Rumors of the death of Flash are greatly exaggerated, says Jeremy Allaire in a TechCrunch guest post. Adobe CTO Kevin Lynch touts the ability to update the millions of Flash-powered devices over the network. Sun CEO Jonathan Schwartz resigns in realtime over Twitter. Nexus One updates the Android OS in realtime when I switch it on this morning. The iPad arrives in March.

Here’s another couple: Netflix streaming is now available on PlayStation, Wii, and Xbox, over Silverlight on Macs and PCs, and via 48% of its customers in the fourth quarter. The company expects 66% will stream by mid-2011, and added a record 1 million new subscribers Q4 for a total of 12 million. And this: Microsoft has released a Silverlight 4 beta client for Facebook on Windows and OS/X, with background notification, a grid UI for status updates, photo and video uploading and device access, and netbook/tablet support.

Each datapoint by itself suggests valid reasons why Flash will endure for many years on a majority of machines. Huge support among gaming developers, 75% penetration on the Web, and soon a foothold on every major phone but the iPhone/iPad. But taken together, Flash faces forces beyond its ability to cope. Whether it’s Silverlight choking off Flex/Air in the enterprise or Apple and Google scraping the cream of the developer community off the top, Adobe is being squeezed into a corner from which it can only escape by losing control of its platform.

Using HTML 5 as a rallying cry serves Google’s marketing and developer evangelism strategies, but its impact on Flash is minimal until the iPad ships. For iPhone users, it took two upgrades for the marketplace to provide a work-around with H.264, but once that was in place with YouTube it brought Ustream and other players in. At about the same time, FriendFeed enabled realtime streaming chat. Suddenly, integrated realtime streaming experiences could be leveraged to target valuable communities.

Whether it’s a Facebooked version of these technologies over Silverlight or a native iPhone/iPad version via decompiling and H.264 streaming, by March we will have multiple versions of essentially the same content running on PCs, Macs, i*’s, and Nexus One. Coupled with Netflix device expansion, holdout services such as Hulu will have to move quickly to avoid a stream of hemorrhaging customers away from what is no longer a unique offering. Watching how fast book publishers like Macmillan and Amazon have rejiggered their relationships to accommodate the iPad realities, can the networks (other than Disney/Pixar/Apple/ABC) be far behind?

Google released the Nexus One not yet a month ago, and already have provided an over the air update to the OS that enables major new features, most significantly a pinch zoom mechanism that eliminates the lion’s share of the utility gap with Web browsing. Given the higher resolution and therefore real estate of the screen, the N1 becomes an attractive alternative for catching up on the Web first thing in the morning or on the move. Indeed, it also suggests Kindle for Android would be virally received.

Extrapolate from that to the launch of the iPad and rumors that over the air updates and other data may be available when the device ships, it’s not hard to imagine both the appearance of an iPad-like competitor via Google and a dramatic acceleration in iterative leapfrogging of features. In other words, major site/app two-tracking of Flash/HTML streaming versions. If the New York Times is serious about being on the iPad’s gateway screen, a Flash-free version of its site is a minor investment relative to the value of being an incumbent or default service.

Push those dynamics out along the content supply chain and it doesn’t take an Adobe CTO long to figure out Flash tools must be quickly reengineered to accommodate both versions of these new sites and apps. Microsoft is already way ahead with its SIlverlight/IIS Media Server/Visual Studio pipeline, ready to spray H.264 streams into iPad web-based applications and subsequently native apps where the content providers maintain the relationship with customers. As Walt Mossberg said in conversation with Mike Arrington and David Carr on Charlie Rose, customers don’t care about formats.

The open standards argument currently championed by Mozilla, that H.264 is a proprietary technology with a looming cost trigger, is similarly irrelevant to customers, who will never notice where along the road to their browsers the licensing fees are absorbed. Most likely, it will be buried in the additional $5 for each book download that the iPad has moved back into the publisher’s accounts, or the delta between the iPad WiFi version and the fully loaded 3G ($329 to start.) Or we’ll simply pay extra for early release on the iPad, then a bit less on the Gpad, and so on, like the way films are metered out across cable, on demand, DVD/BlueRay.

Even there, the speed with which these models are accomodating the realtime Pads is daunting for Adobe. Even as the Academy ups the number of Best Picture nominees, many of the more independently produced films are already available on Comcast on-demand the same day as DVD. Streaming is quickly becoming the gold standard in the queue, and Flash-based venues are fragmenting across mobile and gaming devices. Oops, there goes that gamer dev advantage.

That’s where Jonathan Schwartz and Twitter figure in. Like Flash, Java has tremendous traction and the ability to act as an attention/gesture recorder for developer and customer behavior in realtime. And like Flash, Java is locked out of the iPhone and iPad. Interestingly, Google has already effectively minimized Java on Android by using Google Web Toolkit to spray Java code through Javascript onto Android devices. By spending big dollars and resources on the V8 engine to accelerate Javascript performance, Google started an arms race with Firefox and finally Microsoft to close the gap.

Inevitably, the dynamics of this new race for the middle, the sweet spot of RIA ubiquity, has more to do with the money to be made at the output end of the pipeline. Microsoft has Xbox and Silverlight, Google has its ad revenue, YouTube dominance, and growing Android Market, and Apple its gold-plated innovation chain and credit card access to the addicted customer base. Adobe? Like Sun, they have the developers, the reach, the realtime updating, everything but the fuel to drive the aggressive customer base that will pay through the nose for rapid progress. They want their iTV.

The Gillmor Gang — Andrew Keen, Danny Sullivan, Kevin Marks, and Robert Scoble — talk smack about Flash. Recorded live Friday, February 5, 2010.

Jonathan Schwartz deserves better. Sure, he’s got a rich payout from his years at Sun. Sure, he’s leaving because Ellison doesn’t need anybody explaining why the cloud is a good thing. Sure, there are a lot of hurting people who can use Jonathan as an easy target for what’s become of the dot in dot.com.

But what Jonathan did for Sun, and the rest of the industry, was to twist the conventional wisdom of the enterprise into a new shape now being leveraged by a host of successful players. Jonathan somehow got that ubiquity in the consumer space would translate into platform power. The rising tide of the social network has its roots in many of the things Jonathan was saying long before it was popular or even wise politically.

Probably nobody could have pulled off what Jonathan was tasked to do. At Oracle’s absorbathon last week, Larry Ellison reiterated his nothing-new-here cloud bashing while actually affirming the investments Schwartz made in consolidating the best of breed system solutions Oracle will use to go after weakened competitors like SAP who looked the other way as Salesforce expanded.

The rumblings at the end were that Jonathan couldn’t close the IBM deal, forcing McNeally to quick-punt to Ellison. But Ellison’s analysis of the Sun assets shows that most if not all of the value Schwartz claimed in the financial community will be reflected in revenue from Day One, that keeping Java away from IBM will turn out to be a hugely valuable investment, and that a nuanced use of MySQL as a customer-facing sales tool for the SMB market will stave off the growth of any other open source database.

As the smoke clears from this epic consolidation, what’s left are the explosive pairing of Apple and Google in the new mobile architecture, predicted by Schwartz with his relelntless observation that devices go to free. With Oracle/Sun now positioned as the fuel for the virtualization layer of the cloud, the big freakin’ webtone switch of this era, the iPad Era launches a race to spread the gospel of the financial community infrastructure across the micromessage bus and its media partners.

Jonathan Schwartz was brought in to finesse the transition from the Good Old Days to the Good New Days, and he’ll deserve to harvest irreplaceable time with his young family. It will be interesting to see him return, because he has little need to reinvent himself given his early and prescient take on what is now transpiring.

Fear of iPad is now beginning to circulate with increasing velocity. It seems folks are realizing that regardless of how many things were left off the machine, it still will be bought by virtually everybody on the planet who cares about tech and its show business arm, social media. That means it’s going to be a huge galactic success. That in turn means we have to be very afraid of Uncle Steve owning our data.

Dave Winer suggests this in his second of two posts in a row. Of course, Dave alternates between decrying the locked trunk aspects of the system’s design and crying wolf about the end result when all these mistakes end up as a raging success. In fact, Dave may have hit on an unintended truth in all of this debunking. Namely, it’s what’s been left out that really defines the iPad.

Take Flash. Please. When Jobs quarantined it on the iPhone, we all felt it was a tactical thing, more political than technical. Of course, it’s never been technical, even now when it’s kept off the iPad because it is responsible for such a great percentage of crashes in Safari or whatever. Actually, Flash is being kept off the iPlatform because It Sucks. Google’s HTML 5 liturgy is another contiguous example of how to sell the same message, but enquiring minds still want to know why we need a plug-in from a company that makes its real money from Photoshop.

The Adobe guys are terrific engineers who’ve built a wonderful ecosystem off of a hole in the Arctic Circle of computing called cross-platform ubiquity. But what happens when the OS sucks in the functionality of such a play, as Windows did to Symantec with desktop replacements, compression, and various system management utilities? Oh, and security (remember Bill Gates’ parting push to protect us from the network.) Most recently I heard from Symantec in the form of a Facebook giveaway or some such. And Google now produces software, services, browsers, and OS under the same plan. They can afford it; Adobe can’t.

So it comes down to this: if a site hosts Flash, they are making the same choice WordPerfect made in building an OS/2 version instead of a Windows one. This was when Microsoft was finally getting Windows up above the radiation layer of DOS, where WordPerfect had a stranglehold on the word processing market. IBM’s version of the nextgen OS was superior in many technical ways, but Microsoft had more money than God and they threw it at IBM and its DOS legacy stakeholders like Google did with Office a generation later.

There are certainly good arguments to be made for why Flash has legs, but unfortunately for those who make them they’re bucking Apple and its faux competitor Google. When you click on a YouTube icon in the browser, it launches on Flash. When you click on it in iPlatform it launches on HTML5, or rather the only part Flash cares about. YouTube owns most of the video market, so the user experience is that YouTube works everywhere. User bets on YouTube. They don’t care about HTML 5 or Flash, they want to see the movie, thanks goodbye.

Same with multitasking. Music evidently plays in the background with photos. Remember cut and paste on iPhone 1? No. With iPhone OS 3.0 they fixed that. Remember no video streaming? They fixed that. Didn’t have to buy a new one to fix that stuff, only to upgrade the speed and wait out AT&T’s buildout. Multitasking? Who knows whether we’ll even have to wait past the 3G iPad launch or even care, since we do most of our work inside multi-tabbed browsers. In other words, virtualize multitasking on the server side.

No USB. It’s going to be Christmas in July for the peripheral manufacturers plugging into the charging connector. No camera? If my iPhone can send clips to the Ustream site where they are automagically rendered in H.264 for live streaming, then maybe they can make their way into the Pad over WiFi or god forbid Bluetooth. Or a little clip-on at the top of the screen. The MacBook AIr is being componetized while undergoing an OS transplant. Goodbye Flash, no really. They’ll be able to hang on the way Microsoft demoed Silverlight video streaming down to the iPhone. The portability layer moves to the dev tools.

When we look at Google we think Cloud, but what’s really surprising is how we don’t notice how Cloud Apple has become. The magic of streaming has found its home with this device and the ones to quickly follow. Nothing is left out; it’s been moved to the Cloud where the bits are assembled and streamed back down. If there was anything left out of the iPad announcement, it was a better way of communicating how powerful this platform is and is becoming. No wonder developers are already complaining about only having 90 days to write the first wave of software. Contrary to what Dave Winer warns, they’re more afraid of being left out than locked in.

The Gillmor Gang on the iPad, with Nicholas Carr, Doc Searls, Robert Scoble, and Kevin Marks. Recorded live Thursday, January 28, 2009.

We’ve only got a few days to go before Steve Jobs tells us what we’re spending our money on this year. From all the leaks and positioning announcements, it appears we’re being pushed into the Pay Zone. The NY Times, the top four or five TV shows, the embargo-free bestseller. The bet is we’ll pay for same-day-as access to discretionary consumption of media. I think he’s right. But is that as big a bang as the iPhone?

In and of itself, the tApplet does not change the world or even our corner of the world. But just as with the disruption triggered by the iPhone, this new disruption will move beyond the carriers and into the center of the creative core of the netertainment and information industries. In turn, this new wave of video, music, and text will quickly overturn some of the major stakeholders and rewrite how we spend our time at work and play.

It’s hard to think far enough back to remember how we used to use our computer time before realtime stole onto the stage. Back before my MacBook Air, which turned every other computer in the place into an appliance: the MacBook Pro for rendering video, the iMac for Web site design, the PC for nothing. Back when software was something I paid for, music something I shopped for, television something I set a timer for.

The MacBook Air’s disruption was the strategic removal of an internal CD/DVD drive. It declared independence from physical media, and bootstrapped existing devices to serve as feed machines for the rare need to rip a CD or backup a file for sneakernet. USB drives quickly eliminated even that requirement, and the move to cloud services sealed the deal.

Streaming media rushed quickly into the vacuum of tangible media. Once the location of the actual bits was made irrelevant by look-ahead caching, we quickly learned to validate those services which allowed us to share pointers to the material rather than the downloadable enclosures. Identity online became the control point for micropayments, and the incentive for providing behavior and social signals in return for discounts and sponsored bundling. WiFi became the razor, and the streams the blades.

In effect, we are now selling our gestures into the stream hoping to build up enough credit to buy these new devices as they reach the intersection of battery life, broadband, and social filtering. The overt and implicit affinity groups are the nodes in this realtime auction, harvesting the most elegant and intuitive of their tribe to finance access to the streams most relevant and informative of the next day’s work. Like dreams, these affinity surges work through the underlying themes, fears, yearning, and hopes we share.

Literally, what this means is a renaissance of the kind felt in the Sixties, when music, film, and political discourse conspired in a furnace of creativity. Today these devices are mere portals into this next wave, important only because of what they help to make possible. The iPhone’s genius was in combining the elements to produce a device capable of accelerating use of the network in realtime, to signal the arrival, the existence, of valuable things. Virtualized, homogenized into streams, predicatively cached to preserve the illusion of stability, voice activated to teach the network who we are.

Google has emerged as a great validator not just of the cloud model but the inspiration of the Jobs model: that we can imagine our way into the future we can only glimpse at any given moment. With the iPhone it was brain dead obvious that if the idea could be instantiated, the economic forces could be harnessed to improve the experience as more desired it. The more Apple and Google and Amazon succeed, the more they need to compete with their own success to survive and prosper.

Three machines: the Kindle, the Nexus One, the Apple tablet. Each offers something essential to the power of the creatives who will fuel this disruption. The Kindle is simple, cheap, battery frugal. The Nexus One is multi-tasking, cloud-fueled, realtime empowered. The Apple machine bridges the media across the digital shoals, most likely straddling the intersection of the creative arts now floundering in late night wars, 360 deals, and the great archives we’ve lost the right to share. These are the pre-existing conditions, just before another Golden Age is upon us.

The Gillmor Gang — Andrew Keen, Doc Searls, Robert Scoble, Sam Whitmore, Dan Farber, and Kevin Marks — on the Tablet Wars. Recorded live, Friday, January 22, 2010.

The dominoes are falling fast in the wake of NBC Universal’s decision to ax its experiment with late night in prime time. What seemed a simple revolt by local affiliate stations may spell the beginning of a complete reworking of mainstream media around the emerging realtime architecture of Twitter.

RSS and its podcasting offspring triggered a process of democratization that offered users a way of aggregating news and entertainment under their own control. Most media outlets constrained such access to their programming, but YouTube gave users a way to flout the law and Google a way to look the other way while shows like The Daily Show and copyrighted musical performances were made available over the net. As with Napster, free as in media morphed over time to iTunes, the Kindle, and soon the iTablet.

The disconnect between broadcasting audiences and the economic underpinnings of prime and post-prime time has reached the boiling point. Now that Twitter and its gesture-based Follow architecture has reached a critical mass, audiences can set alerts to notify them of breaking news, analysis, and commentary. If available, these nuggets of information can be played off in realtime and shared with targeted micro-communities while the information is at its most valuable. Unfortunately for local broadcast stations, this destroys a substantial portion of their revenue, much as craigslist eats newspaper classifieds’ lunch.

Follow the money and it’s streaming away from a scheduled architecture to a DVRed and eventually on-demand personalized portal. On the desktop Silverlight is leveraged by Netflix to move that disruptor (see boarded-up Hollywood Video stores) from FedEx to Instant access over the Net. On the iPhone/Nexus platform, Ustream streams realtime events over the cracked-open 3G network. How can the local news compete with an interactive identity wand that lets you download an app in seconds moments after you are told about it via your aggregator filter router?

Once the affiliates said No, the house of cards collapsed. NBC faces the same stupid choice they made when they opted for the middle-of-the-road Leno over the real Carson heir Letterman. By reinstalling Leno after the news, they roll the clock back 7 months (really 6 years) and create a monster called Conan that will destroy what’s left of the Tonight Show heritage. A Fox show will spawn a Late Night Fox show, and suddenly we go from 4 shows to 6. Talk show glut favors a new power alignment around micro-communities, where Letterman and his even funnier followup Ferguson will split the newer audience with Conan and leave Leno with a less and less valuable (and mostly asleep) audience.

Interestingly, CBS has used this opportunity to post Letterman material about the crisis on YouTube, thereby promoting their funnier shows and signaling a move to on-demand. Already CBS makes its Evening News broadcast available on-demand; will the rest of its live shows be far behind? And remember Comcast’s On Demand Online version, which provides all of its on-demand content online at no additional cost. Plug a Mac Mini into your HDMI port and you’re off to the races. This will quickly start making lotso money for the networks with micro-community strategies, which in turn will tip other networks into alignment.

Also note Google’s marketing model for Nexus: no money on advertising local or network, but clickable pitches first in search and soon in Gmail, GApps, Maps, Google Voice, and so on. Hello, future. Same thing will happen in Late Night, where YouTube “breaking news” excerpts will give way to impulse buys (look at how iTunes carved up albums into dollar-a-pop singles) and then to bundling, aka the new networks. With Nexus One and the iPhone converging in disruption of the broadcast model, producers will begin to flow where the incremental pools of money live. These YouTube excerpts not only promote the parent shows but the new bundled streams that alert us.

That’s why Conan told NBC to take a hike: enough already of pandering to Leno’s watered down silent majority. They don’t want him, never did, and besides it’s no longer 11:30 anymore but what time it’s released to the network on-demand that counts. As Twitter sentiment filters across the country and time zones, more and more of us will start choosing which show to rack up based on implicit gestures from our affinities. As advertisers rush to reach these socially-cultivated audiences, the networks (studios?) will more to an on-demand model where shows are made available almost as soon as they pixelate the bleeps. Oh wait, maybe they’ll make bleep-free versions available as adult on-demand.

Once these dynamics settle in, we’ll be voting for not just the new late night schedule but prime time as well, which many of us have already started doing with DVRing House and watching Heroes with the kids, or preferably sampling the on-demand version when alerted. The conventions of 11:30 will not fade, just as waking up to the Today Show will continue to flourish. But inevitably attempts at splitting the baby like NBC tried with Leno and Conan will accelerate the decline of one-size-fits-all broadcasting and reward competitors with a free gift of material with which to market the new realtime platform.

In the age of Twitter, no one can keep a secret. That’s clear from the announcements about the Gphone, the iSlate, and the likely fact that nothing will happen at CES. Comdex has been dead for years, Oracle conferences feature endless rehashes by Scott McNealy about the Sun merger, and in general most trade shows have been denuded of any real news.

That leaves product announcements by the vendors themselves, timed to fit around the old event schedule but in fact disrupt the news flow that normally used to be captured in large multi-vendor settings. But these announcements have begun to focus around hardware devices (phones) that require a supply chain, lead time, and partners. Apple used to be mostly successful at keeping the lid on the hardware part of the equation, choosing its suppliers based as much on security as the commodity parts that help maintain a firewall by need-to-know silos.

But where the process has really broken down from an IP perspective is with the partners. And particularly the media, which has a stake in its survival on top of these devices. So we see a clearly endorsed leak that Apple will ship a tablet in March, as a result of meetings with media folks about supporting the platform. Of course they want to support the platform; the Kindle has already iTuned up the book business and YouTube the video pipeline.

It’s equally important for all concerned that Google succeed with Android and Nexus One; today’s rollout confirms how cleverly this is being played with the media. Not the pixel-stained wretches who seemed oddly more impressed than their content will let on. They are of course secretly very happy that a real competition is engaged. Apple the gatekeeper stories have been milked to death, and no one really cares what Motorola or Nokia has up their sleeve. No, the story is Apple v. Google with a twist.

The twist is that it’s actually not a competition but a mutual tag teaming of our social services. The key demo today was the voice control of tweets enabled across server side resolution engines. Every single input field on the Nexus One is voice-enabled. Sure, the voice enabled search linked up to the voice-prompted GPS service finances the new device, assuming it can be integrated into bluetooth for hands-free driving. That used to cost $99 for TomTom. But hands-free tweeting over bluetooth is huge, no matter what the anti-social media morons think.

Nexus One creates a viable pool of users trained on a gesture pattern similar enough to the iPhone to be absorbed with perhaps 5 minutes of use. Voice email as absorbed into the micro-message bus creates a huge transaction-ready set of customers who can trade access to their so-called private streams in return for discounts, special offers, and so on — provided the vendors play by the rules. Those rules are not to violate the user’s sense of propriety in the use of their private communications.

Gmail has succeeded because it established a sense of respect for our private communications while at the same time providing context-sensitive information that could be useful. Those links can be scary if you happen to notice how intelligently they are generated based on parsing of your private thoughts and business communications. Yet we understand that Google understands where the fourth wall is, where they can go right up to but not over.

Now look at the Nexus gesture stream and marvel: not just the text or the audio converted to text, but the time, screen location, zoom level, what objects and information gets shared, ignored, and so on. The map of these behaviors is incredibly rich — like turning our interests and intentions into a rich kind of braille where our fingers approximate what we are thinking in the moments in between transactions. Remember, each device is tagged to a credit card. It turns just about everything we do into a Kindle experience, as long as we feel compensated for visibility into the gesture stream.

Talking in a personal way to a public audience was the disruption that Twitter engendered. The voice-tweet tool gives us a mechanism that will work just as well across micro-communities, whether inside the Chatter firewall or cross-domain in a FriendFeed conversation. And the text processing can be used in several ways, to enhance voice mail as Google Voice and Ribbit do, and most importantly as a filtering mechanism to determine dynamically who sees what in the message stream. This is a huge disruption that Apple will have to scramble to meet, and another reason why the tablet will be so important when it appears.

Nexus One may seem like me-too, just like the iSlate will be called tablet take two. But in fact we’re seeing voice replace the keyboard on the phone, which in turn creates a vacuum on the desk/laptop for the iScreen to fill. Once we trust the conversion of voice to tweets, we’ll use private tweets to replace email. Once we trust the filters to deliver us the most actionable information in our windows of opportunity, we will also select the media services that best leverage the new platform. Once we make those decisions, the content produced for the astronauts will attract the settlers. And that’s a secret the media won’t be able to keep for more than a few seconds.

Marc Benioff commented on Facebook about Erick Schonfeld’s list of important technologies of the coming year, pleased that Erick thought Salesforce Chatter was going to be a big deal. I agree: Chatter is likely to become a key differentiator in the contest for momentum in cloud computing. Up until now, Twitter and Facebook have had the game all to themselves, with Google content to experiment with Wave and Microsoft busy launching Azure.

Chatter will inevitably go right at the heart of Microsoft’s Sharepoint strategy, which has some serious legs now that the company has wired Visual Studio up to it on the development front and Silverlight on the display side. With Windows Mobile 2010 and Silverlight Mobile still officially unannounced, Chatter has an interesting opportunity for the next three months or so to slipstream alongside Nexus One and Android. This gives Benioff plenty of red meat on the marketing front, but behind the scenes the real target is Twitter.

Chatter was pitched as a Facebook clone, and the more Facebook tweaks their status model the more it begins to look like FriendFeed on steroids. By tagging me in his Erick status update, I received not only Marc’s message but the replies of others in an email thread which pointed me back to a FriendFeedy conversation thread. So far Twitter has resisted harnessing its reply_id capability for conversations, leaving the field wide open for third party clients to (so far) pick up the ball. Robert Scoble was promoting one FriendFeed killer the other day that might go there with a promised UI overhaul, but my bet is on Facebook morphing quicker.

So now we get Facebook and Facebook Connect operating as a stalking horse for establishing an identity map that Chatter can do a LinkedIn party on. For each civilian identity, Chatter offers an extended professional identity with tools to cross-index among enterprises and their internal taxonomies. It’s like taking Twitter lists and harnessing them across affinity groups inside and across companies, leaving Twitter and its clients to carving up the customer end of the transactions. But guess where the carrots lie for those customers? The MinorityReport location-aware enterprises that have realtime deals just waiting to be pitched to those who register for stream offers.

CRM is the logical clearing house for these relationships, as long as care is taken to establish trust and authenticity at the intersection of public and private networks. I’ve often felt Facebook makes too much of the difficulty of transitioning its cloud to the apparently more open Twitter stream. With Chatter, that responsibility shifts to the Facebook Connect channel and the credibility of businesses seeking to engage with the social marketplace.

We’ve already seen the impact of service industries such as food and live entertainment (Yelp, FourSquare, etc.) Next may well be the media companies, once the tools of the trade ship over the next few months. Chatter’s application updates are a huge opportunity for the record companies to stave off a further collapse; same goes for the products formerly known as magazines. Just because the mainstream media is glomming onto Twitter as a realtime DVR index doesn’t mean private streams can’t be nailed up and distributed interactively by newmedia publishers with much higher signal to noise and the yield that comes from mining authority.

Salesforce has consistently outperformed the expectations of its competitors, not so much by some magical formula as by understanding the principles of bootstrapping pioneered by an early group of engineers and standards politcos. Google’s success at decoupling Office from our private lives has now rendered the opportunity to remake the business relationships from the inside out. Chatter can instantiate customer relationships based on what gestures we send to signal streams of our willingness to sip and save.

Chatter is not without challenges; figuring out the intersection of Twitter and Facebook will not come easily. But if Benioff continues to do what he has been doing now for the ten years of the Web Services revolution — correctly marrying a strong sense of what technologies will stick and foster consumer acceptance with the opportunities to disrupt slow moving competitors from his past — he and his company will continue to prosper.

The RSS-is-not-dead-it’s just-Twitter Lobby is finally getting the point. As Dave Winer, Anil Dash, Stowe Boyd, Fred Wilson, and whoever else thinks the time for the Bum’s Rush is upon us are proclaiming, the Open Twitter API can save the world from onecompanyitis. In five words: Bearhug Twitter and feed them PB&J until they explode. I know that’s 9 words, but in this upside down argument, it’s really 5 invented in 2001 with just 4 small one-time-only updates.

Only one small problem: Twitter killed RSS, not the other way around. Twitter didn’t do RSS some big favor by extracting the vast majority of citations away from Google Reader and its victims in the RSS aggregator wars. Twitter rolled through downtown URLville and right over every social media platform including Facebook with one simple premise. Hi, how you doin’? You are what you tweet. The next big thing since Gmail. Please put down your lunchbox and take a number.

Today URLs flow through Twitter. Ideas ship on Twitter. Software is built on Twitter. Fine: the Open RSS API means we can now write to a standard interface that lets Twitter clients become carriers for blogs, conversations, comments, podcasts, and all sorts of unaffiliated competitors. Except that’s hogwash. The time for bearhugging Twitter to the ground vanished when Facebook realized it had to clone Twitter or lose control of the social graph. Once FriendFeed created a realtime conversational data type, the race was under way to codify Twitter and extend it before Twitter absorbed the capability. Neither has happened yet, but once either company reaches that goal, there is no need for a social revolution.

This is not the IM Wars all over again. This is not Do No Evil 2.0. Twitter has produced a great service that transcends the politics of the moment, just as Gmail eviscerated email as we knew it. What part of Yum, Good do we fail to understand is bad for us? It’s a simple and inviolate contract: you do something useful and I’ll give you my data. How do they make money with that? Don’t care, they’ll think of something. If everybody likes it, you got yourself a lock on the market.

This is why the Gphone materializing is just as good for Apple as Google, and therefore all of us. Competition drives innovation, and it also drives duopolies, as Jason correctly noted on this week’s Gillmor Gang. Twitter has already created a duopoly, by proffering a public model with exceptional filtering characteristics that neatly validates Facebook’s private identity model. The power is not in a single API unification but rather an economic duopoly at the intersection of the two social platforms.

Why is the Gphone powerful? Because it leverages price supports to drive the cost of the device toward zero for the user. Google can afford to lower the smartphone entry point to match the iPhone, and in so doing set up a competitive environment where social applications can flourish equally well across both platforms. Those broadband social applications (using hybrid development tools across ChromeOS and Silverlight) provide a second wave of price supports in the form of marketing and transactional revenue. 1% of everything that moves is plenty of a business model for Twitter, Facebook, Google, Microsoft, and the rest of the global economy to boot.

This doesn’t mean that there’s no room for the little guy, the small developer, the open source aesthetic, the impulse to contribute to the community. It just means that painting these companies as evil or controlling or untrustworthy begins to say more about the motives of those who attack them. Of course Twitter can be disingenuous when they remove services for “technical” reasons only to sell them off to Microsoft and Google for millions of dollars when they rebuild their infrastructure. But did that slow down adoption of the service or the proliferation of third party apps? Is Facebook slowing down as it tramples privacy?

No and no. Twitter continues to build out its dominant social array of overlapping follow clouds. Lists and firewalled retweets may keep Scoble and others busy, but until realtime conversation is enabled, Twitter will be valuable mostly for its ubiquity and trigger mechanism for dynamic filtering. Facebook is testing Twitter posting, which when implemented will become the laboratory for FriendFeed style aggregation and realtime chat. Put simply, Facebook will become the hybrid of both models, forcing Twitter to enable threading to contain the damage to its authority model.

We’re seeing a realtime negotiation between these two leaders of the social revolution, with Benioff, Ozzie, Jobs, and LarrynSergey waiting patiently just off camera. It’s a good time for the Open Twitter API guys to declare victory, but it would be nice if they stopped sliming the socialcos and bigcos who get it just as much.

As we prepare for our next RealTime CrunchUp on November 20th in San Francisco, we’re seeing if anything an acceleration of the phenomenon known as RealTime. Startups, cloud platform vendors, the open standards community, and virtually every software and hardware category are being refreshed and reinvented in the new model. And while there are many familiar players talking and to some degree walking the RealTime walk, some have been busy for years building and deploying the fundamentals of this “overnight success.”

A few weeks ago, I traveled to Las Vegas to attend IBM’s Information On Demand conference, and took the opportunity to sit down with Big Blue’s Steve Mills, Senior Vice President and Group Executive of the IBM Software Group. In English that adds up to Steve being The Man at the helm of IBM’s embrace of Web Services, with the software group accounting for one quarter of IBM’s $100 billion business. While others have partied down on Web 2.0 and its various social themes in perhaps a more outward facing way, it turns out IBM is very focused in the same areas, albeit with an eye toward leveraging its deep relationships with the enterprise.

If raw information accounts for the lion’s share of useful data, IBM’s investment in analytics and “mining the nuggets” suggests the company’s history of eating its own dog food with early realtime technologies like Notes and Sametime will bear fruit as IBM begins to share its best practices with customers. But what of the TwitterSphere, the social media stream of micromessages — does IBM see what they call sentiment analysis as a different animal than the internal data that runs corporate systems? Mills says yes, citing IT and regulatory concerns about closely held data leaking across the firewall.

But when I cite competitors such as Salesforce who are rapidly harnessing social relatime data with their CRM and SFA applications, Mills says IBM is doing the same thing with its Lotus Connections technology when customers ask for it. “You have to allow these scenarios to exist if the company wants that scenario,” Mills says, noting that some companies would rather enable what they can’t stop and take advantage of the wave without being overwhelmed by it.

Mills says about half the IBM population microblogs today, using incremental additions to Sametime built not on open source but what Mills delineates as open standards. He sees microblogging as a way of triggering people finding people, with swarming around topics and events producing positive collisions. When I suggest he and his troops are real adopters of realtime, he suggests the word “fanatics.” This is a long-time IBM strategy of amortizing its development (and acquistion in the case of Lotus) costs with internal usage, then rolling the results of that experience out to its army of customers.

Mills was not sure companies would be ready for this free-wheeling technology in the face of regulations and data governance, but was pleasantly surprised when it took off like a rocket. “Businesses were more ready for it than we had thought,” and Mills sees a fairly profound shift as RealTime takes hold. “What’s acceptable to people today is probably something beyond anything they thought they would be doing ten years ago.”

As avid users of the stuff, IBM’s view is that the speed of the stream is not so much to be coped with as to allow the interactions to occur. “There is tremendous value if your company has a culture of problem solving…. There are cultures that are very internally competitive… that don’t want to share,” Mills debates. And he knows where Big Blue comes down on this, saying there’s no company in the world more prolific in its use of collaborative technologies.

IBM continues to invest in predictive analytics across structured and unstructured data, and IOD attendance was strong as companies began to flesh their IT muscles as the recession appears to be abating. The efficiencies of information management hold up well in tough economic times, and IOD featured many sessions and demonstrations of SPSS and earlier acquisition Cognos working together to reduce municipal costs by predicting crime and fraud and shifting resources to combat those drains on budgets.

For Mills, the experiment begun 10 years ago formerly known as Web Services has been wildly successful. The mix of service oriented architectures (SOA), Web 2.0, social media, ubiquitous bandwidth, and low cost microprocessor technology allow us to instrument and analyze the world around us as we’ve never done before. Is it good for IBM too? Mills says IT has always made its own market. “This is the most adaptive tool that mankind’s every created…. Who would have thought this would have been a $1.2 trillion industry?” That could double in size in 10 years, he predicts, as operating and capital expense from other unrelated areas get converted over into IT.

For years we’ve been told the key to the future is the Open Web. And for years it’s been true that taking the open path eventually pays off. You can’t deny the power of open technologies to disrupt the incumbents, whether they are operating systems or carriers or the media in general. Arguing about what constitutes open can be entertaining, but in a world where realtime dominates, we are starting to move on to capture the value of open for ourselves, in the private Web.

As social media clouds become more resilient, we are trusting them more. Twitter lists are a robust signal that the company has moved from keeping up to encoding the value of its network. We won’t see many new stars as lists proliferate, but rather a better sense of how to model the new media forms that micromessages enable. Boiled down to vertical niches, lists are the instantiation of a way of looking at the Web, a kind of Yahoo 2.0 based on people aggregation rather than sites or topics.

But what value do these lists have in raw form? It feels like a Wikipedia page, where you learn not to click on hyperlinked words for fear of getting lost in ever-cascading tangents based on ever-more generic topics. Instead, you rely on the intelligence of whoever constructed the page, scanning for clues as to authority, serendipity, social characteristics worth capturing for yourself. Two problems: the list architecture is splayed all over the place, and we have no tools for harvesting the value.

Of course, we’re just seconds away from the onslaught of third party takes on the subject. Surely we’ll see interesting aggregations of the Top 100, the best, brightest, sexiest, etc. We’ll recognize the familiar names and ratify their positions in the new marketplace. It’s a marketplace that will have its own hierarchy, its own Oprah, its own politicians, police, and underworld. And with all that will emerge its own underground economy.

What is the Private Web? It’s the private place only we know about (or think we do.) It’s the place where our deepest fears and instincts combine to produce the hunches that drive our lives. As a parent of a teenager, I’ve seen my hunches evolve to reflect the rapid pace of social media and my daughter’s use of it. Twitter is nowhere on her radar, Facebook serves as a gas station where she pauses for fill ups, and video chat and IM are interrupted only for food, homework, and periodic audiences for the purpose of fundraising for road trips.

All of the most important parts of her life are conducted on the Private Web. This is not a good or a bad thing; it’s just what it is. I can sense her world but only by inference — more by the difficulty in understanding parts of it than any rational tool such as asking questions or withholding permission until information is volunteered. I feel like Steve Wonder, blind but with some heightened power of perception that slowly carves out information from the resiliency of the difficulty of it.

Take this exchange:

When are you going out?

In a bit.

[some narrowing to an hour, say 4]

Who are you meeting?

Uhh, Amy and mumble and whatever. [co-conspirator, someone I don't know, and no mention of whoever I want to know about, usually boys]

So when will you be coming home?

I don’t know I’ve done my homework [usually not] and it’s [whatever day it is] and I just want to have fun with my friends, Dad. Jeez. [Obfuscation of the length of the excursion to allow for audibles at the line of scrimmage to do all the stuff I should be concerned about]

Lengthy negotiation based on the hunches I’ve collected.

What’s important to understand is that my daughter already knows exactly what she wants to do and has modeled it to the best of her ability to predict the future, online and through the social media framework. Facebook tells her where the opportunities lie, texting confirms or augments those clues, voice is only used to ratify plans once the permission map has been drwan and pre-tested for potential disruption. These kids are really good at this stuff, and we are learning more from them than they from us.

Some conclusions gleaned from observations of the Private Web:

• It’s not about Twitter, it’s about what Twitter has triggered.
• Realtime is the best way to get what you want, before defensive measures can be deployed.
• Friends are important, and particularly a deep bench. If one friend becomes overexposed, you switch to a backup.
• Texting is the prime channel, then video, followed distantly by email and IM.

To unpack, last in first out. Texting is tied to a hard coded identity, credit card, device. This provides two-way leverage, where the parent (boss) can monitor and require timely feedback, while the child (you) can meter out pseudo-information to keep you happy while navigating largely unseen on the digital network. It is much easier to project a sense of action, reliability, and strategic positioning via social media when you can downplay the value of moving physically through space and time. Foursquare will hit a wall once adults (companies) discover the existence of these breadcrumbs. Foursquare will counter by virtualizing location.

Just as location will become more editorially enhanced, so too will the role of the team in social hierarchies. It’s much more useful to have interchangeable friends or partners, so that the parent (company) knows there will be some coherent continuity regardless of conditions on the ground. People profess to value collaboration, but the strongest connections in the social graph are between groups of overlapping friends who in aggregate add up to a rational team but don’t require hardcoded roles. Put in nightcrawling terms, it’s “OK, I helped you out last night, tonight you’re my wingman.”

Realtime, of course, just plain wins. You may get away with almost a few times, but once people are onto you, they’ll start serving the ball to the weakest point. Realtime is inexorable because our sense of timing adapts to each generation of realtime and soon gets frustrated with how slow it is. How many times have you interrupted someone’s argument because you know what they’re going to say? How many times have you skimmed a post or even a tweet for some clue that it’s worth whatever miniscule time you’re now tuned to? That’s why video is right there after texting, because a picture is still worth a thousand words. “If looks could kill…”

And first but not least, Twitter is so not the point but what it has created is. The key to the Private Web is notification, not the actual content. The social signals that enable or disable connections are the new PageRank. It’s not a link but the ability to see the metadata that describes a link’s immediate value that’s valuable. My daughter uses speed to get off the phone or out of range before I can pin her down for the next number to reach her at. The data is sitting there in plain sight but where it is is obscured. Understanding her social graph in realtime is what we want to know and what she wants to obscure.

The Private Web operates on deeper emotions and instincts than we are accustomed to acknowledging. Where do I want to go? Who do I want to be? In the case of my daughter, how do I get to be who I want to be? The keys to the Private Web are shared, not at a location but via implicit and dynamic permissions to access the stream in realtime. Those who signal their understanding of this deeper value pool will implicitly advertise their value, and encourage us to request permission to share with them. Those deeper conversations will contain higher value as we trust those who share them to keep them private to the group who values them.

Twitter may not support conversations very well, but it provides clues to where the Private Web exists. These conversations live in the cracks between the public stream and direct messages, hidden either by obscurity or purpose. As they become more useful, the tendency will be to make them public, but in doing so they will lose that unique quality of trust and value. Instead, these private conversations will grow, until everyone is participating.

I spent this week at John Battelle and Tim O’Reilly’s Web 2.0 Summit, and thoroughly enjoyed myself. Partly because MG SIegler was on fire, doing a hybrid live blogging/news analysis stream that let me mine the hallway conversation, and mostly because John Battelle poured a ton of research and preparation into a relentless pursuit of the “story” — namely Twitter. John asked the questions we all wanted asked, leaving plenty of time to relax and enjoy the moment when the Big Guys finally showed their cards.

We’ll soon see how well these cards are being played, but for now the one fundamental fact is that, as with Noah, there are two of everything. Twitter and Facebook. Google and Microsoft. Scoble and Scoble (the one at the top of the thread and the one at the bottom.) This is very important because it undercuts the rationale for throwing FUD at the BigCos by turning us all into Missouri. If there are two locked trunks (varying degrees perhaps or not, doesn’t matter) then we can make up our minds for ourselves. The result: a valid user contract.

The reason a valid user contract is important is that it shifts the argument from who’s doing what to whom to what are we agreeing to do with our data. We may have argued over the value of Track on an individual basis, but this week’s announcements underline its value in aggregate. The hostility over the embargo of realtime search eased when FriendFeed opened things back up with realtime conversation; now the Facebook acquisition is being used to restart the notion of exclusion. But it has much less force once we notice that, just as with the Fail Whale, FriendFeed will continue until it morphs into a Facebook hybrid. We will continue to have a choice, and will validate those, preferably two, who continue to scratch the aggregate itch.

Viewed through the lense of the power of two, big memes like scalability and market force take on a different hue. What does it matter to me how good Windows 7 is in the abstract, as a revenue splash for Microsoft or as a funding mechanism for whatever the company is trying to do in the WebOS era? Not a lot, but certainly much less than in the context of OS/X, WebKit, iPhone, Android, etc. In context, Windows 7 drives the motion of the two forward. It means that Google Voice drives Apple to drive AT&T to open the door, while driving the Android ecosystem to firm up its AppStore and bake out its alternate proposition. It’s like what Tim Berners-Lee is doing, playing the US and UK governments off each other in a race to document transparency.

This counter-surge disruption draws its power from the elasticity of the network and the cloud computing model. Next to this inexorable self-correcting dynamic, the politics of both FUD and silence fail miserably. If the sound sucks on a Startup School webcast from Berkeley, wait a half hour and the chorus of Fails prompts a fix. If you have to leave to drive to the event, get someone to patch the feed into Ustream so you can monitor from the car. If the car doesn’t play iPhone app audio, get a car that does it right. These micro-decisions in ones and twos make a small ripple; in a cascading social wave, you get Twitter and FriendFeed and Facebook and Google and Microsoft. And in that world, you get a new media model.

The mistake (if that’s what it is and not the fuel for progress) that’s made in identifying any one node as directly competitive with another is that the least important aspect becomes the defining metric of success. In fact, FriendFeed is wildly successful because it does not compare directly with Twitter or Facebook in scale or “user friendliness” but rather creates the ability to do things in the context of those successes. If Twitter lists make some of those FriendFeed processes possible in the larger platform, it only accelerates the value proposition of the aggregate tools. The barrier to entry is in finding complementary roles for new players beyond the first two or three.

Evean Williams’comment about there being room for both Twitter and Facebook may have been good politics, but it also reflects the larger reality of the power of two. Minus Twitter, Facebook remains trapped in its internal domain, without the escape route opened by Adsense to allow Google to achieve scale to create pressure on Microsoft. Without Facebook, Twitter has no vehicle for moving into the larger company’s private (and enterprise) market. FriendFeed is as much the structural backbone for Twitter as it is for Facebook, and Williams’ comments about not seeing two-way synchronization as particularly useful between the two clouds was the least perceptive comment he made at Web 2.0. In fact, the power of two will mandate full sync whether he likes it or not.

Forget the noise about FriendFeed and its founders being elites or two engineering-focused or whatever Silicon Valley spam you hear. If you’re looking for signals about where this thing is moving, look to the voices that are making the turbine spin. It says nothing about the various entities that make up the technology environment, negative or positive, to deride any one node. Commercial, social, open, pay-per-view, whatever. The most disruptive thing I saw on stage at Web 2.0 came from ComCast’s Brian Roberts, with the beta on-demand service that erases the boundary of the TV and the computer. This has gone wll beyond the politics of exclusion, the swiftboating of any individual, company, ideology, format, or layer of the stack. That won’t stop the sniping, but nobody really cares.

I went to a birthday party this weekend where I ran into a Facebook guy, a smart guy who asked me to go off the record. In fact, the whole party was supposed to be off the record. So I ignored the off the record part by insisting that I already knew the thing I was being told, and then I told him on the record what I thought was about to happen for Facebook. This being my usual m.o. which is to insist on not being NDAed except for things I don’t really want to talk about anyway, like the next version of Office.

That way, I can just make up what I want to have happen, never breaking any confidence and yet at the same time painting as plausible picture of assumed reality that it is hard to deny or in fact slow down. So here’s what I told the Facebook guy: the company has at most 3 months window to absorb FriendFeed and open the Everyone News Feed, and if that’s true (again, making all this up) then the messaging about how that’s going to work must begin immediately, like in two weeks. Then I went home and saw MG Siegler’s post and Scoble’s remake of Frenzy on FriendFeed.

OK, so I was off by two weeks. The noise about the death of FriendFeed is already off the charts, and the proof is in the lack of rejoinder from the FriendFeed team. As in: of course FriendFeed is not dead, and here’s what we’re going to do to remake Facebook in the next few weeks. Actually, that is indeed the message from Twitter, what with Lists and ReTweets and the return of Track just as soon as, well, sometime next year or so. No need for FriendFeed real soon now, because these Lists will soon be carved up and meshed together into an authority stream by the 3rd party developers.

Siegler nails the one provable negative about FriendFeed Facebook edition which is the lack of any innovation moving forward. The one thing the FriendFeeders didn’t get in under the wire before the money arrived was stream splicing, the ability to mesh together lists into an authority stream. Is that coming soon from Twitter either? Nope. So the antidote to FriendFeed stasis is Twitter right up until stream splicing is enabled… by who? As of right now, that would be via the FriendFeed APIs. If Siegler/Scobler are right, the danger of doing that is iterating on a dead API.

Here’s where the FriendFeed is dead rumor falls apart. OK, you’re Facebook and you’ve just spent $50 million or actually $15 million plus NetWhuffie stock. Now we sell the deal as a talent buy, which of course it is because the talent built the damn thing. We put Brett Taylor in charge of the platform (API) and Paul Buchheit in charge of something else he hasn’t said yet. So Taylor can still deliver stream splicing, just not in the FriendFeed context. Buchheit, the Gmail guy, now what do we do with him….

Remember, where were the FriendFeed guys when the clock was stopped. They were streamlining not just the API but the architecture of what used to be rooms and what was now groups. Subsumed into that construct was the wonderful Imaginary Friend notion, another way of saying how do we capture individual streams and normalize personal and group communications. Meanwhile, RSS is dying and with it readers of same, and we begin to see seedlings like Threadsy and Brizzly popping up to address the vacuum. Can we assume the Gmail guy might be in a good position to noodle down on this, particularly given the Google Wave fork under way across town?

Obligatory Beatle analogy: I’ve spent the last few weeks partying on the Beatles Mono Mixes, in particular the period that began with Rubber Soul, followed by Revolver, and then jumped ahead to the White Album and its companion Part II, also known as Abbey Road. In just two years, the group transformed themselves from lovable moptops into four individuals who wrote music to avoid board meetings with accountants (Something) and seers who mixed Tibetan chants with backwards tape loops (Tomorrow Never Knows.) At the time it seemed like a lifetime, but in mono as they blended this stuff together it takes on a sense of purpose and inevitability that belies the official storyline.

In effect, with Abbey Road they tied up the loose ends of the White Album’s API and architecture, injected the realtime nature of Revolver and the betrayal of Norwegian Wood, and sold the company to EMI on the promise of new records from a group that had already broken up. Listening to the mixes and reveling in the deconstruction of Beatles RockBand, you can see how intricate their alchemy became during those brief two years, and how valuable it would become for the ages. As David Crosby said recently of a CSN project to do cover versions of favorites, when it came to the Beatles, they’d work up one or another from memory and then give up after listening to the original.

This then is what Facebook bought, or rather invested in: the best work and that yet to come from this group of engineers, strategists, and explorers of realtime. It’s easy to forget how completely wrongheaded it was to attack the realtime experience, how to this day Wave is reviled as an unbridled solution to a problem that doesn’t exist. What are people afraid of to fuel this alleged stampede for the exits, particularly given that there is no credible replacement for many of its most addictive features? The very hysteria of the charge, a cry for no one, a love that should have lasted years.

More likely is that we’ll see a healthy battle for the legacy of FriendFeed between Facebook, Twitter, and Google. First will be the conversational flow, still a pathetic hack in Twitter, possible in Facebook only with a fast (three month) Everyone newstream rollout with 2 way Twitter/Everyone stream sync. Never mind the Web site; this has to come from the API, complete with granular tools for filtering the flow by data type and guaranteed RSS-hubbed delivery. Facebook must invest quickly in stream splicing to make filtering useful, and Twitter Lists give them the room to build it while no such tools exist on the Twitter side.

Second, if there is a second after that first takedown, is splicing email and personal FB data into the stream, through a combination of intelligent push into email for filtered stream data for mobile clients and harvesting of the Twitter follow and List social graph as an open directory outside Twitter’s control. Google has a play here with Gmail, but they need to drive here with Wave taking a backup role rather than the other way around. Buchheit is the key here, regardless of who does it, and Twitter’s lock on direct messages needs to be factored in in the Facebook sync planning, something that didn’t survive the cut in the FriendFeed lockdown.

Yoko didn’t break up the Beatles. The Beatles did. FriendFeed isn’t dead. It’s just getting started. And the walrus is Paul.

Now that Google Wave is trickling out into the water supply, I’ve been sucked into “playing” with it alongside FriendFeed, Yammer, Skype, and email. Erick Schonfeld insists on discussing a project we’re readying, and unfortunately I’m able to sign in from my iPhone. The FriendFeed direct message interface is not exposed on the iPhone version, and Skype makes me feel stupid for entering a ping and then watching my battery indicator drop while waiting for some signs of life. In this environment Wave suddenly is acceptably lousy.

I’m down at Oracle’s OpenWorld event, which lands like Normandy on Howard Street with a massive tent that this year has proved helpful in the rainstorm hitting full force. The occasion was Salesforce boss Marc Benioff’s quasi-keynote in a small theater just off the main Moscone hub. I caught up with Marc after the presentation at the Salesforce booth, a massive presence punctuated by a giveaway of two SmartCars or equivalent. As Marc suggested, they were one of three exciting things at this year’s conference.

The first was the strange Scott McNealy/Larry Ellsion co-keynote on Sunday night, a delayed-on-account-of the-EU swan song by McNealy that picked up midsentence from his first take at JavaOne in June. Jonathan Schwartz was nowhere to be seen, though his number 2 John Fowler was given a visible role in the proceedings. Scott seemed determined to thread the needle of continuity with the old Sun vibe, but even Ellison’s rosy words of support for MySQL and IBM badmouthing in favor of Sun hardware did little to alter the truth that Sun survives only in its products but not the ideas that might have been coming.

Ellison made it clear in recent days that he’s still stuck on his who-cares-about-cloud-computing schtick, but Benioff for one thinks he’s missing the obvious. While Oracle allowed Salesforce to team up with Michael Dell in this little alternate conference within a conference, Benioff seemed happy to promote being right about the cloud in the midst of the lion’s den. From my vantage point at the back of the theater, there was a small hemorrhage of attendees when Facebook/Twitter integration with its Call Center and CRM services were demoed. But if 10% left, that meant 90% got a message 180 degrees from the show-wide Oracle Fusion meme, Marc’s third exciting theme.

So it will go with Google Wave, as it begins to penetrate the legacy environements of Gmail, Gchat, and Apps. Right now it’s a red-haired step child of both the cloud and the stream, pretty much useless in both courts. The more that user feedback intrudes, the more Wave will devolve to an email clone. But if Google resists that impulse, something big is likely to happen. This is not about user experience; it’s a war for control of the Google realtime platform, and the central mechansim to slow down Facebook and Twitter. As such, they need to fail, and fail fast — and then start integrating with or absorbing Gmail and Apps.

They can look no further than Yammer for tips; the Twitter enterprise clone has rapidly expanded its rich clients on the desktop and the iPhone to provide push notification at a precisely the time we need it. In particular the iPhone app is suddenly more useful than email, with new messages indicated on the icon as they are received (42 at the moment) and direct messages popping up in a Push notification. Email has too much flow and not enough filtering to avoid constant interruptions by needy PR and the like, and forget about Twitter or even FriendFeed in their current firehose status.

Wave could grab this away from Yammer with little trouble, but the big problem is one of focus. The prize is stream control, the metering of stream dynamics and some sort of pass-off to a stream feed that can be consumed after the high order Yammer-type business flow is absorbed. For now, Wave can co-exist with FriendFeed/Facebook, and ignore Twitter and email. That leaves Skype and Google Docs traffic, which suggests that Gmail and Gchat integrate Waves as a new datatype to be launched into once pressing messages are triaged.

A strategy begins to emerge: high priority messages, Wave document discussion, stream maintenance, and email/presence monitoring. Using the Oracle/Cloud example, start pilot cloud projects, task IT with building hybrid on-premise “private/public” clouds, then negotiate with hosting and virtualization layers as M&A activity drives the move to cloud consolidation.

Wave sucks in its implementation, in its stonewalling of our need for priority stream filtering, in its confusion about its entry point into Google, or vice versa. But that will get sorted out by brute force, more likely by Facebook and FriendFeed integration, and whatever Twitter can buy in house to avoid cannibalization by Track invaders from their increasingly quarantined thrid party vendors. And Microsoft and Apple loom to mop up if Google slips too much or dithers too long, which probably means they won’t Wave may suck, but it won’t matter for long.

For months now we’ve been wondering when Microsoft was going to start making moves in the social media space. Rumors of talks with Twitter have been swirling at all levels of the company, but now a subtle re-org may shed light on what Microsoft might do internally to shore up its presence in the RealTime Wave. Chief Software Architect Ray Ozzie has announced the formation of Future Social Experiences (FUSE) Labs, a new group led by general manager Lili Cheng. FUSE Labs is being seeded with a range of related talent and software by combining much of Lili’s Creative Systems Group with Rich Media Labs and Startup Labs in Cambridge, MA. In the past, she’s been able to move social technologies from the labs into product.

In an internal memo, Ozzie talks about the growing vortex of social media and realtime:

For many years, technology-based ‘social’ innovations have been most commonly viewed through the lenses of communications and collaboration: messaging, chat, calls, meetings, conferences, co-editing, document sharing, collaboration, multiplayer gaming and the like.

More recently, many factors have begun to transform all that which is ‘social’: the ever-present, high-bandwidth internet both wired and wireless; the ease of connecting people; the dramatic rise in digital cameras, camera phones and ‘app-capable’ phones; net-connected game consoles & TVs; and so on.

Myriad scenarios involving the notion of ‘social’ have now gone far beyond communications and collaboration and are transforming experiences that are key to our customers and key to our business, in leisure & entertainment; productivity & teamwork; experiences extending how we use the OS itself.

The three groups being combined have concrete skills and code in areas where ‘social’ meets sharing; where ‘social’ meets real-time; where ‘social’ meets media; where ‘social’ meets search; where ‘social’ meets the cloud plus three screens and a world of devices.

FUSE Labs will bring more coherence and capability to those advanced development projects where they’re already actively collaborating with product groups to help them succeed with ‘leapfrog’ efforts. Working closely with MSR and across our divisions, the lab will prioritize efforts where its capabilities can be applied to areas where the company’s extant missions, structures, tempo or risk might otherwise cause us to miss a material threat or opportunity.

Cheng, who will report directly to Ozzie, moves from Microsoft Research (MSR) and her Creative Systems team, which most recently produced Kodu, which teaches kids how to create games and stories on the Xbox. Previously, Cheng was in the Windows division where she managed the User Experience teams for Windows Vista. Before that, she ran the Social Computing Group within MSR, which developed projects such as Wallop and VChat. Cheng first joined Microsoft in 1995 as part of the Virtual Worlds Group within MSR.

Reading between the lines, Cheng’s ability to surface technology from the labs has now been focused on more immediate concerns. This mirrors Microsoft’s success with Bing, which has emerged with many MSR features as part of its well-received search engine. Most recently, some of the Visual Search features debuted at TechCrunch 50 take advantage of Silverlight deep zoom technologies. It’s not a stretch to assume that these features will be laced throughout whatever social media constructs might as Office Web Apps hit the beta streets later this year.
Cheng will retain most of her original team from Redmond while traveling to Cambridge to consolidate the other teams. Kostas Mallios, general manager of the Rich Media Lab, will continue to report to Ozzie and take on business development responsibilities assisting the incubations within Ozzie’s org. Reed Sturtevant, managing director of the Startup Labs in Cambridge, MA, has decided to pursue interests outside Microsoft.

Photo credit: Flickr/Joi Ito

AT&T’s decision to allow VoIP onto the iPhone changes the balance of power in the communications industry. The move underlines Apple’s dominant position as the prime mover in converting the phone into the core identity container on the network. As Mike Arrington intuited, number portability via Google Voice was worth more than the Apple device, at least for the political purpose of calling the issue to the floor.

It will be interesting to see how this plays out in the relationship between Google and Apple, but far more important than that cleanup operation will be the effect on other identity firefights. In particular, the SideWiki conflagration, otherwise known as Hey, Get Off My Lawn, threatens to alter our perceptions of what constitutes the basic unit of Internet communications.

If the most recent era of Net value has been dominated by the architecture of Page Rank, SideWiki and other realtime intermingled services including Google Wave, FriendFeed, Disqus, and Echo are just the first cuts at an atomized page that bases its content according to the identity of the viewer. Today, the look and feel of the “page” is determined by the viewer’s profile, which identifies the groups, communications channels, aggregated services, and “friends” they belong to. At its simplest, a browser detect delivers an iPhone interface to those users. At its more complex, FriendFeed filters content based on social data from many of these profile sources.

But SideWiki, PubSubHubbub, and Google Wave seem much more intimidating because of their actual or virtual support by a dominant player. What might seem acceptable writ small (realtime discussions attached to streaming video services on FriendFeed) suddenly appears threatening when viewed through the lens of Google patronage. Never mind that these so-called BigCo strategies are laced with open technologies, standards, and evangelists hired away from the open source community. It’s still a modern day Medici who rules with a benevolent velvet fist.

That of course provides an opening for the so-called Decentralization crowd, who argue that size does matter and that Google can’t be trusted any more than Microsoft or Apple was or is. Only a small band of new patriots can employ the open techniques. If a company starts small and then achieves mass (Twitter) then the analysis needs adjustment. At some point, these startups turn from being the good guys to the bad guys. Of course, the idea is that you should trust the new guys now that the old new guys have something to lose.

This is one of the problems with the success of RSS and, to some degree, podcasting. They appeared to be revolutionary in their disruption, but in fact tended to reinforce the medias they supposedly replaced as they gained traction. While we were busy enjoying the excitement of penetrating the closed walls of the media club, we conveniently overlooked how the winnowing process of the hunt would look a whole lot like the show business we were trying to break into.

The business model (or lack of it) that we accepted as the opportunity cost of getting in the game proved less acceptable once we were inside the circle. Debates about with or because did nothing to change the reality that in a world of unfettered access the index became the barrier. And when the index shifted to a more immediate and simpler technology (Twitter) the money flowed with it and away from the technologies that opened the door. The same thing happened with the carriers.

The iPhone brought down the wall of voice by transferring the index from the phone number to the URL and the new identity. As Web usage grew, the need for more powerful filters drove the increased value of our social addresses, making voice less significant as the gatekeeper to our attention. Twitter quickly gathered momentum by aggregating IM, email, blogging, and rich media under a single apparent transport, and its follow and track tools proved more fine grained and precise than the legacy alternatives. From there, it was only a short hop to money flowing into those priority lists as they became the new gatekeepers.

SIdeWiki appears to be a hijacking of the so-called original content of the blog post, but perhaps that’s looking at what’s happening through the other end of the telescope. In fact, SideWiki and Wave and Twitter are where the index is, and the posts are looking more and more like comments on the stream. Of course, that raises the specter of lock out by market force, and signals the attacks on the SUL, Google’s scale, and Apple’s Walled Garden.

But success at disrupting this grand conspiracy of size — VoIP coming to the iPhone — does not mean failure even for the so-called vanquished. In fact, the big will get a lot bigger, as Google and Apple have now been blessed by government pressure to provide the fruits of an effective alliance without the threat of antitrust action. That’ll teach ‘em. And SIdeWiki will be pushed to provide some form of control for page “owners” that will likely involve some available identity system to white- or blacklist offensive comments. Oh wait, we can use the Gmail contacts and mandate Google social constructs as part of the solution. Cool, no more clumsy backwards engineering of the Gmail social graph. The government insists.

It leaves us to ponder the rationale of rssCLoud and other attempts to foil the BigCos. Is there going to be a decentralized core of adoption that will blunt Twitter/PubSubHubbub/FriendFeed or SideWiki/Wave/Chrome’s control of our data? History doesn’t suggest that outcome. I think people are making a fundamental judgment about the framing of open v. closed. Steve Jobs bet that our desire for control of our identity would trump the hiccups along the way to that reality, and AT&T is validating it for what it is, good business.

The iPhone continues to show how a hybrid of open and closed has staying power with the voters. As long as it delivers increased opportunity, nobody really cares how it works. Faced with a shortened URL that requires a leap of faith, we opt for a social cloud that over time produces a good result based on the power of our peer relationships. The tools that give us the choice of modeling trust relationships will do better. Over time, we and our friends will gain more from faith in our harnessing of identity than fear of its dangers.