windows7microsoft.com

What’s also remarkable (and different from the Western social networks) is QQ’s monetization. Facebook posted revenue of $150 million for 2007 (and according to Plus8star a loss of $50 million); MySpace.com (purchased by News Corp. for $560 million) is projected to generate $750 million in revenue this year; and Bebo (purchased by AOL for $850 million) had revenue of just $20 million in 2007. While QQ reported revenue of $523 million and an astonishing operating profit of $224 million in 2007. The revenue distribution is unusual, too: 60 percent of the revenue came from services like games, an additional 21 percent from mobile services like ringtones, and only 13 percent from online advertising.

(Credit: QQ)

Do added value services trump ad based revenue models?

I just returned from a trip to Shanghai, and in case you didn’t know anyway, here’s my No. 1 insight: China scales.

Let’s take QQ.com as an example, the leading Chinese online social network. The site is reported to have more than 300 million active accounts. That is eight times the member base of Facebook–and it’s the same size as the U.S. population.

Will Gears get stale? I have no idea. Maybe Cliff and Company can come up with something really compelling in the next game and we’ll all be captivated, but I doubt it. The shelf life, for me, on a video game story is about five years. After that, I’m waiting too long to figure out what’s happening in a particular world and I need closure as soon as possible. I move on.

As much as I love the Gears of War series and enjoy the gameplay, its story isn’t all that great. It’s too convoluted, at times it makes no sense, and when you really try to figure everything out, you see too many inconsistencies to get a full grip on what’s happening.

When will Gears of War end?

But is there really a market out there for continuing one storyline for 10 years? The idea has been tried on numerous occasions–Yu Suzuki’s Shenmue comes to mind even though Sega stopped development after two “episodes”–but so far, most (certainly not all) developers have decided that continuing one storyline for 10 years doesn’t work, so they’ve changed things up.

Games lasting more than a decade isn’t unheard of in the video game industry. Almost every major Nintendo franchise has been around much longer than that and the Final Fantasy series seems like it has been around forever. So there certainly is a precedent for a major franchise like Gears to last all that time.

Gears of War 2 writer Joshua Ortega was at Comic-Con in New York City over the weekend and had some interesting things to say about the future of his popular video game franchise.

I’m all for Gears of War hanging around for more than 10 years, but I want its story to end sooner than that. If the story isn’t complete after three iterations, I can tell you now that I’ll lose all interest and have no desire to pick up the fourth game in the series just to find out what’s happening.

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Maybe it’s just me, but I would get bored waiting 10 years for a game franchise to finally end; I need something new, something fresh. Maybe that’s why I appreciate franchises like Final Fantasy that have lasted all these years. Their story lines are still rock solid, but they feature different characters and different plots. Square-Enix isn’t trying to stick to one story throughout the entire series. Maybe that’s because the game’s developers know it would get stale and we would get bored.

Because of that, I just don’t care what happens to Marcus, the Locust, and COG. It’s nothing personal, but if Marcus dies in the third game or the Locust are totally wiped out, I couldn’t care less. I don’t play Gears for the story, I play it for the fun it offers and its intense multiplayer action. Everything else I ignore.

The second game starts with locust attacks that we need to stop, but then we find out they’re taking prisoners, so we need to stop that, too. Then, our team is swallowed by the Riftworm, which we manage to kill from the inside. After a while, we see that there’s an evacuation underway and the Brumak is starting to mutate because of exposure to Imulsion. After we take care of the Brumak and the civilians evacuate, we’re supposed to gain a better understanding of all this and prepare for future iterations when the Locust Queen starts rambling on about legacies and how things don’t always turn out the right way? Yikes.

I can barely wait to find out what happens after two seasons of a sitcom How can I be expected to wait 10 years to find out what happens to Marcus Fenix? Sorry, but it’s just not worth it.

But it’s not just Gears of War. I’m not even sure I would care about any game franchise that hangs on to a story for 10 years. I’m sure some would make the argument that the Super Mario series does that because Bowser is still the antagonist after all these years, but I disagree. There isn’t one single storyline that continues to play out throughout all those games and there isn’t a single goal we’ve known about since the first title that we’re still trying to find.

If what Ortega said is really what the game’s creator, Cliff Bleszinski, has in mind, that would mean the current Gears saga won’t end until 2016, assuming the clock started when the first game was released.

Sure, that synopsis is a very brief outline of the second game in the series, but I think it makes the point clearly: Gears of War is great, but its story isn’t nearly as good as the gameplay.

(Credit:
Epic Games)

“You will not be disappointed in the next ten years,” he said to those in attendance. “It’s a ten-year plan. Gears is long-term. The lancer is the new lightsaber.”

Would you wait 10 years for a video game story to end?
( polls)

Will Gears be different? I hope so.

Social network Hi5 plans to announce on Thursday that it has built a developer application with the Google-created OpenSocial standard that “crowdsources” language translation.

This makes it possible for OpenSocial-compatible social networks or applications to let their users work to translate a site or application’s text and interface into more languages, in turn making it easier for the service to have broader geographic reach. The translation app will be implemented on Hi5, a social network that was founded in San Francisco but is most popular in Spanish-speaking countries, as well as its own developer platform, and is open for more developers to use as well through OpenSocial.

Hi5’s own site is already available in two dozen languages.

One big player in the social-app space that plans to use Hi5’s translation code is iLike, a music service that has become popular largely through applications for platforms from Facebook to Apple’s iTunes, and hopes to see its user base distributed around the world as well as across the Web. Another is RockYou, the “app factory” behind some of the most popular applications created with the Facebook and OpenSocial standards.

Google built OpenSocial as a universal standard for social-network applications, and has since gained the following of almost every social site except for Facebook, which continues to use its own platform. Earlier this year, OpenSocial was spun off into a nonprofit organization separate from Google.

“As the leading music provider on hi5, we’re excited to know that hi5’s crowdsourcing service would expand iLike’s reach internationally, helping music spread among fans from different languages, geographies and cultures,” iLike CEO Ali Partovi said in a release.

The concept of crowdsourcing language translations caught fire when Facebook started enlisting volunteer members to help with the effort through an application on its own platform called Translation. The Hi5 application will, in effect, do the same thing for the OpenSocial platform.

By the end of the year, PC makers will have shipped 310 million units, close to half (145.1 million) of which are notebooks. The rest are desktop PCs and servers, which together on a global basis still comprise the largest slice of the market, but the difference is disappearing fast.

Those three manufacturers have some company in the consumer space. Acer, Hewlett-Packard, and perhaps Dell already have, or plan to release, their own tiny laptops.

Worldwide PC shipments are on pace to grow 15.2 percent in 2008, according to IDC. That’s above the analyst firm’s March prediction of 12.8 percent growth. But laptop shipments, which have become an increasing force in the PC market, will peak.

PC makers such as Hewlett-Packard are betting big on notebooks. The company this week released 17 new models, mostly for consumers.

Portables are especially expected to take off internationally this year, growing from 78 million in 2007 to 109.4 million units this year. That’s good news for the industry because notebooks and laptops tend to be pricier than desktop PCs, and they should keep average selling prices higher for a bit longer.

(Credit:
Hewlett-Packard)

Shipments of portable PCs should grow 34.5 percent this year, according to a PC shipment tracker that IDC released this week. That’s up from 33.9 percent in 2007 and way above the projected 13.4 percent for next year. By 2012, according to the firm, portables will increase by only 9 percent.

But inexpensive notebooks are stirring up the market too. A reason for the dramatic 40 percent bump in international portable shipments has a lot to do with how the numbers have been counted, according to IDC.

The firm said it had previously not included the rapidly growing low-cost mininotebook segment because of the “use of nontraditional PC designs, including the use of embedded or custom operating systems, (as well as) reduced processing power and storage,” IDC said. But now, due to the popularity and computing robustness of the Asus Eee PC, the Classmate PC platform from Intel, and OLPC’s XO, mininotebooks are included. Plus, the firm notes, the volume of units shipped are actually rising.

In a press conference Wednesday, MTV’s digital team referred to Backchannel, developed by New York-based gaming firm Area/Code, as “competitive chat.” When you think about it, it’s a little bit like competitive Twittering.

Here’s how Backchannel works: Watch the show (for now, only The Hills is on Backchannel, but later this fall it will be accompanying the network’s new reality show about Paris Hilton picking a new best friend), join a “room” of other viewers while you’re watching, and offer snarky or insightful one-liners that appear on the screen in a sort of tag cloud. Click on the ones you like, and they’ll accumulate points. You’ll receive points from the votes on your own one-liners, as well as submissions you voted on that became especially popular. And, yes, it extends through commercials, too.

“Something that arguably has diminishing value over time actually becomes more valuable over time,” Area/Code’s Kevin Slavin explained. “If Rock Band is doing that for music, what can do that for television?”

But Backchannel has bigger implications for what MTV has in store when it comes to social networking. Profiles for Backchannel are compatible with Flux, the social platform that MTV parent company Viacom created from its acquisition of start-up Tagworld and debuted last year. Popular comments from Backchannel, aggregated on the Web site, will also be displayed on reruns of the show, much like MTV’s sister channel VH1’s Pop Up Video show from the 1990s.

Additionally, while current incentives for playing are limited to street cred and “badges” on your profile, MTV may be stepping this up a notch. Executives hinted during the press conference that down the road, accumulated gaming points may become a virtual currency that can be exchanged for real prizes–memorabilia, products featured on the show, or whatever.

It’s debuting on Monday night with that evening’s episode of wildly popular reality-soap The Hills.

Once the global leader in youth culture, MTV’s attempts to address the social-networking craze have seemed a little puzzling sometimes (the Twittering Moon Man?) But now we’ve seen another piece of the entertainment brand’s puzzle: Backchannel, a play-while-you watch game that’s one part chat room, one part Digg, and one part Mystery Science Theater with a Mean Girls twist.

(Credit:
MTV)

Something like Backchannel clearly isn’t applicable to shows with a “deep” fandom like Lost or Heroes, but I’ll admit it–it’s perfect for trashing Heidi’s plastic surgery, Whitney’s weird outfits, and Audrina’s perpetually unsound grammar. Brush up on your “OMG” and “fugly,” and get ready to unleash your inner Perez Hilton.

Executives said the formation of the game was heavily influenced by MTV’s video game Rock Band, which added a new dimension to many bands and artists that were well over 20 years past their heyday.

Even so, film mixers and mastering engineers are just beginning to take advantage of the potential of the lossless formats, so I expect the sound encoded on discs to improve over the coming years.

(Credit:
Home Entertainment)

David Birch-Jones and HE’s editor-in-chief, Geoff Morrison, visited Dolby Laboratories and DTS’ headquarters to listen to the new formats under ideal conditions, comparing them to standard Dolby and DTS. Birch-Jones and Morrison were hard-pressed to hear significant differences.

DBJ listens at Dolby Labs.

Judging by the numbers they should sound markedly better than standard Dolby and DTS, but according to a recent article in Home Entertainment magazine, the sonic differences were small to negligible. You can read the full article here.

Ah, yes, but Morrison pointed out that even if you can reliably switch between, say, standard Dolby and Dolby TrueHD, and hear a significant difference between the two, the improvement may be traced to differences in the mixes of the two codecs on a given Blu-ray Disc. They may have been sourced from different masters, and that would account for the improved sonics.

I have limited experience listening to the two contenders, and I never managed to do speedy A-B comparisons. That said, from what I’ve heard, I thought that TrueHD and DTS Master Audio were better than the older formats, especially in the areas of imaging, spaciousness, top-end detail, and “air.”

How about you? What have you heard? Are you thrilled, or are the new codecs a big yawn?

You bought an audio-video receiver a couple of years ago, and now you’re wondering whether it’s time to trade up and get a model that features Dolby and DTS’ new lossless codecs, TrueHD and Master Audio, respectively.

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There is no one-size-fits-all approach to acquiring open-source projects, as the article points out. Indeed, sometimes a private equity buyout of sorts ends up yielding the most value.

All of which leads to Babcock’s conclusion:

So there you have it. Open source code has gained in value over the last two years, and that value is recognized in the high acquisition prices. The open source code, of course, remains freely available, but the code’s value withers if there’s no community of independent, critical users and developers driving it forward, with leadership to guide it.

But this doesn’t tell all of the story on open-source M&A. If it were a matter of “buy open source, make it proprietary,” more would have done it by now. Some, like Red Hat, actually go in the opposite direction, as it did with Sistina, taking proprietary code and open-sourcing it. But the JBoss example is even more interesting, because it involves taking a pre-existing open-source project and trying to improve its financial yield by changing its business model.

By all accounts, including Red Hat’s, Red Hat initially botched its JBoss acquisition. An exodus of JBoss employees resulted, prompting Red Hat to reconsider its approach to the company and its product. While Red Hat proceeded with applying its RHEL model to JBoss, it also (eventually) embraced JBoss’ model for working with system integrators, among other things.

What do I mean by “private equity buyout?” Consider XenSource.

Squeeze too hard, and you risk alienating the community of customers, developers, and interested onlookers that made the open-source project successful. Squeeze too lightly, and you end up being popular and poor.

InformationWeek’s Charles Babcock takes a fascinating look into the pros and cons of open-source mergers and acquisitions, and comes up with some interesting perspectives in the process. In sum, if you want to acquire an open-source software company, you’d better be very clear about what you’re buying, and how you’re going to pull value from it.

Some acquirers will seek a return on their huge investments by turning the open source into an enhanced “enterprise” product line that, in a matter of months, creates lock-in no different from proprietary code. Some will sustain and encourage a community, balancing the community’s interests with the need to drive profits. Some software companies have grown by being good at acquiring and integrating startups. They have a new skill to learn in doing that with open source.

The key is to understand what you’re buying (Code? Cash? Community?), and act accordingly. Don’t be misled by myths. Ultimately, an open-source acquisition is just like any other: if it’s not driving dollars, it’s not worth doing. Those dollars may be short or long-term, but if you’re acquiring an open-source project to be Top of the Pops on SourceForge, you probably deserve the failure you’re going to acquire.

XenSource was bought for the princely sum of $500 million despite offering virtually nothing in the way of revenue and a clear business model. Under Citrix’s proprietary hand, however, XenSource has gone from pocket change to what XenSource CTO Simon Crosby says will be $50 million in revenue this year. Crosby tells InformationWeek that “XenSource has close to 3,000 customers, compared with 1,800 at the time of the acquisition.” Considering that it made less than $10 million or so in sales off those 1,800 “customers,” XenSource may well be thanking the proprietary gods right now that Citrix gave it a new way to monetize adoption.

Two years later, JBoss is thriving under Red Hat’s hand, with some geographies showing JBoss sales set to surpass Red Hat Enterprise Linux (RHEL) business, I’ve heard from sources both inside and outside the company. Red Hat cracked the code on open-source M&A. It took awhile, but it is paying dividends now.

To get people excited, Mozilla has provided a map showing pledges to date along with more details.

Mozilla hopes to set a world record for the most downloads within a 24-hour period on the day
Firefox 3 is released (currently expected to be in June).

The online edition of Guinness Book of World Records does not list a current record for most downloads within 24 hours.

To help Mozilla set a world record, the foundation recommends the following:

The final release candidates for Firefox 3 are showing a number of improvements, including greater rendering speed, the use of fewer resources, and more baked-in security features than other browsers.

Sign up to get the final copy of Firefox 3 on Download Day. Host a Download Day Fest on Firefox 3 launch day at your school, office, or anywhere with an Internet connection. Become a Firefox campus representative and collect pledges from fellow students.
Add Mozilla buttons and banners to your site, blog, or profile.

IDC said it expects the volume of all mobile handsets to decline by 8.3 percent in 2009. And it expects sales of hot smartphones, like Apple’s
iPhone and Research In Motion’s BlackBerry phones, to slow to about 3.4 percent growth. Smartphones have been a hot ticket for mobile phone makers over the past year. In December, IDC had predicted a growth rate for smartphones in 2009 to be about 8.7 percent.

Still, market forecasters believe that smartphones represent the biggest opportunity for mobile device makers. IDC said in its report that consumers are hungry for smartphones that can access the Internet and run different applications.

But the tough economic times may prevent some consumers from upgrading their phones to smartphones in 2009, largely because the prices of these devices are too high. The sweet spot in the market seems to be in the $200 range. Apple’s iPhone, T-Mobile’s G1, and several BlackBerry devices sell in this range or slightly lower. These devices are subsidized by mobile operators and require users sign a two-year service contract. The data services attached to these devices are also expensive, typically in the $30 a month range. But as the economic noose tightens around consumers’ wallets, it’s expected that these prices could keep many potential customers at bay.

But IDC’s analysts believe that the fact that the smartphone market can grow at all, when the total cell phone market is expected to decline 8.3 percent for the year, indicates the strength of this segment. And the firm predicts that when the economy turns around, smartphone sales will explode. I tend to agree. This will become especially true if the economic recovery coincides with nationwide availability of new 4G wireless services from Clearwire and Verizon Wireless.

It’s likely over the next year that mobile operators will subsidize the cost of these phones even more to push sales volumes. But the economic malaise might also create a market for smarter, less expensive, feature phones that don’t run a full operating system. These phones, which could sell in the $50-and-under range, could still provide many of the Web functions found on smartphones, such as connectivity to social networking sites, e-mail and IM.

Two major market research firms published figures for the fourth quarter of 2008 this week. And they each have bleak news for the cell phone industry.

Market research firm Gartner published similarly dismal numbers in its market share report for 2008. The firm said that smartphone sales in the fourth quarter of 2008 were only up about 3.7 compared to the previous year. And the firm noted that the growth rate had slowed from the previous quarter. In the third quarter of 2008, smartphone sales increased 12 percent compared to year earlier, and sales were up 16 percent in the second quarter. The firm blames the slowing growth on the deteriorating economic situation.

The global economic crisis is taking its toll on the cell phone business, with sales even in the hot smartphone category also expected to slow in 2009.

A company called INQ is working on such a phone, and another company called iSkoot just announced on Wednesday that it is offering software to allow all cell phone manufacturers to make their cheap feature phones smarter.

But that forecast has changed. Ryan Reith, a senior analyst at IDC, said in a statement that the overall cell phone market was looking gloomier than expected due mostly to the economic crisis. And he said he expected all segments, including smartphones, to be affected in 2009.

Diffie began the discussion, saying that after 80 years, “we’ve gotten cryptography to a fairly good point,” but added that “the Internet’s a mess.” He said that on the Internet, “defense–pure defense–simply doesn’t work.” He said that where it takes us months and years to secure something, it takes the opponent only hours. “They can run rings around us.” He then mentioned that some in the government are starting to talk about going to where the opponents live and using a variety of means to shut them down.

Rivest briefly mentioned Alan Turing, to whom this year’s RSA conference is dedicated. Turing is best known for the Turing Test, a process that determines a machine’s ability to demonstrate intelligence. What Rivest really wanted to talk about, however, was electronic voting. He said cryptography is relevant to creating end-to-end security. He’s part of a group that has released a public proposal on voting system standards. One of the key parts is the definition of “dependent” and “independent” software on a voting system. He said software dependent is a category where a bug or a flaw could easily change the end result; this is along the lines of work done recently by Professor Ed Felten and his grad students at Princeton. Software independent is where the system doesn’t entirely depend on the software and uses paper or some other means of capturing the vote. He favors voting systems that are software independent.

On Tuesday, the creators of the Diffie-Hellman key exchange, a cryptographic protocol, and two of the creators of EMC security division RSA gathered onstage for the annual cryptographers’ panel at RSA 2008 in San Francisco.

Shamir gave a short recitation of hacks within the last year or so on various cryptographic systems, mentioning in particular recent attacks on various municipal transit systems, such as Boston’s Charlie Card and London’s Oyster Card. Most curious, however, were his final comments about the adoption of Blu-Ray DVD discs by Warner Bros. He said he’d wondered about the tipping point in the Blu-Ray vs. HD DVD battle, and said he’d heard a rumor–and stressed it was only a rumor–that Blu-Ray had better security overall than HD DVD. If true, he said, security is finally starting to become a factor in consumer electronics.

First, panel members offered their perspectives on the state of security since last year, then they answered questions posed by a moderator. The panel included: Whitfield Diffie, chief security officer at Sun Microsystems; Martin Hellman, professor emeritus of electrical engineering at Stanford University; Ronald Rivest, professor of electrical engineering and computer science at MIT; and Adi Shamir, professor of computer science at the Weizmann Institute of Science in Israel. The moderator was by Burt Kaliski, founding scientist at RSA Laboratories.

Hellman showed a photograph of a glider flying over a runway. Himself a pilot, he said the greatest risk was executing a maneuver that most people consider 99.9 percent safe. Hellman said that “humans are not good in judging low-probability events,” and cautioned against complacency. He said he hoped that the non-security world would reach a tipping point and start taking security seriously. (Malcolm Gladwell, author of The Tipping Point, is an RSA keynote speaker on Thursday.)