In a key hire, Jawbone said today that it had hired Mindy Mount, a top corporate VP at Microsoft, as its president.

The move by the San Francisco-based maker of wireless, music and wearable devices is part of what has been a major upgrading of its management and board. Recently, Jawbone added Yahoo CEO Marissa Mayer and Rob Wiesenthal of Warner Music as directors.

Jawbone has also recently done a big acquisition — purchasing BodyMedia, a wearable health and fitness company, for $100 million. The move comes just a couple months after it bought data and digital-design companies Massive Health and Visere.

All this expansion requires tight organizational efforts and Mount has a lot of financial and operational experience, having held several key jobs at the software giant. She was most recently corporate VP and CFO at Microsoft’s Online Services Division, which includes Bing, MSN and Microsoft Advertising. Before that she held a similar job at the Entertainment and Devices Division, which has the Xbox, Zune and Windows Phone units.

Previous to that, Mount ran AOL’s U.K. unit, worked in strategy at Time Warner and also was an exec at Morgan Stanley. She has an MBA from the Harvard Graduate School of Business and an undergraduate degree from the University of Wisconsin-Madison.

In an interview today, Mount said that what attracted her to Jawbone was the challenge of scaling the fast-growth company, which is helmed by CEO and co-founder Hosain Rahman.

“Right out of the block, I’ll be spending time on business operations, since the scale and scope and complexity of Jawbone has really increased,” she said. “What really attracted me to the role is that it is a really meaty one … It’s a company with great products, where I can come in and have real impact, because consumer electronics companies really have to execute.”

Jawbone products include Jawbone wireless headsets, Jambox speakers and the Up personal fitness wristbands. The company has raised a lot of funding, totaling about $210 million from such venture firms as Andreessen Horowitz, Khosla Ventures, Kleiner Perkins and Sequoia Capital, as well as Deutsche Telekom, investor Yuri Milner and others.

In a tense two-hour hearing, parliament’s Public Affairs Committee grilled Matt Brittin, Google’s head of sales and operations in northern and central Europe, about whether the firm completes sales of its products and services in the U.K., making it liable to pay more tax in Britain.

Read the rest of this post on the original site »

Outside the U.S., iMac shipping windows remain at a week or more. In France and the U.K., they’re five to seven business days for the 21.5-inch models and one to two weeks for the 27-inch models. In Germany, the window is two weeks for both models. And in Japan, the 21.5-inch models ship in two to three weeks, and the 27-inch models in three to four weeks. So, overseas, iMac availability clearly remains somewhat constrained.

Why the intercontinental disparity in shipping windows? Simple: Apple has amassed enough North American inventory to meet expected demand. But this is true only of the iMac’s four standard models. The addition of any customization, even if it’s simply swapping in a trackpad for a mouse, pushes the device’s ship time back out to two to three weeks. Outside the U.S., the story is the same as it has been to date. IMac supplies still aren’t at the level Apple wants. As CEO Tim Cook noted on the company’s last earnings call, “We left the quarter with significant constraints on the iMac. … We are confident that we are going to significantly increase the supply. But the demand here is very strong, and we are not certain that we will achieve a supply-demand balance during the quarter.”

That remains the case today, as these varied shipping windows demonstrate. Which is not to say that Apple isn’t making headway. It is. As I noted here recently, Mac sales rose 31 percent year over year for the month of January, according to NPD, and the reason was likely improved iMac availability. But again, that was in the U.S. To reach supply-demand equilibrium overseas, Apple has to ramp up iMac production even more.

Speaking at an industry event this week, Richard Piasentin, managing director of BlackBerry’s U.S. business, said a lot of early Z10 buyers are new to BlackBerry. According to the company’s preliminary sales data, about half of the Z10s it has sold in Canada so far have been purchased by customers who have never owned a BlackBerry. Evidently, a similar scenario is playing out in the U.K., where about a third of Z10 sales are going to BlackBerry newbies.

Now, as BlackBerry notes, this is preliminary data, and should be treated as such. But even so, it’s encouraging to hear that the Z10’s appeal might extend beyond BlackBerry loyalists. The company’s comeback hinges not just on convincing existing customers to stick with BlackBerry, but proving itself a viable alternative to iOS and Android devices.

“We are seeing strong interest from consumers currently on other platforms, but can’t comment further on specifics,” BlackBerry spokeswoman Amy McDowell told AllThingsD. “While of course our loyal customer base is upgrading to BlackBerry 10, initial reports from Canada and the UK are encouraging, and data suggests a significant percentage of users are coming to us from iOS and Android too.”

Deutsche Bank’s Brian Modoff recently surveyed 60 BlackBerry carrier stores in the U.K. and Canada and found no sell-outs in the former, and a few in the latter that may have been driven by poor inventory.

“In Canada, many stores reported being sold out of the Z10 and the sales force was well-versed on the device’s attributes; however, a few representatives told us that they did not receive a large initial inventory,” Modoff said. “In the U.K., the sales force was better-versed on the feature sets relative to the week prior; however, no stores were sold out. … We think the initial signs of this launch do not indicate the strong sales we would like to see.”

If Modoff’s findings are accurate and a good litmus test of the broader market, this is concerning news. BlackBerry launched in Canada and the U.K. first because they’re strong markets with very loyal user bases. If strong early demand isn’t translating into solid, sustainable demand there, where will it?

BlackBerry has not yet provided any sales numbers for the Z10, so Modoff’s claims are anecdotal. But 60 stores is 60 stores. And given the lack of hard data coming out of Waterloo, it’s certainly a sampling decent enough to raise questions about how the Z10 will sell once launch buzz has faded.

The U.K.’s Financial Reporting Council announced the investigation today in a statement on its website. This would make it the second regulatory body in the U.K. — the first is the Serious Fraud Office — to begin investigating the company. Correction: Actually not true. While HP has reported its findings to the UK’s Serious Fraud Office, that agency has never confirmed an investigation. The U.S. Department of Justice is also said to be investigating Autonomy’s books. HP alleged last year that Autonomy had used accounting tricks to inflate its value.

HP paid north of $11 billion for the company in 2011, then turned around and wrote down about $5 billion of its value as part of a larger $8.8 billion write-down announced in the fall. It was the second of two significant write-downs at HP during 2012, the first being the $8.9 billion write-down for the IT services firm EDS, acquired in 2008.

The council said it will investigate Autonomy’s accounting statements for the period between Jan. 1, 2009, and June 30, 2011. HP announced the deal to acquire Autonomy on Aug. 18 of that year.

The regulator is responsible for, in its words, “promoting high quality corporate governance and reporting to foster investment,” and also sets corporate governance and accounting standards in the U.K.

On Tuesday, Zynga appeased investors by beating its already lowered expectations for the period and exceeding analysts’ expectations.

It also showed critical progress on mobile, where one-quarter of the company’s monthly active users are now playing its games — that’s 72 million people out of 298 million monthly average users in total, making for a very large market across both Facebook and smartphones.

Just yesterday, there was some additional good news for the struggling games company.

New Jersey Governor Chris Christie gave conditional support to in-state Internet gambling, a market that will benefit Zynga as it looks for potential new revenue sources.

To date, most of Zynga’s real-money gaming efforts have been focused in the U.K., where online gambling has been legal for a while. Zynga confirmed on Tuesday that it still plans to launch games there during the first half of the year. Additionally, it said its real-money games would also be available on Facebook in the U.K., where the social network has only conducted a few minor tests to date.

Zynga’s stock soared 11 percent today, or 34 cents, to $3.43 a share. The stock has not traded that high — at least consistently – since July. While today’s rise is encouraging, shares are still down more than 75 percent from a high of $15.91.

Other gambling stocks also jumped following the news out of New Jersey, including Caesars Entertainment, which saw its shares rise 38 percent, or $3.84 a share, to close at $13.91.

What’s particularly important to note about the measure that Christie has endorsed is that it would permit a kind of reciprocity with other states where online gambling is legal. Zynga has already begun the long process of getting licenses in Nevada, so conceivably it would not have to jump through as many hoops to begin operating in New Jersey. And reciprocity would be essential to making a big enough market.

While many investors are obviously thrilled about the prospects of online gambling, it’s hard to know how much revenue it will produce. Dennis Farrell, a gambling-industry analyst for Wells Fargo, told The Wall Street Journal that online gambling could generate between $650 million and $850 million in annual revenue for the industry in the near term, assuming around 5.8 million people gamble on the sites.

I just received this internal memo, shared by an HP spokesman, from Robert Youngjohns, the newly appointed head of Autonomy, to his team. The highlights include confirmation — but no specific number — of coming layoffs at Autonomy. AllThingsD reported in December that about 70 people, most of them in sales roles, would be getting the ax.

The layoffs in the sales jobs are coinciding with a boost in R&D spending and the hiring of some 50 new engineers at Autonomy. Additionally, Youngjohns announced big plans to tie an Autonomy product, Aurasma 2.0, to HP’s massive printing and personal systems group. The point is to make printing a “cloud citizen,” the memo reads. However, some of the job cuts will be coming within the group that builds Aurasma.

From: Robert Youngjohns — HP Software Autonomy IM
Sent: Monday, January 14, 2013 7:50 AM
Subject: HP Autonomy Increases R&D Investments & Refocuses Aurasma

Team,

As we enter 2013, the focus of the HP Autonomy team is to position our business for growth and success. We have three priorities: making customer success the heart of everything that we do; building great products with a clear, funded roadmap; and leveraging the rest of HP to gain access to markets and customers. Our priorities are aligned with both HP Software as well as the larger HP, and I am pleased with the progress we’ve made so far and very optimistic about the future of the business.

In the spirit of being open and transparent, I want to let you know about two changes we’re making in the business:

First, we continue to invest in HP Autonomy and are aligning our resources with the priorities for HP Software overall. As part of this, we are continuing to invest in our R&D capabilities around the world; in fact, we expect to hire at least 50 additional engineers for Autonomy in the near term to lead new initiatives and further our technical prowess.

Secondly, with the announcement of Aurasma 2.0, we are ready to move to the next stage of this exciting business and focus on commercialization and revenue generation, including plans to feature Aurasma in products from other parts of HP – notably PPS, where the technology is key to PPS’s strategic intent to link print back to the Internet making it an equal mobile, social, and cloud citizen with digital display technologies (e.g., smartphones, tablets, PC’s, and TV). For instance, our close collaboration with the team on the ‘HP Live Photo’ app for iOS is one of the first instances of product integration in action.

This transition will require some changes to the Aurasma business as we to move to the next stage. While a number of roles will remain largely unaffected by this, other roles within Aurasma will no longer be required going forward and some work force reduction is likely.

We will of course hold individual discussions with employees who may be potentially affected, although the timing will vary by country, and will follow the appropriate legal processes relative to reorganizing and workforce reductions. Where applicable, we have consulted with all appropriate Workers’ Councils.

We will be working with affected employees to redeploy as many as possible into other job opportunities across our business where skill sets and interests align with our business priorities.

Thank you for your continued professionalism and for your ongoing efforts in helping us build the HP Autonomy business into a tremendous success story.

My staff and I are available should you have any questions or needs.

Robert

Overall, it was a very appy holiday season for the mobile industry, according to Flurry, which is known for producing reports based on the information it gathers through the thousands of developers who use its analytics tools.

In its report today, Flurry said that more than 50 million iOS and Android tablets and smartphones were activated from Christmas to New Year’s Eve, and 1.76 billion applications were downloaded worldwide during that period. That’s a huge jump from last year’s figures.

In comparison, Flurry estimated last year that 1.2 billion apps were downloaded worldwide across both Android and iOS.

Here is a chart comparing the holiday week to the same number of days earlier in December:

The year-over-year progress shows just how commonplace app downloading is around the globe.

In fact, this year Flurry said that a number of weeks since late November delivered more than a billion downloads, which just last year was considered record-shattering. This year, it is forecasting that a billion weekly downloads could become a regular occurrence.

“Looking forward to 2013, Flurry expects the trend of one-billion-download weeks to become the norm, and that the industry will surpass the two-billion download week during Q4,” wrote Flurry marketing VP Peter Farago in a blog post.

Most of these downloads are still occurring in the U.S., where there is widespread adoption of smartphones and tablets. During the week, the U.S. downloaded 604 million applications, or 34.3 percent of the total. China is not exactly a close second with 183 million downloads, and the U.K., Germany and France are much further behind.

Based on Flurry’s previous reports, one of the most popular app categories is games. And based on evidence from at least two game companies, that continued to be the case this holiday season, as people picked up their phones and tablets for entertainment during their time off.

Disney Mobile said game downloads jumped 98 percent year over year to more than 15 million in 2012, from Dec. 22 to Dec. 28. It benefited from new titles such as Where’s My Holiday? and Nemo’s Reef and Monsters climbing the charts. Separately, Storm8, which publishes such titles as Dragon Story, City Story and Jewel Mania, reported that it had two million game downloads on Christmas Day, an increase of four times compared to an average Tuesday.

Zynga Plus Poker and Zynga Plus Casino are both viewable in the U.S., but once it goes live, players will have to be located in the U.K. and over the age of 18 to legally play.

Right now, the sites are being used primarily as a marketing tool to get the word out and to start collecting email addresses ahead of the official launch.

A Zynga spokeswoman declined to comment.

One thing that’s noticeable is how much social is being emphasized. The tag lines for the respective sites are “Casino For The People” and “Poker For The People.”

Today’s launch shows that Zynga is making at least some progress on its promise of expanding into online games where players can win and lose real money, from its core business of selling virtual goods on Facebook. Both sites say that the games will go live in early 2013, which lines up with what Zynga’s CEO Mark Pincus had previously promised.

In October, the San Francisco company announced an exclusive partnership with bwin.party, which enables it to launch a real-money gaming site in the U.K. The casino site is expected to launch with 180 games, including slots, roulette and blackjack. Additionally, Zynga’s FarmVille brand is expected to be used for one of the slot games.

For now, Zynga’s casino ambitions will have to be limited to markets where gambling has been legalized. It has filed an “Application for a Preliminary Finding of Suitability” in Nevada, but the process could take up to 18 months. If Zynga is found suitable, a license could take another two to three months. Even then, it still would only be allowed to operate online in one state.

During its last conference call, Zynga declined to say how much revenue the real-money gaming sites could generate, but based on the company’s current stock price, it seems investors are being cautious. Zynga’s shares fell 5 cents, or two percent, today to $2.33 a share.

Microsoft has been aggressively expanding its retail presence in support of the launch of Windows 8 and its new Surface tablet. But that expansion has been limited to the U.S., Canada and Puerto Rico, and a number of the stores it has opened recently are pop-up holiday kiosks that presumably will close up shop come January.

Since Microsoft plans to sell the Surface only through its own retail stores and Microsoft.com, it’s clearly in the company’s best interests to expand its retail footprint. Right now, consumers curious about Surface have very, very few locations where they can have some hands-on time with the device. That will inevitably limit sales — not exactly a winning strategy for a new product that Microsoft has so much riding on. Hence the company’s plan to open 75 brick-and-mortar storefronts over the next two to three years. As Microsoft COO Kevin Turner said earlier this year, “We’re going to continue to build and roll out more stores. And we’re going to keep going more and more pervasive. And you’ll see the store brand continue to go out and go out into the world with the opportunity we believe we have to tell the Microsoft story.”

Microsoft declined comment.

Asa Mathat / AllThingsD.com

You may recall a brief PR kerfuffle in which Oracle disclosed that it had been approached by investment banker Frank Quattrone, who was, as some people have it, shopping Autonomy around for a possible acquisition. Some people, including Quattrone and Autonomy’s founding CEO Mike Lynch, wouldn’t call it “shopping around” because it would have been illegal to “shop around” a U.K.-based company under that country’s securities laws without disclosing the fact to shareholders. But we’re getting ahead of ourselves here.

Remember, however, that in the wake of HP’s move to acquire Autonomy, Ellison said that at something north of $11 billion, HP had paid an “absurdly high” price, and cattily followed that by saying that Oracle had “taken a pass” on Autonomy.

Lynch, in an interview with The Wall Street Journal days later, said that no such overtures to Oracle had ever been made.

Oracle, just to set the record straight, mind you, with absolutely no other agenda in mind, fired back that Lynch apparently had a bad memory and had forgotten about a meeting, indeed a pair of meetings, involving Hurd, Lynch and Quattrone and some PowerPoint slides.

“Oh, you mean those slides,” Lynch said. No, he didn’t really say that, but he might have. Anyway, at that point, Lynch clarified that he had indeed accepted an offer to meet Hurd to talk about database technologies but he was “not there to sell anything.” Okay, then.

Again, just to clarify the record and nothing else, Oracle dug through its files and found the PowerPoint slides from at least two meetings that Lynch and Quattrone had held with Hurd. Quattrone owned up that the slides were his and that the idea had been to pitch Autonomy to Oracle independently of Lynch or Autonomy “as an idea.”

Autonomy had already been the subject of repeated rumors about a nonexistent bidding war for the company that had Oracle and Microsoft wrestling over it. And the meetings at Oracle took place in early 2011 after those rumors had been in the water a little while.

So yesterday’s disclosures by HP certainly put an exclamation mark on a back-and-forth between Oracle and Lynch that had simply quieted but not concluded.

Which brings us to those slides. What’s in them? Some interesting nuggets for sure, but there are no smoking guns concerning Autonomy’s alleged cooking of the books prior to HP’s announcement that it would acquire the software firm on Aug. 18, 2011.

On one slide we see Autonomy’s revenue mix as of early 2010. (Click to make bigger.) Note that the IDOL Product that makes up the blue slice of 29 percent of sales is the “hardware product” that in HP’s telling is the one sold either at a low margin or at a loss in some cases. Those allegedly improper bookings, HP says, amounted to 10 percent to 15 percent of Autonomy’s overall sales, and would otherwise be about half the size shown here.

In another slide we see Autonomy’s revenue and enterprise value as of January 24, 2011 — less than six months before HP’s acquisition — converted to U.S. dollars and compared against other notable software companies. Autonomy is valued at about $5.7 billion, or a little less than six times revenue. Six months later HP would pay nearly twice a much, which struck pretty much anyone paying attention as odd if only for the timing of the deal. Now HP says it paid about $5 billion too much for Autonomy and that amount lines up almost exactly with the increase in Autonomy’s valuation from this point. Coincidence? Maybe. But, interesting! (Click to see it bigger.)

And here we see a list of names of both Autonomy senior executives and members of its board of directors. As yet there’s no indication who it was from within the ranks of Autonomy who came forward to HP after Lynch’s dismissal from HP by CEO Meg Whitman, and so there’s no way to know if this person’s name appears here. Also, Autonomy’s former directors will almost certainly be contacted by both the U.S. Securities and Exchange Commission and the U.K.’s Serious Fraud Office. (Click to see it bigger.)

If you want to read those slides in their entirety yourself, here they are, via Scribd.

Autonomy Presentation 1 503341

Autonomy Presentation 2 503342

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• Mike Lynch Punches Back at Today’s HP Filing: Whither $5B Writedown?
• HP Confirms DOJ Is Investigating Alleged Fraud in Autonomy Deal
• Yes, There Are Layoffs Pending at HP’s Autonomy Unit in the U.K.
• Former HP CEO Shifts Blame for Autonomy Deal to Chairman
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• Autonomy Founder Lynch Asks Board to Explain HP Allegations
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Arguing that Apple crafted its notice of apology to Samsung specifically to undermine its intended effect, the England and Wales Court of Appeal said the company failed to comply with its mandate. It ordered Apple to revise its statement, which included excerpts from a court ruling describing Samsung’s products as uncool, and a mention of others in which Samsung was found to have violated Apple’s intellectual property. And, as punishment for allegedly adding inaccurate text to an otherwise straightforward notice, it said Apple must pay Samsung’s legal fees.

“What Apple added was false and misleading,” the court said in its decision. “There is a false innuendo that the U.K. court’s decision is at odds with decisions in other countries whereas that is simply not true.”

So, as entertaining as it was, Apple’s petulant apology has ended up costing the company in the end. And not just financially. It has clearly cost it some goodwill from the U.K. court, which went out of its way to call out what it viewed as bad behavior.

“As to the costs (lawyers’ fees) to be awarded against Apple, we concluded that they should be on an indemnity basis,” the court wrote. “Such a basis (which is higher than the normal, ‘standard’ basis) can be awarded as a mark of the court’s disapproval of a party’s conduct, particularly in relation to its respect for an order of the court. Apple’s conduct warranted such an order. … I hope that the lack of integrity involved in this incident is entirely atypical of Apple.”

But no. After fighting the order for several months, last week Apple finally issued a statement in which the only element of “sorry” was regret that the U.K. court had not seen things with the same clarity as courts in other countries.

Her Majesty’s magistrates were not amused.

Today, the U.K. Court of Appeal ordered Apple to pull its original statement off its Web site within 24 hours, and to post within 48 hours a new version that additionally acknowledges that the company’s first try contained statements that the judges called “untrue” and “incorrect.”

“I’m at a loss that a company such as Apple would do this,” said Judge Robin Jacob. “That is a plain breach of the order.”

Apple lawyer Michael Beloff contended the original statement met the court’s requirements, saying the order “is not designed to punish, it is not designed to make us grovel. The only purpose is to dispel commercial uncertainty.”

But the court wasn’t buying it, and when Apple asked for 14 days, instead of 48 hours, to post the new statement, Jacob was aghast again.

“I would like to see the head of Apple make an affidavit setting out the technical difficulties which means Apple can’t put this on” its Web site, Jacob said. “I just can’t believe the instructions you’ve been given. This is Apple. They cannot put something on their Web site?”

Request denied.

The notice does comply with the court’s order, but in the annals of recantation … well, Galileo should have been so lucky. Apple’s statement cites at length a widely publicized High Court finding that said Samsung’s Galaxy tablets were “not cool” enough to be mistaken for iPads. And it goes on to point out that while the U.K. court didn’t find Samsung guilty of infringement, courts in the U.S. and Germany have.

Which makes it hardly an apology at all, and a masterful twist of the court mandate.

Here’s the notice, which Apple must promote from the front page of all its EU Web sites for a month, and publish in the Financial Times, the Daily Mail, the Guardian, Mobile Magazine and T3 magazine, “in a font size no smaller than Arial 14 on a page earlier than Page 6.”

Samsung / Apple UK judgment

On 9th July 2012 the High Court of Justice of England and Wales ruled that Samsung Electronic (UK) Limited’s Galaxy Tablet Computer, namely the Galaxy Tab 10.1, Tab 8.9 and Tab 7.7 do not infringe Apple’s registered design No. 0000181607-0001. A copy of the full judgment of the High court is available on the following link www.bailii.org/ew/cases/EWHC/Patents/2012/1882.html.
In the ruling, the judge made several important points comparing the designs of the Apple and Samsung products:

“The extreme simplicity of the Apple design is striking. Overall it has undecorated flat surfaces with a plate of glass on the front all the way out to a very thin rim and a blank back. There is a crisp edge around the rim and a combination of curves, both at the corners and the sides. The design looks like an object the informed user would want to pick up and hold. It is an understated, smooth and simple product. It is a cool design.”

“The informed user’s overall impression of each of the Samsung Galaxy Tablets is the following. From the front they belong to the family which includes the Apple design; but the Samsung products are very thin, almost insubstantial members of that family with unusual details on the back. They do not have the same understated and extreme simplicity which is possessed by the Apple design. They are not as cool.”

That Judgment has effect throughout the European Union and was upheld by the Court of Appeal on 18 October 2012. A copy of the Court of Appeal’s judgment is available on the following link www.bailii.org/ew/cases/EWCA/Civ/2012/1339.html. There is no injunction in respect of the registered design in force anywhere in Europe.

However, in a case tried in Germany regarding the same patent, the court found that Samsung engaged in unfair competition by copying the iPad design. A U.S. jury also found Samsung guilty of infringing on Apple’s design and utility patents, awarding over one billion U.S. dollars in damages to Apple Inc. So while the U.K. court did not find Samsung guilty of infringement, other courts have recognized that in the course of creating its Galaxy tablet, Samsung willfully copied Apple’s far more popular iPad.

The U.K. Court of Appeals Thursday decided not to overturn a lower court ruling that will force Apple to publicly recant allegations that Samsung copied the design of the iPad for its own Galaxy tablet. First issued in July, the mandate requires Apple to post to its Web site, and in a number of British newspapers and magazines, a notice explaining that Samsung has not infringed its intellectual property with the Galaxy. Specifically, Apple must link to the original order from the front page of all its EU Web sites for a month, and publish notices in the Financial Times, the Daily Mail, the Guardian, Mobile Magazine and T3 magazine, “in a font size no smaller than Arial 14 on a page earlier than Page 6.”

Arial, not Helvetica? Cruel punishment, indeed. (Could have been worse; could have been Comic Sans.)

The court’s rationale for denying Apple’s appeal? To do otherwise would stifle competition.

“If the registered design has a scope as wide as Apple contends, it would foreclose much of the market for tablet computers,” the court wrote in its decision. “Alterations in thickness, curvature of the sides, embellishment and so on would not escape its grasp. Legitimate competition by different designs would be stifled.”

One expression of that strategy — and a controversial one at that — was the nearly $12 billion acquisition of the British software firm Autonomy, announced 13 months ago. HP ultimately didn’t spin off its PC business, but its acquisition of Autonomy stuck. Now it is firmly part of HP’s software business.

As CEO Meg Whitman struggles to turn HP around, software is still a key part of her plans. While Whitman has made no secret of her opinion that Autonomy needs attention, there are some solid bits of HP’s software business — like Vertica and ArcSight — that are showing significant promise, if only they could grow.

Finding a way to get them growing is the job of George Kadifa. In June, HP named him as executive vice president, head of the company’s software business and a member of its executive council. Kadifa knows a bit about the software business. He spent seven years as a senior vice president at Oracle, and then ran his own company, Corio, for six years, until it was acquired by IBM for $182 million in 2005. From there, he went to investment firm Silver Lake, where, as partner, he pushed portfolio companies to improve their operations.

Kadifa sat down with AllThingsD last week at the software unit’s new headquarters in Sunnyvale, Calif., for his first interview since joining HP. We talked about how he plans to fix its weaknesses, improve its strengths and make software a more sizable piece of HP’s overall business.

AllThingsD: George, you joined HP to head up its software business unit in June. You’ve reached the 100-day mark, so give us your assessment of where you see things now and where they’re going.

Kadifa: A lot of good things are happening. We’re at about $4 billion in revenue, so if you look at HP Software as its own business, we’re about the fifth- or sixth-largest software business in the world. We have a great customer base; having worked at IBM and Oracle and now HP, customers really like us, versus previous experience. And we have a lot of products. A lot of them we acquired rather than built in-house.

Among the recent acquisitions, Vertica is one where the consensus seems to be that it was a pretty good deal. Where do you see Vertica going in particular, and what sets it apart?

One is the technology, which we think is second to none. When you think about it, the idea of taking data in columns and then arranging it in a row fashion, it seems like sort of a trivial difference. But it’s really unbelievable what it gives you in terms of capabilities. Say you’re storing a thousand names, you’ve got first names and last names. Let’s say five of those guys are named Arik. Normally you’d store five Ariks in a column. But here, instead of listing the name five times, you make a note above it with a five, so you know the name occurs five times. Now when you search through that list it’s so much more efficient, it’s two or three orders of magnitude faster, which means it’s 100 to 1,000 times faster than classic relationional technology. It has turned out to be a real diamond for us.

Yet it’s a small diamond. Yes, it’s growing, but how do you get it to grow fast enough that it becomes a more meaningful part of HP?

It’s a fair question. What we started with was a business with revenue in the low millions. It wasn’t in the $100 million range in revenue. It was really a project with some customers. We took it, and now it’s in the middle-double-digit millions. I can see us getting to $100 million with Vertica in a very short period of time. And there’s no reason it can’t be a billion-dollar business.

Let’s wrestle with the situation at Autonomy a little. You just named Robert Youngjohns to run it. Unlike Vertica, the consensus here is that Autonomy was an expensive deal that hasn’t come close to meeting expectations yet. What do you see happening there?

We just had a two-day planning meeting with everyone from Autonomy, where we went through the current status and looked at where we’re heading. The key for us right now is to get fiscal year 2013 on track, and that starts Nov. 1, so we’re working on that right now. Basically, when you look at Autonomy, the core unit is the IDOL Engine, which is the unique capability of meaning-based computing. We’re going to double down on that. In our labs in Cambridge, England, we have 40 or 50 mathematicians writing algorithms. And we’re going to build a team here in the U.S. to productize it and create a platform around it, because it has that potential. Frankly, the way Autonomy was managed previously, they put a lot more emphasis into enabling applications, which was fine, but our belief is that there’s a broad agenda, which is creating a platform around meaning-based computing. So we will maintain those apps, but at the same time we’ll open up the capabilities to a broader set of players outside HP.

It sounds like what Autonomy was doing was growing by acquisitions and then creating a more vertical stack of applications prior to HP’s ownership, rather than taking a broader, more horizontal approach. It sounds to me like HP wants to make Autonomy more horizontal. Is the potential there?

You’re correct. And, yes, the potential is there. I asked Autonomy that very question about why they went vertical instead of horizontal, and the answer that I got was that it came down to a difference of culture between the U.S. and Europe. In Europe, they tend to make things complex in order to create more value. For example, they saw the IDOL engine as too complex to just give it to people. Instead they thought they should acquire vendors and then create value by enabling applications. Here we take something that’s complex and we ask how we might simplify it in order to give it more scale for a bigger market. So, some of that difference was cultural, and some of it was that I think they fell in love with these acquisitions. … We think Autonomy’s technology has broader implications. And to reach that potential, we have to open it up as much as possible. And we’re also working with other organizations inside HP — PCs, printers, servers — to basically produce additional synergies.

Are the teams ready and primed? Meg Whitman, your CEO, and CFO Cathie Lesjak have made no secret that, so far, they have seen Autonomy’s ability to respond to deals that had been teed up by HP as lacking. Is the structure in place to address that problem?

It’s not in place yet, but the situation has settled down somewhat. The processes are working. The reason is that initially we kind of left Autonomy alone, and then we tossed a bunch of deals at Autonomy. The initial plan was to keep it intact, have the HP salesforce bring in deals, and everyone would be happy. One problem is that there were too many deals, and second is that the deals weren’t well-qualified. So what we did next was put in place a management process around sales cycles at Autonomy.

There’s been a lot of turnover there. Obviously, the former CEO, Mike Lynch, left, but so did a lot of the people who worked with him. Does that hurt the institutional memory at all?

No. Basically we lost the top half-dozen people. And you always expect that with an acquisition, especially with people who have grown up as entrepreneurs and will always be entrepreneurs. The remaining people running the products lines are still around, and so is the salesforce. The development guys in Cambridge and Chicago are still there.

Michael Dell has basically said he intends to keep growing his company by acquisition. Your boss, Meg, has said that we can expect no major acquisitions for the forseeable future — at least until the balance sheet is in better shape. If there were going to be acquisitions, even small ones, I would imagine they’d more likely be in software. Is that a fair statement?

I don’t want to say anything on Meg’s behalf. From a software point of view, if there are tuck-in acquisitions that can help us develop our technology, I’ll go and request to do it. The cash we generate from software would cover us. So that’s the thinking right now. We need to learn as a business how to grow organically because that’s where all the value is. At Silver Lake we did analysis on companies that grew by acquisition: Oracle, SAP, Microsoft, IBM, EMC and others. You find that their revenues grow and their profits grow. But what doesn’t grow, and what actually shrank from 2006 to 2011, is their multiples. Their valuations multiples shrank. What the market is saying is that just making acquisitions doesn’t add any value unless they create organic growth. That is how we look at it here. We’ve done a ton of acquisitions, so the task now is to create more organic growth because that is what the market will value.

Ecuador’s foreign minister, Ricardo Patino, told reporters in Quito Thursday that the country had granted Mr. Assange asylum to protect him from alleged “political persecution” in the U.S., which Mr. Assange argues wants to prosecute him for WikiLeaks’ role in publishing thousands of classified U.S. government documents.

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The move is both expected and a sore spot with some Netflix investors. The company’s expansion outside the U.S. (starting with Canada, moving to Latin America and then the U.K.) has been an expensive one, with mixed results.

Netflix had already announced that it would be expanding again in 2012; last month, it told Wall Street that it would lose money in Q4 because of a move into “an additional attractive European market.”

More than 3.6 million of the company’s 27 million streaming-video subscribers come from outside the U.S.

Canada has worked well for Hastings, but he admits that the company has stumbled in Latin America. In the U.K., Netflix says, it has acquired a million subscribers in its first six months of operation, putting it ahead of Amazon’s Lovefilm, which it will also compete with in some of its Scandinavian markets.

News of the remaining data got out because the U.K. Information Commissioner’s Office published a statement about it that included the full text of Google’s Friday email.

Google said it was “in touch with other data protection authorities in the European Union” on the same topic.

Other countries affected include Ireland, France, Belgium, the Netherlands, Switzerland and Australia. Google had collected the data between 2008 and 2010.

Google today apologized for this latest error, which it said was discovered in a recent inspection of its Street View disks. The company said it would like to delete the remaining data, but gave local authorities the option to look at the data before it was destroyed.

And, in fact, the ICO’s head of enforcement Steve Eckersley replied to Google today that his organization would like to examine the data Google had found.

The ICO had reopened its investigation into the issue in June, after it became clear that user data had been collected deliberately — a fact that hadn’t previously been public. Remember, this was news about the “rogue engineer” who designed Google Street View cars to suck up payload data from open Wi-Fi networks as it was driving around.

Google has for years rather unsuccessfully tried to downplay the incident. In April 2010, Google denied that it had collected any payload data; then it later admitted it had collected data “mistakenly.” Then the company and the U.S. Federal Communications Commission released a report that showed the wardriving system was knowingly built by a Google engineer, and it sailed through internal approval processes without thorough review of the privacy implications.

Google has been cleared of wrongdoing in the incident by various authorities, though it was fined $25,000 by the FCC for impeding its investigation.

Update: Additional countries are speaking out. Ireland’s Deputy Information Commissioner Gary Davis told the Associated Press the prolonged data retention was “clearly unacceptable” and he is asking Google for answers by Wednesday.

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Judge Colin Birss today ordered Apple to post a notice acknowledging his ruling on its Web site and in British newspapers. The notice, which is to state that Samsung did not copy the iPad’s design, must remain on Apple’s Web site for the next six months, and must appear in a number of U.K. papers and magazines.

A humiliating twist of the knife for Apple, which has repeatedly accused Samsung of “slavishly” copying its mobile devices, branding the company “a copyist.” If Birss’s order stands, Apple will be obligated to essentially publish an advertisement for Samsung.

A bitter pill indeed for Cupertino, following its allegations that the Galaxy line “blatantly imitates the appearance of Apple’s products to capitalize on Apple’s success.”

Apple, of course, can appeal. And you can be certain that it will. It has won injunctions against Samsung around the world.

Apple declined comment on Birss’s order. Samsung hasn’t yet replied.

On Wednesday, the U.K.’s High Court ruled that HTC does not infringe the four patents Apple asserted against it. It also found three of those four patents — for slide-to-unlock, multitouch and multilingual keyboard capability — to be invalid, partly due to their obviousness.

The ruling, which follows by days another HTC victory over Apple before the International Trade Commission, means the Taiwanese company is free to continue importing its smartphones into the U.K.

But the broader battle is far from over. Apple has asserted the same four patents against HTC in Germany.

That said, as FOSS Patents points out, the High Court ruling may well improve HTC’s chances of prevailing in Munich. Said FOSS Patents’ Florian Mueller, “The U.K. decision makes it even less likely that the Munich court, which was skeptical of Apple’s arguments anyway, would be persuaded now.”

The acquisition being announced today on the company’s blog is Llustre, a U.K. copycat of Fab that is identically focused on selling home decor, apparel and other items from independent designers. Terms of the deal were not disclosed.

Fab previously purchased Casacanda in Germany and FashionStake in the U.S. to launch a clothing vertical.

Given that Fab has only been around for a year and has seen such significant growth, it appears to have identified just what consumers want: Hard-to-find, quirky and stylish products, gadgets and clothing that are not easily found in Target, Walmart or even on Amazon.com.

The inventory may be shallow, but the product types are vast. Yesterday, the site was selling earphones shaped like bullets, vintage-looking vases, toilet seats that function as bidets and motion-activated cameras for the outdoors. In other words, it’s a hipster’s paradise.

It took Fab four months to hit one million subscribers, six months to hit 1.5 million and 12 months to hit 4.75 million. Fab has not been shy about its successes over the past year, and has raised lots of capital along the way, including a $40 million round in December from Andreessen Horowitz and others.

Now, Fab is claiming it is entering Europe in a serious way, and expects the region to contribute about 20 percent of the New York-based company’s sales this year. Fab is now shipping to 20 countries; it has 360 employees in five offices, including New York, Berlin and London.

Llustre has also moved quickly since launching only two months ago. Founded by Tracy Doree and Vivienne Bearman, it has 25 employees, works with more than 500 designers; membership and orders have tripled in the past five weeks to some unknown quantity.

Starting today, Llustre will become Fab UK. Doree and Bearman will remain on board, heading merchandising and product and operations, respectively.

One of the things the company signaled it was going to do with that money was make acquisitions. Today it announced its first: OneDrum, a British start-up that specializes in making Microsoft Office a lot more collaborative.

Financial terms aren’t being disclosed, and OneDrum is a pretty early-stage company with 10 employees and combined $2 million in capital raised, mainly from angels and Amadeus Capital Partners, a British VC firm. But, the deal is invariably going to be compared to a similar one announced last year by Yammer rival Jive for OfficSync.

I talked to Yammer CEO David Sacks about the deal earlier today and I asked him about the comparison. He said that one thing OneDrum does that OfficSync does not is a level of desktop synchronization that’s comparable in some ways with what you find with something like DropBox. And, it does so without the need for a plugin that might, he argues, mess up how Office runs and which can be difficult to deploy across an enterprise.

Basically, Yammer customers will be able to share and see the contents of the folders they share with other people via Yammer. Also, people can collaborate on Office documents live. Changes are tracked within the Yammer news feed and revisions are stored. Once you drag a document into your Yammer folders, the contents are instantly text searchable from within Yammer.

What OneDrum lacked, Sacks told me, was “a good front end to express the OneDrum technology,” which Yammer will readily provide.