When people come up against the realtime experience, they have one of several fundamental reactions. The first, and most pervasive, is excitement, following almost immediately by mistrust. This is great, followed by How can I keep up with this? Next is bargaining: attempting to manage the flow through a combination of filtering and exclusion, reducing the noise but also in the process the surprise, the What you don’t know or don’t know you know.

Even in that first paragraph, all the elements exist: Realtime? So what. Mistrust - you betcha. Why am I being lectured to? Too many words without sufficient context. Why am I being dropped in the middle of this crap? All real reactions, a sort of gauntlet you’re forced to run to understand something you haven’t yet thought or want to think about. That’s realtime alright.

Before realtime we had the Web page, a nod to the cerebral. Here’s a document, with a title, author, corroborative links, supportive advertising or similar model, and attendant comments, linkbacks, and related archives. RSS came along and added a notification system to an organic information space that lived at the user’s discretion outside the boundaries of the originating sites.

RSS aggregators captured the contours of this refined information in one or more UIs, the river of news popularized by Dave Winer in his seminal Radio application and the 3-pane email views most recently dominated by NewsGator’s FeedDemon and NetNewsWire. When on-demand versions proliferated, Google Reader soon became the default container. It wasn’t until Twitter that the lead changed hands again.

Today, this minute, when information happens, Twitter or some micromessaging stream, delivers the nugget first. Links, which had lost some momentum as RSS spread, regain some of their power to maintain control of the flow from one object to the next. But conversational aggregation has also become a powerful container, from two competing directions.

The first, the Track function in Twitter, allowed realtime conversations to occur between discoverable points. That is, anyone on the Twitter network could monitor a thread of individual tweets, and then, by addressing someone with an @ reply, initiate a one to one conversation. Using Track at both ends on one of the participant’s names, the conversants could continue as long as they directly cited each other or used the mutual tracked name as a kind of conversation tag. Eventually, they could formalize the relationship with mutual follows if necessary.

FriendFeed provided a more formalized alternative, first with threaded conversations and then with topics organized as rooms. Where Twitter conversations could be tracked in realtime via Track and delivered over XMPP in IM clients such as Gmail’s Gchat, FriendFeed was more leisurely delivered as an aggregation not just of Twitter but blogs, images, videos, and other services. As Twitter dropped both IM and Track, its value as a replacement for RSS readers grew along with its huge audience. In effect, Twitter became a universal controller for content, while FriendFeed captured more and more of the comment conversation around the content.

RSS aggregation had become a victim of its own success. Too much interesting content, not enough dynamic discovery of unexpected value, the growing competition from a threatened mainstream media, the quickening pace of the realtimesphere. Like the Web culture it absorbed before, RSS has spawned its conqueror. Realtime’s Darwinian efficiencies present both improvements in information processing and new problems to overcome.

Realtime harnesses social graph characteristics to improve prioritization. Faced with a limited amount of time to choose virtually unlimited resources, human filters outperform algorithms. I’d rather make decisions about how to invest my time based on a combination of what’s going on and what those important to me think important to them, than rely on filtering based on broader popularity, explicit voting, or link ranking.

A small number of Follows combined with Track produces a high degree of coverage on a daily basis. FriendFeed’s new realtime tools let you create imaginary friends to integrate Twitter follows who aren’t active in FriendFeed; Friends Lists let you mold realtime feeds into high value groups. Configuring FriendFeed to output comments to Twitter makes FriendFeed the input client. And we wait for Track, API access to creating imaginary friends, and other tools to filter in and out of FriendFeed’s aggregation services.

Let’s say we get all of these tools in place and Twitter returns Track as some kind of service for users if not competitors. How do we manage this volume of realtime data? With a new kind of media realignment.

Video becomes a first class Twitter object. Favorite network news such as Olbermann and Maddow create conversational chunks designed to be inserted into Twitter broadcasts and FriendFeed conversations. Since iPhone only supports YouTube, that defines the format.

Tech events adopt similar strategies, microcasting conferences, press Q&A’s, and product releases over chunk channels. Once sufficient industry support is realized, tech companies can provide microstreaming services to customers in their own verticals.

At least one of the record cartel announces a signing policy that offers new and existing artists realtime channels in return for a cut of performance and ancillary rights. Recordings are released first in realtime markets, with relaxed (free) release of concert, rehearsal, and private recordings bundled with the purchase of studio product.

As a condition of this new content distribution model, all microcast content must be made available to all microchannels, and microchannels who carry these materials must agree to support open standards that allow Track in realtime across all channels.

Realtime economics depend on the immutable fact that we don’t have the time for realtime. We need both speed and context, and only our social clouds can provide the self-knowledge necessary to process the flow efficiently. Many of the most valuable information streams are at crossroads where it may well be worth more to sign on to a realtime network with direct control of marketing, merchandising, and publishing. I’d suggest setting up imaginary friends, Friend Lists, and realtime streams from among the talent pool of these industries.

Dare Obasanjo tweets today about why he likes Microsoft Live services and why that means he doesn’t think much of OpenSocial. It seems at least some Microsoftees still think the best way to compete is to talk down the competition, but I guess old habits die slowly.

Here’s a video shot yesterday at Internet Identity Workshop where David Recordon of Six Apart and Kevin Marks of Google attempt to unravel the open standards debate, with the help of Echovar’s Cliff Gerrish. I’m sure we can find some vendor sports embedded here as well, but for the most part there’s a new spirit of cooperation among the platform players (including Microsoft) as IIW continues to produce progress.

Google’s release of its Gmail Video service is noteworthy for several reasons. It is integrated into the Gmail console, adding voice and video services to the realtime console that is being built out around XMPP. It is remarkably easy to use; Dan Farber just called to test the service and I popped the window out and continued chatting with him while returning to this post. Several alerts on Yammer and Friendfeed’s realtime IM competed briefly in other chat windows. Oh, and Google just added about a quarter of its version of Silverlight to my MacBook Air. Call it Silverlite.

If I hadn’t already installed the new service yesterday to get an advanced look, Farber’s call this morning would have prompted me to download and install a 2MB plugin. The code works with Intel Macs and Vista or XP, and so far only on Firefox and Safari (with some install issues) on the Mac. So by installing the plugin, I’ve basically added a significant part of Google’s multimedia services to this machine. It’s not Flash either. It’s cross-platform, it’s RIA code, it’s not Flash. Am I making my point?

[Note: Flash is used along with proprietary code. More as Google clarifies.]

Couple this with all the new doodads Gmail has added in recent weeks via Gmail Labs: tools to float the IM panel on the opposite side of the Gmail window, widgets to integrate Google Calendar and Docs, and drag and drop functionality to rearrange all these modules on the page. The calendar object is particularly useful, because not only does it display coming events for multiple calendars in a simple scrolling interface, but it lets you add events from within Gmail. In effect, it roundtrips the experience in a way that promotes more and more usage. It’s lock-in by choice, and it threatens Microsoft at its very core.

The 2MB plugin is perhaps even more insidious. Who knows what services it adds that the growing grid of Gmail tools can access. What if Gmail Labs offers a video annotation service, or a podcast recording module, or a collaborative screen sharing capability, or a micromessaging console, or a group meeting organizer/live blogging console, or… These are enterprise apps, popping up on demand or as upsells to what is rapidly becoming a serious Office competitor. And what part of the 2MB can run on Android? This last one will drive Apple nuts, and likely force Silverlight onto the iPhone to boot.

This is Cloud Office, folks, and all you need is a reasonably new machine. It’s also iterative deployment, where 3G delivers a realtime, intelligent caching media fabric that disrupts terrestrial radio, cable television, and the Hollywood studio system. With the 2MB down payment, Google can continue to add code multiplexed with content, streaming additional upgrades and services along with alerts, conversations, and appointment requests. Advertising will morph from selling a product to being part of the product.

By blurring the boundary between Ajax and RIA, Google has found a way to grow into the Mesh that Microsoft is close to delivering from IT outward. In many ways, this strategy is supportive of the new Microsoft as much as it is disruptive of the old. Just as Microsoft can’t be stopped from executing on its cloud strategy in the enterprise, neither can Google from its base in the user cloud. Where the two platforms meet in the middle looks a lot like a hybrid of iTunes and Office.

Friendfeed co-founder Bret Taylor joined the Gillmor Gang this afternoon to discuss Friendfeed’s XMPP stream of its Home and Friends List feeds. I sat with Taylor at the Friendfeed offices and Marc Canter joined intermittently by phone. Canter took the opportunity to vent about Friendfeed’s responsibility to exert leadership in the XMPP space before his line unexpectedly went dead.

The video below joins the conversation just before that point, and continues with discussion of Friendfeed’s new direction and role with the release of the realtime technologies. While Taylor acknowledged the possible threat to some companies (read Twitter) of providing access to the full firehose of data, he indicated building confidence in allowing businesses on top of the Friendfeed APIs was more valuable for Friendfeed.

Taylor confirmed that Friendfeed in fact does have access to Twitter’s full firehose stream, but that they were only using the stream to serve Friendfeed subscribers and had had no discussions with Twitter about second sourcing the stream for third party developers to add Track functionality. He again confirmed Track was coming to Friendfeed, to mine the full stream of content and not just the individual subscribed clouds of users.

With Friendfeed now supporting bridging to Twitter via IM and realtime interfaces from third parties, it is the logical candidate for being at the head of the chain of messages flowing across the micromessaging universe. Taylor said he was in discussions to add bridging to Identi.ca and other Laconica servers, adding that the similarity of the APIs to Twitter’s made it doable in the near future. Friendfeed’s aggressive step into a leadership role via the realtime tools is paying dividends for the small startup.

In the press room at the Web 2.0 Summit, News.com editor in chief Dan Farber covers Day 2 of the grand old conference, now in its fifth year. Tim O’Reilly and program chair John Battelle have steered the conference from its beginnings as the Peer to Peer and then Emerging Tech conferences to a broadened agenda that tried to subsume the emerging enterprise conversation known as cloud computing.

Battelle’s conversation with Jerry Yang was noteworthy for Yang’s physical gestures - crouched forward in his seat with barely a glance of eye contact as he defended his tenure and ducked any sense of his posture regarding the future. As Farber indicates below, the CEO job is not one that leverages Yang’s strengths. Yang’s posture underlines the unlikelihood of a revived Microsoft deal any time soon given the missed window before the election when the deal could have worked.

The muted presence of Microsoft at the conference - absent from a Day 2 cloud computing panel with execs from Salesforce, Google, Adobe, and VMWare - was mitigated somewhat by a platform panel where Live Services’ David Treadwell traded barbs with Google’s Vic Gundotra (formerly of Microsoft.) But a conference-ending talk and conversation with AL Gore brought the more pressing issues of saving the world to the front and blurred the subtle tilt toward SIlicon Valley in tone if not substance.

Battelle’s skill in asking the news-worthy questions without expecting the answers brought enough clarity to keep the conference valid as a marker of the state of the technology union. While nothing will repeat the first year of the conference or even the upscale show biz quality of the next few, the emotional impact of the Obama election could be felt as O’Reilly and Battelle kept the focus on what to do with this stuff rather than solely swimming in the stream of industry politics. Gore set the tone we will remember in his oddly improvised talk, dabbing his eyes and face and looking a lot like Jesse Jackson trying hard not to burst out crying. This year’s Web 2.0 Summit turned out to be what Gore said it needed to be: a puppy with a purpose.

At the O’Reilly Web 2.0 Summit conference in San Francisco, a context switch from Web 2.0 to cloud computing is well under way. Wired’s Kevin Kelly suggested a variation of the Semantic Web where pages give way to the data on the pages, with each of those chunks representing real objects in physical space, or a Kelly said, anything that can hold an electric charge.

AT&T’s Ralph de la Vega told Mike Arrington that he foresaw a world where phones controlled TVs, coffee machines, cars, and every other device along the way to and from work. The notion of a universal remote or mouse as Microsoft Research defined it years ago is now becoming an economic reality, one that de la Vega suggests is recession-immune as of now. The presence of a keyboard, whether physical as per the Blackberry Bold or virtual on the iPhone, is the new dividing line, with AT&T deriving north of $95 a month revenue versus $58 per month for the average user.

de la Vega responded to an audience question by confirming AT&T will “shortly” release software to allow iPhone tethering to PCs. A German blog also reported an iPhone 2.2 software update will allow direct downloading of podcasts, bypassing iTunes and essentially kickstarting a streaming model for advertiser-supported media on the go. The new service reportedly is limited to 10MB per file, which provides additional ad inventory for longer shows.

de la Vega said AT&T 3G actually supports up to 3.6 megabits service, but today the maximimum available is 700K for phones up to 1.7mbs for laptops. With today’s Wayport acquisition, which adds 20,000 wifi hotspots available to iPhone and other AT&T-supported devices, and AT&T’s U-Verse IPTV service, which bundles wireless access and a screen to screen DVR capability in the home, AT&T is close to establishing an alternate media service that may well supplant cable and even broadcast media control.

As we’re seeing with iterative granularized API access to micromessaging services, the on-demand information services that users can cobble together continue to outperform last-gen models among early adopters. As de la Vega suggests, simplicity and ease of use will soon overwhem bandwidth, carrier, and device restrictions as the key driver of mobile disruption. The old song is becoming: I want my iTV.

Friendfeed’s march toward realtime functionality is already seeing some switching from focus on Identi.ca as the service most likely to dent Twitter’s rule of the micromessagesphere. One star developer, Dustin Sallings is now moving forward with a new XMPP service even as Gnip announces it’s abandoning XMPP services because of problems with servers consuming its often promised but never arriving firehose feed of Twitter public messages.

Sallings and his co-developer Ken Sheppardson appear to have tired of waiting for Twitter to provide access that would allow third parties to deliver realtime track services instead of the 15-minute delayed TwitterSpy which sucks indirectly off the Summize Twitter search output. Twitter recently took IM off their fix list, and Gnip reported no response to requests from multiple developers for XMPP permission.

Now Sallings and Sheppardson are reaching into Friendfeed’s realtime feed and providing Jabber (XMPP) access to and from individual comments. A two-letter naming convention lets you reply directly to comments of those you subscribe to in Friendfeed from your Gtalk or Gchat window. One immediate benefit: Gmail archives the chats, eliminating the 100 message limit Friendfeed currently employs on realtime feeds.

Sallings already provides track services for Identi.ca and other instances of its parent Laconica project. There a re several paths to adding track to enjit, either by constraining the search cloud to those who join the enjit service, or by getting Friendfeed to provide wider access to the firehose. While Friendfeed has not specifically confirmed the timing of its own XMPP output, they have certainly indicated they are working on it. But more importantly, Friendfeed seems interested in carefully building out its feature set via APIs rather than walling the whole container off via business decisions.

Yesterday’s Salesforce partnering with Facebook, along with a similar two-step with Amazon Web Services, indicates the speed with which not only startups and skunkwork projects can achieve velocity but major players as well. At the post-keynote Q & A with Marc Benioff, the Salesforce CEO beat back talk of adding Microsoft Azure to the list of services that can hook directly into the Force.com development model. But eventually Benioff had to concur that it will be up to developers to decide what components, gadgets, runtimes, and Web services will be aggregated.

A direct reply mechanism of the type demonstrated by enjit levels the playing field for Friendfeed, making it compatible with Twitter functionality while taking advantage of Friendfeed’s ability to aggregate other messaging services and orchestrating them. Last week saw a new Friendfeed feature that lets users bridge comments out to Twitter, moving a big step forward to putting Friendfeed in the dominant position at the head of the chain, making Twitter a client of Friendfeed and encouraging production of a bridge to other services such as Identi.ca to round out the tail of the micromessaging channel.

enjit’s two-letter reply scheme can certainly be extended to encode not just the message but the originating service. This is the holy grail, where smart clients can handle cross-platform handoffs and manage name collisions and the intricacies of direct messaging. And with Microsoft Live Mesh entering beta, its significant resources and Silverlight integration suggest rich clients that at a minimum make possible offline synchronization and multimedia consoles much like the BBC application shown at the PDC.

What’s truly disruptive is the degree to which developers can wire together these realtime apps across platforms, from Google with its gadget lab tool that allows injecting services into the Gmail console to Facebook’s social graph to Friendfeed’s aggregation router to Mesh’s device caching and multimedia rendering engine. Twitter may be paying the price for ignoring the free range developers who will endow this componentized architecture with credibility and IT investment.

ZDNet’s Michael Krigsman asked me to join a short podcast with Salesforce’s AppExchange Product Line Director Clare Shih and Facebook’s Senior Platform Manager Dave Morin. Facebook COO Sheryl Sandberg took part in Marc Benioff’s DreamForce opening keynote as the Salesforce CEO announced a data sharing partnership with the social media giant. The podcast is available here, and the video version is below.

So much of this long protracted struggle for political change has rubbed off on the tech community. In the partisan windup to this long election process, we’ve become almost inured to the fact that as much as things will continue to be the same, already the “choice” between the two candidates has produced one sure thing. That is, either of the two candidates represents fundamental change from the status quo, no matter how much you want to differentiate further.

So it is with the shift to the Cloud. Whether you’re betting on Google, or Amazon, or Microsoft, or less obviously Apple, IBM, Oracle, or Cisco, the sure thing is that Web services has gone main stream. If this is a horse race at the vendor level, it’s about each company’s ability to harness its innate strengths and migrate its weaknesses. Put another way, the battle is within, not between.

So it is with Microsoft, mere months into Bill Gates’ retirement. Though my friend Dan Farber and others raise the specter of Gates returning to lead Microsoft at some climactic point, more likely Gates has already weighed in and signed off on the strategy unveiled at the PDC in Los Angeles this past week. Steve Ballmer’s leaked memo could easily have been written by Ray Ozzie, with its methodical restating of the software plus services case and the surprising (for Ballmer) summoning of Live Mesh at the end as Azure’s secret sauce:

Live Mesh hints at how our lives will be transformed as the barriers between devices disappear and the option to connect instantly to people, devices, programs, and information becomes a reality.

Who is Ballmer speaking to? Ostensibly customers, the target of subscribers to Executive Emails from Microsoft. But really the refactored executive team inside the company, and in no uncertain terms, the power structure built largely by Gates and managed by Ballmer. To a Steven Sinofsky, “the barriers between devices” speaks differently than to a Bob Muglia, David Thompson, Scott Guthrie, or David Treadwell. That’s because Sinofsky owns only one leg of that PC-Web-Phone stool that the Azure Services Platform rests on.

The second day keynote also hinted at the new political alignment in the company. While the first day introduced the cloud strategy, the second spoke as much to the Palace Guard as it did to the developers. Sinofsky’s Windows 7 brought the first significant developer applause of the week, perhaps a reflection of the sense that the OS would indeed survive the OS/X challenge with its Touch feature set, multi-monitor support, and screen management tools. As a Mac user, I had the odd sensation of feeling like Microsoft was trying to reengage with switchers, a point Ray Ozzie joked about in a later conversation.

But to the Microsoft rank and file, another message was clear. Sinofsky stayed completely away from the rest of the Azure announcements, hewing closely to the fundamental keep-the-trains-running-on-time reassurance that Vista (and by implication Longhorn) were mistakes of the previous regime. But wait, that was Bill’s regime, and Sinofsky is partially running against himself this time out. His former job as Office boss is now owned by Stephen Elop, who did not speak, instead handing that task to junior executives for the Office Online demo.

By contrast, Bob Muglia, who controls the Server group with its burgeoning revenue gusher, straddles both old and new Microsoft. A wily tactician who survived the DOJ meltdown where others didn’t, seems poised to inherit the mantle of Allchin in the new reworked Redmond. To him, the 3-legged stool is all upside “and the option to connect instantly to people, devices, programs, and information becomes” not only “a reality” but an annuity.

Scott Guthrie continued the subtle shift from old to new, highlighting Windows 7 features such as jump lists exposed to developers via Windows Presentation Foundation, a new WPF Toolkit with support for the same Visual State Manager and controls shipped two weeks earlier for Silverlight. .The

Silverlight gives .Net developers real skin in the cloud game without undermining the open nature of Mesh and Azure's REST and RSS/Atom gateways. Ozzie's challenge is not to convince developers of the power of the Cloud, but to leverage Microsoft's legacy cash cows without letting the people who own those groups stifle innovation as they have done for years. The loudest applause line of the two major keynotes was for the BBC's Anthony Rose and his BBC iPlayer demo, where Silverlight and Live Mesh Services harnessed social graph and user behavior that went several steps beyond anything from competitors including Google, Facebook, or Apple.

Now, what’s really interesting here is because this is Mesh-ified, this information is going off to all my devices. So, if I’m in the office and I’ve watched a program halfway through, and I’m now going out for lunch, I can take out my cell phone, and when I go on my cell phone, that program has been synched to the cell phone. And it’s not just the information, the metadata, but through the cloud the actual program is on the phone and the program, in fact, will resume playing from exactly where I left off on my desktop computer.

The PDC developers could smell money, and this was with live code orchestrated by a customer. This makes the questions about pricing and timing moot: Microsoft has the money to get this out there, and the timing is real soon now for a tech community looking to rebound from the tough times ahead. But the developers, though comforted by the Windows 7 snapshot and mildly enthusiastic about the online Office pitch, were voting with their applause for the Silverlight/Mesh/Azure triumvirate as the way forward.

Office for the Web may pan out as just a leg of the stool for collaborative purposes, but the Silverlight Office has never seemed more disruptive. Significantly, no Outlook Web version was shown, suggesting that Ozzie is keeping his powder dry while giving Mesh time to ripen along with its PubSub router underpinnings. Again, from Anthony Rose:

[MSN] Messenger is the largest IM network in the UK. So, for the BBC this is a huge viral opportunity. Imagine all of my friends just a click away, I can share my iPlayer programs and activity feed with them.

We’re looking at the next Outlook, and it’s going to be hard to stop inside Microsoft’s executive war room. The biggest single sound we heard at the Azure rollout was that of silence - a three year incubation period where very little of what Ray Ozzie has been building leaked out, and that which did was couched in terms that gave the old guard little to attack or slow down. Now that it’s here and endorsed by Ballmer in such unequivocal terms, the war for Microsoft’s soul is over. By opening the platform to standards forged in large part by scripters, hackers, and especially competitors, Microsoft has leapfrogged into the lead for mindshare where it counts: inside the company.

Salesforce’s DreamForce developer conference opens Monday morning with the announcement of a new Force.com Sites service. Sites is a new business for Salesforce, potentially extending the thousands of Force.com applications by pushing application data to the Web over Salesforce servers. The new service leverages Force.com’s VisualForce UI construction tools as well as Force.com’s logic, security, integration, and customization services.

While this is more a point upgrade to the platform in terms of revenue and customer acquisition than a major transition, it does signal the willingness to expand Force.com’s cloud into hybrid applications that span both internal enterprise customers and the customers of those applications. In doing so, Salesforce becomes even more of a channel for larger cloud players such as Google and Amazon, and even Microsoft to the extent that Force.com developers are free to integrate services such as Mesh and even Silverlight.

Although Marc Benioff dismisses such an alliance, he’ll have to work fast to expand Force.com outward as Microsoft comes after him from the outside in. Fertile ground may lie in harnessing Google apps and realtime services to populate Sites-enabled applications with smart information services based on targeted user behavior derived from Gmail, Google Reader, IM, and micromessaging. Salesforce can provide tomorrow’s Azure services today while using fear of Microsoft overwhelming the industry again to encourage Google and other RIA cloud players such as Adobe to federate around Salesforce as a rallying point for the enterprise.