Let’s see if photos work. Here’s an example.

One more kitchen gadget for the junk heap. As Alton Brown would say, this is an undeniable uni-tasker. It’s a martini machine. Why do you need a machine to make a martini? Well, because shaking a shaker is so much darned work.

Uni-tasking martini machine

What’s a chumby? The quick answer is this: chumby is many things, and the list never stops growing.

We last wrote about chumby in April 2008, when they raised $12.5 million in a Series B round in order to “accelerate growth of the company, and expand and broaden the Chumby Network to other screen-based Internet connected devices such as LCD TVs and digital photo frames.”

Well, it looks like they are accomplishing their goal.

Chumby Industries, Inc. recently announced a new partnership with Broadcom to integrate the chumby network into devices, such as internet-connected TVs, set-top boxes, and Blu-ray players, featuring Broadcom’s chipsets.

Chumbys of all shapes and sizes

So, that means chumby is:

• chumby, a huggable, Wi-Fi-connected clock/radio/widget-playing device
• the chumby network, freely providing over 1,000 widgets in more than 30 categories, such as weather, social networks, photos, sports, news, entertainment, videos and more
• chumby-enabled, internet-connected digital photo frames
• chumby-enabled portable media players and portable TVs
• now, chumby-enabled, internet-connected TVs, set-top boxes, and Blu-ray players
• … and surely more to come

Video: Sneak peak of upcoming chumby integrations

What do all these different manifestations have in common? Answer: an open source, Linux-based platform and a cloud-based content network. The open source platform runs on a local device, chumby industries hosts the widgets, and the ‘net connects it all.

Not only does the chumby network provide live information to devices, but a user’s widgets are synchronized across various devices, providing a coherent experience from one screen to another. Many chumby widgets are social-enabled, allowing for sharing of content, photos, video clips, games or messages with friends who own a chumby-powered device.

Chumby Change

The chumby device. (Credit: chumby industries)

If the chumby network is free for users, then where is chumby making money? Selling chumby devices?

No, the iconic, padded chumby, currently selling for $200, is reportedly priced at a break-even point. (If you’d like to learn more about the manufacture of chumbys, and back-stories on Chinese society, read eye-opening accounts about setting up production in China from Andrew “bunnie” Huang, chumby’s VP of Hardware Engineering here.)

Instead, chumby aims to profit from the chumby content network, including:

• Sponsored advertisements, both interstitial (yes, they’re skippable) and embedded (like “this widget brought to you by Coca-Cola”)
• Service fees for subscription content
• Referral fees (pointing users to media, stores, products, etc)
• Payment fees (taking a cut from purchases)

Video: Preview of chumby on Broadcom-powered TV

What’s Next?

There’s no doubt that content previously confined to the internet is moving (finally) to other screens, particular TVs, but Chumby is facing serious competition for those eyeballs. It’s like there’s a piñata full of eyeballs, and chumby + Broadcom, Yahoo! + Intel, Sigma, Sony, and, without a doubt, Google and Microsoft, are all swinging sticks wildly in an attempt to crack that donkey open.

The battle has begun. But can chumby carry enough a big enough stick to the fight? They’ve made important partnerships and progress to date, but as they shift their focus away from their iconic chumby device (aka “iPod touch knocks up a hacky sack and has a baby”), can their brand compete with the mighty Yahoo!?

Chumby is the nimble lightweight in this fight. It’s small, nimble, and quick, and it can use its smaller size to take advantage of deals that companies like Yahoo! can’t afford because of it’s required rate of return.

It’s still early in this sage of convergence, probably just midway through Round 1, so sit back and enjoy the show.

In February of 2008, six guys in San Diego decided to fundamentally change the software community for the better.

You need only read the first sentence of OpenCandy‘s About us page to learn a telling amount about the new company: one, they carry a grand vision for the impact their product will have on the software business, and two, there are a lot of dudes at this place.

Let’s tackle the latter characteristic first.

Who are all these guys?

Well, they’re ex-DivX employees, particular those who were building Stage6, a high-quality internet video sharing service that never escaped the gravitational pull of beta, despite its popularity.

What’s their grand vision?

Simply put, their goal is to improve the distribution and monetization of downloaded consumer software. They aim to do this by helping increase software distribution volumes, by monetizing this distribution through referrals, by providing marketing data to software creators, and by helping consumers find relevant applications. To fund their pursuit of this goal, they’ve raised $3.5 million in Series A funding from Bessemer Venture Partners, O’Reilly AlphaTech Ventures (OATV) and angel investors including Reid Hoffman (Chairman of LinkedIn, Board of Mozilla), and Jordan Greenhall (Former CEO and Co-Founder of DivX).

How’s this work?

The OpenCandy plug-in is bundled with an existing software installer. Let’s call this software Orange. While Orange is being installed, OpenCandy recommends to the user another application that is, in theory, relevant to the user. Let’s call this recommended software Banana.

Banana is picked from a fruit basket pool of applications chosen by the publishers of Orange. Orange Co. can hand-pick free recommendations (no charge to Banana for being recommended), can allow OpenCandy to select paid referrals (a “bounty” is paid to Orange if the user installs Banana), or a mix of the two.

The user can then choose to opt-in and install Banana. I emphasize opt-in because the recommended software will not be installed by default, an important distinction from annoying installers like RealPlayer that try to stick the user with 20 extra programs.

Another important note is that the Banana software is not included with the Orange installer, so the size of the installer is not noticeably increased (only by the negligible size the OpenCandy).

In fact, it is not determined what software will be recommended until the Orange installer runs. When it does run, OpenCandy scans the user’s registry for installed programs, operating system details, and chosen language. This information is sent to the OpenCandy servers where some magic happens (including consideration of which recommendations are converting best), and then a personalized recommendation is sent back to the installer in response.

For example, if a user has several already developer tools installed, OpenCandy might recommend Notepad++, a popular text editor. If a user is installing Miro, an open source video player, OpenCandy might recommend Audacity, an open source audio editor.

(If this process threatens your sense of privacy, then you’re not alone. Several blog comments have echoed this sentiment, so OpenCandy’s CEO, Darrius Thompson, answered some of the frequently asked privacy questions here.)

If the user opts to install Banana, or whatever juicy personalized software is recommended that day, OpenCandy will download the necessary installer and handle the installation process. Opting in will not interrupt the in-progress Orange installation.

You can see screenshots of the process here.

Let’s talk money

OpenCandy is aiming to charge between $1 and $2 each time an application is installed through a recommendation. It then splits these revenues with the publishers of the original software.

The OpenCandy team learned a lot about sponsored recommendations at DivX, where the company was reportedly raking in around $20 million annually for bundling software like the Yahoo! Toolbar with the DivX player.

Trick or treat

So, what’s it going to take for OpenCandy to find success and change the software world?

Fundamentally, there needs to exist a strong, profitable market for downloadable consumer software, because OpenCandy’s business is built upon that ecosystem. Downl

Thomson Reuters has partnered with Harvard University’s Berkman Center for Internet & Society to launch the Media Cloud, a set of research tools for tracking online media coverage.

The joint effort is meant to bring some clarity to the vast tangle of news and information on the Web, attempting to answer questions about what types of stories are covered by which media sources, where stories begin, and how blogosphere coverage compares to that of the mainstream media.

The open-source project will debut in the second quarter of 2009.

On the Media Cloud site, the team asked the question, “What Are Your Research Ideas?“.

I’m interested to see the full capabilities of this system when it launches later this year. I’m sure it will reveal some interesting truths about the nature of news network effects. It might also assist in media research projects such as those on media bias. But one question came to mind that I couldn’t shake, so I left this comment on the post:

I’m wondering if Media Cloud will be able to analyze not only information in and around a news story, but statistics on the people who READ a story, pass it on, etc. It seems that in today’s world of immediate global communication, these figures are necessary to draw important conclusions about the relative influence of different news outlets. Do you have any ideas for obtaining or estimating the number of people who read about a given topic for each source covering it? Data such as unique visitors to a page and "send to a friend" emails is typically confidential.

A database of news stories, content analysis, trackbacks, citations, and more, can tell a lot about the distribution and nature of news coverage. But it doesn’t answer the question, “What news source is most influential?“

It seems to me more information is required to answer this question. For example, in studies of the influence of Fox News’ conservative bias, researchers measured the change in voting patterns by households who gained access to Fox News versus those households who did not have access to the channel (the control group).

Nonetheless, Media Cloud sounds like an intriguing research project, and I’m happy to hear that the software will be open-sourced and available to the world for study and collaborative improvement.

Would you consider the research and development Microsoft is doing on the social networking aspects of email communication to be innovative?

My answer: Yes. Just from this short video I can tell Microsoft is one of the leaders in terms of investment in the way established communications methods, such as email, can be mined for increased usability, efficiency, and added value.

Why isn’t Microsoft recognized for innovation to the degree that they are, in reality, actually innovating?

My answer: Because they hide this stuff inside their monstrous corporation and don’t release it for the world to play with!

I have been reading about innovative enterprise collaboration research from Microsoft for years, but it seems that very little of these products actually get released into the wild. Microsoft is still stuck in its old behavior pattern of keeping products locked up internally and working to incorporate every desired feature before releasing the product to the public. 

That worked with operating systems (except maybe Vista, the scourge of my computing life) and office suites because they were used primarily by individuals perform siloed tasks.

Collaboration and communication software, on the other hand, is used to perform work across groups of people and the tool’s efficacy is largely determined by how well it integrates into human social behavior patterns.

Microsoft needs to kick these in-development projects out of the next and see if they can fly in the real world.

Microsoft needs to leverage the desire of its users to collaboratively participate in the development of their own solutions, collecting feedback from users and incorporating this voice of the customer into the next revision.

Take the lid off, Microsoft, and let us see what you’re cookin’! 

Social Views of Email on the Desktop | Chris Pirillo.

It's all a big social media circle

It all started when I decided to apply for the position of Founder’s Associate at Twitter. Rather than a standard cover letter, I submitted a strategic analysis outlining Twitter’s current competitive state and its options to win the microblogging battle and larger social communications war. The primary tools used were scenario planning and Porter’s 5 Forces.

I then presented this analysis in a session at BarCampSD (San Diego) on November 12, 2008 to an audience with great interaction and sharing of thoughts.

Fast forward to the present. I have been a bit off the grid the last couple weeks while traveling home for Thanksgiving and working on the family business. So, just yesterday I read the news that Facebook had, so far, unsuccessfully negotiated an acquisition of Twitter.

About time. Their partnership was my first recommendation in the strategy presentation.

In my mind, at least an attempt by Facebook to acquire Twitter was inevitable for these fundamental reasons:

It’s a mutually beneficial relationship

Twitter gets a business model, as tweets are displayed amongst advertisements in users’ feeds.

Facebook buys Twitter’s large, existing userbase and brand recognition rather than battling Twitter head-on with a modified status feature.

They need each other

Twitter has, by far, the largest userbase of all microblogging services. But yet its size pales in comparison to the number of people using Facebook. It’s hard to imagine another way Twitter could scale its userbase so quickly.

Facebook is missing out on all the conversations that occur outside its walls on Twitter. It would be beneficial for Facebook user frequency and volume to have Twitter conversations integrated with profiles, the Facebook platform, and the rest of the user’s social graph.

I called this scenario “Slap in the Facebook World”, describing a situation where Twitter must either partner with Facebook or watch as Facebook builds a Twitter clone and leverages its size to bully Twitter out of the ring.

Other scenarios included in the presentation:

• “Twitter in the Cloud Behind the Curtain” — Twitter as a service provider, with revenue coming from premium API access
• “Microblogging the Microsoft Way” — The microblogging platform with the largest corporate userbase wins the consumer game
• “Open Sesame” — Open standards and open source win (e.g. Laconica) and no company makes significant revenues directly from the product

If you’d like to check out the strategy presentation, I’ve embedded it below.

Disclaimer: I made this presentation quickly and for the purpose of sharing indirectly, not for delivering a speech. Therefore, I don’t advise following my example in such text-heavy slides and lack of graphics. You will put your audience to sleep!

One great iPhone feature is its ability to feed a user’s GPS coordinates into a location-based service, or LBS. This expands the usefulness of GPS beyond navigation to enhanced social networking activities. TechCrunch recently reviewed the state of major LBS applications for iPhone, and I recently attended the Web 2.0 Mapping and Social Networks Meetup, so it’s time for me to throw my two cents in the pool.

Regarding the title of this post: No, I’m not yet overly concerned with privacy issues regarding the sharing of a person’s location at this point. I just couldn’t think of any other good acronyms at the time. But privacy will a serious matter for the creators of LBS software, and I’m sure they will be working hard on getting the balance right between sharing location with wanted friends and avoided unwanted threats.

The major problem with the LBSs I’ve seen so far is they could more accurately be described as LBFs, or Location-Based Features. These applications don’t provide a full user social experience and don’t really stand up on their own.

As soon as Facebook and MySpace release their own location-based channel into their massive existing user bases, these LBS forerunners, as admirable as their pioneering work is, will be trumped out of the market. I don’t see significant, proprietary innovation occurring at the existing LBS firms, thereby reducing the incentive for Facebook and MySpace to acquire the technology rather than just building it themselves. Plus, any integration tasks would be as significant as building the service in the first place.

Many of the current LBSs seem to be aiming to compete with Yelp’s user-generated business review service. Again, they can quickly be trumped as it will be easier for Yelp to build an iPhone app that pulls GPS coordinates than it will be for a brand-spanking new LBS to build a competitive database of user reviews. Loopt has partnered with Yelp to use its reviews, but again, once Yelp builds the app, why won’t I just use that? Yelp already has my bookmarks and personal reviews, both which would be very useful on the mobile app.

LBS Logo Collage

Venturing a little off topic:

Imagine creating a review while you’re still at the restaurant! (Or after walking out the door if your girlfriend doesn’t approve of you tinkering on your phone during dinner.) The app knows what restaurant you’re at (as long as you have a GPS signal). It can ask you questions to prompt things you might forget later: “Was the service attentive?” or “Were the bathrooms clean?” You can upload photos of the food or interior while you’re still there.

Back on topic:

One last thing.

We don’t know how a LBS should be designed yet because it creates a new paradigm for the way society interacts.

This isn’t the fault of the current providers, but it does highlight the challenge they face it meeting customer demands and continuously upgrading and modifying interactions. For example, how often will I want even my friends to know where I am? How often will I end up changing my discoverability status back and forth? What if I turn discoverability off for an annoying “friend” but then we run into each other at the bar — will I have to lie to cover the fact that I’m digitally hiding from him? Will my phone prompt me for my status every time it detects I’m walking out of my house?

Nobody knows the answers to these questions just yet, but I think we’ll know soon enough.

I was doing some research recently into GPS solutions for flying as my father is training for his sport pilot license in pursuit of piloting his new powered parachute. Surfing around Garmin’s site, I was surprised to see the lack of support it provides for making a shopping decision. It’s not easy to pick the right device — in the automotive category alone, there are at least 31 different GPS devices from which to choose.

Although not unique in its lapse, I believe this sort of marketing shortcoming is entirely inexcusable. The most advanced shopping feature is a side-by-side comparison tool. How about a product advisor that asks questions about how I’m going to use my GPS or what features are important and then recommends the best options?

Want to navigate me to the best one?

I understand that Garmin does not retail its own products, but that shouldn’t keep it from helping me select the perfect product from its lineup at Garmin.com so I can go buy it at a nearby electronics store.

After all, who should be more helpful and knowledgeable regarding a product line than the company who designs and builds it? No doubt everyone in their marketing department could help me pick the right product if I met them over a beer at a local bar. But they can’t help me on their own company website?

This is a missed pre-sales opportunity, without a doubt. If I get to this site, I am already interested in Garmin’s products. Garmin needs to seize this opportunity and make sure that I find the right product from its lineup. Scaring me with a massive grid of options is as likely to send me clicking to a competitor as it is to present the best choice.

Keep the shopping simple. Don’t miss an opportunity to educate the customer on why they should by your product. 3 is better than 30 when it comes to encouraging the customer to make a decision and purchase.

The relatively low risks to launching a new Internet business, compared to physical ventures with higher capital requirements, also leads to exciting, experimental ventures that can afford to launch in a less-than-perfected state and then polish and revise their product as users provide real-world feedback.

But these same qualities that attract attention of aspiring startups, like honey for entrepreneurial bees, also leads to the recurring bubbles and hype that seem inextricably tied to the Internet business world.

The low up-front investment requirements and accompanying cheap maintenance costs lead to ventures with uncertain, and often completely unknown, revenue prospects. But this itself is not the problem. I won’t dispute that a business with hundreds of thousands or millions of passionate users has a realistic possibility of eventually discovering a method to monetize those customers — even if that business model is not apparent up-front.

The problem is that a profit-producing business model is not the only wrench missing from these companies’ strategic toolboxes. On the contrary, some of these ventures are so far from defensible profitability, they’re bringing a standard wrench to a metric party.

Let’s look at Slide, the social network widget company, as an example. In its fourth round of financing, they raised $50 million, valuing the company at around $550 million. They just opened an office in New York City from which to sell more advertising. If you need more background on Slide, read here.

As I said earlier, the problem for Slide isn’t necessarily that they haven’t cracked the humongous money nut that is their 170 million unique monthly viewers. Hearsay evidence says that their CPMs aren’t anything spectacular. But they will probably figure this out eventually.

The problem for Slide isn’t that they don’t already make tons of cash off their sky-high viewership numbers.

The problem for Slide is that they aren’t going to last long enough to solve the business model puzzle.

Let’s grab a few of Michael Porter’s 5 Forces out of the strategic toolbox and start wrenching on the broken machine that is Slide — let’s say, barriers to entry, threat of substitutes, and degree of rivalry, for starters.

Barriers to Entry

The barrier to entry in Slide’s industry, producing widgets for social networks, is like a speed bump in front of a monster truck. The driver might feel it, if he’s sitting just right.

Brand identity:

Almost nonexistent. No user cares who wrote the tool that allows them to chest bump their friends. They just care that they can now do it online and no longer have to risk pecular injury or social embarrassment should their super chest bump end in a super pile of flailing arms and legs.

Capital requirements:

Lunch money. It doesn’t cost anything to put your application on a social network and the network does the hosting for you. You might even have change left over for a rectangular piece of lunchroom pizza.

Threat of substitutes

Switching costs:

Again, almost nonexistent. What keeps me from uninstalling your application from my profile and never using it again? The years of experience I’ve accumulated and deep integration of my workflow with your software? Oh wait, that’s Photoshop. Nope, I can learn a new application in the time it takes to super fart on a friend.

Degree of rivalry

Product differences:

Does Slide possess a unique ability in the industry to design a widget user interface that revolutionizes the marketplace, a la the iPod in a sea of mediocre MP3 players? Nope. Their viewer advantage is due to moving first, network effects, and questionable practices in recruiting users’ friends to add an application. But now that Facebook, for example, has cracked down on runaway app invites and is redesigning the profile page layout, Slide’s previous advantages have melted away like a chocolate bar errantly placed near my laptop’s cooling fan. (I swear it’s about to burn up.)

Now Slide needs to rely on actual product development talent to provide useful, long-term solutions for their customers — not flash-in-the-pan fads, which will never scale into a large, predictable revenue stream. Investing in venture capital is already like gambling. Slide’s investors have either steel balls or empty skulls to want to scale up the risks even greater and bet big on a company, like Slide, whose fortunes ride on something as unpredictable and finicky as consumers’ flavor-of-the-week poking preference.

Not to mention that the social networks themselves can quickly duplicate Slide’s applications on a whim and erase Slide’s business model. The next day, what were the basis of an entire company are now one of a hundred features of someone else’s product.

Sliding into home (aka The Conclusion)

If you’ve made it this far, it’s should be sufficiently clear that the strategic flat tire that will drag many Web 2.0 companies off the information super highway and into the ditch of dot-com blowouts isn’t simply their lack of a business model.

The fact that companies like Slide can build huge viewership numbers isn’t a freestanding sign of success. McDonald’s gives away millions of free toys every year. But with every one, it’s selling a burger-like hockey puck or nuggets that taste like chicken. And making money off of them, too.

Right now, Slide’s products are the equivalent of Happy Meal toys I didn’t ask for. If I show up at Facebook and find a Kung Fu Panda figurine in my Inbox, I’ll probably have fun with it for a while. I might even tell my friends to get one so we can start a big plastic-throwing fight.

But just because you’re good at getting millions of people to play with your free toys for a while doesn’t mean you’re the next Google.

Slide, if you’re listening, remember this:

You need to do something unique and useful.

Uniqueness is different than novelty. Novelty wears off quickly because it’s replaced quickly. Uniqueness comes from solving a problem in a way no one else can.

Usefulness is different than full of users. Making decisions expressly to grow your viewership, when you aren’t making much money off viewers, is aiming at the wrong target. Aim to be useful, first, to just a small number of people, and your audience will grow as everyone realizes your product is indispensable.

Be unique and useful first, and eventually you will find your proverbial chicken-flavored nugget of gold.

Panel is discussing use of social media to craft a brand for a business. There is a question from the audience about whether blogging works when an employee for a company has a different perspective from the company itself.

Danielle Wiley says that she doesn’t necessarily speak as an individual for the companies she consults in PR. For example, she writes about primarily organic foods while her clients may sell processed foods.

Does this contradiction hurt Danielle and her prospects for working with these clients in the future?

More generally, can a person writing on the persistent, open web, express a personal viewpoint that doesn’t fit the mold of their work brand?

This isn’t a black-and-white issue, but I believe that the answer is a (qualified) yes.

In today’s marketing climate, with bottomless inboxes of deceitful spam and hoaxy health product offers, consumers are yearning for honest voices, even if the words from that voice don’t conform with their personal views.

Blogging and other social media is personal by nature. I would argue that blogging is almost pointless if the creator isn’t set to open him/herself as an individual with unique beliefs.

Even the blog of the largest corporation should read like an individual’s voice, with convictions and values that may, in fact, represent the entire company, but first and foremost portray honestly the writer’s persona.

Consumers can see through the smoke. They want honesty and openness. Both sides are humans and should communicate like people — voice to voice. Social media can provide that. It can help form an open communication pathway between the company and the consumer.

That’s what marketing fundamentally is, isn’t it?

This will be my first TECH cocktail conference or mixer, as I’m pretty new to Chicago (moved here in February 2008). That means there should be a lot of people left to meet.

Some interesting-sounding speakers from the schedule include:

You Can Build a Business From Anywhere
Mike Domek

Designing With Users In Mind
John Zeratsky & Matt Shobe

Getting Real Keynote
Jason Fried

How to find funding
Moderator: Eric Olson
Panel: Matthew McCall, Kirk Wolfe, Rob Schultz, Bruce Barron & Brad Feld