The report isn’t quite as bleak as one released for the fourth quarter of last year from Thomson Reuters and the National Venture Capital Association, which noted a decline in VC funding of 71 percent from the fourth quarter of 2007.

The venture capital industry took another big hit in the first quarter of the year, according to new data from Dow Jones VentureSource.

Venture capitalists invested just $3.90 billion in U.S. companies during the quarter, a 50 percent decline from the almost $7.78 billion invested during the same quarter last year, according to VentureSource. In terms of actual venture deals, 477 were completed, well below the 706 completed last year and the lowest quarterly deal total since 1996.

The report also documents another plunge for the
green tech and clean energy sectors, with $189 million in 15 deals during the first quarter, down 59 percent from the $457 million invested in 24 such deals last year.

Hit particularly hard was the information technology industry, which saw its lowest level of investment since 1997, with $1.68 billion invested in 231 deals for the first quarter. That’s a 52 percent drop from the $3.48 billion invested in 370 such deals during the same quarter last year, according to the report. That’s also the lowest deal level for the IT industry–the software sector included–since 1995, the report says.

Also for the first quarter of the year, VentureSource earlier this month reported a 65 percent fall in liquidity for VCs.

Following the Jack Abramoff lobbying scandal, Howell erred when she said that the lobbyist gave campaign donations to Democrats as well as Republicans. Abramoff gave only to Republicans. The paper’s Web site saw more than 1,000 comments, many from people who accused the Post of conspiring with the Republicans.

But this isn’t a solution. Brady believes that in the next five years people will be required to identify themselves in some way at many sites. “I don’t know whether we do it with a credit card number, a driver’s license or passport, but I think making people responsible would raise the level of discourse.”

Brady, executive editor of The Washington Post’s online division, said during a panel discussion at the Digital Hollywood conference here that he would like to see a technology that could identify people who violate site standards–and if need be–automatically kick them off for good.

Pluck, a company that provides social-networking software, helps maintain some of the Post’s blogs and has implemented a “bozo filter,” which can isolate comments that include banned words or phrases, according to Brady.

LOS ANGELES–If Jim Brady had his way, there would be no guaranteed anonymity for those who post comments to Washingtonpost.com.

Brady has a notable history with this issue and I’ll get to that. First, his position must be made clear. In an interview following the panel discussion, Brady said he doesn’t want people’s personal information for any other reason but to hold them accountable for what they post. He said he’s not–as he has been accused by some–an enemy of free speech. He just wants to oversee a site where readers engage in civil discourse and debate without fear of it degenerating into a “back alley environment.”

I reminded Brady that many people feel strongly about their right to privacy online. He responded that he feels strongly about it too, but there are plenty of sites that take an anything-goes approach and that people who want to drop F-bombs and blast each other should go there. “We don’t want our site to be sanitized, but we have the right to create a different kind of community,” Brady said.

Things got worse when Howell posted a clarification. When Brady saw that many of those comments violated the paper’s policy against the use of profanity or personal attacks, he blocked users’ ability to post. The decision was widely criticized. In defense of his decision, Brady wrote that many of the posts weren’t comments at all, but the kind of thing “you might find carved on the door of a public toilet stall.”

“I think part of the problem is that people aren’t held accountable on the Web,” Brady said. “People say things online they would never say when disagreeing with someone at the dinner table. I think heated debate is fine, but when there are (flame wars), many people won’t take part for fear they will be attacked and bashed over the head with the (Internet-equivalent) of a steel pipe.”

Brady also lamented that closing user accounts doesn’t keep bad eggs off a site. They just come back and create new ones. He said that his site can identify someone’s IP address, but it’s not an elegant solution because blocking them can be tricky. “You don’t want to end up blocking the entire Department of Energy or something like that,” he said.

Brady knows how intensely many Internet users disagree with him. He made headlines in January 2006 after shutting down the comments area of a blog where outraged readers gathered to rebuke the Post’s ombudsman, Deborah Howell.

Apple’s fourth-quarter profit soared past expectations on extremely strong sales of the iPhone, but revenue was a little light.
iPhone sales were astonishing during the quarter: Apple sold 6.9 million iPhone 3Gs during the quarter, which was far more than analysts had been anticipating and more than the total number of original iPhones sold in a year.

Apple had hit rock bottom and was trading for a few bucks a share, while Yahoo was the Internet darling at the height of the Internet boom. In the past couple of years, they quietly exchanged places, and their earnings calls this week bore that out clearly.

Also, a new report from security services provider ScanSafe finds that companies are at increasing risk of having employees inadvertently download backdoors and password stealers onto corporate computers from Web sites that have malicious software hidden on them. One company in ScanSafe’s focus group faced a nearly 500 percent greater risk of exposure to those threats in September than in January of this year, according to the report.

Compounding all this, of course, is the specter of Microsoft’s attempted acquisition. Yahoo rejection of Microsoft’s $33-a-share offer now is more notable, given that Yahoo’s stock has dropped to nearly $12.

While the Apple-Intel love-hate fest was going on, T-Mobile USA made the formal, nationwide launch of its G1, the first phone to run Google’s Android operating system.

The recent malware spikes could be due to the fact that cybercriminals now have fewer possible targets with the consolidation in the banking industry, and the perception of instability in the financial community could be causing panic, even within the cyberunderground, PandaLabs said.

Microsoft rates this patch as critical for Microsoft Windows 2000, Windows XP, Windows Server 2003, and as important for Windows Vista and Windows Server 2008. It also affects versions of
Windows 7, prebeta in limited release.

It should come as little surprise that the iPhone 3G would help boost profits for AT&T. The phone company’s decision to sell the phone for a subsidized price of $199 has likely helped boost sales. The previous version of the phone was not subsidized, initially costing AT&T customers $499.

Call of the smartphone
Apple wasn’t the only company basking in the iPhone’s glory. AT&T’s profits were up 5.5 percent in the third quarter, thanks in large part to the popularity of the iPhone 3G.

The iPhone now accounts for 39 percent of Apple’s business, having generated $4.6 billion in revenue on sales of 6.9 million units during the quarter. Those numbers, however, are not included as part of Apple’s official quarterly results because of the way the company chooses to account for the sale of each iPhone. If Apple treated the iPhone like it does the Mac, it would have recorded an additional $3.8 billion in revenue and an additional $1.3 billion in net income during the company’s fourth fiscal quarter.

Security alert
Microsoft issued a rare out-of-cycle patch for a vulnerability in the Windows Server service that handles remote-procedure calls that allows programmers to run code either locally or remotely. In issuing the patch, Microsoft warned that “it is possible that this vulnerability could be used in the crafting of a wormable exploit.” The vulnerability could result in a remote code execution, in which malicious attackers could take control of a user’s computer to launch code.

However, in a blog posting, the head of Intel’s low-power efforts threw his fellow executives under the bus in admitting that Intel’s current low-power x86 processors don’t even come close to matching the power consumption numbers–a vital design parameter in smartphones–of those made by ARM’s partners, which are used in smartphones like the iPhone and more than 90 percent of all the mobile phones in the world.

There’s more evidence of a direct correlation between the recent stock market declines and increases in targeted cyberattacks, according to a recent PandaLabs report.

Saying Apple’s iPhone business “had become too big to ignore,” Apple CEO Steve Jobs made a rare appearance on the company’s earnings conference call to explain just how much money the iPhone is dumping into Apple’s coffers. For the first time, the company used supplemental financial details to give some color on the contribution that the iPhone could be making to Apple’s bottom line, if iPhone sales were handled like
Mac sales, and the numbers are astonishing.

Companies in the energy sector are at greater risk from Web-based malware than other industries, the report concludes. The energy sector, worldwide, faces a 189 percent higher risk of exposure from workers visiting sites with malware on them than other industries, followed by the pharmaceutical and chemicals industry, construction and engineering, and media and publishing.

Ten years ago, Apple and Yahoo were in very different financial situations.

Meanwhile, the picture at Yahoo is not so rosy. The Internet search pioneer reported a 64 percent drop in net income for the third quarter, issued cautions about a weakening advertising market, and confirmed that the company plans to lay off at least 10 percent of its workforce. With 14,300 employed at the end of last quarter, that means at least 1,430 are losing their jobs in 2008. And CEO Jerry Yang indicated that there could be further cuts in 2009.

The G1 smartphone, also known as the HTC Dream, is now available to consumers at retail outlets in cities where T-Mobile’s 3G service is available, including Boston, Chicago, Dallas, Los Angeles, Minneapolis, New York, and Seattle. The company made its first retail sale of the G1 Tuesday evening in San Francisco.

But not everyone loves the iPhone. Intel executives have decided to start including the iPhone as one of their prime examples of smartphones that don’t run “the full Internet” because they don’t use an Intel chip. This specious argument–that ARM-based chips aren’t man enough to run the Internet–is nothing new from Intel, but the decision to highlight the iPhone as part of that argument is.

Also of note
Sources at an Internet search company have spotted the tracks of an Apple device with a screen larger than an iPhone, but smaller than a MacBook, in their visitor logs…Microsoft said Office 2007 Service Pack 2 will come sometime between February and April of next year…Intel expects a crush of ultrathin laptops from PC makers in 2009 and unveiled cooling technology to make sure these svelte air-flow constrained designs stay cool.

Part of Yahoo’s core problem today is the weakening online advertising market–in particular, ads for autos, finance, real estate, and travel. Another part is that Yahoo is more exposed to that trouble than its top rival, Google, whose stronger results afford it some of the breathing room Yahoo lacks.

Any company has two ways to improve profitability: increase revenue or decrease expenses. With advertisers’ purse strings tightening, the latter option rises to the fore. That 10 percent expense cut is significant, to be sure, and Yang said in an internal memo about the layoffs that “having layoffs is very difficult, particularly in light of all we’ve experienced this year.”

Microsoft is a smart company, and has obviously thought about these issues. I still wonder if the company will find that its partners don’t like having to compete with their old friend.

Tech watchers will see lots of familiar concepts in software behemoth Microsoft’s revamped go-to-market strategy….[Microsoft] proclaimed its newfound focus on delivering software and services to customers via “the cloud,” using a subscription-based model popularized by companies like Red Hat, Websense and Salesforce.com.

If you attended Microsoft’s Worldwide Partner Conference 2008, you can be excused for thinking you showed up at the partner event for Red Hat, Google, or Salesforce.

After all, Microsoft’s new partner initiatives rely heavily on concepts devised and delivered by these companies:

By tangling with its partners in accounts of all sizes, Microsoft may have finally proved to be too big for its own good. Since it got into the applications business, it has had a competitive relationship with its software partners. But now it will also be competing with its channel delivery partners.

commentary

Microsoft is smart: Why reinvent the business model wheel when others have pioneered successful ways to deliver software value? Of course, Microsoft has never been the most innovative of companies - it has become the market behemoth that it is by out-executing its competitors, not by out-thinking them.

Although partners will get a 12% cut of the first year’s subscription, and 6% thereafter, they will now be competing head-to-head against Microsoft for delivering value-added services. This marks a dramatic departure from the way Microsoft has worked with partners in the past. Mr. Softy formerly provided direct support and services only to the largest enterprise clients, while channel partners handled the rest.

Intel Flash/SSD capacity: Intel and Micron have a joint venture called IM Flash Technologies. Both companies are currently making flash on a 50-nanometer process with plans to move to 40nm later this year. There are three NAND flash fabrication plants and one more currently being built in Singapore. The Intel-Micron venture provides funding for the development of silicon technology and the capacity to produce that silicon, according to Winslow. But marketing and end-product decisions are “absolutely separate,” he said.

Finally, Winslow addressed the price collapse in the flash market in general–a topic that generated a lot of press after the Intel analyst meeting on Wednesday. “A majority of flash is being sold in very cyclical consumer electronics devices. Q1 and Q2 are soft quarters,” he said. On top of this, suppliers continue to shrink manufacturing process technologies, leading to more capacity at lower cost, he said.

“We will be supplementing our product line with a SATA offering,” he said. Serial ATA, or SATA, is an interface used in high-performance hard disk drives. Intel’s products will be based on the SATA II specification that offers speeds of 3 gigabits (Gb) per second. Samsung is now shipping 64GB SSDs to Dell using the same technology.

Intel's current offering: the Z-P140 PATA solid-state drive.

“When Intel launches its…products, you’ll see that not all SSDs are created equal,” Winslow said. “The way the SSDs are architected, the way the controller and firmware operates makes a huge difference,” he said, referring to the chip (controller) that manages the SSD and software (firmware) that the controller uses.

Intel doesn’t enter markets gently. Its new high-capacity solid-state drives (SSDs) are expected to jolt a market currently dominated by Samsung, Toshiba, and SanDisk.

With new competition, drive speeds will jump. Currently, the fastest SSDs from companies like Samsung approach 100MB/second for reading data. “What I can tell you is ours is much better than that,” Winslow said. Hard drives typically read data at about half this speed.

At the moment, Intel offers small-capacity chip-level (what are called Thin Small Outline Packages or TSOPs) technology that provides end-product sizes ranging up to 16GB. But this modest line of products will get a big boost in the second quarter when Intel offers 1.8- and 2.5-inch SSDs ranging from 80GB to 160GB in capacity, said Troy Winslow, marketing manager for the NAND Products Group at Intel. Intel’s new SSDs will compete with Samsung, for example, which is slated to bring out a 128GB SSD in the third quarter.

SSD Primer, Part 1: SSDs are based on flash memory chip technology and have no moving parts. Hard-disk drives (HDDs), in contrast, use read-write heads that hover over spinning platters to access and record data. With no moving parts, SSDs avoid both the risk of mechanical failure and the mechanical delays of HDDs. Therefore, SSDs are generally faster and more reliable. The catch is the cost: SSDs are currently much more expensive than HDDs.

SSD Primer, Part 2: Intel will be shipping in the second quarter a Multi-Level Cell or MLC solid-state drive. This is a more sophisticated technology than current Single-Level Cell or SLC. The advantage is larger capacity since MLC uses multiple levels per cell to allow more bits to be stored. The disadvantage is more complexity which can result in lower performance. “Inherently, MLC is slower and inherently fewer write cycling endurance,” Winslow said. Intel, however, has technology that will get around these problems, he said.

But to be competitive with hard drives, SSD prices have to come down–a lot. In many cases, upgrading from a hard drive to an SSD in a notebook can mean paying an extra $1,000. Intel, like Samsung and Toshiba, sees steep declines in cost in the next two years. “Price declines are historically 40 percent per year,” Winslow said. “And in 2009, a 50 percent reduction, then again in 2010.”

While the latter statement seems like typical marketing spin, it’s more than just spin in Intel’s case. The largest chipmaker in the world is in a competitive position because it already supplies many of a PC’s core components including the processor, chipset, communications silicon, and in some cases, the graphics processor. Add the main storage device to the mix, and–with the exception of an optical drive and screen–that’s all the core component in a notebook PC.

Intel believes 2008 is the year of the SSD. (See SSD primer below.) “For the first time, flash is going into the compute environment. In the last nine years or so when it experienced all of its growth, this has been in digital cameras and USB keys,” Winslow said. But now flash memory, in the form of SSDs, will be used as the main storage device in PCs. “When you’re putting all your critical applications and data into notebook or server (SSDs), who knows those markets better than the manufacturer that’s supplying the world with CPUs,” Winslow added.

(Credit:
Intel Corp.)

SPARC64 comes from Sun’s partner Fujitsu, which also designs and builds the midrange and high-end servers that use the chip; these systems went by the "APL" codename while they were under development. Fujitsu and Sun jointly sell these servers–as well as the CMT "Niagara’ boxes for which Sun does the processor and server development.

My critique instead relates to how Sun (again) seemed almost bored by this announcement. Yes, there was a press release–it wasn’t exactly a stealth launch–but there was certainly none of the mass marketing air cover that Sun (for better or worse) is wont to darken the skies with when it comes to something that it’s genuinely excited about. No blog postings from its pony-tailed Blogger-in-Chief. No glitzy roll-out.

Earlier this week, Sun Microsystems launched a family of new servers based on the SPARC64 VII processor. In contrast to Sun’s "CMT" (Chip Multithreading) UltraSPARC T1 and T2 designs that deliver aggregate performance using a large number of threads, SPARC64 takes a more conventional approach that is more rooted in parallelism and performance at the level of a single thread. This design is more attuned with the performance requirements of typical enterprise back-end applications and databases, whereas CMT has more of a network-facing orientation.

Sun pegs the performance boost over the prior generation at up to about 80 percent for commercial applications, and up to 2x on apps that are floating point-intensive. That’s a nice increment, considering that upgrades from the SPARC64 VI servers require only CPU board upgrades. While I find that vendors often overplay the issues associated with competitors’ "forklift" hardware upgrades and other supposed gotchas, there’s no doubt that less is more when it comes to making infrastructure changes.

commentary

The new processor and servers are solid upgrades. Although not as multi-threaded as Niagara, the SPARC64 VII bumps the number of cores per chip to four, and adds the ability to run two threads on each of those cores–a technique that helps mask delays associated with waiting for data to arrive from memory. Frequency is also up from the prior generation to 2.4 GHz and 2.52 GHz.

Don’t get me wrong, many of the things that get Sun’s corporate blood flowing such as open storage, OpenSolaris, Project BlackBox, ZFS and solid state disk, and Niagara are genuinely exciting. But many are also speculative. It would behoove Sun to at least make the old college try to display some comparable enthusiasm about products that are proven and bringing in real revenues.

This week at GDC 09, we learned about OnLive, a new “cloud”-based on-demand video game and entertainment service. It promises high-quality streaming of first-run major publisher games to many Macs and PCs, and it could threaten the traditional console model for gamers that Nintendo, Sony, and Microsoft have built their game businesses around.

CNET News Poll OnLive fallout
Which response to OnLive would you most like to hear?

View results

The companies have definitely taken notice, but what are they saying behind closed doors? Which of these responses would you most like to hear from the gaming behemoths?

See also:

“I would have thought I knew what the word ‘cloud computing’ meant,” he said, “until I sat with Anne and a bunch of venture capitalists this morning who used the word completely differently than I would have used it.”

But he did offer this stab at a definition: “I think when people talk about cloud computing they’re talking about taking some stuff, putting it outside the firewall, and perhaps putting it on servers that are also shared–or storage systems–that are also shared, perhaps with other companies that they know nothing about.”

Speaking with venture capitalist Ann Winblad at the Churchill Club onThursday, Microsoft CEO Steve Ballmer addressed those differences of opinion:

• Ballmer on search: ‘I don’t like not being No. 1′
• Mundie: The cloud needs killer apps
• Microsoft’s Mundie outlines the future of computing
• Ballmer jabs at VMware

Ballmer declined to get into the specifics of Microsoft’s vision, or to offer any details on its “Red Dog” project. That topic, he said, is something the company will open up about at its Professional Developer Conference in late October.

“Bloggers can be journalists,” he said. “Bloggers can have journalistic standards. However, not all do… The one thing I know for sure is that because someone is a blogger for a big company, doesn’t make him or her “better” or more qualified blogger.”

But by limiting access to bloggers, Cuban is discriminating against a form of journalism that is practiced by every major publication in the country and one which is growing in influence every day. Cuban argues that he’s not trying to pick on bloggers as a group.

He has a point. The Internet enables anyone to blog and to call themselves a blogger. If the Mavericks handed out press credentials to anyone calling themselves a blogger, press row would fill half of the American Airlines’ Center, where the team plays.

Why would the founder of Broadcast.com and the owner of the NBA’s Dallas Mavericks force bloggers into a digital ghetto by limiting their access to his basketball team? Isn’t he a card-carrying member of the digerati?

At the same time he’s unfairly tarnishing blogging’s image.

By banning bloggers from the Maverick’s locker room, that’s what he’s doing, according to several journalism poobahs, including the Society of Professional Journalists.

“The issue is that anyone can be a blogger. In about 10 seconds,” Cuban wrote. “I have to make some sort of judgment on who should qualify for access. I’m not prepared to make that judgment yet. I haven’t decided what the parameters will be.”

Cuban, as a friend to new media and technology and someone who I think tries to be fair to reporters, should rescind his blogger policy.Bloggers aren’t going away.

Mark Cuban wants bloggers out of locker room

The Mavericks said the decision was made because there’s too little space in the locker room to accommodate everyone. In an e-mail to CNET News.com, Cuban explained his view.

The kerfuffle allegedly began when Tim MacMahon, who blogs for the Dallas Morning News, wrote something to the effect that the Mavs needed a new coach. On the same day the story was published, Cuban bounced MacMahon from the locker room. Days later, the team issued a new policy. No one who writes full-time for the Web is allowed in the Mav’s locker room.

As a former sportswriter, I’ve covered Cuban for both sports and technology stories. He is one of the most accessible team owners and technology heavyweights there is. He answers e-mails at all hours and about all subjects. He doesn’t duck anyone. But in this situation, it looks like MacMahon’s story ticked him off and he saw a way to weed out journalists he doesn’t like.

Technology and new media made Mark Cuban a billionaire.

(Credit:
Golden State Warriors blog)

He has to know if he slammed the door on superstar columnists like Michael Wilbon or Mitch Albom, their employers, The Washington Post or Detroit Free Press wouldn’t put up with it. Just ask Al Davis, owner of the NFL’s Oakland Raiders, who tried to ban a newspaper reporter in Los Angeles years ago. The major papers and TV stations in town threatened to stop covering the team and Davis soon backed down.

In the overall graphics market (desktops and notebooks), Intel held its first place position, claiming 42.7 percent, up from about 38.7 percent in the same period of the previous year, the market researcher said.

“The overall ‘double attach’ is about 35 percent,” said Jon Peddie. That puts a sizable dent in Intel’s market share. A recent report from Doug Freedman of American Technology Research went so far to say this: “Nvidia remains the No.1 graphics supplier as up to 73 mil Integrated (Intel) IGPs are unused in systems due to ‘double-attach’ with a Nvidia solution.”

But this isn’t the whole story. In a post Nvidia-CEO-rant world, there is a push to recognize a pesky statistic called “double-attach.” This means that a PC shipped with an integrated Intel graphics chip will be double attached when a separate graphics card is attached on top of the existing Intel graphics silicon. The Intel chip is disabled and goes “unused.”

In the notebook market, Intel held its dominant position but slipped one point to 53 percent while Nvidia gained a point to 27 percent and AMD slid a point to 17 percent.

First, the official first-quarter graphics chip market share numbers. Total shipments for Q1 were 95 million units, down 5.6 percent from the fourth quarter of 2007 and up 20 percent over the same period in the previous year, according to Jon Peddie Research.

Nvidia’s share stood at 32.7 percent, up from 28.5 percent in the year-earlier period. Advanced Micro Devices was at 18.6 percent, down from a 22 percent share last year.

“Traditionally, the first quarter has flat to negative growth for the computer industry as retailers and OEMs sell what’s left from the holiday season. The quarter saw the biggest drop since 2005,” said Peddie.

Intel officially still rules the graphics chip market. But an arcane-sounding statistic called “double-attach” may redefine the chipmaker’s standing.

Intel dominates market share figures because virtually all Intel-based PCs (shipping over the last few years) have an Intel Integrated Graphics Processor (IGP) built in. And PC suppliers opt to use this low-end Intel IGP configuration in a number of models–particularly in the notebook market–because it’s an extremely inexpensive way to provide graphics. Intel graphics chips are used in specialized markets like ultra-portables, too. The Apple MacBook Air and ThinkPad X300, for example, ship only with Intel X3100 integrated graphics.

Total graphics chip market shares for the first quarter of 2008.

On the desktop, Intel took back its first place position (year-to-year) with a 38 percent share against Nvidia’s 36 percent, while AMD moved up to 19 percent, Peddie said.