Comcast’s decision to cap monthy broadband usage at 250GB is being decried as the end of the Internet as we know it. Maybe so, but it can also be seen as the dawn of the Streaming Era. As the Olympics drew to a close with big numbers – 75.5 million streams (NBCOlympics.com), 40 million (BBC), another 130 million from the European Broadcasting Union, and 100 million Chinese viewers – the networks were already moving on by serving the Democratic National Convention in HD. CBS offered an after-convention netcast with Katie Couric, and CNN promoted “full and complete” streaming coverage of all speeches.

The Comcast move seems more focused on the politics of the FCC decision to rule out Comcast’s filtering of P2P traffic. But BitTorrent and other such traffic is all about downloading, not streaming, and the advent of new look-ahead streaming capabilities in Silverlight suggest that streaming can accommodate DVR-like functionality that makes the value proposition of “owning” the data on a local drive much less important.

It used to be that having physical control of entertainment and other software was critical to the user experience. Record and film companies kept accelerating the quality levels of their products to stay ahead of the pirates and the growing ability of consumers to capture and archive content off the radio and television networks. But as broadband became more available as competition between telcos, cable, and satellite increased, sharing of MP3s and DVR time-shifting had an oddly counter-intuitive impact.

First, the Netflix strategy made renting movies a less onerous process, with no late fees and a large catalogue to choose from. When Blockbuster and Hollywood Video adopted similar MVP programs, the cable and satellite companies were forced to counter-attack with on-demand offerings that were even easier to acquire and in fact were spooled from servers rather than downloaded to home machines.

This, of course, is the same shift software has undergone from shrinkwrap to service, from Outlook to Gmail, Office to Google Apps, and from the hard drive to the cloud. In effect, productivity apps are now streamed to and the data from the user. With the data stored redundantly in the cloud, we are more comfortable with a streaming situation than with the former illusion that we “owned” our data locally.

Once the user has undergone this reworking of trust, devices such as the iPhone and the Slingbox have extended the notion of streaming to the car, the hotel room, to a friend’s house, anywhere. Podcasts are still an efficient way to transfer data via iTunes to the iPhone or iPod, but with 3G beginning to make its way into AT&T service areas, soon streaming will rival satellite and terrresterial radio on the go. And the Slingbox methodology of pulling HD from home to a laptop will be adopted by iPhone users for music via bluetooth to car systems.

The shift seems to be from ultimate quality to ultimate utility, to fit the data into the time available to consume it. Streaming content is far more efficient than downloading, since you don’t need to cache all the material you don’t get around to seeing. And the growth of social networks means more and more of us will start taking advantage of streaming devices to establish relationships with friends to “share” information outside of the reach of DRM.

Once the underground streaming economy reaches a critical mass, media companies will reach some form of accommodation. Whether it takes the form of advertising supported models or the emergence of viral talent going “direct” to consumers, the end result will be the Net-based delivery of high value content under user control. Comcast’s cap will be seen not as the start of a decline but rather the flowering of the Golden Age of Streaming.

Qik has announced that Marc Andreessen and Ben Horowitz have joined their growing list of investors, and taken seats on the board of advisors along with previous investors Marc Benioff, George Garrick, Arjun Gupta, Andreessen, and Horowitz.

Qik is a mobile video casting service that sees competition from Kyte, Flixwagon, and Livecast. To get a feel for the services we ran a test here at TechCrunch comparing Qik, Kyte, and Flixwagon, ignoring Livecast because we couldn’t get it to install correctly. In the end we determined that Kyte and Qik were the clear leaders in the space, giving the edge to Kyte for its superior audio quality.

What’s surprising is that Qik has been able to compete with Kyte without significant venture funding. Kyte on the other hand is sitting on nearly $25 million in venture capital. This suggests that Qik has found a relatively cheap way to outsource their bandwidth, whether they are hosting their streaming service in the cloud or using their own servers. It is a prime example of how start-ups can use web 2.0 technology to get off the ground, and start to build once they gain momentum.

Kyte is also backed by Nokia, which raises questions about how hard the company wants to open up options for viewing and recording via other phones, most importantly the iPhone. In fact, Qik has already released an unauthorized version of its software that will allow iPhone video recording on a jail-broken device, and is rumored to be readying a way to view Qik streams on the iPhone.

Dell tossed its hat into the cloud computing ring last night, or more precisely declared its having done so about 2 years ago with a group providing optimized storage, server, and data center solutions for its top 50 customers. At a press briefing high above San Francisco on the 52nd floor, Dell officials suggested they are moving to the cloud and places in the technology stack where customers are pulling them.

For a company that acknowledges it is not about software and one not as visibly aggressive about R & D as competitors Sun, IBM, and HP, Dell has nonetheless attracted some high profile customers or “partners” as the announcement about the event indicated. Facebook VP of Technical Operations Jonathan Heiliger was careful not to position Facebook as aligned only with Dell, but by the end of this video he made it clear Dell is offering hardware that fits into Facebook’s plans for rapidly prototyping and delivering new features to an audience of 100 million users.

Today HP announced the closing of a $13.9 billion acquisition of Electronic Data Systems Corp, ending the process that officially began in May.

Under the terms of the deal HP payed $25 per share in cash, and will set up a new business group titled EDS, an HP company. HP hopes the purchase will better enable them to grapple with market leader IBM, who currently owns over double HP’s market share. The companies will combine to provide outsourcing, application development, consulting, and integration services to a variety of industries.

Both firms provide a variety of services geared to help companies run their networks, manage data, and process information, so expanding their reach should prove beneficial for HP. However in the past few years EDS has undergone significant reconstruction to improve profitability. They have lower margins than HP and have been growing at a slower pace, which could make the acquisition a liability if these trends are more than temporary.

HP may have also been enticed by the cloud computing possibilities associated with EDS’s many data centers stationed around the world. Cloud computing would drastically change the margins and potential market opportunities for consulting and outsourcing services, and allow HP to utilize EDS is much larger ways. HP has stated that they expect the deal to turn profitable by 2010.

Last week on The Gillmor Gang and this weekend on TWiT, the subject of the sorry state of the music business came up and in particular the notion of “Free Internet Radio.” Part of the discussion was triggered by a threat (plea?) by the founder of the Pandora music service to shut down. Pandora employs an ingenuous strategy based on something called the Music Genome Project, which breaks down recordings into some 400 individual characteristics, then uses these elements to predict what new music the listener might like based on what he or she found compelling in the original song.

Pandora uses this strategy to recommend new music, but it also attempts to skirt the draconian licensing and now price infrastructure of the music cartel, by only playing a proscribed number of songs by a single artist within a defined time. Gang and TWiT listener Mike Lerch quoted from the DMCA regulations to wit:

In any three-hour period, you should not intentionally program more than three songs (and not more than two songs in a row) from the same recording; you should not intentionally program more than four songs (and not more than three songs in a row) from the same recording artist or anthology/box set.

The net result is that if I input The Beatles as the representative music I’d like to hear, I get three or four Beatle songs followed by a not-so-Magical Mystery Tour of every Beatle clone that has come since the last notes faded on the rooftop in London almost 40 years ago. Leo Laporte and others on both shows (and many listeners, from the feedback I’ve gotten so far), are good with that tradeoff, finding new music at a compelling rate. Pandora’s complaint is that they’re being priced out of existence by the accelerating tax imposed by legislation that not surprisingly favors broadcast and even satellite services with plenty of lobbying muscle.

While I certainly sympathize with Pandora’s (and the Internet radio community’s) dilemma in general, a startup built on a business model designed to work within a system designed to frustrate the listener’s ability to hear what they want to leaves little sympathy from me when the squeeze is further tightened. There’s no big secret here: the cartel wants to keep prices high ans their archives shut to the Internet, and attempts to play ball with them to perpetuate that stand off are politically naive and counter productive. Rather than encourage the production of new music, the net effect is to sanctify the chasm artists, producers, and yes, companies have to cross to reach a Net-coherent new model.

As I suggested on the Gang, a better idea would be to adopt a strategy of hitting the cartel where it hurts, by establishing a Free Radio tip jar. Building on an idea Doc Searls has envisioned in his role at Harvard’s Berkman Law, create a fund to accept contributions from listeners of whatever source – brodcast, sattelite, Internet radio, BitTorrent, whatever – to recognize music. It’s similar to the public radio and television pitch drives, but instead targetted at the artists directly, not as a gift via the subscription. This fund would, when sufficiently large enough to have an impact, be donated directly to the artists for distribution at their discretion. That could include splitting it with the record company, or even the distribution chain including the very radio outlets that are choking the business. But here the artist decides.

If Pandora is serious about closing down, perhaps they should seed the tip jar with the next few months revenue and then get back in the very powerful business of being on the listener’s side, helping find new music instead of propping up the cartel by going along. As a registry of new music, they could use the behavioral signature of their listeners to chart popularity of this new music and give them a new Top Forty for the Tip Jar. And in the process, turn their slogan from a pitch to a call to arms – Free Internet Radio.

Several news organizations, including the New York Times, Washington Post, and Dow Jones, have recently demanded that the Intel-AMD anti-trust case records be unsealed. Though the move suggests that critical information may have been withheld from the public, neither AMD or Intel have expressed any problem with further inquiry into case documents.

This is the latest in the anti-trust case AMD filed against Intel in June 2005. AMD’s case is backed primarily by allegations that Intel K.K. offered rebates to Japanese PC makers on the condition that they limit purchases of AMD and Transmeta chips. Intel has denied allegations, and played off the case as a desperation move by AMD.

The two companies have a history of competitive bickering, dating back to when AMD made a living reconfiguring chips they licensed from other companies. In the early 90’s AMD licensed x86 processor designs from Intel for the 8086 and 80286 chips. However, when the 386 model was released Intel refused to provide designs, and later sued AMD for allegedly copying low level microcode within the CPU. Since then AMD has proven itself to be Intel’s biggest competitor, but has always been a very distant second place in the market.

It’s difficult to take anything from the most recent case because it is unclear who is in the right. If it be Intel, then it could be seen as indication that AMD has not met growth expectations, or is trying to shield itself from being pushed out of the market. However if AMD’s claims hold it can be assumed that they have done something to threaten Intel’s formidable presence in the space. The case is expected to go to trial in 2010.

With just the weekend between now and the start of the major party conventions, the amazing thing about the New Media is just how little it has impacted so far on the story. No major leaks about the vice presidential nominations, no blogger unmaskings of damaging revelations about the candidates at the top of the ticket, no shaky video of loose talk or surrogates jockeying for position.

Is is possible that the campaigns have learned how to contain the new viral media, or is something else going on? With Twitter, Qik, FriendFeed, and other social media platforms now in place and largely battle-tested for the coming storm of pre-baked circuses, why is the news so tightly controlled by the traditional networks?

Perhaps the nature of the underlying story of this election undercuts the technology equation. With a disruptive candidate like Barack Obama, people are looking to the media for less, rather than more drama. The shiny object fascination with radical technology change has given way to a more pragmatic mood, where iPhones have become commonplace and the rapid spread of information throughout the day and on the move has let the mainstream media play more to its traditional strengths as not just aggregators but synthesists of the news.

Real time bursts of information over Twitter and IM have changed how we react to events; the edge professionals have with insider notification is being smoothed out and delivered as a service to consumers via intermediaries who give away the data for the ongoing relationship. We use Facebook and other social hubs as early warning systems, insurance against being out of the loop when breaking information makes a difference in how you do your job or finding one.

Ironically, the very ubiquity of cameras, recorders, texting, and the rest of the *Phone tools has made it both mandatory and easier to keep things secret. Just today, a story broke ruling Sam Nunn out as a potential Obama running mate because he’s been spotted overseas with an itinerary that makes it unlikely he would be available for Saturday’s presumed announcement in the Midwest. Not only can Nunn be tracked easily for the next few days, but the same goes for all of the short listers, which means that keeping any information closely held to the last minute and releasing it simultaneously to the media via IM and email insures security.

The flattening of the information hierarchy has implications for the technology industry that go well beyond its marketing in the media. Social media platforms are competing for key roles in the new government, as evidenced by Google’s and Microsoft’s deals with each party for convention IT. Once the parties are over and the campaign bears down on November, the infrastructures put in place over the next two weeks will be used to coordinate the state organizations and feed back into the electoral college command centers where the election will be decided.

The result will look familiar on the surface, with the traditional swing states and voter groups oscillating as Election Day approaches. But what will be profoundly different is that this election and the events leading up to it will be the most recorded in history. Like a gigantic EKG, the clicks and packets that emanate out of each campaign will be gathered, mapped, and played back in close to real time, then analyzed and revised to look for fluctuations in the right or wrong direction.

Here is where the difference between search and track will prove pivotal. Search produces analysis after the fact, while track produces interactions that change the events themselves. As social hubs perform for the “cameras” over the next weeks, the efficiencies of those with real time synergies will likely outperform more historical views of the resulting data. Those micro-communities more adept at conversational politics will do better faster, and may in fact tip the election in much the same way Obama’s teams tipped the nomination process via the caucuses.

And in December, the playback of this data will prove decisive in who gets the jobs in the next administration, both in Washington and across the new Congress. While we may not see the obvious signature of the social media revolution in scoops and headlines, it will be hard to miss in the rear view mirror.

Amazon today launched a new web service – EBS, the Elastic Block Store (yes I also first read it as ‘Elastic Book Store’) for EC2. EBS provides persistent storage for EC2 computing instances, and the service is public today and available to all customers after a period of alpha testing with some users.

Previously EC2 instances were able to access temporary storage as part of the compute instance, or persistent storage only on S3 – the Amazon online storage service. The difference between EBS and S3 is that EBS allows block-level access, so that it can be mounted just like any other local storage device from within EC2 and can be accessed across servers and between instances. S3 is accessed as a web service, so performance for latency sensitive applications was never optimal (such as running a database store). EBS provides a much higher level of performance comparable to high-grade local storage in terms of both access times and availability.

Persistant block-level storage for EC2 is perhaps long overdue, as one of the criticisms of EC2 when it first launched was the inability to run a fast data store across snapshots, which made running databases or other data-intensive applications slightly more complicated. Services such as RightScale have built products around helping developers scale and manage MySQL instances on EC2. Other cloud-based computing services such as Mosso or virtual servers from providers such as MediaTemple have had persistent storage options, although what Amazon have developed with the combination of EC2, S3 and now EBS is a tiered approach which provides more flexibility to developers.

Users of AWS can from today create up to 20 EBS storage points utilizing up to 20 terabytes of storage. Snapshots can be stored to and retrieved from S3. Pricing is based on both storage used (10 cents per GB) as well as raw IO requests (10 cents per million). Storing back to S3 is charged at the standard S3 rates.

EBS is certain to open up new territory in terms of the ease at which certain types of applications can now run on AWS. The most obvious is the ability to now run high-performance and high-availability database instances, which is an essential part of the standard LAMP or RubyOnRails stack that many web applications use.

Perhaps somebody will build a simple setup and installer for running Laconica instances on AWS, with auto-federation built in. EBS will certainly make such an application, and a lot more, much easier now.

Today was the day that Leo Laporte jumped into the Tw*tter odyssey with both feet. He interviewed Identi.ca developer Evan Prodromou on one of his myriad non-stop podcasts that are also streamed live on his TwitTV channel. As have many of us, Leo has grown frustrated with Twitter’s troubles and seems to have stopped taking seriously the idea, as he put it with more than a touch of sarcasm, that Twitter “is working to restore IM service to our users.”

To the contrary, the company has long since passed by the benefit of the doubt about all things related to XMPP service and the underlying Track functionality that is now widely understood as the crown jewels of the service. Whether it’s limits on API calls or business deals with companies such as Gnip that only allow notification of tweets but require the same API blockade to retrieve them, in short, as the old Bert and I record used to say: “You can’t get there from here.”

Twitter’s continued silence on this front betrays the kind of arrogance reminiscent of the Microsoft of pre-antitrust days, when questions from users or journalists about most subjects were difficult to get asked let alone be answered. Company executives and engineers alike were walled off from the press, and opportunities for Q & A carefully proscribed to provide enough access to sell whatever the pitch was but not enough to dive down. A News.com interview with Google CEO Eric Schmidt some months ago seemed to fall into that familiar category.

Of course, since Robert Scoble’s days at Microsoft, corporate “transparency” is the new black. These days you can tell the real secrets by the length of time the questions go unanswered. The real secret with Twitter is simple: can we (Twitter) play out the clock long enough to establish enough market force to create a data stream valuable enough to auction off to marketers at an unassailable efficiency. Sort of Adsense for micro-blogging, or attention rank, or whatever you want to call a relevance engine for micro-objects.

Identi.ca and the open source Laconica code base it sits on top of represent the first real threat to that strategy, mostly because so far Prodromou has carefully matched Twitter fundamentals step by step. Laporte’s delight in realizing he could establish an instance of Laconica and federate it with other nodes was palpable. But several things emerged in his conversation with Prodromou that bear watching, and perhaps concern by those who hope Twitter’s apparent hammerlock might be broken.

For one, Leo drew some interesting details out about future enhancements on the drawing boards, including one that could easily derail Identi.ca’s forward progress. Not so coincidently, it was the much mentioned Track feature that Prodromou indicated was in the cards for Identi.ca itself. Forgetting for a moment that building Track into the Identi.ca cloud would exclude other Laconica servers from the results, the native strategy disrupts the very reason why Identi.ca proved so seductive in the first place.

Namely, that Identi.ca’s wide open XMPP data stream provided all the incentive necessary for third party developers to hook up to the new service. What better enticement than the very feed that Twitter has so desperately hoarded since May. The same one that Summize leveraged to extract 10% of the company when it was acquired. The same one that Twhirl has been denied. And when Twhirl implemented the Identi.ca stream, you had a visceral demonstration of the difference when bridges appeared to post Identi.ca items on Twitter.

You can sit there and watch it: type a message into the Identi.ca Update GTalk (Jabber) IM window and watch it pop up in Twhirl in seconds. The bridge copies it over to Twitter, and API calls surface it perhaps a minute later. But Track is all about discovery, about real time conversations between nodes that may not know, or “follow” each other synchronously. By including the user name of a target in your message to someone who is running track on their name, you can establish a real time conversation on the spot. Twitter’s @reply messages work just fine with track, as do hashtags (#keyword) and other topic cues.

But Twitter won’t let outside services access the XMPP stream in real-time; the only third party service that does this via Jabber IM siphons data off of the Summize stream but only querying every 10-15 minutes. By the time you see the Track hit, the conversation is long over on Identi.ca where it proceeds in real time with ease.

The mullti-app, multi-window hack that I just described is not friendly to those who don’t know the system’s value, but real time conversation is being used on Identi.ca to literally construct the platform. Ideas and features are debated between developers who’ve never talked, with code being constructed in the background, checked into the Laconica base, and surfacing in the core at a dizzying pace. And I’ve been using the same tools to cajole, encourage, and even threaten people to maintain the pace of providing a credible open alternative to Twitter’s stonewalling.

That’s why the potential to kill the golden goose is so unnerving. Identi.ca/Laconica’s very strength is in attracting third party developers such as Dustin Sallings, whose IdentiSpy Track feature works right now on Identi.ca’s cloud and will include new Laconica instances like Leo’s when he launches it. Building Track into the core is the same strategy that undermined Twitter’s original promise when it opened up its API and garnered the wealth of third party apps that drove so much of its adoption by users.

At its heart, the anger with Twitter is not over its wanting to monetize its invention but rather the violation of the contract we all signed on for, namely to establish relationships with our friends and most importantly friends we don’t yet know about. It’s a bait and switch Twitter has pulled, establishing the cloud and then pulling the plug on our relationships, and I for one of many take it personally.

That’s why I’m thrilled that Leo Laporte has put his weight behind the Identi.ca arrow, and also why it’s important for all of us to make sure we don’t trade one gatekeeper for another just over the hill. We need to preserve the open access to the innovation of a thousand points of light, the third party developers that attract the millions of users that give us the power Twitter has uncovered. Or else, we’ll hear that same Down East refrain over and over again.

Today SpikeSource, an open source-focused software verification company, has announced that their software certification service has been gaining significant traction amongst independent software vendors (ISV’s). The company has been heavily funded by Intel , and is now powering the system that certifies ISV applications before they are made available in the Intel Business Exchange.

The platform gives ISV’s the ability to develop applications on a custom stack, complete with a set of pre-tested components that ensure security and interoperability. It also enables ISV’s to leverage advanced Intel technology such as multi-core processing in the development process to produce scalability, reduce support costs, and accelerate the time into market. ISV’s using the service boast an Intel branded certification badge to attest to the quality of their product.

The platform is currently in use by over 100 ISV’s, primarily in the security, networking, telecommunications, and enterprise markets. SpikeSource’s Jamshed Patel claims that they are currently focusing on expansion into foreign markets, and eventually plan on designing packages for vertical market segments.

The service has potential to be enormously helpful. Alternative deployment services are generally highly manual and program driven rather than technology driven, leaving a majority of the work to the ISV’s. It should be of huge help to long tail software companies trying to penetrate the market.

IVR and VoIP provider Voxeo has been putting up annual growth numbers near 100%, serving dozens of big name companies, and getting considerable attention from VC’s in the Valley as of late. However, the company has remained largely under the radar since its founding in 2000, and has done so deliberately. CEO Jonathan Taylor explained to us how keeping a low profile while doing high volume business has been easy in this particular industry.

In short, Voxeo does its job so well that its clients don’t talk about it. When an enterprise discovers their platform they keep it a secret to preserve the competitive advantage. As a result, Voxeo doesn’t even publish a list of notable customers. Relationships with clients have been so discreet that many of their customers are listed as competitors in market research briefs.

The company continues to grow at an impressive rate, and has recently expanded into foreign markets and started acquiring smaller companies. Taylor says they are being approached by several VC firms, but will most likely not announce anything until late September. It will be interesting to see how much longer Voxeo maintains its underground profile. Based on BT’s valuation of Ribbit, they could be worth a whole lot of money.

Silverlight seems to be doing pretty well according to most accounts in its Olympics launch, suffering digs only at the hands of John Dowdell of Adobe and those unhappy with the lack of full screen display (a function not of a limitation of Silverlight technology but NBC wanting to sell the HD version of the events and avoid pissing off the cable and satellite companies.)

The numbers were big: 30 million uniques, 6.3 million shared streams, and according to eWeek 8 million Silverlight downloads a day. The New York Times even produced a Silverlight offline Reader for the Mac but unfortunately it doesn’t work on Intel Macs or apparently Firefox or Safari. I loaded it and got a menu but no window. Verdict: NBC, Microsoft, Mac fans largely happy, Adobe sucking wind and trying to make it sound like a musical interlude.

More and more, the difference between a commercial free venture and an open source free venture is hard to pin down. WordPress is a raging success, with contributed code being leveraged across personal, business, and media sites. And .Net developers now are free to build cross-platform apps on Silverlight, leveraging the 4MB mini-Windows runtime with .Net Framework’s managed code and smart DVR-like fetch-ahead and Deep Zoom features for starters.

Meanwhile, Apple’s continued MobileMe problems forced another 60-day extension of the free introductory period. The Curpertino on-demand unit’s troubles underline how spectacular a rollout Silverlight accomplished, and set up an interesting dynamic with the new 60 days timing out around the time of the PDC in October when Mesh will go into beta with developers. Oh, and Dell and Facebook are announcing something about a “partnership around the next generation of Cloud Computing” on the 26th in San Francisco. Tick tick tick…

Dell’s controversial attempt to claim ownership of the coinage “cloud computing” has officially been denied. The request was rejected by the US Patent and Trade Office on the basis that the term was “generic” and “therefore incapable of functioning as a source-identifier for applicant’s services.” This makes a strong case against Dell’s movement for a trademark, which initially seemed promising since Dell had secured the domain name cloudcomputing.com over a year ago. The decision was made on the reasoning that cloud computing is merely a type of computing, and therefore cannot be used as an identifier of Dell as a company.

Though competitors in the space were outraged at the attempt when news leaked earlier this month, Dell maintains that their application for trademark, dated March 23, 2007, came well before the term and technology had been widely acknowledged. This fact has partially been overlooked amidst the news on the issue. In retrospect the move seems incredibly bold, but I can’t help but feel that if this leaked in March 2007 the response would pale in comparison to what we are seeing now. So in all fairness, let’s cut Dell some slack, and just be happy we don’t have to come up with a new witty name for computing in the cloud.

Dave Winer used the bearhug to wrap his arms around Netscape’s version of RSS and not let go until a merged RSS was born. With Twitter’s announcement of “a minor change to the API that should have a major impact on the Twitter community” the time may be here to bearhug Twitter and unify the microblogging architecture.

The tweak “allows API clients to specify which status a status to be posted is in reply to, rather than our system assuming that it’s in reply to the last message posted by the user specified by ‘@username’.” In fact, forget about the @username nomenclature, which has caused no end of confusion and market fragmentation, and which is completely obviated by use of the Track mechanism. Of course, Twitter killed Track allegedly over scalability issues, but has kept it dead for business reasons.

But the API change makes it possible for clients to directly address each micro-object in the Twitter universe directly. That opens the door for other services to address posts from Twitter and vice-versa, which means that applications can now mix and match the parts of services they like rather than be tethered to one cloud of messages. Cue the bearhug, which appeared this afternoon in a message from Identi.ca creator Evan Prodromou: “@zach just implemented the in_reply_to_id parameter for our Twitter-like API. Way to go!”

On the Gillmor Gang today, I held Prodromou’s feet to the fire over some discussion apparently underway to boost Identi.ca’s 140 character limit. I argued that the value of such a change would be trivial compared to the lost ability to maintain the bearhug, as well as fragmenting the micro-objects that result from encouraging a different length from the market “standard” Twitter adopted from SMS requirements. The network effects of such a coalition radically increase the virality and marginalization of switching costs between networks, good for those seeking to catch up and a business challenge for incumbents.

Prodromou’s bearhug suggests that Identi.ca and federated Laconica servers will soon be able to talk to each other at the atomic item level, allowing a much deeper level of workflow for information objects. Standing as we are at the intersection of email, IM, (micro)blogging, and aggregation, it now becomes possible to orchestrate the different requirements of authoring, messaging, editing, filtering, and transacting in a unified communications system. This will bring all segments of the technology community into an increasingly larger bearhug, commonly known as open standards.

With the Internet OS, Office, media, and government all at intersecting crossroads, the bearhug seems difficult to defend against and extremely difficult to rationalize obstruction with users. Twitter has opened the door to the bearhug, and at this early stage it seems hard to see how they can disrupt the consequences of such an intelligent and ecumenical move. And let’s remember that Twitter is a David next to Googliath, and can use the bearhug just as effectively as Google has done with Facebook and MySpace with their support of OpenID and OAuth.

But Twitter is living on borrowed time with its XMPP blockade. The flowering of micro-objects opens the door to applications that leverage swarming around events and the growing availability of iPhone-class mobile devices. The success of App Store stars such as Evernote suggests that adding micro-object support will accelerate usage of the XMPP backbone. Latency in that environment will be an instant deal-breaker, opening the door for better-financed competitors to subsidize real time services to capture audience.

Perhaps the API move suggests Twitter is close to restoring Track and IM, whether alone or in concert with partners. The bearhug works in both directions, putting pressure on Identi.ca and other services such as FriendFeed to scale up and work with hub applications such as Twhirl to compete with whatever services Twitter tries to monetize. FriendFeed can use the micro-object standard to solve its problems with orphan comments, and there are opportunities for URL-shorteners, attention farms, and payload engines to build consensus as well.

Dave Winer and I are hoping to finalize plans for a MicroBlogging Camp in September, hopefully by the end of the weekend. Already there is talk of contention over the so-called Open Microblogging brand with competing .com and .org camps. And there’s always the chance that Twitter will pull back from making micro-objects accessible on the network. That’s why we’re applying our own bearhug here, by inviting all the players in the open and making it as hard as possible for anyone to say no.

Today Randall Munroe’s webcomic XKCD features an amusing clip mocking Premier Election Solutions, formerly known as Diebold Election Systems, for installing anti-virus software on their voting machines. For those unfamiliar with the subject matter, the comic suggests that there should be absolutely no need for security software on such devices, and if there is then Premier Election Solutions has made some extremely poor design choices. Premier is using McAfee anti-virus software, which indicates that their voting machines run a version of Windows. However this in itself is completely overkill for the simplicity of the task, not to mention a security liability.

The voting machines were intended to increase accuracy, security, and overall efficiency during the voting process. This would have been feasible with a simple microcontroller, but Premier seems to have taken the wrong course of action, installing an Operating System that is not only susceptible to viruses but capable of running nontrivial anti-virus software.

Diebold also has a history of performance issues with its election technology. They have since changed their name to shed this reputation, but the most recent incident confirms that the new entity is experiencing the same issues. Last week county boards in Ohio filed suit against the company for device malfunction and tabulation errors. Apparently in all test cases their tabulation software failed to upload votes from memory cards while equipment indicated they had been counted. It’s alright though, Premier spokesman Chris Riggall has blamed the malfunctions on the McAfee anti-virus software.

As XKCD points out, someone is clearly doing their job horribly wrong.

In China new methods of advertising have been turning up everywhere, and Bluetooth media company Pioco has made mobile devices the newest outlet. The Shanghai based company has set up “hotspots” in hotels, shopping malls, and other commercial areas around the city where people can receive advertisements through their mobile device’s Bluetooth connection. About a week ago news broke that Pioco would be partnering with Coca Cola to serve mobile ads for the Olympics, so we spoke with CEO Steve Chao about the details and potential of the service.

Whenever someone with a Bluetooth enabled device enters a hotspot they receive a message asking if they would like to download Pioco content. If they accept, they are shown a video from Coca Cola, or some other partner company, and then given access to things like free movie trailers, music, wallpaper, e-coupons, and premium content from companies like Disney or MTV. The incentive program is only run in these hotspots, so the conversion rates have been much higher than in regular Bluetooth ad campaigns.

Chao explained that Bluetooth is the best execution angle in China because 3G functionality has yet to penetrate the market. He stated that Pioco is prepared for market change, and will adjust their strategies to accommodate other wireless technologies when the timing is right. In the near future he sees Pioco offering location-based browsing, and creating a centralized network to manage content and track usage.

Pioco sees its primary competition from E-Xing and many other, but differentiates itself by bundling advertisements with desirable content. The company was founded in 2006, has about 50 employes, and has received very little funding. Advertising partners include Coca Cola, Best Buy, Sony, and Chevrolet.

The battle for Tw*tter took another interesting turn as Identi.ca developer Brad Williams rolled out a bridge between Identi.ca and Twitter. Register for the beta service and all subsequent posts on Identi.ca will be reposted on Twitter, prepended with a user configurable flag that defaults to Identi.ca.

I’ve been self-exiled from posting on Twitter for a month now, but the new service does for the rest of us what Dave Winer rolled for himself to bridge from FriendFeed to Twitter. When I left Twitter posting behind, I left the Twitter inputs in FriendFeed alone and added a new Identi.ca hook when FriendFeed began supporting its XMPP stream. But with the new bridge, I had to go in and cut the Twitter feed, leaving old messages intact with FriendFeed’s handy switch.

Monitoring the Twitter flow continues to be a hack, with TwitterSpy limping along on its quasi-authorized siphoning off of the old Summize-now-Twitter Search API feed. Twitter has long since proven that Track will only return when the company has figured out how to monetize the process or lock everybody else out from its cloud. Twhirl and FriendFeed provide a reasonable way to monitor the Twitter side by side with the fast Identi.ca stream, but the reverse direction underlines the handcuffs Twitter has imposed.

Switching back to posting to Twitter via the bridge stirred some debate among the Identi.ca crowd, particularly among the open source advocates who looked somewhat askance at this new service and its possibly commercial roots. It’s easy to forget that Identi.ca is both open source and openly commercial, as its creator Evan Prodromou is quick to note. But what fundamentally separates Identi.ca from Twitter in my book is not the roots of its code base but the fact that the XMPP stream is open in one and only via proprietary business deals in the other.

In the month I was silent on Twitter, the Identi.ca community quickly became a haven for an open conversation about what capabilities the new network needed to survive and prosper. I’ve lobbied so far unsuccessfully for an iPhone port similar to Twitter’s mobile client, which although limited to about 10 screens of data (same as the parent Web client) is functional with font size and formatting that’s easy for most boomers to read. Identi.ca’s Web site has no limit on going back in time, but I have to resize each screen and rotate to landscape mode to be able to read without squinting.

IdentiSpy has ably filled the Track shoes, displaying new hits within a second or two of sending them from Twhirl or the Update IM window in Gtalk or Gchat within Gmail. There’s talk of unifying the IdentiSpy, TwitterSpy, and Update IM windows, but for now you can input from any, even from one network to another with appropriate flags. With the new bridge, I can sit in Twhirl and post from the Identi.ca window and watch the posts appear first in FriendFeed and then moments later on Twitter.

As my posts began to proliferate, several Twitter followers complained. I suggested they unfollow or block me. On the Identi.ca side, some argued for limiting the @message syntax across the two networks on the theory that it would be just noise to the folks on Twitter. Again, unfollow or block. Several lobbied for a bridge coming the other way, and I suggested that not only was that not a good idea, but that if it was implemented I would drop the bridge service and wait for one that went from open to closed and not the other way around.

Earlier in the day I had lunch with the CMO of an enterprise company that’s in the process of implementing an XMPP gateway to enhance its collaboration toolset. The software literally adopts the nomenclature of microblogging, letting you “follow” people inside the firewall and even remap the UI from “follow” to “subscribe” as Identi.ca calls it. The company’s chief technologists are contributers to the open XMPP community, the CTO having served on the board of the XMPP Standards Foundation.

Here we have convergence between entrepreneurs leveraging open source contributions, open standards coalitions, and open transparency in giving users and groups the confidence to enter into social contracts for personal and professional productivity. As if to round out this fascinating day of progress, Google finally closed the hole they opened up with the misuse of Gmail contacts in exposing Google Reader Shared Items without the consent of the user.

From now on, users will be able to define “friends” overtly, and configure who can see their shared items and hide the ones you don’t want to see in Reader. After months of rising the issue and having it go largely unheeded, a series of NewsGang Live podcasts consisting of anyone who wants to call in led to one participant calling a friend at Google who subsequently called me and arranged for a dialogue with the company that led to today’s announcement.

Taken alone, these small bricks in the wall seem frail and even trivial, like the reconstruction of how an argument started after it’s over. But taken together, they illustrate the power of people to work together with just a few rules: openness, respect, and integrity. There’s nothing inherent in any of these constructs – commercial, open source, enterprise, consumer, local, or the cloud – that rules them in or out of this social journey we’re on.

Dave Winer has suggested we convene a MicroBlogging Camp to help continue this effort toward an open microblogging community. I second that idea and will work to find a venue and resources to help make that happen. If you’re in, contact me @stevegillmor on Identi.ca, FriendFeed, or Twitter, or leave your thoughts here on TechCrunchIT.

Within the last year shares of Yell, Idearc, R.H. Donnelley, and other telephone directory (Yellow Pages) publishers have dropped nearly 80 percent. Yellow Page companies have unwisely entrenched themselves in print while paper costs are increasing, environmental awareness is at its peak, and businesses and buyers are moving online. Their waning influence has forced their primary customers, small businesses, to seek other methods of exposure – the Internet.

Though many small companies have moved to the Web, only about half have developed custom domain names, and of those only a small portion leverage web elements like social media and e-commerce to drive sales. There are a abundance of tools out there designed to help small companies generate business, but distributing them to small firms with little web presence is a difficult task.

Virginia based SMBLive has realized this problem, and has partnered with broadband carriers to bridge the gap. SMBLive has cleverly built their enterprise products upon the Microsoft Sharepoint stack, allowing broadband carriers to easily integrate it with existing Microsoft enterprise software. This has enabled carriers to monetize their Sharepoint piece, and allowed SMBLive to get their business off the ground.

SMBLive provides two main products, 1WorkSpace and 1StoreFront. Both designed for the enterprise, 1WorkSpace is a simple web collaboration platform for small companies, while 1StoreFront is designed to help companies use social media and e-commerce to drive sales and build brand identity. Their solutions are undoubtedly well-crafted, but the key difference between them and the competition is their distribution model. The company is in its third year of business, and currently has partnerships with British Telecom, Telmex, Telus, and Swisscom.

Provider of 1-to-1 web personalization solutions Magnify360 has announced $2.5 million of first round funding from MHS Capital. CEO Olivier Chaine stated that the funding will be used to attain the resources and capital necessary for the company to expand and establish itself in the growing industry.

The product can best be described as a web-based behavioral targeting platform. As a visitor browses a company’s site, information like the time of day, browser being used, clicking locations, and other forms of behavioral data are gathered. The system processes this data based on a predictive model, develops a profile for the user, and determines where they are on the buying cycle. With this information page content is displayed in a way that has received positive responses from users of a similar profile. In the end, users are more effectively engaged, leading to higher conversion rates and sales.

The key is segmentation of the user base and delivering results in real time. This allows the system to engage each individual user, and in turn provides valuable demographic information about a company or blog’s user base. Magnify360 hopes this will differentiate them from Omniture and the many other contenders in the industry. This investment marks the second investment in the space in the last week, following Marketo’s round of funding on August 8th.

Dare Obasanjo does a good job of gathering together the sad sack stories of a number of startup acquisitions. The rule of thumb he suggests is that rewriting in the acquirer’s technology base destroys the confidence of the startup’s developers, who trigger a cascading loss of faith by users as the founders abandon the company. He cites Fred Wilson’s frank assessment of his Union Square Ventures’ delicious, FeedBurner, and TACODA’s fates as support.

Coming as this does from the point of view of the acquired, both posts don’t take into account the motives of the acquirer – in these cases Yahoo, Google, and AOL. Yahoo bought delicious at a signal point in the Web 2.0 bubble, when the startup’s street cred with developers was significantly enhanced by the purchase. At the time, Yahoo executives and even members of the delicious investor pool openly talked of the lack of business model or in fact concern that there was no such animal.

This was in fact a momentum buy. If there was something to the first rumblings of social media, then delicious would eventually provide a useful clue or at the very least a leg up on continuing to attract other early thought leaders such as the far more successful Flickr acquisition some 9 months earlier. And then there’s the other big reason for many of these types of acquisitions: taking intellectual property off the table and out of the hands of competitors who might be able to react more quickly with a better match of technology platform or people fit.

But what Obasanjo and Wilson may be onto is the possibility that so much of what we’re seeing right now is governed by the dynamic of a zero sum game. delicious may be losing its user base because of a mismatch of code base and the ability to innovate through a transition, or it may be obsoleted by disruptors including Facebook, FriendFeed, and Twitter. Facebook users get a bigger bang for their bookmark buck by sharing their links via a toolbar (ironically pioneered by delicious user Jon Udell), or by sucking their delicious feed into FriendFeed where it becomes submerged in the aggregation of similar signals including Tweets and Google Reader shares.

Fred Wilson sees no growth in Feedburner’s publisher business, but Google immediately gets the benefit of swallowing the startup’s feed splicing services, an early take on what FriendFeed has done with aggregation, a viral competitor to Yahoo’s pipe service, and most importantly, an historical archive of RSS behavioral targeting data from most if not all of the high value blogosphere and mainstream media.

Add in Google’s M&A’s of JotSpot and Jaiku and you may be convinced that Google has a real problem here. It didn’t take a rocket scientist to infer that JotSpot technology would never be integrated successfully, even though the Google Apps team swore up and down that it would work at a press event some 10 months after the deal. But which is more important for Google – staffing up their Apps team with JotSpot co-founder Joe Kraus as project leader or delivering a competitive offering to a Microsoft Mesh Office that is still months from political traction?

And finally, Jaiku – who needs another Twitter when Google’s strategy is to integrate social media fundamentals into its existing Gmail ecosystem? It seems more likely that Jaiku will see itself reborn at the intersection between Gmail, Gchat, and Google Reader, putting pressure on Twitter to align itself with Microsoft to survive. In the Zero Sum Games, watching the torch pass from startup to cloudkeeper is an exercise in making sure the flame doesn’t go out.