Monday, May 16, 2011

The Latest from TechCrunch

The Latest from TechCrunch

Link to TechCrunch

As Viadeo Shelves IPO, LinkedIn Set To Begin Trading On Thursday

Posted: 16 May 2011 09:03 AM PDT

As one professional network puts its IPO plans on hold, another is readying to go public on Thursday. Reuters reported this morning that Viadeo, the world’s second-largest professional network, is putting of its IPO plans to focus on growing its core business. Professional social networking giant LinkedIn is set to begin trading on the New York Stock Exchange this Thursday, under the symbol LNKD.

As we wrote last week LinkedIn revealed that it is pricing its IPO between $32.00 and $35.00 per share (for a total of 7,840,000 shares); valuing the company between $3 billion and $3.3 billion. LinkedIn is raising as much as $274 million in the offering.

So how will the street respond to LinkedIn? One thing in LinkedIn’s favor is that it is growing revenue—the company just reported that Q1 revenue in 2011 was up 110 percent to $93.9 million. Net income increased to $2.08 million, from $1.81 million in Q1 2010. The increase in sales came from the company’s hiring solutions, a paid offering which helps recruiters search for professionals and list jobs on the site. But the question is whether LinkedIn can accelerate this revenue growth.

However, many of the previous public offerings in the tech world this year have not performed particularly well. Chinese social networking giant RenRen pricedits IPO at $14 per share, but shares quickly slipped below this offering price shortly after trading began on the NYSE.

Many analysts are expecting demand to be strong for LinkedIn.

As we wrote in January, Chairman and co-founder Reid Hoffman is LinkedIn’s largest shareholder, owning 21.4 percent of the company. Sequoia Capital and Greylock are the second and third largest shareholders.



Will Nokia Become The IBM Of Handsets?

Posted: 16 May 2011 07:44 AM PDT

Tech industry insider and Mobile Review Editor Eldar Murtazin hit us with what could be the most shocking bit of leaked Nokia news since his infamous N8 hands-on last year. What happened? This morning Murtazin posted some crucial information regarding the ongoing Microsoft/Nokia deal on his personal blog.

Read more…



B&N Serves Up 1 Million Nook App Downloads

Posted: 16 May 2011 07:27 AM PDT

Barnes & Noble just announced that Nook Color users have downloaded over 1 millon apps so far, including Angry Birds, Drawing Pad, and Pulse. Obviously 1 million apps in comparison to the numbers downloaded (notice they didn’t say “sold”) is fairly paltry but it’s a great start.

This bit of news confirms what we’ve been saying for a while: the Nook is kind of a stealth Android device and, barring problems with processer power and general usability, it’s a fine entry-level tablet.

Read more…



eBay Takes Auto Marketplace Mobile With Dedicated Motors iPhone App

Posted: 16 May 2011 06:51 AM PDT


It’s no secret that eBay has been pushing a significant mobile strategy of late, and today the company is rolling out a new app in its mobile family—an eBay Motors iPhone app.

eBay said it made sense to launch a dedicated app for the Motors vertical (one of the company’s strongest auction place verticals) , which sells cars, parts and accessories, because the volume of purchases made via eBay’s main mobile apps. Currently, 90,000 parts and accessories and 2,000 cars are purchased per week globally from eBay’s general mobile apps.

The free app allows users to search for, bid on or buy anything from parts to accessories to cars from the app. Via a "My Garage" feature, users can add favorite cars and parts to a wish list. Using Red Laser’s barcode scanning technology (which eBay acquired last year), users can scan any Vehicle Identification Number (VIN) to automatically add car details including year, make and model to My Garage. From My Garage, car owners can shop the eBay Motors inventory to find matching parts and accessories for their specific vehicles in My Garage.

The app allows you to access vehicle history information with free Experian AutoCheck Vehicle History Reports, save searches for vehicles, ask sellers questions from the app, and share listings with Facebook, Twitter or email.

eBay expects the additional functionality in the mobile app to continue to buoy sales of cars via the marketplace. For eBay, motors is a vertical that is growing in terms of sales. The total amount of vehicles sold via mobile in the first quarter of 2011 increased more than 160% compared to first quarter of 2010. And globally, the total number of parts and accessories sold in the first quarter of 2011 was nearly 250% higher than the first quarter of 2010.



SanDisk Acquires Flash Disk Maker Pliant Technology For More Than $327 Million

Posted: 16 May 2011 06:10 AM PDT

Flash memory storage solutions provider SanDisk has acquired Pliant Technology, a developer of enterprise solid state drives, the company announced this morning. Under the terms of the agreement, SanDisk will pay approximately $327 million in cash plus earn-out.


Bitly Gets A New CEO

Posted: 16 May 2011 06:09 AM PDT

Three years after founding bitly as a home-grown startup inside betaworks, John Borthwick is passing the reigns to a new CEO, Peter Stern. Borthwick will remain CEO of betaworks and concentrate on new products and investments.

Stern comes most recently from Zenbe, a webmail platform and mobile that went through a Facebook talent acquisition last November. Stern, who was a co-founder, didn’t go to Facebook. He’s more a New York kind of guy. Back in the 1990s, he founded Datek, one of the original online brokerages.

Of course, bitly started out as a link-shortener, and that is still primarily what it is used for. But all of that realtime data about the links people are sharing is very valuable and can give rise to other products. For instance, bitly data is at the core of its News.me reader for the iPad. “You can expect bitly to build on its strengths,” says Stern, “enabling people to explore and share content in other ways beyond url shortening.”

Late last year, bitly raised $10 million, which it is putting towards new product development and hires (including Flickr’s former product chief).



Mobile Payments Startup Billing Revolution Raises $6.6 Million

Posted: 16 May 2011 06:00 AM PDT

Mobile payments startup Billing Revolution has raised $6.6 million in Series B funding, led by DCM and SK Telecom Ventures. This latest funding round will be used to hire marketing, business development and product staff.

Launched in 2008, the startup that offers a single-click billing and payment service for transactions on mobile phones, including Android and iPhone devices. Once consumers are ready to buy a digital or physical product from the Web from a vendor that employs Billing Revolution's service for payment, they are taken to Billing Revolution's purchase page where they input limited information (credit card number, expiration date, no registration, no login) from their phone.

When the purchase is complete, Billing Revolution automatically sends an SMS receipt to their phone. Billing Revolution says single-click checkout increases mobile checkout rates to 36% for first time users and 78% for second time users.



VMware Buys Cloud-Based IT Management Service Provider Shavlik Technologies

Posted: 16 May 2011 05:15 AM PDT

Virtualization software giant VMware this morning announced that it has agreed to acquire Shavlik Technologies, a provider of cloud-based IT management solutions for small and medium businesses. Financial terms of the acquisition, which is expected to be completed later this year, were not disclosed.


StackMob Raises $7.5 Million To Be The ‘Heroku For Mobile’

Posted: 16 May 2011 05:00 AM PDT

StackMob, a cloud-based system designed to ease the development and deployment of mobile applications, has raised $7.5 million led by Trinity Ventures with StackMob's existing investors, Harrison Metal and Baseline Ventures, participating in the round.

StackMob, which is currently in private beta, is a fully hosted and managed platform that allows developers to build, deploy and manage feature rich mobile applications, similar to what Heroku did for web applications. The suite of services are designed for rapid development and implementation.

Developers can integrate OAuth, social services (Twitter, Facebook, etc), storage solutions (Joyent, Amazon), advertising, messaging (including Push), APIs, analytics, and more simply. A developer can pick and choose what they want or need to include from StackMob via a freemium model.

As the mobile app ecosystem continues to rapidly grow, StackMob is sure to ride this wave. The platform supports iOS currently but plans to extend the functionality for Android development as well. The new funding will be used to for additional hiring, product development and to build support for additional platforms.

Developers can sign up to StackMob's private beta here.



European Social Games Publisher Pretty Simple Raises €2.5 Million

Posted: 16 May 2011 04:45 AM PDT

The first name that comes to mind when we talk about social games in Europe is probably Wooga. But the German-based social games publisher has a number of local competitors dispersed throughout the continent. In France, one of the names that has gotten a lot of attention is Kobojo, who is behind PyramidVille and Goobox. Well, now there is a new kid on the block: Pretty Simple. And the company has just raised €2.5 million with Idinvest Partners (formerly AGF Private Equity) to produce 2-4 new games per year.


First To File Raises $2 Million For IP Document Management Service

Posted: 16 May 2011 04:30 AM PDT

First To File, a patent document management service, has raised $2 million in Series B funding led by Foundation Capital. This brings the startup’s total funding to $4 million.

First To File is a SaaS, patent document management service for organizations and companies that deal with IP portfolios. The startup’s software provides a way to manage all patent related documents and knowledge; and automates the storage, management, and analysis of legal documents.

While First To File doesn’t allow you to file directly with the USPTO, the service is meant to sit on top of a company’s existing document system. And today, the company also introduced a similar service document management service for Trademarks.

First To File is currently being used by Johnson & Johnson, Unilever and others.



Which Startup Is Cleared For Launch As Europe’s Next €100+ Million Exit?

Posted: 16 May 2011 04:01 AM PDT

This is a guest post by Monty Munford, blogger at Monty’s Outlook and freelance Mobile/social consultant is (also a Bollywood actor, next movie out April 2011). He tweets @montymunford.

Eighteen entrepreneurs from around the UK recently spent a week on the West Coast of the US as part of Webmisson. As part of the visit, the group attended the TechCrunch offices in San Francisco and were part of an impromptu Q&A with TechCrunch’s Sarah Lacy.

In a good-natured discussion, the question was posited to Lacy that perhaps business people in Europe, and especially London, were 'nicer' than their Silicon Valley counterparts. Lacy, somewhat witheringly, replied that maybe that was so, but which London-based companies had $10+ billion valuations?



Primedia Acquired By TPG Capital For $525 Million

Posted: 16 May 2011 03:41 AM PDT

Primedia, which helps people find apartments, houses for rent or new homes for sale through websites, mobile and print publications, this morning said it has entered into a definitive agreement to be acquired by affiliates of private investment firm TPG Capital.

Under the terms of the agreement, holders of the outstanding common shares of Primedia will receive $7.10 per share in cash, representing a transaction value of approximately $525 million.

Mostly known for its guides and magazines, such as Apartment Guide and New Home Guide, PRIMEDIA also operates a number of websites, including ApartmentGuide.com, NewHomeGuide.com and Rentals.com.

The acquisition by TPG Capital is subject to customary closing conditions and is expected to close in the third quarter of 2011.

According to the press statement, stockholders holding approximately 58% of the outstanding common stock have approved the transaction in writing, which means no additional Primedia stockholder action is required to complete the transaction.



Former Sirius CEO Joseph Clayton Takes Over The Reins From Ergen At DISH

Posted: 16 May 2011 03:24 AM PDT

Satellite TV and video-on-demand company DISH Network this morning announced today that Joseph P. Clayton has been named the company’s president and chief executive officer and has been appointed to its board of directors, effective June 20, 2011. The company’s iconic co-founder, Charles Ergen, will step down from his operational role at the helm of the company but remain as chairman of DISH Network.

Clayton previously served as chairman of Sirius Satellite Radio, from November 2004 through July 2008, and served as CEO of Sirius from November 2001 through November 2004.

Prior to joining Sirius, Clayton served as president of Global Crossing North America and as president and CEO of Frontier Corporation.

For your further reading pleasure:

DISH And EchoStar Settle Patent Litigation With TiVo, Agree To Pay $500 Million

DISH Wins Bankruptcy Auction, Buys Blockbuster Assets For $228M In Cash



Ask.fm Adds Video Answers To Its European Formspring

Posted: 16 May 2011 03:12 AM PDT

Ask.fm, a European Formspring competitor, has added video answers to its conversational Q&A service. Rather than answering questions in text, the browser-based feature lets anybody with a webcam record and upload an answer in video to questions sent to their Ask.fm profile, which can be from other Ask.fm members or submitted anonymously. It's pretty straightforward, with the 'Record video answer' sitting right next to the regular answer button, while the video recording functionality itself is powered by Flash.


Autonomy Buys Iron Mountain’s Digital Archiving, Online Backup Business For $380M

Posted: 16 May 2011 03:12 AM PDT

Cambridge, UK-based infrastructure software company Autonomy this morning announced that it is acquiring a number of assets of Iron Mountain's digital division - including the latter's archiving, e-discovery and online backup business units - for $380 million in cash. Dr. Mike Lynch, CEO of Autonomy, said in a statement that they've been wanting to close such a deal for a while now.


Boticca’s High-End Marketplace For Fashion Accessories Scores $2.5 Million

Posted: 16 May 2011 01:37 AM PDT

I have no idea if Lady Gaga, Jessica Alba or Cameron Diaz have good taste. But whoever is designing their fashion accessories is also selling pieces on Boticca.com. The London-based startup that launched it's high-end designer marketplace in October 2010 has been getting quite a bit of attention from investors over the last few months. Finally, the team is announcing that it has closed a £1.5 million (or $2.5 million) round - primarily for developing editorial content, additional market channels and adding new people to the team.


Push comes to shove

Posted: 15 May 2011 09:45 PM PDT

At 35 thousand feet, the fact that I’m horribly behind on my deadline (10am Pacific Sunday) is of little consequence. After all, Google had a year to come up with something for its Google I/O conference and zeroed out with a loser Flashbook, no music deal, and no TV disruption either. The Popular Mechanics set is juiced up with a toolkit for running your house, and Google Me or +1 or Gsnot threatens but does not yet have a reason for life.

The Microsoft Skype deal could be characterized by “at least they’re doing something.” Given the company’s investments in Bing and XBox, owning a real social media platform is surely a good thing when you get past the current phase of Twitter and Facebook hegemony. Apple’s FaceTime forced the ante as it gobbles up the email namespace as the video address of record. The Skype deal also damages GTalk, which Google has stupidly deprecated on iOS and its push notification queue.

At 35 thousand feet you can see the future of push notification more clearly. The in-flight WiFi won’t sustain FaceTime or Skype video, but it handles IM just fine. GTalk is buried in the Gmail menus; it has no iPhone or iPad version. Neither Skype nor Facebook Chat have iPad versions, but they do support push notifications through iPhone. Facebook Chat sends push notifications but goes offline after a small interval.

But Skype both supports push notification and maintains a connection. While I type in Pages, I receive pushes in realtime at 35 thousand feet. As John Taschek pushed just now, easily worth $2billion. He pushed not only from his iPad2 but his Droid and PC. Works on the Mac too. While Google times out on its stupid web-only gadget I am multitasking across 3 or 4 OSes, depending on whether you think OS/X is anything more than a deer in iOS’s headlights. This is big news for Microsoft as long as Steve Ballmer can deprecate Windows.

Unfortunately for Steve, he’s in a serious struggle with the other Steve for enough runway to come up with a Skype OS strategy in time to blunt the impact of the Apple value chain. If you see Windows Phone as XBox lite and Kinect gestures as a substitute for the millions now comfortable with iOS and Android swipes, you still are several years away from a serious run at Steve Sinofsky and the Office Death Star. The very place Microsoft is vulnerable is also Sinofsky’s raison d’ĂȘtre for ascending to the throne.

And of course that presumes Apple stands still, which is exactly not going to happen. Let’s look again from 35 thousand feet, as the next version of iOS delivers smart swipe tools that bounce you back and forth between push notifications and saved state. Right now I have to double-click the Home button to go to the icon bar of open apps, then load one, and so on. If the devs are right, soon we’ll swipe down to load the icon bar or left or right to navigate between last opened apps.

Saved state will also improve, from nowhere as in the Wall Street Journal app to Skype’s gateway menu of chat sessions to the actual state you left the screen in. Perhaps the Push Notification View button can be left as it is but the Close button can morph into a staging area to respond to a message and then close the window. Saved state could morph into a split screen drag and drop editor where you route images, URLs, and stream data.

You only have to take a look at the latest Concur app to understand how far the iOS platform has come. A few months ago, you couldn’t do a tenth of what you could do on  the web; today I can add receipt images as I travel, find the hotel and registration code as I step up to the check in counter, do the most complex expense reports and book new travel simultaneously — all at 35 thousand feet while my wife negotiates with the in-laws and pushes updates as I struggle with this post. Looks like I’m going to my high school reunion after all.

Every trip takes me a big step closer to leaving my laptop at home, as iOS gobbles up more real estate on the realtime social game board. Last year we heard about how Netflix would be brought to earth by the studios pricing streaming out of the market, the way the record cartel killed Internet radio. It didn’t happen.  Already CBS and some cable networks are switching from fearing Netflix to loving the increased revenue for the programming formerly known as reruns and high value niche casts like Damages and Mad Men.

Google can hurt Microsoft with its Chromebooks, but the more it drives Redmond away from Windows and toward the Push economy, the harder it will be to fight off Apple with red-state blue-state politics. With the Skype deal, Microsoft sets in motion an alliance that speaks to a post-Windows era, one where the differences between OS are submerged in a stream-based notification uber platform that eats at the heart of Office and email. Just look at our kids and how they use email — not.

It’s almost like Ballmer is disrupting his own company before it’s too late to recover.  Buying its way into push notification gives Microsoft a beachhead for an assault on the post-Office changing of the guard. With e-mail pushed into a backwater, we relearn how to organize our resources based on social dynamics. You can see an incipient cross-platform OS in the outlines of the Skype framework: chat, video, screen and file sharing.

It’s most reminiscent of Microsoft’s purchase of the Spyglass browser code, the first step along the road to Internet Explorer and the choking off of Netscape’s air supply. And it’s ironic that Marc Andreesen engineered Skype’s fattening up for the slaughter. This time Google is Netscape, cobbling together the social OS out of open standards and skunkworks startups. Will Microsoft mop up again? Not if Apple has anything to say about it. With Google and Microsoft going after each other, this time Apple is Microsoft.



Initial Thoughts On The Samsung Series 5 Chromebook

Posted: 15 May 2011 06:46 PM PDT

Google has finally made good on their promise to deliver Chrome OS to the world this summer. Or they will, on June 15 when the first Chromebooks are available. Considering that I’m potentially the perfect type of user for such a machine — that is, nearly everything I do these days is in the browser — I’ve been very interested in the OS/product development. Last week, I got my hands on one of the first models for a bit, and I thought I’d post some initial thoughts.

Following the formal unveiling on day two of Google I/O, Samsung and Google held a joint event to further show off the hardware to a group of journalists and give us some hands-on time with one of the first Chromebooks, the Samsung Series 5. I got to play with one for about 20 minutes. And while this is far from a full review, my initial impression is that it’s good. Really good. Especially for a first crack at a product.

(I should note that the unit I tried had a beta build of Chrome OS and not the final, stable version which should be released right before June 15, Google says.)

Of course, these Chromebooks aren’t truly the first crack at the product. That was the Cr-48, a barebones notebook that Google sent to developers who signed up for a pilot program late last year. That product, quite frankly, was not very good. It had hands-down the worst trackpad I had ever used on a computing device. This improved over time (with driver updates in the OS), but the machine was still far too slow to replace a regular notebook (or even most tablets).

The Samsung Series 5 is much better.

First of all, the Samsung device seems far faster than the Cr-48. That’s a bit surprising since the specs aren’t all that different except for the fact that the Series 5 has a dual-core Intel Atom chip as opposed to the single-core one that the Cr-48 has. The RAM, SSD, etc, are the same. So apparently the chip does make the big difference.

With the Cr-48, I would continually be frustrated by the speed (or lack of speed) at which I could open new tabs. Series 5 didn’t have those issues when I tried it out. This led to a feeling much closer to using Chrome (the browser) on a Mac or PC. That is to say, fast.

Flash playback had also been a big problem with the Cr-48. On Series 5, Flash seems to work pretty well — even in HD on sites like YouTube and Hulu. Well, 720p anyway. 1080p produced quite a bit of lag, and yes, some serious undercarriage heat.

As for the trackpad, it’s also much improved. It’s not nice as nice as the glass MacBook trackpad, but it is able to track where you finger is moving in realtime (which the Cr-48 could not always do). It still feels a little cheap, but it works more or less as expected.

But the initial thing you’ll notice about the Samsung Series 5 is what a good first impression it makes. That’s because the thing starts up nearly instantaneously. Google is claiming an 8-second boot, I think it might be ever faster.  Compare that to a Mac or PC which often takes several times as long (though the Macs with new SSDs are very fast as well).

Even better is that when you hit the login screen and enter your Google credentials (assuming you have them, of course), everything in synced within seconds. That means your bookmarks, passwords, and even extensions/apps hop over to the new machine seamlessly through the air. This experience was actually one of the cooler things I’ve seen in a while. Such integration will probably give a regular user that “magical” type feeling.

Also magical is the battery life. Obviously, I didn’t get a chance to fully test it out, but if the Cr-48 is any indication, the 8.5 hour stated life may be an underestimate. I wouldn’t be shocked if these things did 10 hours of continuous usages fairly easily.

The form-factor does leave a bit to be desired. Perhaps I’m spoiled by the MacBook Air, but the Series 5 feels very plastic-y and many of the ports/joints look a bit cheap and tacked-on. At 3 and a quarter pounds, it’s also heavier than the Air (both models).

Of course, that’s not really a fair comparison when the cheapest Air costs $1,000. The Series 5 will cost just $429 or $499 depending on if you get WiFi-only or WiFi/3G. (And the weight/build quality is quite a bit better than the Cr-48, so again, it’s hard to complain.)

And let’s talk about the price, because that will be very important. While the Samsung models (and the even cheaper Acer model) easily beat any Mac laptop in price, they are in line with several PC notebooks already on the market. And because these Chromebooks are stripped of many of the features people typically look for when PC shopping, it will be interesting to see how these stack up on bestbuy.com and amazon.com (where they’ll initially be sold).

Getting below the $500 threshold was crucial, but they may need models half that price if they really want them to move against cheap PC notebooks. (The monthly subscription pricing you probably read about is just meant for the education and enterprise markets.)

The sub-$500 price was aslo critical to get below the iPad. At least at first, consumers are likely going to look at Chromebooks as cheap, secondary machines, and not full-on computer replacements. Fair or not, that will run head-first into the iPad market as well. So again, the cheaper Google can make these things, the better.

The truth is that, based on my initial impression, Chromebooks are likely to be good enough to replace a full-on computer for many users. There will be reluctance at first to accept this idea simply because change is hard. But if Google can break the Windows mindset  — something that will be much easier said than done — you should see users start to move over.

Make no mistake, Chromebooks are a direct attack on Microsoft. Thanks to Chrome, Google Search, Gmail, etc, Google has all the data they need to know that people spend the vast majority of their time on computers these days in the web browser. So why not just cut out the middle man? Microsoft.

These initial Chromebooks are just act one of this melodrama. But it looks to be a pretty good act one.



@J_Pinet Tweets IMF Chief’s Arrest Before US Media And Gets Accused Of Conspiracy

Posted: 15 May 2011 05:52 PM PDT

"a friend in the US just told me that #DSK was arrested by the police in a NYC hotel one hour ago."

It was the middle of the night in Paris when the news broke that Dominique Strauss-Kahn, the Chief of the IMF, had been pulled off an Air France flight and arrested for sexual assault. Coincidentally, he was also set to announce his candidacy for the 2012 French presidential elections next month - and could therefore become one of the strongest opponents of President Sarkozy. But now it looks like the Parti Socialiste may have to nominate someone else...


Single? Married? It’s Complicated? Wear Your Relationship Status With Buump

Posted: 15 May 2011 04:36 PM PDT

Facebook may have over 600 million users but there's still one problem: all the info is online!  How on earth are you supposed to know if that cutie you just met is single or married without access to his or her profile?! Ok, yes, you could just ask - but that's not very tactful now, is it? So, rather than having to muster up any courage and attack the subject head on, we could all just wear our relationship status and make it easier for everyone. At least, that's what Buump thinks we should do. The company sells colorful plastic bracelets featuring the 5-different relationship status options in English for €5.99. There is also an additional pack with the 5 "looking for" options sold for the same price. And you can buy all 10 bracelets for €10.99 (the site also lets you buy in bulk and customize your own bracelets for orders of 1,000 or more).


The Chilling Story of Genius in a Land of Chronic Unemployment

Posted: 15 May 2011 02:59 PM PDT

Ever since he could remember, Ibrahim Boakye had a knack for understanding how things worked. There were things he could just do that no other kids– let alone adults– could understand. By the time he was five-years-old everyone had stopped questioning it, and neighbors were calling on him to fix their broken toasters, irons, or anything that was the least bit mechanical.

By his early teens, he was getting things out of the dump and fixing them for fun. Soon after that, he was teaching himself to code. He’s made an outsized living no one in his family could have anticipated by outsmarting other people on computers ever since. It’s never been about money or even in those early days about doing good deeds around the neighborhood. He gets an intoxicating rush from solving the hardest technical problem he can find and from knowing that he’s the best.

As I sat in a hotel lobby in Lagos listening to his story, I couldn’t help being reminded of Max Levchin of PayPal and Slide fame. Levchin grew up in Soviet Russia and had the same knack, that same innate ability to understand how machines worked. He learned to code on whatever he could find– calculators, pen and paper, old Soviet microcomputers. When his family moved to America, he rebuilt things he found in dumpsters too. Watching the nightly news on a old black-and-white TV helped teach him English.

For Levchin, it was also about the thrill. He once got in trouble with the FBI for cracking video game codes for a Chicago crime boss. He didn’t really think about the fact that he was doing something illegal, he just loved the challenge. And like Boakye, he’s made an outsized living no one in his family could have anticipated by outsmarting other people on computers ever since. His rush also comes from solving the hardest technical problem he can find, and from knowing that he is the best.

But there’s a big difference between the two. Levchin immigrated to the US at 16, went to University of Illinois and was inspired by the example of Marc Andreessen. He moved to Silicon Valley at the best possible time for an aggressive, insanely-competitive coder to move to Silicon Valley. A company as complex and lasting as PayPal was hardly all luck and timing, but Levchin took advantage of being in the right place at the right time and meeting the right people, most notably PayPal co-founder Peter Thiel.

By contrast, Boakye grew up in a poor section of Lagos. In a way, his timing was also serendipitous: The Internet’s emergence in Nigeria breathed new life into an old national scam: The 419 letter. And a new generation was making hay out of the naivetĂ© of millions of new Internet users. For Nigeria’s massive unemployed population– some fifty million people today– this was every bit the gold rush that Silicon Valley was in the 1990s. And the “entrepreneurs” concocting these schemes late night after the doors were locked in Nigeria’s Internet cafes needed a brilliant coder who was more motivated the bigger the challenge. Boakye was one of the best in the country.

Like Levchin, he took advantage of being in the right place at the right time and having the right skills. Only most would say he met the wrong kind of people. At his peak he was making as much as $50,000 per day as a freelancer hacking into bank systems, stealing social security numbers and credit cards, and exposing the Web’s deepest vulnerabilities for Nigeria’s “Yahoo boys,” called that because they were known for using Yahoo email addresses.

Boakye has since left the life of crime, he says. We met my last day in Lagos; one of nearly a dozen interviews I did with current and reformed Yahoo boys in Nigeria. I won’t detail how I got the meetings, because of the elaborate personal assurances of safety. I’ve taken pains to disguise any details about the man whose name is obviously not really Ibrahim Boakye. Appropriately, I got that name off the most recent 419 email I found in my spam folder. Some of the juiciest parts of the accounts I won’t detail here, lest it put the people who personally vouched for me at risk.

Finding Yahoo boys to talk to me was near-impossible; a big change from a few years ago. The 419 scammers used to be the rockstars of Nigeria’s underground world. “Girls wanted to date us because we were smart,” one told me. “We could get money out of white men using only our brains and a computer.” There was also the justification that this was some how a revenge for colonialism; when white men took Africa’s natural resources without consent. And– as is the case with every black market– there was the lure of all that cash. Skills were flaunted in cafes, whole organizations were built out, and even rap songs were written glorifying 419.

It’s much harder to make money today. That’s mostly because Internet companies have made it harder, through restricting mass emails and educating people not to purchase any goods from Nigeria. Most ecommerce sites block Nigerian ISPs. And consumers have gotten smarter, too, the Yahoo boys say. The Nigerian government has also made greater efforts to crack down, under International pressure and pressure from the country’s legitimate tech entrepreneurs who are furious at the Yahoo boys for globally sullying the country’s reputation. The people still doing it have been driven underground, forced to keep a low profile. They don’t talk about what they do even with friends. They can’t trust anyone. One current scammer told me he couldn’t invite friends over because of the noticeable stench in his bedroom from all the stacks of money stashed under his bed.

For most of the day, I sat transfixed listening to their stories. Of course it was impossible to know whether they were telling the truth about everything. But so many of the individual stories corresponded to one another, and the complex systems of scamming were too elaborate to have been made up on the spot. Each boy would start telling his stories shyly, but once he got going he couldn’t help but boast about his methods. Sometimes the hardest thing about committing the perfect crime can be keeping your genius to yourself.

Boakye’s sheer hacker genius was the most astounding. It’s not just technical ability– he tries to figure out how the person who set up the security system he’s trying to break thinks, and outsmart him at his own game. If he can’t crack the software, he studies the hardware and learns its vulnerabilities.

The way he described the chess match with this unknown nemesis reminded me of another entrepreneur in the Valley: Dennis Fong. Fong spent his teens as a professional gamer, better known by the name “Thresh.” He rarely lost thanks to an uncanny ability to anticipate opponents’ moves. Opponents called it “Thresh ESP,” and it earned him six-figure computing endorsement deals. The way Boakye explained how he breaks into multi-national banks was identical to Thresh’s approach. I wouldn’t be surprised if he’s hacked into at least one of my accounts by now just out of curiosity. I asked him not to do anything malicious, and he promised he wouldn’t. But we were both pretty convinced he could.

As a person, I found these meeting more terrifying than my run in with Bones and his machete men in Alaba. As a business reporter, I couldn’t stop the broad smile from spreading across my face as we spoke, even breaking out in laughter once or twice. It’s the same Cheshire cat grin I get when I meet any amazing entrepreneur, anywhere in the world. You know them after five minutes of conversation. And several of these guys just had it. Born into a different circumstance, they could be on the cover of any magazine, ringing the opening bell at the Nasdaq.

This is the darkside of what we know in Silicon Valley: That great entrepreneurs can come from anywhere in the world. Sometimes some of the best technical minds fall into a life of crime. And just like corporate giants can’t keep a hot startup from disrupting them; law enforcement can’t keep people like Boakye from accessing your information.

There weren’t just stunning personality comparisons between someone like Boakye and Fong or Levchin, there were stunning industry comparisons. Like entrepreneurs in the Valley, the industry has evolved to the point where few of them need to be hard-core techies. Today, the Nigerians focus on user experience– put a less euphemistic way, their job is to find the mark and rope him or her in. Any hardcore hacking work is outsourced to Vietnam, India or elsewhere– particularly now that Boakye has retired from crime. One Yahoo boy told me he met his Vietnamese partner online when he tried to scam him. The man wrote back, “I’m not going to fall for this, but I know what you are doing and I can help you.” The world is flat for criminals too.

Don’t let the clunky syntax on these emails fool you. The Yahoo boys I met are masters of human manipulation. The latest scam revolves around online dating. Yahoo boys find a lonely man– sometimes a single man who wants a mail-order bride; sometimes a married one with kids who wants an escape on the side. They key with 419 scams is always finding someone who wants a easy shortcut in money or love. An elaborate relationship over IM begins. One boy I met excelled at these. He says he just closes his eyes and pretends it’s a woman on the other end he’s seducing. He uses carefully constructed porn clips for video chats; other scammers hire actresses to portray the fictional girls.

This Yahoo boy carries on five to seven relationships at once, playing the dutiful girlfriend to each– down to helping them pick out their clothes for work everyday. When one suitor lost a job, he used the Web to help find him an interview and pumped up his confidence to apply. He gave him several months to get back on his feet before asking for more cash. One time, he even sent the mark cash, to show how much he — or “she”– cared. “I take care of them,” he says. “They are the people who feed me.”

He helps build them up; he listens to their problems. He makes them feel loved. He calls each an innocuous pet name, lest he accidentally type the wrong message into the wrong chat window. He asks for a little bit of money here and there, until men are sending him steady amounts from each paycheck. He says it takes exactly one month for a man to fall in love with him, and once he has a man’s heart, no woman can take it.

This isn’t a short con, this is a long term game of constant maintenance. He creates fictional Web pages to back up the fictional girl’s story, so if the man Google’s her, he finds seemingly legitimate confirmation. When he goes to church, he tells them “she’s” going to church. When he makes dinner he tells them “she’s” making dinner. He’s less a 419 scammer, and more a long-distance emotional prostitute, providing a service men appear to be happy to pay for. Like any great entrepreneur, this Yahoo boy knows his customer. “if you get their heart, you have control,” he says. “You white people have very flexible hearts. We’ve seen it. That’s why there can be no true love in Nigeria. Your closest friends rip you off here.” He continued, “I wish I could stop. I’m not into the black man power like some people. I don’t want to make someone sell their house; I don’t want to take everything. I just can’t find a job. If I had a junior brother I wouldn’t teach him. You get addicted to it.”

Just like you have people in the Valley looking to flip products and those in it for the long haul; in the 419 world you have kids who try it out for easy money, and those who commit to it. To be successful today you have to work as many hours as a Valley Internet entrepreneur and have just as long term of a focus. There’s just as much creative problem solving involved; this is something you can’t really teach. A lot of these Yahoo boys told me they’ve tried to take on apprentices, but few of them last. It’s not the glamorous, quick-money world it used to be. Today being a scammer takes smarts and stamina.

Nigeria is undoubtably one of the juiciest markets in the emerging world, and by many accounts the juiciest in all of Africa. And legitimate tech entrepreneurs will be understandably upset about Western reporters fixating on the 419 world. But if they want to stay in Nigeria, they’ll have to get used to it. These kids, the circumstances that created them, and the lasting impact of the damage they’ve done to people aren’t issues the country can shrug off no matter how much it would like to. “We use our brains to get what we want. For us it’s the only way to live and survive,” one boy said. “As long as technology keeps advancing, there is no way to stop us.”

It’s Nigeria’s central issue that it will have to face, own up to, and tackle if the country is going to play a greater role in the global economy. Ignoring it is like ignoring China’s lack of political freedom; India’s deep poverty and infrastructure problems; or the civil war going on in Brazil’s favelas between drug lords and the frequently corrupt policemen cracking down on them. The reason Westerners tend to fixate on these issues isn’t because we’re opting for easy stereotypes. It’s because they are each huge problems without easy solutions. Problems that have to be faced. And you face them by talking to the real people behind them, not by sweeping them under a rug, assuming they’re all two-dimensional villains or dismissing them as a made up stereotype.

One of the active scammers I spoke with is supporting his whole family, including several siblings he is putting through university, so they have a chance at a better life. But one of them has been out of school for years, and still can’t find a job. It’s not a ringing endorsement to go legit. This guy doesn’t feel great about what he does, but he says he has no other option. He goes to church several times a week, where he wrestles with it. He tells himself he is on God’s path, and he has faith it ends with him leaving this life behind.

He’s describing the hope of anyone who is touched by the genius and the opportunity in Nigeria, as I was during my trip. That this stunning raw talent can find a way to stop relying on bilking Westerners out of cash and start using their wily genius to create local jobs.



Honeycomb Has A Fighting Chance Against The iPad

Posted: 15 May 2011 02:47 PM PDT


If you’d asked me a week ago what I thought about Honeycomb, the tablet version of Android, I would have said that it was in very bad shape and that it would be several months before it could even hold a candle to the iPad 2. Because despite my excitement to see Android take on Apple’s ridiculously successful iPad, my experience with the Motorola Xoom — the first Honeycomb tablet — has been decidedly poor.

From day one things were off to a bad start. At first, Android Market would crash literally every time I opened it. The Android team fixed that pretty quickly, but the OS was still riddled with weird bugs: swiping between home screens is laggy, widgets go blank and need to refresh, and there are myriad other glitches that pop up at random. And even beyond the bugs, there are weird quirks in the OS that feel poorly thought out (seriously, why does the ‘Home’ button look like an Up arrow?). But now I’ve had some time to test out the Samsung Galaxy Tab 10.1,  the new tablet that was given to Google I/O attendees and will be available in stores beginning June 8. And after spending the last couple of days using it around my apartment, I’m much more optimistic. In fact, I’m guessing this device is going to do very well, and that it foreshadows a bright future ahead for Honeycomb.

For those that haven’t been following along, there have been plenty of reports suggesting that the Xoom has seen meager sales. Yes, there have been other Honeycomb devices released, but the Xoom was first to market and it had the most pre-launch hype, so it’s no surprise that people are using it gauge Honeycomb’s initial reception. Which hasn’t been great. For example, Mike McCue, the CEO Flipboard, has said that the company won’t be porting its nifty application to Android any time soon because the iPad will continue to own the tablet market through the rest of the year.

But I’m becoming increasingly convinced that my issues and the tepid response to the Xoom have more to do with the hardware than Honeycomb itself, because I’m enjoying my time with the Galaxy Tab much more. I’m not going to do a detailed run-through of the hardware specs (which aren’t my forte), but there are some differences that are immediately apparent between the two.

The Motorola Xoom weighs 1.6 pounds. It has a rubberized back that feels sturdy, but it meets the screen at a fairly sharp edge that doesn’t feel great in your hand. The new Galaxy Tab weighs 1.24 pounds. It has a rounded plastic exterior that feels cheaper, but also feels much more natural in your palm. The difference in weight between the two is no more than a hefty hamburger — and yet it makes all the difference.

Holding the Xoom with one hand isn’t difficult in the slightest, but it isn’t effortless either. You’re bound to feel some muscle strain if you do it for a long time, and if you balance it against your lap (or your stomach if you’re lying down), you’re not going to forget it’s there. The Galaxy Tab feels far more natural. It doesn’t weigh down on you nearly as much, and, as you hold it in your hand, its smooth edges feel more like the coveted iPad 2 (in fact, it’s actually slightly lighter than Apple’s device). These differences sound petty, but given that your interaction with a tablet is inherently physical, they’re important.

Don’t get me wrong: Honeycomb 3.0 on the Galaxy Tab is still buggy as hell. Sometimes I feel like the browser is a game — tap the wrong thing, and you’ll suddenly jump to the bottom of a webpage, or all animations will get sluggish. Even the 3.1 update, which I just tried out on my Xoom and will be available for the Galaxy Tab in a few weeks, doesn’t seem to have fixed all the performance kinks. And Android Market still appears to have fewer than 100 applications optimized for the tablet form factor.

But I think that will change soon. All of the Google I/O attendees (most of whom are developers) obviously now have the tablet, which will probably help give the OS some momentum. And, perhaps more importantly, I think this new wave of better, lighter Android tablets will spur people to actually buy them, so developers will have a bigger incentive to optimize their apps for the tablet.

iPad sales won’t suffer in the slightest (it is still much more polished and intuitive than Honeycomb, and probably always will be). But, just as we saw with Android on mobile phones, I’m guessing Honeycomb’s growth is going to start rapidly accelerating around one month from now. The Market will get fleshed out over the summer, and then things will really get going this fall as even better tablets land in time for the holiday season. In retrospect it will all seem obvious (of course the multitude of available Android tablets will give rise to a large customer base). But I don’t think anyone who has compared the Xoom to an iPad 2 would have called the rise of Honeycomb a given.

Of course, that’s all assuming they fix the damn bugs.



Busting Super-Injunctions On Twitter: Another Symptom Of An Over-Entitled Age

Posted: 15 May 2011 01:10 PM PDT

This weekend finds me in London, whirling around in the eye of the book launch storm and with very little opportunity to keep track of what’s making news in the world of technology.

Fortunately here in the UK there’s one tech story that’s impossible to miss: an anonymous Twitter user has been posting details of legal injunctions, taken out by celebrities to keep their alleged misdeeds out of the public eye.

Inevitably, a debate is raging both in the traditional press and online: does Twitter render so-called "super injunctions" redundant? What’s the value in gagging a newspaper when the same allegations can be published anonymously online with impunity? Is there a place for secrecy in today’s open and connected world?

It’s a subject in which I’ve long had an interest. As I wrote last month, I was once threatened with jail after I broke a super-injunction online to demonstrate that, in the Internet era, gagging orders (which only cover the UK, and so are unenforceable against, say, Twitter) aren’t worth the paper they’re written on.

Given that history, you might assume that I’d be all in favour of the current flurry of leaks. In fact, nothing could be further from the truth. Call it growing up (almost a decade has passed since my near-run-in with the High Court), call it post-Wikileaks-fatigue, call it whatever you like: the fact is I have almost no sympathy left for the idea notion that just because something can be published, it should be.

Much of my objection stems from the language of the proponents of openness. In almost all cases, from the Twitter injunction-busters to the Wikileakers, we hear the same justifications: "sunlight is the best disinfectant", "the public has a right to know", "innocent people have nothing to hide". Oh please. Let’s at least call a voyeuristic spade a spade. The majority of the people couldn’t give a damn about the public interest, or of disinfecting public life: they just want to know what rich and powerful people do behind closed doors.

That attitude reached its ghoulish nadir after the killing of Osama Bin Laden. "We have the right to see the photos of his body," cried the entitled masses – the Twitterers, the bloggers, the news media. To which I have to respond: why? Given the risk of further inflaming tensions, and of crass Photoshop stunts, and countless other arguments for blocking the publication of graphic images of the corpse of a terrorist, what exact right do we have to demand that the US Government upload them to Flickr? Simply because they exist? Simply because we have a mawkish fascination – and don’t let’s pretend it goes any further than that for most people – with what a celebrity terrorist with his eye blown out looks like?

("But without the photos, we can’t get closure," wail the openness advocates "we can’t be sure he’s dead." Sure. As if seeing a photograph is proof of anything any more. Al-Qaeda say he’s dead; the government says he’s dead; senators on the other side of the aisle say he’s dead. He’s dead. Closure accomplished.)

Even accepting that some people’s interest in injunction-breaking and photo-publishing goes beyond the voyeuristic, doesn’t make their reasoning any more sound. Those supporting the breaking of injunctions on Twitter frequently make a public interest argument: what right do celebrities have to cover up their bad behavior? Well, for one thing, not every injunction is an example of a guilty celebrity using the law to cover up a sordid affair. Injunctions are frequently used by high-profile people to prevent the publication of malicious and untrue allegations which would destroy families and ruin reputations. In those cases, it’s no use suing for libel after the fact. Anyone who thinks that "the public" (whoever they are) will hear an allegation and not assume it’s basically true is living in a fantasy land.

Even where there is a genuine story being covered up, it’s still far from given that just because someone is, say, a famous footballer or TV personality that they have surrendered the right to a private life; particularly when the privacy of their family is also threatened.

And even in cases with a stronger public-interest – the Bin Laden photos, the Wikileaks allegations – the notion that everything should be shared with the people and the press is dangerous and disingenuous. I’ve written before about how Wikileaks damaged the ability of diplomats to do their job in return for – what? – showing that American and British diplomats aren’t all that corrupt at all, actually. Great.

The truth is that, at some point in the past decade or so, an idea grew to maturity that secrets are inherently bad: that the public has a right to know every detail about everything so that we might make our own judgement on it. If anyone in a position of power or influence – a celebrity, a government minister, a spy – writes a document or takes a photograph, we have the right to see it and comment on it.

It’s perhaps no coincidence that this era of entitlement coincides with an era in which we are entitled to comment on every other damn thing in the universe. A world in which everyone is a book reviewer, or a film critic. A time when no news programme is complete without inviting the viewer to share their opinion and no news article truly comprehensive until the comments of readers have been taken into account.

Is it any wonder – when we’re constantly being told that our opinion is as valid as that of experts, or ministers or journalists or any number of people who are actually paid and trained to make decisions or provide analysis – that we’ve come to assume that we’re entitled to know or see everything, no matter how private, sordid or distasteful?



Connecting The Dots On eBay’s Local Shopping Strategy

Posted: 15 May 2011 09:07 AM PDT

It’s no secret that eBay has been heavily investing in a local commerce strategy. The central core of this is trying to capitalize on the $917 million online-to-offline buying market, which Forrester estimates will eventually reach $1.3 trillion (although this number seems low) and account for nearly 50% of total retail sales by 2013. Virtually every acquisition in the past year (besides the company’s $2.4 billion purchase of GSI Commerce) has been of a company that is dabbling in local payments or linking to merchants (Milo, RedLaser, Where, FigCard). If you look closely, a clear strategy is emerging that positions eBay at the center of mobile shopping, local commerce, and payments (through PayPal). Let’s connect the dots.

Online-To-Offline and Comparison Shopping

eBay’s first foray into the local commerce arena was though the acquisition of barcode scanning mobile app RedLaser last June. RedLaser’s barcode scanning technology allows users to comparison shop on the go. Anyone can scan a barcode on an item at a store and then automatically access any eBay listings of the product on the marketplace. Sellers can also use the scanning technology to scan an item and list the product in very little time. RedLaser’s technology was quickly integrated into eBay’s dedicated iPhone and Android apps.

The company then bought Milo for $75 million, which aggregates and lists real-time in-store product inventory for over 50,000 stores across the country; featuring over 3 million products from Target, Macy's, Best Buy, Crate & Barrel and more.

Most recently eBay integrated Milo into a few of its core products, including RedLaser. So with a single scan of a product in a store, users can see which nearby retailers have a product in store, and at what price. eBay also integrated Milo’s results into its own marketplace, allowing users to include local shopping tab in search results to check a product's local, or in-store, availability directly from the eBay search results page.

But surfacing local product results and integrating barcode scanning only scratches the surface of local and mobile commerce and its potential. There’s no doubt that eBay is reaping the benefits of mobile commerce (the company expects to do $4 billion in mobile gross merchandise volume in 2011).

Local Payments

And eBay realizes that in order to really capitalize on local and mobile in the ecommerce experience, the company also has to be a part of the point of sale for local merchants. And eBay has a player in this race—payments giant PayPal. PayPal has been making its own small forays into local commerce and late last year launched a new version of its popular iPhone app that allows users to find businesses near their immediate location that accept PayPal as a form of payment. The feature rolled out in San Francisco initially, but we haven’t heard much about the initiative since last November.

Why? Well, scaling this feature broadly to other cities is a challenge for even a large company like PayPal. Not only do they have to find the local businesses, but PayPal has to teach them how to use their mobile apps as a payment mechanism. Wouldn’t it be much easier to acquire a company that could help PayPal and eBay do this?

Enter Where, a geo-location service and mobile advertising company that already has millions of active users across many mobile platforms. The apps show local listings for restaurants, bars, merchants, and events, and also suggests places and deals for you based on your location and past behavior. Where also offers a location-based ad network, which allows advertisers to show their mobile ads only to people near their store, or perhaps near a competitor's store (after the user opts in to see these types of ads). Currently, more than 120,000 retailers, brands and small merchants use Where's network daily to reach new audiences and deliver real-time foot traffic to their doorstep.

eBay of course acquired Where a few weeks ago, and housed the company within PayPal. Not only does this give PayPal much more of a reach with its payments service, but it gives eBay a platform to to enter into the the local deals market. As Where’s CEO Walt Doyle told us after the acquisition, “eBay is about connecting buyers and sellers and Where is about connecting people with places." Ebay can now tap into connecting consumers with local businesses and can be a part of the transaction with PayPal.

PayPal also just bought mobile payments startup FigCard, a Boston-based startup that allows merchants to accept mobile payments in stores by using a simple USB device that plugs into the cash register or point-of-sale terminal. All the consumer needs is the Fig app on his or her smart phone. The connection with PayPal is that when consumers setup their payment information, they could add PayPal as a payments option and pay for goods via their mobile phone.

Eliminating the need for an actual wallet has always been a goal for PayPal, and if the company can scale FigCard’s technology (perhaps to many of those merchants using Where?); PayPal could have a stake in the mobile wallet race.

The ‘Pivot’

In the past year, it’s fair to say that eBay and PayPal have spent over $200 million on the acquisitions I mentioned above. That’s a fair chunk of change even for a company that is making billions each year.

There’s no doubt that eBay is invested heavily in this strategy and believes that the future of the company is based on both online to offline purchases, local and mobile commerce. eBay VP of engineering Dane Glasgow recently told us that one of the challenges for eBay in this strategy is being on the pulse of technology, which is constantly evolving.

But as retail evolves, eBay is shifting its business as well, and it will undoubtedly be interesting to see if the company can connect the dots with all these acquisitions and technologies to create a powerhouse in mobile and local commerce. The challenge is that some of these initiatives aren't really that complimentary to eBay's core marketplace and auction business.

While eBay won’t be quitting the auction business anytimesoon, the marketplace business itself isn’t growing as fast as PayPal. PayPal now represents 39 percent of eBay's total revenue, and nearly made $1 billion in revenue for the company in the first quarter of 2011, up 23 percent from the same quarter in the previous year. Marketplaces brought in $1.5 billion, up 12 percent from the same quarter in 2010.

Pivot is a word that tends to be over-used in the tech world, but in eBay’s case that is exactly what we are witnessing—a major pivot in the company’s business model to local commerce. It’s certainly not easy for any company to “pivot,” especially one as massive as eBay. If it manages to pull this off so late in the game, it could herald a whole new era of growth for the company.

As Glasgow tells us, “it’s a new retail environment, where the convergence of online and offline are coming to life through mobile and local experiences.” Can eBay position itself fast enough to flourish in that environment?



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