companies in the coming months.

Groupon has previously served up deals for magazine and newspaper subscriptions, the Redbox movie-rental service and bundles of movie tickets, but hasn’t offered a substantial national deal for a specific movie.

Through Groupon, Lions Gate Entertainment Corp. will offer half-price, or $6, tickets to its new suspense thriller “The Lincoln Lawyer,” which hits theaters Friday. The deal goes live Wednesday at midnight and runs through late Thursday evening.

Read the rest of this post on the original site »

The cellphone maker is hoping that its PlayStation phone, combined with several other new smartphones, will help lift the company to the top of the Android race as opposed to being just one of the pack.

In an interview at the Mobile World Congress in Barcelona, Sony Ericsson CTO Jan Uddenfeldt told Mobilized that the company intends to capitalize on Sony technologies beyond gaming, particularly in the areas of screens and cameras.

“We think we have a really competitive edge,” said Uddenfeldt. The Xperia Arc, for example, uses the Bravia Engine that comes from Sony’s television heritage. “We will introduce 3-D technology and that will come from Sony, of course.

Uddenfeldt said that the company is now leading on Android as well, being the first company outside of Google itself to release a Gingerbread-based phone, with its Arc that was announced at CES. At Mobile World Congress, it announced the Xperia Play and two other phones.

“From being a little bit of a laggard when it comes to Android releases, we are now the leader,” he said. “We intend to really stay that way. Our intention is to be the number one player in this Android world.”

First and foremost, Uddenfeldt said the company has to be a leader when it comes to using both the latest version of Android and the newest chips and other hardware. “It is a technology race, so it is very important to be on the latest technology,” he said.

With Xperia Play, Uddenfeldt said, the company has something that takes advantage of the latest and greatest version of Android but also does something unique.

“We don’t see anyone else doing this in the near future,” he said. In addition to being PlayStation certified, it will also work with a lot of Android games, including many customized just for the Play.

“Most of the games that we will launch are actually non-Sony-based games, Android games,” he said, referring to deals with Gameloft and EA Sports to create Xperia Play-optimized titles. “There’s going to be like 50 games when we launch the product in March or April.”

Though most Americans wouldn’t know it, Sony Ericsson is a top-three global player in Android phones, with about 20 percent market share, he said. Until recently, Uddenfeldt said, the company would tend to introduce phones first in Europe and Asia, bringing them to the U.S. several months later–and that, he said, “was absolutely not the right strategy.”

“The U.S. is now the leading market,” he said. “The U.S. is the country where the most advanced products are being launched first. That was not the case two or three years ago.”

Sony Ericsson is realizing this and is changing, he said, noting that Verizon will be among the first carriers to offer the Play. “We will work very closely with AT&T in launching different products as well,” he added.

The company is also shifting more of its design and engineering to the U.S., Uddenfeldt said, noting that the Redwood Shores, Calif., office where he works, established just two years ago, now has about 300 workers doing everything from product design and engineering to business development.

“It’s the right place to be,” he said. “We have Android there. We have Facebook.”

Uddenfeldt has a unique perspective, having been with Sony Ericsson for only six months but at the same time being a 30-year Ericsson veteran and being based in Silicon Valley for the past several years. He’s also not afraid to admit that the company has made mistakes, including in the past year as it tried to move from proprietary Walkman and Cybershot phones to a fully Android-based lineup.

“I don’t think Sony Ericsson fully understood the importance of being on the latest Android release,” he said. “That kind of hindered a little bit the growth of the company during last year.”

However, he said, with the move to Android, the company has stemmed its losses and has now had four profitable quarters. This year, he said, it is time for growth.

In contrast to a decade ago, when many such deals went through with little trouble, today’s venture-backed acquisitions are fraught with landmines that can result in delayed payments and reduced purchase prices long after the deal has been struck, say venture capitalists, entrepreneurs and deal attorneys.

Such complications were evident in the $125.2 million acquisition of privately held surveillance-technology firm Era Systems Corp. by SRA International Inc., a tech supplier to the federal government.

While the deal was struck in mid-2008, Era’s shareholders took a haircut on their purchase price and didn’t collect their reduced amount until last year, partly because of a disagreement during the escrow period.

Read the rest of this post on the original site

The company said it is performing well, as deal seekers around the world–from North America to Western Europe to the Asia-Pacific region–look for deals on hotels and rental cars, specifically, and benefit from improvements in the economy.

The company’s stock is trading at $463.33, up $6.32 a share today. A new 52-week high was hit yesterday, trading at $459.57 a share.

Yesterday, Priceline announced it entered its fifth straight year of its well-known advertising campaign, featuring William Shatner–a.k.a. “the Priceline Negotiator.”

Shatner is portrayed as a James Bond-like character who will stop at nothing to obtain the best travel deals and maximum savings for Priceline customers–although he does silly things along the way, too, like watch a gorilla wrestle a scrawny man.

Shatner will be joined in the campaign–created by Butler, Shine, Stern & Partners–by new sidekicks Naomi Pryce and the NBA’s all-time leading scorer, Kareem Abdul-Jabbar.

The Norwalk, Conn.-based company will release its fourth-quarter and full-year results Feb. 23.

Expect the focus to be on growth.

Priceline is forecasting total gross travel bookings to jump year-over-year by 36 to 41 percent, with most of the growth coming internationally.

International bookings are expected to jump by 54 to 59 percent vs. minimal growth in domestic gross travel of 5 to 10 percent.

Annual revenues are forecasted to jump by 31 to 36 percent, and gross profits are expected to soar by 49 to 54 percent.

As a close competitor to Priceline, Expedia.com hit a 52-week high of $29.85 back in September, but has fallen considerably since, to trade around $21.69 a share.

Yesterday, Expedia relaunched a new price-savings campaign called ASAP: A Sudden Amazing Price. The  promotion will offer two discounts a day on hotels and other items of up to 50 percent, aimed at both sides of the country.

In 13 years of trying to bring the Depression-era business into the 21st century, Coupons.com CEO Steven Boal had his doubts along the way,  but “lo and behold, it’s actually happening,” he said.

There have been a lot of challenges–like wrestling those scissors out of the hands of senior citizens.

But you take America’s deal-oriented culture and put it together with today’s digital media, and you get things like Groupon and Coupons.com. “It’s an explosive opportunity,” he said.

However, digital coupons today are still pretty physical.

On Coupons.com, you can find them online and print them out, or potentially save them to the loyalty card that gets swiped at checkout. Some of that is changing with mobile phones, but that’s still in its infancy.

What is changing with digital coupons is the frequency of use and the demographics.

Now, 40 percent of Coupons.com’s customers are male, and there’s a wider variety of products being purchased, Boal said. That’s leading to soaring redemption rates. Of the people who visit the Coupons.com network, 17 percent actually use a coupon, which is much higher than the newspaper average of half a percent.

As for the progress of the business, Boal said it started to scale about three years ago, “and this past year was the first time we had visibility into extreme growth into 2011. We hit the gates running, and the 2011 numbers are smoking hot off the charts,” he said. “The lines are going vertical right now.”

Last year, more than 49 million U.S. consumers used online coupons, representing more than 16 percent of the population, and of those coupon users, almost one-third did not also clip coupons from their newspaper, according to Simmons Market Research.

Coupons.com said that last year, total consumer savings from its network, which also includes other Web sites using its technology, equaled more than $1.2 billion in coupon savings, a 41 percent jump year-over-year.

Coupons.com is the 63rd largest Web property in the U.S. (coming in one spot above Groupon and one below Expedia), with just more than 14.7 million monthly uniques.

In 2010, Coupons.com grew to more than 270 employees and expects to hire an additional 100 people this year, mostly in engineering, sales and marketing in the U.S. and international markets.

Here’s a chart of the top 20 most frugal cities, according to Coupons.com:

It’s a note to the European company’s select group of freeloading American users, letting them know they’re going to have to start paying sooner or later. And it says Spotify is “looking forward” to a U.S. launch in ‘the coming months.”

From: Spotify
Date: February 8, 2011
To: xxx
Subject: Spotify Payment Problem- ACTION REQUIRED!

Hello from Spotify!

You are one of only a few people who has access to a Spotify promotional test account in the USA, and we hope you’re enjoying listening to Spotify through our Premium or Unlimited service.

We are really looking forward to launching the service in full in the USA over the coming months, and hope that you will continue to use the service and be one of our key advocates.

We need to make some small system changes to our payment system for our USA launch, and so in order to make the transition for you as smooth as possible, we have credited your Spotify account with 1 month worth of FREE Spotify Premium/ Unlimited!

In return for this, we ask that you please do the following:

• Visit our website https://www.spotify.com/account/subscription/change-payment/
• Login with your username and password.
• Select a payment method (Card or Paypal) and click ‘Change’
• Click ‘I Accept/ Continue’ to accept the new product in US Dollars
• Provide us with your payment details once more, so that after your FREE
month has expired you will be able to keep listening to music through Spotify.

Your next bill is due to us on ’14/02/12′, so please provide us with your payment details before then, otherwise you will revert back to Spotify Free and if you have Premium you will lose access to Spotify on your mobile. On this date, you will then be billed in Dollars!

Thanks for your help, and please feel free to reply to us directly if you have any
questions!

Obviously this note isn’t anything like a confirmed launch date. In order to do that, Spotify needs U.S. deals with the big music labels, and so far only has Sony signed on.

Industry sources keep telling me a deal with EMI is this close, but they’ve been saying that for weeks now. Which doesn’t mean that it won’t happen. Just that it hasn’t yet.

And no matter what happens with EMI, Spotify can’t go anywhere unless it has Universal Music Group, the world’s largest label, on board. Again, lots of people tell me they’re confident a deal will get done soon, but…

In any case, the note does point out one of the reasons so many plugged-in Americans you know are raving about Spotify, even though the service doesn’t formally exist here–Spotify has quite cleverly been handing out free test accounts to lots and lots of people who might rave about it.

That includes VIPs and their families, all sorts of music industry people and media people, including yours truly.

And if you’re getting Spotify in the U.S., you are indeed getting a really, really good service: Free, unlimited music, anywhere you want it, whenever you want it, without ads.

Which is not what Spotify’s “real” users actually get. The ones who use the free service have a cap on the number of hours they can listen for free, can only listen on their PCs and will encounter a smattering of advertising. To get the real deal–mobile, no ads, no limits–they’ll need to cough up the equivalent of about $13.50 a month.

So far, about a million people are doing just that, people familiar with the company tell me. But how many will go for it if, or when, it gets to the U.S.?

KickApps CEO Alex Blum will become KIT’s COO, and Blum and KIT CEO Kaleil Isaza Tuzman say almost all of the three acquired companies’ employees will hang on to their jobs.

Tuzman said his company paid about $62 million in KIT’s Nasdaq-traded stock for the three companies, and the balance in cash.

KickApps and Kyte had collectively raised some $55 million, so the companies’ backers aren’t going to do much more than break even in these deals. And the deal may be a coulda-shoulda for KickApps, which had talked to AOL about a $90 million deal three years ago, but never got it done.

Blum wouldn’t comment directly about the AOL non-deal, except to note that the spring of 2008 “was a different era.” And he says that all of his investors, which include North Atlantic Capital, Spark Capital and Softbank, have gotten “more than their money back,” and that all of them have taken KIT stock instead of cash. Spark general partner Santo Politi will join KIT’s board.

Tuzman, meanwhile, has an interesting story. During the first bubble he ran GovWorks, a failed start-up that happened to have a movie crew documenting its rise and fall. (Sadly, you can’t get “Startup.com” from Netflix or any other obvious place–can anyone point us to a copy?)

But this Forbes profile documents his efforts to build a second career. And at the very least, his newest company appears to be growing. In its last public filing, KIT reported quarterly losses of $8 million on sales of $28 million, which was up 151 percent from the previous year.

And late last year, KIT raised more than $100 million earmarked for acquisitions. None of that money, Tuzman says, was spent on these three deals.

[Image credit: Tyw7 via Wikipedia]

But there could be a problem: Fat fingers.

According to a survey released today, 47 percent of mobile app users say they click or tap on mobile ads more often by mistake than they do on purpose.

Accidental clicks obviously come with the territory. Today’s smartphones often have large displays, but it’s still to easy to accidentally click on a banner instead of a link.

In fact, screen limitations led Steve Jobs to criticize seven-inch tablet screens recently (vs. the iPad’s nine-inch screen), by saying users will have to file down their fingers to achieve ultimate accuracy.

Apple is only one of many companies that are investing heavily in mobile with the hopes that it will produce the next big advertising goldmine. While filing down fingertips isn’t a practical solution, there is a way to avoid spending on clumsy clicks.

To do so, advertisers are increasingly paying for mobile ads based on action, like a user providing an email address or watching a video. The survey was conducted by Harris Interactive on behalf of Pontiflex, which is pitching its own solution for this problem.

It measures advertising through what it calls “cost per lead,” meaning advertisers don’t pay until users sign up and share their contact information.

Other findings from the survey:

• The vast majority of apps that are downloaded are free–95 percent of mobile app users download free apps, while only 41 percent pay.
• 71 percent of mobile app users said they prefer ads that keep them within the app they are using, instead of ads that take them to the browser.
• 96 percent of mobile app users with a household income of $75,000 or greater said they use free apps.
• Almost two-thirds of mobile app users selected ads that contain coupons, deals or newsletters as their preferred in-app mobile ad type.

Photo Credit: herbrm.

While many division leaders might just release a dull memo, the former Google exec went right to the videotape, and I mean really went for it.

The adorkable result is an all-hands Q4 music video, which BoomTown acquired, in which a suit-wearing Eun moves into Lady Gaga territory and shakes his very buttoned-up booty.

While I like to see this kind of corporate playfulness and fun-poking, let’s hope AOL’s fourth-quarter earnings–being announced in a little more than a week and expected to remain weak–show as many jazz hands as Eun’s effort below does.

Enjoy:

]]> http://allthingsd.com/20110124/viral-video-aol-media-head-david-eun-gets-jiggy-in-internal-all-hands-video/feed/ 0 http://allthingsd.com/20110120/a-big-quarter-from-google-and-shake-up-at-the-top/ http://allthingsd.com/20110120/a-big-quarter-from-google-and-shake-up-at-the-top/#comments Thu, 20 Jan 2011 21:03:37 +0000 Peter Kafka http://mediamemo.allthingsd.com/?p=28356 First look at Google earnings: Net revenue of $6.4 billion and $8.75 a share.

The Street was looking for $6.06 billion and $8.09 a share.

Also, importantly, a shake-up at the top. From the release:

* Starting from April 4, Larry Page, Google Co-Founder, will take charge of Google’s day-to-day operations as Chief Executive Officer.
* Sergey Brin, Google Co-Founder, will devote his energy to strategic projects, in particular working on new products.
* Eric Schmidt will assume the role of Executive Chairman, focusing externally on deals, partnerships, customers and broader business relationships, government outreach and technology thought leadership–all of which are increasingly important given Google’s global reach. Internally, he will continue to act as an advisor to Larry and Sergey.

Here’s the full text of Schmidt’s statement explaining the move:

When I joined Google in 2001 I never imagined—even in my wildest dreams—that we would get as far, as fast as we have today. Search has quite literally changed people’s lives—increasing the collective sum of the world’s knowledge and revolutionizing advertising in the process. And our emerging businesses—display, Android, YouTube and Chrome—are on fire. Of course, like any successful organization we’ve had our fair share of good luck, but the entire team—now over 24,000 Googlers globally—deserves most of the credit.

And as our results today show, the outlook is bright. But as Google has grown, managing the business has become more complicated. So Larry, Sergey and I have been talking for a long time how best to simplify our management structure and speed up decision making—and over the holidays we decided now was the right moment to make some changes to the way we are structured.

For the last 10 years, we have all been equally involved in making decisions. This triumvirate approach has real benefits in terms of shared wisdom, and we will continue to discuss the big decisions among the three of us. But we have also agreed to clarify our individual roles so there’s clear responsibility and accountability at the top of the company.

Larry will now lead product development and technology strategy, his greatest strengths, and starting from April 4 he will take charge of our day-to-day operations as Google’s Chief Executive Officer. In this new role I know he will merge Google’s technology and business vision brilliantly. I am enormously proud of my last decade as CEO, and I am certain that the next 10 years under Larry will be even better! Larry, in my clear opinion, is ready to lead.

Sergey has decided to devote his time and energy to strategic projects, in particular working on new products. His title will be Co-Founder. He’s an innovator and entrepreneur to the core, and this role suits him perfectly.

As Executive Chairman, I will focus wherever I can add the greatest value: externally, on the deals, partnerships, customers and broader business relationships, government outreach and technology thought leadership that are increasingly important given Google’s global reach; and internally as an advisor to Larry and Sergey.

We are confident that this focus will serve Google and our users well in the future. Larry, Sergey and I have worked exceptionally closely together for over a decade—and we anticipate working together for a long time to come. As friends, co-workers and computer scientists we have a lot in common, most important of all a profound belief in the potential for technology to make the world a better place. We love Google—our people, our products and most of all the opportunity we have to improve the lives of millions of people around the world.

His shorter comment, via Twitter:

Here, again, is a cheat sheet from Citi’s Mark Mahaney, so you can play along at home:

]]> http://allthingsd.com/20110120/a-big-quarter-from-google-and-shake-up-at-the-top/feed/ 1 http://allthingsd.com/20110118/want-to-cut-your-cord-the-nbcu-comcast-deal-wont-make-it-easier/ http://allthingsd.com/20110118/want-to-cut-your-cord-the-nbcu-comcast-deal-wont-make-it-easier/#comments Tue, 18 Jan 2011 22:47:42 +0000 Peter Kafka http://mediamemo.allthingsd.com/?p=28242 If you were hoping that the government restrictions on the NBC U-Comcast deal would make it easier for you to stop paying for cable, you’re out of luck.

At a very first glance, some of the new rules imposed by the feds might seem like they require the new company to offer up programming to any online player that wants to pay up.

And technically, they do. But the new rules have plenty of conditions and limits. So the bottom line is you’re not much more likely to get access to “30 Rock” via YouTube, or CNBC via iTunes, then you were before.

The new FCC and DOJ rules do give, say, Google the ability to buy access to some of NBC U shows or channels. But it would require Comcast’s competitors to do the same thing, first.

That is: Unless the people who are reluctant to put their stuff online because they don’t want to upset Comcast go ahead and put their stuff online, Comcast doesn’t have to, either. So it’s theoretically possible, but not probable.

And if it happens, it will happen haltingly. If Viacom sells someone online access to its MTV lineup of reality shows, that might require Comcast to offer up its reality show lineup on Bravo. But it wouldn’t entitle an online outlet to the police procedurals on USA.

The government also gives the option to, say, Netflix, to set up shop as another cable operator, and buy access to all of NBC Universal’s programming. But it would have to buy all of it–just like Time Warner Cable and Cablevision do when they make a carriage deal for NBC U’s shows.

And again, Comcast wouldn’t have to do that unless its peers did. Which means that if Netflix really wanted to set up shop as a direct competitor of the cable guys, it can do so. But it would have to operate exactly like the cable guys, just like the satellite guys did when they entered the market a couple of decades ago.

So if Netflix, or Apple or whoever really wants to offer a full suite of cable programming, at cable prices, it could. But that would be very, very expensive: Analyst Rich Greenfield estimates that the bill for NBC U’s programming alone would run a new entrant $1 billion a year.

Just as, or even more, important, is that those kind of bundled, take-it-or-leave-it deals are exactly the kind of thing that the cord-cutting crowd complains about.

They don’t want to have to pay for USA and Bravo and Syfy and MSNBC–they want to pick and choose channels, or shows. And pay a lot less.

“I don’t think cord-cutting was a major focus” of negotiations, Comcast EVP David Cohen said during a press conference this afternoon. And that may be true!

But the net result reads very much as if Comcast wanted to make sure the government didn’t force it to break its business model. And if that was the case, it got what it wanted.

]]> http://allthingsd.com/20110118/want-to-cut-your-cord-the-nbcu-comcast-deal-wont-make-it-easier/feed/ 3 http://allthingsd.com/20110114/meet-andreessen-horowitz%e2%80%99s-newest-partner-mark-cranney/ http://allthingsd.com/20110114/meet-andreessen-horowitz%e2%80%99s-newest-partner-mark-cranney/#comments Sat, 15 Jan 2011 00:01:41 +0000 Arik Hesseldahl http://newenterprise.allthingsd.com/?p=1838 Venture capital firm Andreessen Horowitz has named Mark Cranney–a veteran tech executive with more than 20 years of experience in senior positions at Hewlett-Packard, Opsware and Parametric Technology–as its newest partner today. He’s been entrepreneur-in-residence at the firm for about seven months.

His role will be a little different from that of most other VC partners. As AH’s partner for “market development,” rather than evaluate new deals he’ll spend his time on developing the sales and go-to-market strategies of companies that the firm has already invested in.

AH co-founder Ben Horowitz said it’s all part of the firm’s preference for founders becoming CEOs. “The thing that’s most difficult, especially for a technical founder, the most difficult thing to learn is sales. It’s the most difficult thing to learn operationally,” Horowitz told me. “If you don’t have experience with sales, it can cause you to fail as a founding CEO.”

It turns out that Cranney knows a thing or two about sales, and his history with Horowitz and AH’s other co-founder Marc Andreessen runs deep. Cranney spent four years as vice president of worldwide field operations at Opsware, which Andreessen and Horowitz sold to HP in 2007 for $1.65 billion. During that time Cranney’s team grew from 10 to 350 and sales grew from $18 million to $150 million. Horowitz wrote last year about how he came to hire Cranney at Opsware and how he possesses what Horowitz calls “the right kind of ambition.”

Cranney said that sometimes new companies get so focused on selling their new product or service that they forget to consider the larger backdrop of what’s going on inside a potential customer’s operations. “You want to help them avoid looking like a hammer in search of a nail,” Cranney told me. “There’s a systematic way of helping companies identify what’s going on in particular industries and companies and how they can tie what they do to projects already underway.” He’s also building out a network of contacts at large companies–including the Walt Disney Company, FedEx and JPMorgan Chase–that could become potential customers of the companies in the AH portfolio.

He’ll be focused on helping companies in the AH portfolio build their sales talent, and help them grapple with tricky issues like moving from “freemium” to premium business models, working with partners, identifying customers and responding to competitors.

One company he’s already worked with is Apptio, which helps companies manage their IT costs. It’s also notable for being the first investment that AH made. “They’ve had explosive growth in the last year and have been staffing up their sales teams,” Cranney said. “They had been a little concerned that these teams weren’t ramping up fast enough,” he said. Cranney helped Apptio develop a sales training program.

Besides Opsware, Cranney’s prior jobs include time at Aster Data, where he was executive VP of worldwide field operations, and a position as vice president for the Americas at Hewlett-Packard’s software and solutions business. He was also a vice president at Parametric Technology.

It’s another sign of growth at Andreessen Horowitz, which debuted in 2009 with a $300 million fund, then raised a bigger one of $650 million in November. It has recently taken positions at Groupon and Facebook on the consumer side. Its enterprise investments besides Apptio have included stakes in Okta and Fusion-io.

]]> http://allthingsd.com/20110114/meet-andreessen-horowitz%e2%80%99s-newest-partner-mark-cranney/feed/ 0 http://allthingsd.com/20110107/with-500-shareholder-concerns-gone-will-facebook-make-big-acquisitions/ http://allthingsd.com/20110107/with-500-shareholder-concerns-gone-will-facebook-make-big-acquisitions/#comments Fri, 07 Jan 2011 21:14:56 +0000 Liz Gannes http://networkeffect.allthingsd.com/?p=2103 At the stroke of midnight this New Year’s Eve, Facebook’s financial gurus must have breathed a sigh of relief. It was a new fiscal year, 2011, which meant an end to the days of stressing about having 500 shareholders.

Staying at 499 shareholders or fewer is something Facebook has worried about since at least 2007, and sidestepped by creating a special kind of restricted stock unit for new employees and making small talent acquisitions that avoided, when possible, awarding start-ups and their investors with Facebook stock.

Now that that’s over, Facebook’s acquisitions team may get the go-ahead this year to pursue larger and more complicated deals.

As is now widely known, SEC rules mandate that a company with more than 500 shareholders at the end of a fiscal year must report financial information, something Facebook didn’t want to do as a private company. But if you read the fine print, as BoomTown’s Kara Swisher first reported, Facebook has 120 days to disclose from the end of the fiscal year in which it crosses 500 shareholders.

That means the end of April of 2012, by which point Facebook has said in paperwork for its Goldman Sachs funding deal it expects to file to go public.

Basically, Facebook has exorcised a curse hanging over its head by outlasting it. Like a nightclub bouncer, the company had been letting one shareholder out of the room before allowing another in. And now that’s over, as long as Facebook goes public next year.

(Though at this point, many of the company’s financial details are already leaking out as part of the troubling Goldman Sachs deal.)

For now, Facebook is still being cautious about adding shareholders; the Goldman deal (which we’ve heard still hasn’t closed) was structured to combine Goldman’s wealthy clients into a single entity to avoid adding too many shareholders.

Facebook’s corporate development team has said publicly that part of why it likes doing “acqhire” deals of small, early-stage start-ups is because they are relatively uncomplicated, financially speaking. Wherever it can, Facebook tries to cash out an acquired start-up’s shareholders instead of giving them stock. In the past, if a start-up had too many shareholders, it might not have been an attractive acquisition candidate.

Facebook doesn’t always get its way on that preference; sometimes it pays in stock. For instance, Facebook bought two start-ups that had taken investments from RRE Ventures: Hot Potato (in August 2010) and Drop.io (in October). In the first case, Facebook paid RRE in cash, but the second time around, RRE was able to negotiate for stock.

But now that Facebook seems to basically be giving itself the go-ahead to surge past 500, who gets to be shareholder number 501 or even number 1,001? It’s possible they could be the employees and investors in larger, more complicated M&A deals. Facebook’s name has come up in acquisition discussions for companies like Twitter and Foursquare, but now it may actually start closing more of those deals.

To date, Facebook’s largest acquisition has been FriendFeed for $50 million in cash and stock in 2009. The first time many tech watchers heard of the 10 tiny start-ups Facebook acquired in 2010 was when the deals closed.

But now that big deals are on the table, the question is, who’s next?

Here’s Jon Stewart of “The Daily Show” last night ranting about Facebook avoiding making financial disclosures:

The Daily Show With Jon Stewart	Mon – Thurs 11p / 10c
The Anti-Social Network
www.thedailyshow.com
Daily Show Full Episodes Political Humor & Satire Blog</a> The Daily Show on Facebook

Please see my own disclosure about Facebook in my ethics statement.

]]> http://allthingsd.com/20110107/with-500-shareholder-concerns-gone-will-facebook-make-big-acquisitions/feed/ 0 http://allthingsd.com/20101222/hp-networking-head-people-are-tired-of-paying-for-cisco/ http://allthingsd.com/20101222/hp-networking-head-people-are-tired-of-paying-for-cisco/#comments Wed, 22 Dec 2010 14:00:44 +0000 Arik Hesseldahl http://newenterprise.allthingsd.com/?p=944 Marius Haas doesn’t do small jobs. During his five-year stint as head of corporate strategy for Hewlett-Packard, he was the one who oversaw the massive acquisition of IT services firm EDS in 2008.

Now as head of HP Networking, he has a job that is no less daunting: Wrestling with none other than Cisco Systems, the powerful grandaddy of the networking business. HP’s networking unit, recently bolstered by its $2.7 billion acquisition of 3Com last year, caught some attention this week with an audacious promotion offering networking customers a 20 percent discount on certain products if they trade in old Cisco gear.

To be fair, HP has yet to take much business away from Cisco. As The Wall Street Journal noted, Cisco has so far held on to its 70 percent share of the enterprise Ethernet switching market in Q3, up from 67 percent a year ago, according to the research firm Infonetics. HP’s share was 11 percent, the same share that 3Com had before it was part of HP.

Still, it’s an interesting time to be trading barbs with Cisco, in part because it appears vulnerable given its uncertain market outlook when it reported earnings last month, but also because it’s eyeing some of HP’s home turf for expansion.

I met up with Haas at HP Headquarters in Palo Alto recently to talk about how the matchup with Cisco is shaping up, and what to expect from HP in 2011.

NewEnterprise: Marius, let’s start with the big question about the coming year. You were deeply involved with the EDS deal and several HP deals before that. Is there still an appetite for big deals in IT or at HP?

Marius Haas: “It’s not going to stop. The big are going to get bigger. The appetite for some of the niche technology players to get some funding so they can grow to a sufficient scale is not gone. Now it’s becoming clear that Cisco, Oracle, IBM and HP are all pretty much starting to build out their end-to-end stacks and I don’t see any stop to the deal-making. In order to get the kind of muscle you need to compete in this market you have to be pretty big and you have to be global.”

NE: So HP is not done doing deals?

MH: “No.”

NE: What kind of deals might we see?

MH: “I’ll give you a hint. Look at who our new CEO and Chairman [former SAP CEO Léo Apotheker] is. You can probably draw a conclusion that maybe we’ll continue to expand in the software arena, and then move up the stack. That’s a logical path he could be taking.

NE: Let’s talk about the competition, specifically Cisco–a networking company that’s going after the data center and IT. You run the networking division of an IT company. Talk to me about that dynamic.

MH: “We like the position we’re in. We have all the things you need in order to bring together and deliver a sort of holistic kind of cloud strategy for customers. It takes a lot of IP and we’re the only company on the planet that has it all. Servers, storage, networking, management software, services. And all the devices as well. No one else has that. And Cisco doesn’t have it. They will come from their position of strength which is networking, but they are going to have to partner to deliver the broader ecosystem. It’s easy to put on paper, but harder to deliver.

“They’re used to their network model with proprietary products. Customers are saying they don’t want proprietary stuff. They want something that’s standards-based, interoperable and at a much lower cost. Our offering is resonating. We don’t see the kind of slowness they are seeing. And the enterprise customers are telling us they no longer want a single-vendor-dominated networking market. They want competition for their business.”

NE: So where are you seeing demand?

MH: “Historically HP before we acquired 3Com was strong in the mid-market and in the edge of the enterprise. We were strong in the K-12, local government, hospitality and health care segments. Now we’re seeing broader momentum in the enterprise, especially from companies who are modernizing their environment and getting ready for the cloud. People are getting tired of paying a premium for Cisco. And you’ve got about $9 billion worth of gear from Cisco that is going end of life soon. Out of our top 1,000 enterprise accounts, 458 are doing proof of concept trials with us. People are now convinced we are that second horse in the race.”

]]> http://allthingsd.com/20101222/hp-networking-head-people-are-tired-of-paying-for-cisco/feed/ 5 http://allthingsd.com/20101217/nokia-silicon-valley-giant/ http://allthingsd.com/20101217/nokia-silicon-valley-giant/#comments Fri, 17 Dec 2010 13:20:35 +0000 Ina Fried http://mobilized.allthingsd.com/?p=1015 When one thinks of Silicon Valley tech companies, Nokia is hardly a name that comes to mind. But the company has amassed a decent presence in the Valley, with about 500 people working on everything from research to inking deals with Web giants to building the features that the company hopes will someday soon return it to the forefront of the smartphone market.

In fact, the Bay Area unit was one of the first parts of Nokia that CEO Stephen Elop visited when he took the job earlier this year–in part because the company’s board had already scheduled to have its meeting in the area.

Silicon Valley has slowly become an important spot for the company, despite the fact that Nokia doesn’t sell all that many smartphones in the U.S.

Earlier this month, the company’s area employees got a new home as Nokia consolidated nearly all of its Bay Area workers in new offices in Sunnyvale (see picture above). Each floor of the Finnish-style interior has self-standing structures that from the outside look like saunas, but are actually “privacy huts” used for small group meetings or just some alone time pondering the ins and outs of the cellphone business. Nokia kept its research labs in Palo Alto and Berkeley so they could stay close to the area’s top two universities.

The local staff is doing a range of different things. About 50 of Nokia’s Silicon Valley employees come from the company’s 2008 purchase of a Norweigian company called Trolltech, which makes an application platform called QT that is used to control everything from phones to trains and more.

There are also a variety of individuals and small groups working on various product and research efforts. Kari Pulli is a Nokia Fellow who focuses on camera technology. He helped develop a panorama photo feature that is part of the latest Nokia cellphones. His team also developed an HDR photography capability–a feature Pulli reminds people was added to Nokia’s phones before Apple included it in the iPhone. He said his team is currently working on techniques to improve cellphone pictures taken in low-light conditions.

Typically, such photos are either noisy or blurry, depending on what step is taken to compensate for the lack of light. But by taking two pictures–one picture that aims to be sharp, though noisy, and another that will be a bit blurry, but have low noise–he said that a better composite image can be created.

Pulli, who was born in Finland but has spent the past four years in Palo Alto, said he is not too worried that the new Nokia chief is not Finnish. “At least he’s Canadian,” Pulli said, pointing out it’s another cold, dark place that loves hockey. (Elop does love hockey.)

While some of Nokia’s workforce is building new features, others are working on making sure that the company has partnerships with all the important companies in the valley–especially the Facebooks and Twitters of the world.

As for the research projects, they vary widely, and many are only tangentially related to Nokia’s core phone-making business.

Tico Ballagas is a user experience researcher working on how to make technology a better tool for family communications. So he’s been spending a lot of time with Elmo as part of a Family Story Play project to see if distant relatives can better connect with young relatives by reading a story to them over videoconferencing gear.

Meanwhile, Jorg Brakensiek is working with a number of German carmakers to develop a framework known as Terminal Mode, which would allow all manner of smartphones to be usable within cars without users having to stare down at a screen to make use features like maps, email and more.

What many at the offices lament, though, is the fact that so few of the people in the U.S. get a chance to appreciate their work. While Nokia certainly has its challenges globally, it is all but invisible at the cutting edge of the U.S. market. that’s because none of the major carriers here sell a subsidized model of the company’s high-end phones.

What’s worse, the phones that the carriers do sell tend to be the most basic and boring of cellular designs. The company has plans to change that next year, when it hopes the introduction of Meego-based phones will finally sway U.S. carriers to offer subsidized Nokia smartphones, ideally by next summer.

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