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The Week in Geek – Feb. 23, 2007

Go Go Days for Windows On the Go (3rd item down)
Last year phones running Windows Mobile have outsold Blackberries. The Motorola Q, T-Mobile Dash are hot, and LG will launch a Win Mobile smart phone by year end. That means Microsoft will have 3 of the top 5 handset makers in its camp. Worldwide Nokia’s Symbian is still the smartphone OS leader, but Microsoft is likely to only gain share. Markets for consumer-oriented Windows smartphones may actually increase with the launch of the pricey but muscular iPhone in June, as first-time smartphone users are drawn to the market. While the other phones lack the features & elegance of Apple’s products, they’re functional, slim, cheap, and will only get better.

How Steve Jobs Played Hardball In iPhone Birth
Cingular made remarkable concessions in landing iPhone deal – nearly all of which were made sight unseen. Only three Cingular executives got to see the iPhone before it was announced. In negotiations, the WSJ says Jobs pointed to stats showing that Cingular voice revenues were declining, and that iPhone could ignite data plan sales & open new markets.

Cingular will leave its brand off the phone, and it abandoned its usual insistence that phone makers carry its software for Web surfing, ringtones and other services. Most significantly, Cingular will share with Apple a portion of the monthly revenues from subscribers. For now the phone will only be available through Cingular and Apple stores and both firms’ websites.

Several small Cingular teams worked on the project to achieve key usability advances, like the ability to access voice mail messages out of order, but each team worked without knowing what the others were up to. Technicians weren’t allowed to see the iPhone, but instead were given dummy versions that would only demonstrate necessary tests. While many speculate that the market is an uphill fight because there are so many mobile music players on the market, almost none of my students claim their cell phone as their #1 music player. Nearly everyone has an iPod. The WSJ hypes iPhone rivals, but misses a key point – very few in the target demographic market for the iPhone have a full-keyboard mobile device. The selling price ($500-$600) is the main stickler, but Moore’s Law will cut this down in no time. The consumer market is still wide open.

Apple Store: Boston
For our local readers, the city has finally approved an Apple design for a 3-story building to replace the old Copy Cop store on Boylston Street. The flagship-sized store will be a modern, glass-front open box. Apple stores sell over $4000 per square foot annually, that’s the best performance / square foot of any US retailer.

Web 2.0 … The Machine is Us/ing Us
BC’s latest star hire, Jerry Kane (a.k.a. Prof. WIki) recently gave a drop-dead presentation on Web 2.0’s impact on the classroom, leading with this great video from Michael Wesch, of Kansas State U. The Wesch video will give you goosebumps. Jerry has pioneered the use of wikis in the classroom with great results. Riding on his coattails, I’ve adopted SocialText as the platform for our work in our TechTrek course and will convert all of my courses to wikis by March. The collaborative nature of the wiki is perfect for seminar-style courses where each new class should build on (rather than re-build) knowledge from the prior semester. The SocialText software is stunningly easy to use and is readily embraced by our students, who collectively do a much better job than I alone can at following developments at our 20 host firms. But here’s the clincher for wikis in education – when everyone can see the contributions of others, the bar indicating ‘excellence’ gets progressively raised and the quality of student contributions & commitment soars.

Commentary: 10 years ago I threw out the book – teaching entirely from web-accessible material. Teaching evaluations soared & I’ve never used a textbook since. This semester we’ll ‘write the book’ in MI021, creating course-specific wiki content for all.  Wikis make sense: Why have a group of students throw out their learning each semester? Why not capture the knowledge product & have others build on it iteratively – adding new cases and ‘chapters’, and improving what’s already there? The goal will be engaging content, not stale encyclopedia-style entries. Wiki-edited books have failed, but small, talented teams focused on high quality products, repeatedly peer-reviewed by others (for engagement style, accuracy, and clarity), just might work. Stay tuned. The days of the out-of-date $125 textbook are numbered.

SocialText is part of Intel’s SuiteTwo offering of Web2.0 products that also includes NewsGator Technologies, makers of RSS feed software; SimpleFeed, makers of a Web-based application that allows marketing departments to implement, manage, and modify customer communications programs; and Six Apart, makers of blogging software. We’ll be meeting with SocialText’s CEO in the coming weeks.

Wikis in the Enterprise
Wikis are enjoying break-out adoption in corporations, too, so training students to think & work in this sort of collaborative environment makes sense. Microsoft will ship wiki features in Office & SharePoint this year, and IBM’s Ventura product will also wiki. Motorola, Novell, Nokia, and Chordiant all offer examples of widely embraced use of the low-cost tools. Wikis aren’t a cure-all. While wikis are models of collaboration, as Wired points out, collaboration on a wiki is not always pretty. They can be ugly places, full of fights over minutiae and politics, vandalism, repetitive reverts of users’ changes, locked pages, self-aggrandizement and spam.  Hopefully Jerry & I will be in a position to share dos & don’ts learned along the way.

Spam Surge Linked to Hackers
The number of spam messages increased a whopping 67% in just 4 months from Aug. to Nov. of last year. Bot net (sometimes called zombie network) hackers are responsible for most of this. The sophistication of these networks is stunning. A Russian group has infected some 73,000 Windows computers in 166 countries (half in the US) with the SpamThru Trojan, creating a network powerful enough to force the computers of unsuspecting users to send a collective billion e-mails a day. The Trojan installs its own anti-virus software that removes competing malware from infected PCs. Infected PCs are centrally controlled, but each infected PC runs its own spam generation engine, taking a portion of the e-mail list, generating random ‘Subject’ phrases, and even creating spam-embedded images with random sizes and additional pixels. Since each note has a different title, contains text inside images of different sizes and mail comes from any one of tens of thousands of hosts, it’s almost impossible to screen this stuff out. If spam embedded in an image has snuck past your e-mail filter in the past few months, it’s almost certainly coming from one of these networks.

How Does the Hacker Economy Work?
InformationWeek takes us inside the creepy underbelly of the Net to see how Cybercrime is pulled off. “One forum, CardingWorld.cc, has more than 100,000 posts from 13,000 registered members, most of whom write in Russian. The site’s English section includes offers for Bank of America, Fidelity Bank, and PayPal logons; credit card information from around the world; valid gift cards; and services for the safe transfer of large amounts of money”. At Dumps International, the cost for U.S. credit card numbers ranges from $40 for a standard to $120 for “signature” credit cards. The hackers even offer specials – buy a mixed batch of 100 cards and the price drops to $30 a card. Since transactions over $10,000 are reported by banks, large transactions are often split up, with some hacker gangs taking payment in electronics, iTunes accounts, World of Warcraft credentials, and access to compromised routers. Hacker markets also sell malware, viruses, and Trojan horses. In December, info on a flaw in Vista was being fenced on a Romanian Web forum for $50,000. Zero-day exploits that take advantage of security vulnerabilities as soon as they’re discovered can sell for as much as $20,000 to $30,000 each. Trend Micro’s CTO suggests the illegal malware industry rakes in more revenue than the $26 billion that legit security vendors generated in 2005. If you receive scam e-mail you can forward it to the TFC at [email protected], but we’re clearly running against increasingly powerful networks. The SEC’s recent bust of a Florida-based pump-and-dump hacker shows the sophistication of some of these attempts. In 5 weeks the hacker netted more than $82,000 by using funds in multiple compromised accounts at Charles Schwab, E-Trade, JPMorgan Chase, TD Ameritrade, and other online brokers to buy shares in lightly traded companies. This activity was enough to move the market, and the hacker then sold the shares & exited with the profit. No wonder Bill Gates recently said “Technology’s most significant challenge is keeping data secure”.

Get Outta My Phone
Speaking of spam – many of us in Boston have noticed our first mobile spam these past few weeks – yikes! 18% of mobile phone users have received unsolicited text messages (a problem that has plagued text-happy overseas users for years). The first strike from spammers seem to focus on the same pump-and-dump stock schemes favored by the botnet hackers above. Technically illegal under the 2003 CAN-SPAM act, which prohibits sending unwanted commercial e-mail messages to wireless devices without permission, organized crime clearly doesn’t care. An estimated 1 billion more of those are on the way over the next year.

Rockin’ Along in the Shadow of iTunes
Steve Jobs’ free music manifesto got lots of attention this week, and I think Jobs is right. The Europeans claim iPod/iTunes locks users in. But AAC and MP3 are open formats. The only proprietary songs are those bought on iTunes – those use Apple’s iPod-only FairPlay DRM. Despite the 2 billion protected songs sold on iTunes, protected music represents only about 3% of the average iPod content. That’s not a high lock-in. And Apple’s unique hardware/software control has kept the music remarkably secure despite being the DRM hackers’ biggest target. Jobs concludes that Europeans seeking to crack open iTunes are focusing on the wrong firm – it’s the labels that are at the root of the problem. Let DRM-free music be sold by everyone. It’s a conclusion that’s easy for Apple to arrive at, but face it, all music sellers are stuck. Open the DRM & access secrets will inevitably leak – hackers will likely get in and labels will pull out (even Microsoft shunned the firm’s multi-vendor PlaysForSure DRM in favor of a Zune-only product for its new player).

But when it comes to calling for DRM-free music, David Pakman, CEO eMusic, the #2 site for legitimate music, says this is the tune he’s been playing for years. eMusic has a quarter of a million subscribers (50K new in the last 4 months) who get 30 songs a month, all in the unprotected MP3 format (so they can be played on iPods). And you own the tunes forever. To Jobs’ point, none of the big four labels are on board with eMusic, however over 11,000 indie labels in the system boast some artists with wider appeal including Johnny Cash, Miles Davis, Lil’ John, the White Stripes, and the Decemberists. Yahoo Music has also been experimenting with free MP3s from big-label artists, offering up EMI artist Nora Jones’s “Thinking About You” following the site’s release last year of the DRM-free release of Jessica Simpson’s “A Public Affair”. And in a shout out of thanks, we were thrilled to have Gary Brotman of Yahoo Music on campus this week.

Wal-Mart tries its hand at video downloads
The world’s biggest retailer controls 40% of the physical DVD market – the single largest portion of revenue for Hollywood Studios. That scale & control over the vital retail channel means WalMart can call the shots. In the past, pressure from WalMart has been named as a reason that studios have offered fewer titles and set higher prices than consumers would like. But the big box giant has jumped into online videos with all the major studios, offering TV shows for 4 cents less than iTunes, and some older titles as low as $7.50 ($1.49 below Apple’s price). You’ve still got to watch the titles on a computer, so the beta will almost certainly be a bust. And even long term this effort looks like a waste of money for WalMart. There has been talk of an in-store burning effort (instead of stocking shelves, have a kiosk burn your DVDs on-site from a catalog of millions). That’d be something off-the-net (more secure, which the studios like) & that encourages foot traffic to WalMart stores. But it’s hard to imagine that WalMart will have the technical & marketing chops necessary to ever be a dominant player online. It’s a great move for the industry, though, because now that WalMart’s in, more studios, more titles, and innovation are likely to follow online.

Amazon & TiVo Put Downlaods on TV
The biggest problem with online download services is that most won’t allow you to watch from your TV without kludgy cabling that all but the geekiest refuse to endure. But now there are several options – Microsoft has incorporated downloads into XBox Live, Apple’s set to ship Apple TV, and now Amazon & TiVo have partnered. While the service is still in beta & you can’t (yet) order videos on your TV, customers of Amazon UnBox will, at no extra fee, be able to squirt downloads to TiVo. If the two firms tighten their partnership with a slick, TiVo controlled interface, TiVo/Amazon could become a hub for Net content. Use your remote to find the best not only on UnBox, but also YouTube, and other services. And that could be just the start. Could TiVo-filtered TV content fuel purchases over Amazon? Could ads linked with ‘click to buy’ on Amazon capability pay for content? This could be much bigger than the beta suggests.

What’s Your House Really Worth?
  To create Zestimates, Zillow cranks through two terabytes of data each night, comparing every home with nearby sales and factoring in new sales. But how accurate is this stuff? Fortune’s cover story on Zillow provides some insight. Zillow has Zestimates on the value of 57% of US housing stock, but only 65% can be considered ‘accurate’ – which Fortune claims is within 10% of the actual selling price. Only 53% of homes in metro New York have estimates & only half of those are accurate. In Louisiana, where one in 50 homes is listed, Fortune states Zillow is just about worthless. Zillow says “just you wait” – later this year valuations will dramatically increase in accuracy. It remains to be seen how this site will ever make money, but like Craigslist, a few geeks, free data, and the #1 brand in its field might be enough to keep its a-list founders (including the former head of Expedia) liquid enough to be happy.

Shanghai Rising
Students traveling with me to Shanghai may want to check out BusinessWeek’s story and accompanying slideshow. Gleaming, modern Shanghai is the mainland’s most populous city, with 18 million inhabitants; and it’s the headquarters for 150 global corporations. Shanghai’s economic growth of 12% outpaces the 10.7% in China as a whole. Shanghai GDP is only about half of London’s, but it’s growing 3 times as fast. Last year it attracted $14.65 billion in FDI commitments, 23% of China’s total! Today’s Shanghai is nearly unrecognizable from the one I studied in 15 years ago. And while efforts like the Xintiandi shopping center try to blend old Shanghai architecture with modern, relentless growth presents challenges. Air quality is horrible, roads are choked, quality office space costs more than in Midtown Manhattan, and expats can pay $5-10K+ in monthly rent.

Technology from Zafu Matches Fit of Jeans
 Having a hard time finding jeans that flatter? You’re not alone. Up to 50% of online pant purchases are returned. Zafu.com‘s website (named #3 on Time Magazine’s Best Websites of 2006) claims a 97% satisfaction rate. Zafu is run by the same folks who brought custom clothing to Lands End, JC Penny, and Tommy Hilfiger, but in this case, instead of making custom duds, Zafu plums a database of 80+ brands and 300 jeans to find what will look best on you. The site is cheeky, detailing problems like ‘muffin top’ and ‘whale tail’, but students visiting claim the recs have been spot on.  TechTrekkers will be visiting Zafu.com in March.

Wiriing the Medical World
What’s the biggest company in the biggest sector of the biggest economy on earth? The answer can be quite a shocker – McKesson (the U.S. pharmaceuticals distributor). But the San Francisco firm has long been known as a pioneer in leveraging tech for business process improvement. Heath care consumers 17% of US GDP and that # is rising. But it’s shocking to find how little the medical industry leverages tech. A one-liner in the State of the Union speech a few years back claimed better use of infotech in health care could save $162 billion a year. But less than 20% of hospitals today have bar-coded medication dispensing systems – shocking when you consider how critical dosage & product matching can be. How important is this? Consider McKesson’s claim that there are 300,000 medication errors caught in medication systems each week.

Intel’s Teraflop Chip
Intel details research chip capable of more than a trillion calculations per second – the amount of computing power in entire data center – while consuming as much energy as a light bulb. In 1996, a super computer with that kind of power took up 2,000 sq. ft and run 10,000 processors. It’s unlikely that the 80 core chip will hit the market in its current form, and writing software to take advantage of that main simultaneous brains has been called the toughest task in computer science. But it does point out to the sophisticated level of parallel computing that will soon be available in PC (and smaller) devices.

China’s Market for Mobile Phones
China’s mobile-telephone market is proving tough for global handset leaders. The country’s local manufacturers are grabbing market share quickly, partly because they better understand the preferences of Chinese consumers. In a related piece, McKinsey also suggests that any estimate of the economic benefits of wireless activity must include not only wireless operators but also auxiliary players and end users.

On the Record with Meg Whitman
The SF Chronicle had a revealing Q&A with eBay’s CEO late last year. eBay stumbles in ’06 reveal a string of unintended consequences. By integrating store inventory with eBay listings, search results returned 10x the usual results, many of which were not competitively priced. More inventory actually meant a less valuable eBay experience. And while a global trading platform seems to make sense, EachNet (eBay China) suffered when the global platform didn’t offer what Chinese consumers demanded, ultimately leading the firm to announce a shuttering of EachNet and a minority position in a JV with Tom Online. But eBay’s numbers-beating Q406 suggests the worst is behind it. Experiments continue, with eBay creating a custom market to sell television advertising. And although Skype monetization remains a question, the service is adding an astounding 300,000 users a day!

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