| New Facebook iPhone App "Pretty Much Done"
August 8, 2009 at 12:42 am
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|  As one of the most popular applications on Apple’s popular iPhone platform, a lot of users are eagerly awaiting the next version of the app. And that wait is almost over.
“The app is pretty much done - we’re just working on translating it into a bunch of languages,” Facebook developer Joe Hewitt wrote tonight on Twitter. That means that shortly, we’ll have access to the much-improved app which is scheduled to have features such as a News Feed that is more like the one on Facebook’s site, the ability to “like” items and a new customizable home screen. More importantly, it will also have video support for the iPhone 3GS, something which Hewitt threw-in at the last second, unexpectedly. And perhaps best of all, the app will have the ability to manage events, finally. But don’t get too worked up just yet. We asked Hewitt if “pretty much done” meant next week perhaps. His response: “Can’t be sure - translating could take a while. I’ve been avoiding predicting an actual release date“. And of course even when the app is done, Facebook still has to submit it for approval in the App Store, and as we all know, that can be a crapshoot. We could see it next week, we could see it 6 months from now. Though, Apple does seem to do a pretty good job pushing important apps like this one through quickly. Funny how that works, isn’t it? Facebook is also finally working on an Android app. That should drop any day now. 
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| Source: Apple And Google Agreed Not To Poach Workers
August 7, 2009 at 10:34 pm
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|  While Google CEO Eric Schmidt was on Apple’s board of directors, the two companies had an agreement not to hire away each other’s workers, a former Google employee with knowledge of such matters has told us. We have since confirmed this with other ex-Googlers. This was not a written agreement, and was considered non-official, but it was well-known and followed within the recruitment division of Google, we’re told.
This news follows a report by The Washington Post in early June that the Justice Department was looking into this very issue. That report cited sources close to the investigation stating that the government was looking for possible antitrust violations among several tech companies, including Google and Apple, with regard to their hiring policies. But that report didn’t say whether or not it was actually taking place. According to our sources, it is. Or at least, it was. Another interesting element to this is that the main component of this understood agreement between the two companies was Schmidt’s position with each, one source tells us. Now that Schmidt has stepped down from Apple’s board of directors, that agreement may be off, they went on to say. It’s hard to know that for sure until actual hiring starts taking place, but one source says that both Google and Apple have been ramping up their staffing departments recently, presumably to make a bunch of hires. To be clear, this unwritten agreement was that Google would not go after Apple employees, and vice versa. However, employees of both companies were free to apply to the other company on their own, we’re told. That’s a small, but important difference as the practice of going after other company’s talent, also known as “poaching”, is considered to be an important component of healthy competition in the market. That’s why the Justice Department is looking into it.  While plenty of tech companies have non-compete clauses that would seem to make poaching moot, both Apple and Google are headquartered in California, which is known for not recognizing non-compete portions of contracts.
This news comes amid much controversy between the two companies. The stated reason for Schmidt stepping down was the growing overlap the two companies have on the product side. But the FTC was (and still is) also looking into the overlap between Google and Apple on its board of directors. And more recently the FCC launched an inquiry into the relationship between Google and Apple (and AT&T) on Apple’s App Store. That followed Apple’s rejection of Google’s Google Voice app. And it goes even deeper. A few months ago, there was a report (written by me, for another publication) that the reason Google didn’t put multi-touch support into its Android mobile operating system was because Apple asked it not to. More recently, Google admitted that it scrapped plans for a Latitude native iPhone app in favor of a web app because, yes, Apple asked it to. We’ve reached out to both Google and Apple for comment on this latest matter, but have yet to hear back from either. We will update if we do. [photo: flickr/mackz]
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| Hey, What Happened To Scribd? Traffic Down Over 48% Since June
August 7, 2009 at 8:53 pm
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|  Scribd, the so-called ‘YouTube for documents’ that’s recently also become an Ebook store, has been seeing a major drop in traffic over the last two months. Since June, the site has lost over 48% of its global traffic, falling from a peak of 58.3 million monthly visitors to 30.1 million less than two months later. These aren’t fuzzy stats, either— Scribd is Quantcast Quantified, which means the traffic is directly measured (you can see their full stats here). We reached out to Scribd CEO Trip Adler, who says that the site is currently toning down its SEO efforts and further reducing pirated content. He also writes that there’s a dip associated with the summer season: We made some changes that will have a short-term impact on traffic. Primarily: 1) improving our copyright filter, which keeps unauthorized content off the site and 2) reducing the aggressiveness of our SEO, which reduces total traffic in the near term but increases the relevancy of Scribd links in search engine results 3) trending down typical in the summer time — we experienced this last year at this time and other major sites (YouTube , Google Books ) are experiencing the same. We’re not concerned about the dip - we expect traffic to go back up quickly. The metrics we care about at Scribd are active members of our community and uploads of unique, authorized works. As long as these numbers keep growing, we are positioned very well for long-term growth in unique visitors. These product changes are part of a long-term strategy to focus on user experience and quality content. We call it a “controlled growth strategy”, similar to what Facebook did a few years ago. We have a lot product changes planned in the next few months that will increase quality / relevance / stickiness of the site.
It sounds like Scribd has some major changes coming, and it’s understandable that the site might want to prepare for those in advance. Still, it isn’t often that you hear about a site voluntarily killing nearly 50% of its traffic — perhaps Scribd didn’t expect its changes to have such a major effect (it’s sort of hard to believe that they aren’t concerned about the dip). That said, Scribd is still ranked as the 130th most visited site on the web by Quantcast, which is hardly anything to scoff at. Crunch Network: CrunchGear drool over the sexiest new gadgets and hardware. 
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| Outlook Not So Good: Predictify Heads To The Deadpool
August 7, 2009 at 8:04 pm
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|  Predictify, a prediction market that launched back in 2007, is closing its doors. The service allowed users to vote on potential outcomes for current news stories (it likened itself to a “fantasy sports for everything else”). Users could have their accuracy measured across multiple polls, both on the site’s central hub and on partner sites, and the most clairvoyant of them were featured on the Predictify leaderboard.
Last year, the site seemed like it was starting to pick up steam: by summer 2008, it had forged partnerships with The Washington Post, The New York Times, and the San Francisco Chronicle, and it subsequently got CBS News as well. News sites liked Predictify because it could potentially increase reader engagement. Along with its media partnerships, Predictify also offered “Premium Questions”, which allowed businesses and market researchers to pose questions to the Predictify user base for a fee. The most accurate users would receive a portion of the money generated by the Premium Questions, and marketers were entitled to all of the resulting data (including demographics). The site has posted the following: Due to the tough economic climate, we are planning to cease operations and shut down the company in the near future. As such, we are no longer approving or scoring questions and apologize for any inconvenience this may cause. If you have an account balance of $20 or more, please visit your account page and enter your withdrawal information by 11:59pm on August 31, 2009 to receive payment. We sincerely enjoyed building and operating Predictify, and we’re glad that you could be a part of it. The Predictify Team
Predictify has been added to the Deadpool.
 Crunch Network: CrunchGear drool over the sexiest new gadgets and hardware. 
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| Spotify, Napster and The Quest For Premium Music Dollars
August 7, 2009 at 7:03 pm
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|  This guest post on the struggles of online music services to reach profitability is written by Michael Robertson, the founder of music sites MP3.com and MP3Tunes, as well as a number of non-music related startups like Gizmo and Dealpedia. As one of the first entrepreneurs to battle the music labels over an online service, he has a unique perspective on the scene.
A new music service called Spotify has attracted millions of users in a short time with the enticing lure of listening to any common song on your computer free. Meanwhile, the digital music grandpa Napster has quietly launched a $5 service that offers unlimited streaming plus free MP3 files. A closer examination reveals that Spotify has raised tens of millions of dollars, given equity to the record labels, is under constant attack by hackers, uses clever P2P technology, is accruing enormous per song royalty obligations and has the seemingly impossible task of figuring out how to generate enough money from a free ad model to satisfy the music companies. Here’s my admittedly biased look at both companies: Spotify: Spotify is a music service to browse and play songs from a library of 3.5 million songs. Users can create custom playlists, culling out their favorite songs and the service generally gets high marks for an intuitive user interface and peppy performance. It is a free ad supported service in which users get banner ads and audio ads. There’s also a $13/month premium level which gives you an advertising free experience. The service is available in U.K., Sweden, Norway, Finland, France and Spain and the premium service is available in other EU territories. U.S. access is not available although company representatives are saying it is coming. Technology: Unlike other web based services like imeem and Last.fm, Spotify requires a downloadable client available for Mac or Win computers. When songs are requested they are delivered from either the Spotify central servers or other users computers using P2P (peer to peer). This means Spotify will use your bandwidth even when you’re not listening music to service their other customers. They have filed a patent for this technology. Music is delivered using the Ogg Vorbis q5 codec at around 160Kbps which sounds nice and is also speedy to load.
Background: Spotify was founded in 2006 by serial entrepreneurs Daniel Ek (previous CTO at Stardoll, founder of Advertigo and Evertigo among others) and Martin Lorentzon (one of two co-founders of Tradedoubler, the largest European online affiliate advertising company). Spotify is based in Luxembourg to avoid taxes although most of its employees are in Sweden, the UK and Romania. Finances: While Spotify has been tight lipped about financing amounts and sources details have leaked out and they reveal that Spotify has raised millions from its wealthy founders and tens of millions from venture capitalists. Similar to imeem, Myspace Music and Lala, the major labels own part of Spotify. | Financing for Webcasting/On-demand Digitial Music Companies | | | Amount
| Myspace Music
| $45,000,000 | Pandora
| | | Spotify | $28,000,000
| | Slacker | $65,000,000
| Security: Since Spotify has 3.5 million songs it is an obvious target for hackers. There’s a battle pitting Spotify programmers against net hackers trying to decipher how the technology works. Code within the Windows version attempts to block debuggers so the Mac version is a more easy target. Several software programs have been released which download tracks from Spotify such as spotifysave and despotify. Spotify has is available in a limited number of countries, but its been well documented that the only check is on the initial signup page and its trivial to bypass. Users can easily bypass this by going to http://www.defilter.co.uk/ and entering the signup URL: https://www.spotify.com/en/get-started/ A UK mailing code like W1T 3EF is required but users simply look those up athttp://www.postcodesearch.org.uk/ Economics: The Spotify CEO boasted they have spent just £5,000 ($10,000) in total marketing the Spotify service in the UK and attracted 1 million users doing 10 million streams making it the cheapest and most effective service launch since Google. Missing from the calculation is the royalty obligation. Like all webcasters, Spotify must pay a per song fee for every song they play. These range from 1 cent per play (for interactive playback) to 0.2 cents (radio experience). While the rates seem modest they add up quickly. 10 million streams per day translates to $100,000 per day, $30mm/month and $360 million annually in royalties - just for the UK operation. Royalty rates are similar in other countries and its Spotify claims 1mm users from Sweden as well. Advertising from audio and banner ads cannot generate even a sizable fraction of these royalty obligation. Spotify is a on quest to get paid monthly subscribers and has launched a $13/month service. They join a crowded field of competitors including Napster who recently relaunched their subscription service moving from $12.95 down to $5/month. The Napster service includes unlimited streaming like Spotify but also 5 free MP3s to add to your permanent collection each month. Napster: Literally weeks before the economic meltdown Napster was sold to electronics retailing giant Napster. Bestbuy’s plan is to cost effectively market Napster service to their large customer base. To achieve this, Napster had to move away from their limited Microsoft orphaned DRM service to a MP3 service. This would allow the service to work with all devices sold by the big box retailer. Recently, they announced a $5/month service where you can stream any song - much like Spotify - but you also get 5 free MP3s per month to add to your personal collection. Since most newer MP3s are $1.29 this is a cost savings in itself and the unlimited free streaming is a bonus. Users paying for an annual service can immediately download 60 tracks plus a bonus 10 making the cost of tracks 85 cents. Like AmazonMP3 and itunes, Napster has a rich uncle to lean on to not only promote their service, but add other business segments to rationalize a low or no-margin digital music business. Apple sells ipods, Amazon sells other stuff while you’re shopping for MP3s and Bestbuy can send you home with electronic gear they profit from selling. Using this financial flexibility Napster is able to offer an industry leading price point for a full streaming and MP3 service. This renders other services seem overly expensive and uncompetitive. | Premium Music Services (Ad Free) | | | Monthly
| Streaming
| Devices
| Mobile
| Region
| Other
| Napster
| $5.00
| Interactive
| Net radios
| -
| US, expected in UK, Germany shortly
| Includes 5 MP3s/month
| Pandora
| $3.00
| Radio
| -
| iphone, Blackberry, J2ME version for other phones
| US
| Huge userbase, but struggling to get per stream royalty rates changed in Congress.
| Rhapsody
| $12.95
| Interactive
| Net radios
| -
| US
| Windows Only
| Sirius
| $12.95
| Radio
| Car radios
| -
| US, Canada
| iphone app promised
Price raising $1.95/month end of July
| | Spotify | $13.00
| Interactive
| -
| -
| EU, Scandinavia, US promised
| Android app previewed, but not released
| | Slacker | $3.99
| Radio
| Net radios
| iphone, Blackberry
| US
| #1 music app on Blackberry. Rumored to be considering a MP3 store.
| Future Users have largely rejected paying a monthly fee for music subscriptions. The masses have ignored subscription services like Napster and Rhapsody which offer similar catalogs, some music portability and limited device support. Cheaper radio services like early paid Pandora have also been failures (although desperate Pandora is bringing it back to try again). There’s little reason to believe that customers are willing to pay $13/month to stream music mostly to their PC. (Even Pandora estimates only 3% will pay a monthly fee.) This leaves Spotify with strictly an advertising based business. Ad rates cannot generate revenues sufficient to pay even the mandated royalty rates much less all the costs of running a high tech business. Publicly Spotify is promising a US launch and mobile clients (iphone andAndroid) however this completely ignores the incongruity of the underlying economics. Current royalty rates are too expensive by 10-100x for an advertising business to work. This is why Youtube dropped music videos in the UK. Getting more users will not improve the upside down economics. Napster new service has lowered the bar dramatically to a modest $5/month for unlimited streaming and personal MP3 collecting. It’s not clear that Napster can generate a profit from this service, but as a tiny division of BestBuy it’s not clear they are required to. What is clear is the $5 price point means financial pressure on standalone digital music companies. The music selling and radio business is increasingly commoditized squeezing out profits to that of unsustainability. This spells pending doom for imeem, Pandora, Myspace Music, Slacker and the newest entrant Spotify unless there is industry upheaving royalty rate change. Crunch Network: CrunchBase the free database of technology companies, people, and investors 
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| Translation Party: Tapping Into Google Translate's Untold Creative Genius
August 7, 2009 at 6:16 pm
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|  Anyone who has ever used Google’s automated translation service knows that it’s not exactly perfect — generally you’ll wind up with words that are close approximations of what you started with, but Google inevitably decides to change the meaning of at least a few sentences, just for kicks. Today, there’s a new site that taps into Google Translate’s under-appreciated creativity and magnifies it to the point of greatness : Translation Party!.
The site is incredibly simple: you enter any English phrase you can think of, and it uses Google’s automated translator to convert it into Japanese. And then it translates it back into English. And back into Japanese. At each step along the way, the words you began with gradually take shape to form something entirely different and (hopefully) awesome. The retranslations continue until you reach what the site calls ‘equilibrium’, when the English and Japanese words translate back and forth into exactly the same thing. Fortunately, it usually takes at least a few steps for your words to reach equilibrium, and the resulting sentences are often hilarious. There really isn’t much else to do on the site, but it’s definitely a great way to kill some time. Movie quotes and song lyrics seems to work best. You can also check out a list of some of the results other people are generating by clicking the “crash other parties” at the bottom of the page. Enjoy it. And October 5 power, to please.
 Crunch Network: CrunchGear drool over the sexiest new gadgets and hardware. 
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| Geopolitical Attacks On Twitter Intensified Almost Tenfold Last Night
August 7, 2009 at 4:24 pm
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|  As we noted early this morning, Twitter is still having some major issues getting its service stabilized following the DDoS attacks. Co-founder Biz Stone has posted a new update on the situation on Twitter’s blog today. Apparently, the attacks are still ongoing, and while Stone refuses to speculate on the motivation behind them, he does note that they appear to be “geopolitical” in their nature.
Says Stone: The ongoing, massively coordinated attacks on Twitter this week appear to have been geopolitical in motivation. However, we don’t feel it’s appropriate to engage in speculative discussion about these motivations. The open exchange of information can have a positive impact globally and our job is to keep Twitter services running reliably to the best of our ability.
This is in line with various reports around the web suggesting that a group of Russian hackers are targeting Georgian users, and possibly just one user. Similar attacks also targeted Facebook, LiveJournal, Blogger and YouTube. While certainly this would fall into the realm of cyber terrorism, what’s crazy is how this is echoing elements of actual terrorism as well. We’ve gotten multiple tips from parties either claiming or denying responsibility for the attacks, much like terrorist factions claim or deny responsibility when a bomb goes off somewhere. Sadly, given the success the responsible parties have seen in taking down these sites, it seems likely that it will only embolden others to carry out more attacks of this nature in the future. Twitter notes that it is doing all it can to prevent that and to resolve this situation, but as Stone writes, “Denial of Service attacks are a known quantity on the web and they are not going away any time soon.” Twitter has been posting updates on its status blog to let users and third party developers know what is going on. On top of taking out Twitter’s main service, these attacks forced it to shut down many of its API services, which obviously crippled many of the services built on top of Twitter’s platform. Twitter is still working on restoring those. The API team is encouraging developers to post questions on their mailing list found here. One recent update in that list is pretty telling for how serious these attacks are: As you know all too well Twitter, among other services, has been getting hit pretty hard with a DDoS attack over the past 24+ hours. Yesterday we saw the attack come in a number of waves and from a number of different vectors increasing in intensity along the way. We were able to stabilize our own service for a bit, hence Biz’s post saying all was well, but that didn’t mean the attacks had ceased. In fact, at around 3am PST today the attacks intensified to almost 10x of what it was yesterday. In order for us to defend from the attack we have had to put a number of services in place and we know that some of you have gotten caught in the crossfire. Please know we are as frustrated as you are and wish there was more we could have communicated along the way.
The key point there is obviously that the attacks intensified almost tenfold from what they were seeing yesterday. That’s not good. [photo: flickr/lucianvenutian] Crunch Network: MobileCrunch Mobile Gadgets and Applications, Delivered Daily. 
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| Pic: The Microsoft Mall Invasion Begins
August 7, 2009 at 4:11 pm
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| The Microsoft PR team tweeted out the first image to Twitpic of the Microsoft Retail Store opening in Scottsdale and Mission Viejo. The stores are slated to open sometime in the fall, with more locations opening after. In July, Microsoft’s master plan for the retail stores were leaked in a presentation. Image below. 
Thanks for the tip, @Loic Crunch Network: CrunchBoard because it’s time for you to find a new Job2.0 
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| Apple Tablet Prophesied, Sales Foretold By Eager Analysts
August 7, 2009 at 3:20 pm
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|  Everybody's making noise about the upcoming Apple tablet, and who can blame them? It'll certainly be an interesting device, but the thing is that nobody really knows what it's going to be. Flat, to be sure, and tablet-shaped in all likelihood, but beyond that it's pretty much anybody's guess. Analyst-at-large Gene Munster has made a list of predictions anyway, since his job is to turn ignorance into money. So what does he think you can expect? Sales, for one thing. Via a house-of-cards sort of logic peculiar to analysts like himself, he determines the features, then the price, then the sales, then the revenue. Here are his nested prognostications, as summarized by Fortune's Brainstorm Tech. 
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| Assetize Launches Twitter Account Parking
August 7, 2009 at 3:00 pm
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|  Assetize, the startup known for selling Facebook vanity URL’s, has launched a new service targeted at Twitter users with unused, unwanted accounts. The same concept from Facebook vanity URL’s carries over to the Twittersphere. Assetize will let you park Twitter accounts, like domain names, for future use and in the meantime put ads on the account while you sit back and make money. To park your Twitter account, simply register with Assetize for an invite, then put in all of your account information, give keywords related to the parked account, and Assetize will then place ads on the account that are supposedly relevant to keywords you specify. In order to apply for the private beta, your Twitter account must have at least 200 followers.
Assetize currently has support for parked accounts at Blogger/Blogspot, Friendfeed, Gmail, Google Groups, Google Voice, Ning, Twitter, Wordpress, and Yahoo!. While there is nothing in Twitter’s terms of service that explicitly states you cannot squat on names, you can be sure it won’t like the idea of using these accounts as placeholders with ads. Also, Twitter’s TOS is full of talk about copyrights and how it can “reclaim” Twitter names if there is some kind of dispute over the name. So park at your own risk. Crunch Network: CrunchBoard because it’s time for you to find a new Job2.0 
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| Confirmed: Spotify Now Valued At €170 million
August 7, 2009 at 2:51 pm
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|  We’ve done more digging on the Spotify cap table story from yesterday, and have confirmed with one source that the company did close on at least part of the new round of financing the Financial Times reported they were negotiating earlier this week.
Wellington Partners invested in the company some time prior to July 10, taking a 3.8% stake for €6.5 million, confirms our source. That implies a valuation of €170 million, or about $242 million based on today’s exchange rates. The previously reported valuation was $250 million. So what’s new? The fact that the valuation has been locked down and the round partially closed. As of a few days ago Li Ka-Shing had supposedly not yet officially joined the round and wasn’t happy with the valuation, but was presumed to be willing to accept the independent Wellington valuation. When the round is complete, Spotify will have a post money valuation of around €200 million, says our source. That means the company has roughly doubled in valuation from a year ago, when investors bought stock at a €100 million post money valuation. And the service hasn’t yet left beta. Crunch Network: MobileCrunch Mobile Gadgets and Applications, Delivered Daily. 
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| When Amazon Bought Zappos, Clothes.com Also Came In The Box
August 7, 2009 at 2:05 pm
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When Amazon paid $928 million for Zappos in July, it got a little something extra in the box: the Clothes.com domain. It turns out that Zappos bought the domain last year from Idealab for $4.9 million (Bill Gross strikes again). The detail is tucked away in Amazon’s SEC filing about its acquisition of Zappos: In May 2008, we acquired the Clothes.com internet domain name from Idealab. The domain name was recognized as a purchased intangible asset with a useful life of 20 years. The entire purchase price of $4.9 million was assigned to the price of the domain name intangible asset and will be amortized on a straight-line basis over its remaining estimated useful life.
The “we” in that sentence is Zappos (now Amazon). At $4.9 million, the Clothes.com sale would have been the second largest reported domain-name transaction in 2008 after Fund.com ($10 million), and the second biggest one so far this year after Toys.com ($5.1 million). The Clothes.com URL goes to a Zappos landing page with a clothing product smackdown. Zappos is primarily known as an online shoe retailer, but sells clothing as well. Such a large investment, however, suggests that Zappos may have had plans to branch out more aggressively into clothing, perhaps under the Clothes.com domain. (Thanks to reader George Kirikos for the tip). 
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| Video: Where Were You When Twitter Went Down?
August 7, 2009 at 1:46 pm
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| | Twitter was down for a little while yesterday (it’s still a little iffy), and it was the closest the United States of America has ever come to collapsing. P.S. I know the song is played out; that’s why I picked it! Crunch Network: CrunchBoard because it’s time for you to find a new Job2.0 
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| Tesla Says It Is Now Profitable, Ships 109 Roadsters In July
August 7, 2009 at 1:06 pm
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Silicon Valley’s electric car company, Tesla Motors, says that it hit profitability in July. The private company reports that it made “approximately $1 million of earnings” on revenues of $20 million, and that it shipped 109 Roadsters, its $109,000 all-electric sports car. The revenues reflect GAAP accounting standards and are only for the month of July. Founder and CEO Elon Musk predicted in June that the company would soon hit profitability at the end of a lengthy blog post dealing primarily with a lawsuit brought on by Tesla’s ousted co-founder Martin Eberhard. In June, Tesla was also awarded a $465 million loan from the Department of Energy, which will help it manufacture its more reasonably priced Modern S sedan. The $20 million in revenues and $1 million in profits do not reflect any proceeds from that loan, the company tells us. Crunch Network: CrunchGear drool over the sexiest new gadgets and hardware. 
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| Geek Weekend: Ann Arbor, Michigan
August 7, 2009 at 12:14 pm
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|  If you're craving city life or a university setting, Ann Arbor, Michigan is the place to be. Ann Arbor is the seventh largest city in the state of Michigan, with a population of 114,386, of which more than 30% are college or university students. Since its founding in 1824, Ann Arbor has flourished into a city of intellect and culture that has influenced the nation and the world. In the mood to relive your college days? Visit the University of Michigan campus; go to the Big House, experience a tailgate, or just wander through the Diag. But maybe you're in the mood for a night in the city. Try the array of restaurants and bars that make up downtown Ann Arbor, ranging from martini bars like the Black Pearl, jazz venues like the Firefly Club, to world renowned concert halls like Hill Auditorium. No matter what kind of mood you're in, Ann Arbor has a way of satisfying every craving. Check it out. 
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| Spacelocker, A Social Network You'll Want To Avoid Like The Plague
August 7, 2009 at 10:00 am
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|  I had never heard of Spacelocker before, have you? Apparently, it’s a social network where you can go to “meet friends and connect to online stuff” but not to upload and store photos, videos, or music. So essentially it’s like Facebook or MySpace but without the goodies. Or Twitter, but then offering an “evocative experience that is fun, free and functional”. I have absolutely no idea what that means either, and I won’t find out either because I never actually signed up.
We got an e-mail from Son Lee yesterday, who wanted to alert us to the misleading registration process Spacelocker boasts and particularly the way the company handled her complaint about it. After reading through the communication and taking a peek at Spacelocker, we’ll gladly oblige. What happened was Lee registered for the service using her Gmail account, and Spacelocker didn’t waste any time sending all of her contacts an e-mail with an invitation to try it out too without her explicit consent or knowledge. These sorts of things regretfully happen all the time, but there’s more to the story. When Lee complained to the company about the whole situation, she not only simply got her account wiped out, but she also received this jaw-dropping, unprofessional response: Hi Son, You obviously can write English. However I think you have a problem reading English; or are careless when you read. The sign up page has 2 forms on it. One form is to be used by those who want spacelocker to automatically invite their friends. The other form is to be used if you do not want to invite your friends. There are big red letters on the left side form that tells you to read the note on the sign up page before you sign up. The note on the sign up page tells you about the sign up procedures. There is a link to a blog on the sign up page which further explains the sign up procedures in detail. The terms of service and privacy policy of Spacelocker clearly set out what you have agreed to by signing up. You obviously failed to read any of that before you signed up and now you want to blame us for your carelessness!!! Incredible!!! Her is a link to the sign up: http://www.spacelocker.com/signUp.php Read it and think if you can! Spacelocker Ltd
www.spacelocker.com
the happiest space on earth
The rudest space on earth, more like it. Technically, sure, the company has a point. There are in fact two separate forms one can use to register for the service, and only one has the annoying habit of spamming the hell out of your relatives, friends and colleagues. The problem is that it’s very misleading and obviously designed to confuse users as much as possible while steering clear of doing anything illegal. Just take a look at the sign-up page. 
The registration form on the left reads “use your aol, gmail, hotmail or yahoo account” while the form on the right lets your register with a different e-mail address. But if you don’t want to spam all your contacts, the latter would actually be the form you’d need to use, even if you use a webmail account. Despite the fact that it reads “don’t have webmail? sign up here!”. How’s that for misleading? Oh, and does the company effectively say they’ll be sending out an invitation to all your mail contacts when you sign up using the form on the left? Sure it does. See that microscopic line at the very bottom of the screenshot above? There’s that clear policy of theirs right there! My guess is the red line that reads ‘please read the note below before signing up’ was added only after complaints started trickling in, but to me it’s clear that Spacelocker is purposely trying to trick new users so they can get some extra e-mail addresses to spam. And to add insult to injury, they feel the need to behave so rudely when a user files a formal complaint. Classy, Spacelocker, very classy. I think I’ll go look for an evocative experience that’s fun, free and functional elsewhere. Crunch Network: MobileCrunch Mobile Gadgets and Applications, Delivered Daily. 
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| Next Big Sound Shines A Light On Music Fans' Online Behavior
August 7, 2009 at 9:00 am
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|  Going over the 10 startups that were profiled by guest author Don Dodge yesterday on the occasion of their TechStars 2009 ‘graduation’, Next Big Sound to me seemed one of the more interesting ones and I wanted to take a closer look at it. Basically, it’s a statistics and comparison engine à la Alexa or Compete, but for music artists and industry professionals.
And while I think that’s inherently a good idea, there are a couple of flaws in the system that put a downer on the experience. I’ll explain. What Next Big Sounds aims to be is a place where you can go to see how fans interact with music online, virtually in real time. Look up a music artist, say Manu Chao, and you’ll get a nice overview of how many ‘plays’ his music is getting on his MySpace, Last.fm and iLike profile, measured by week, month or all time. Wanna see how many fans your favorite artist has on any of those sites or other services such as Facebook and Twitter, how many times one of his accounts was viewed and how many comments it gets? No problem, click the corresponding tab and you’ll see a nice graph representing the evolution of all these elements. Also a neat feature is that you can subscribe to any given artist in the NBS database and get fed RSS items or e-mailed alerts with updates on all that is measured. Furthermore, much like Alexa and Compete for website traffic, you can do comparisons between artists and bands, enabling you to track their online evolution in comparison with others. 
A couple of gripes. When you sign up for the service, you can opt to register as a fan, an ‘industry professional’ or an artist but nowhere does NBS specify what the difference is. I signed up as a fan and set out to get some basic statistics on bands that I like, and quickly noticed that Next Big Sound’s database is currently too far from complete to be truly useful. I did a search for a band I like called “Blackbox Revelation”, which yielded zero results, and trying my luck with electro dance sensation “Justice” there were multiple options yet the service failed to tell me which would be the right one to pick. YouTube isn’t tracked at all, and neither are services like Rhapsody and Pandora. Finally, it would be cool if Next Big Sounds let you check the online activity centered around individual tracks or albums instead of merely the artist’s name. Overall, I think it’s a great idea and I’m looking forward to seeing it evolve in the future, but for now it’s clear that the service requires some extra work and polish. Crunch Network: CrunchBase the free database of technology companies, people, and investors 
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| This Is Quite Possibly The Spotify Cap Table
August 7, 2009 at 5:17 am
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| Hot European music startup Spotify is back in the news today. On August 4 we broke the news that the big music labels have secretly been shareholders in the company since 2008, and that they paid roughly the same price for their preferred stock as venture capital investors Northzone Ventures and Creandum paid last year. Now, though, Swedish news site ComputerSweden is reporting that those music labels actually got their stock for free. “Sony BMG, Universal Music, Warner Music, EMI and Merlin…bought at the time in to Spotify - for a pittance. They received 18 percent of the shares in Spotify barely 100 000 kronor,” (about €10,000) says the report. Metro Teknik has also picked up on the story. We don’t believe that report is correct based on our sources that say that the labels paid roughly the same price as the venture investors for that stock. And we have now obtained that unverified capitalization table information, reportedly based on a filing in Luxembourg where the company is headquartered, showing the various ownership positions of the major Spotify shareholders, including the prices paid for the stock. We have reason to believe this is largely or completely accurate based on information it contains that we independently obtained from a separate source and have not previously published. With one exception - either the report inaccurately shows investments by labels as 1/1000 of their real amount (meaning three 0’s need to be added), or the report excludes most of these investment amounts. Here’s the cap table: Shareholders in Spotify on 10/7 2009
Bolag Andel
Rosello (Lorentzon) 28,6%
Instructus (Ek) 23,3%
Northzone Ventures 11,9%
Enzymix Systems (F. Hagnö) 5,8%
Sony BMG 5,8%
Universal Music 4,8%
Warner Music 3,8%
Wellington IV Tech 3,8%
Creandum II LP 3,5%
Swiftic (Strigéus) 2,6%
Creandum II KB 2,4%
EMI 1,9%
Merlin 1,0%
SBH Capital (B. Hagnö) 0,8% df
Riskkapitalbolagens investeringar
Northzone 8 miljoner euro
Creandum 4 miljoner euro
Wellington 6,5 miljoner euro
Li Ka-shing 20 miljoner euro* * enligt Financial Times
How much the labels paid for their shares.
Sony BMG - 2 935 euro för 6 procent av aktierna.
Universal Music - 2 446 euro för 5 procent av aktierna.
Warner Music - 1 957 euro för 4 procent av aktierna.
EMI - 980 euro för 2 procent av aktierna.
Merlin* - 490 euro 1 procent av aktierna.
This cap table shows founders Daniel Ek and Martin Lorentzon with 23.3% and 28.6% of the stock, respectively, for a total of 51.9% of the fully diluted stock of the company. The four big labels plus indie aggregator Merlin own a total of 17.3%, and paid an aggregate of €8.8 million for that stock. Or, they paid €8,808 for that stock, which is what ComputerSweden is reporting. Based on all previous information that we’ve received about the company from sources, including additional discussions with people close to the company this evening, the aggregate investment by labels was €8.8 million. If the labels didn’t pay for the stock, all those previously sourced numbers are incorrect, which we think is highly unlikely. The new round of financing, from Wellington Partners, Li Ka-Shing and additional strategic partners (Based on the cap table above, Spotify has already closed on the Wellington portion of that deal) will be $50 million or so, at valuation of $250 million (yes, I know I’m mixing currencies, but the numbers are all roughly working out). Most of that, or about €26.5 million, may be accounted for. The key takeaway from this is that the founders have done an excellent job of raising a big bucket of money while retaining control of the company, and they are one of the very few music startups to actually get real cash from the labels. My esteemed colleagues see some big holes in the Spotify story, but there is clearly a lot going right with this company, too. The real hurdle is making the model work, meaning they have to generate real advertising and premium revenues to offset big royalty streaming payments to the labels. Crunch Network: CrunchBoard because it’s time for you to find a new Job2.0 
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| Twitter Outage Moves Into Day 2
August 7, 2009 at 4:15 am
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Twitter, Facebook and LiveJournal spent yesterday battling a DDOS attack that started around 6 am California time. Twitter and LiveJournal went down hard, Facebook stayed mostly online but was clearly under strain. CNET reports that a single individual’s accounts on the services may have been the primary target. Now, nearly 24 hours later, Facebook and LiveJournal appear to be performing normally. But Twitter is down completely and has been for the last few hours. As of 4 pm Twitter was saying things were looking better: “Site latency has continued to improve.” But for most users, all third party services have been completely unusable for the last 20 hours or so (Tweetdeck, Seesmic, Power Twitter, etc..), bringing down the entire Twitter ecosystem. The Twitter.com site itself hasn’t been reliable either. The Twitter status blog has been silent since that 4:14 update. Crunch Network: MobileCrunch Mobile Gadgets and Applications, Delivered Daily. 
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