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In these perilous economic times, the layoff memos often follow a familiar refrain: “We have cut costs by 20 percent. That gives us an additional year’s runway. Or two.” But while yes, companies can cut costs and prolong their survival, when it comes to startups, just because they can doesn’t mean they should.

I’m speaking here of venture-backed startups, which represent a small minority of companies. The sole purpose of most companies is to create a steady income stream for their owners and operators — in other words, survival. Venture-backed startups, on the other hand, are created with the sole purpose of a successful exit.

Why growth is crucial

Whether that exit comes in the form of an acquisition or an IPO, in the meantime, the lifeblood of any startup is growth, be it in terms of customers, usage, revenues or profits. Under most economic conditions, an IPO is impossible without revenue and profit growth, and we are unlikely to see that change any time soon. From an acquisition point of view, stagnant companies are valued at low multiples of revenue, say 1x-2x. And while popular meme suggests that flat is the new growth — given the downturn in the economy, the argument goes, even keeping revenues flat is sufficient — this argument does not apply to startups.

By definition, startups are supposed to be attacking nascent market opportunities and unsaturated markets, and as such should be able to grow even during a downturn. If a startup cannot find growth in this environment, it’s a clear message that the market opportunity might be better served by an established company. Of course, growth in profits or revenues are far better than just growth in usage, but even growth in usage is better than stagnation on all three fronts. There is at least the possibility that a company with strong usage growth might one day be attractive to an acquirer with a good monetization engine.

It’s no fun to work at a startup that isn’t growing. Stagnation leads to low morale, with people sitting around waiting for the axe to fall. Rather than let the company become a zombie, management would be doing their investors and employees a favor by pulling the plug and returning the remaining capital to investors.

Why VCs often don’t put companies out of their misery

Founders and executives have a lot of emotional capital invested in their companies, so when it comes to making the ultimate decision, their reluctance is understandable. What’s surprising is how often VCs let companies turn into zombies. The reason for this is a subtle misalignment of interests between VCs and their investors. As long as a startup still appears to be, on some level, alive, VCs can carry the company on their books at the valuation set by the last round of financing. Once they pull the plug, the fund will receive pennies on the dollar, a loss that has to be recorded on the books and doesn’t look good when the firm goes to raise their next fund. Every VC portfolio, therefore, has its fair share of zombies.

Another contributing factor is excessive preference overhangs. Investors receive preferred stock with the right to get back their invested capital ahead of common shareholders in an exit; in some cases they have the right to receive a multiple of their invested capital ahead of common shareholders. The total amount that investors need to receive before common shareholders can participate in an exit is called the “preference overhang.”

If a company has raised so much capital that any realistic acquisition will be below the overhang, then common shareholders stand to receive nothing from the sale — and company management has no incentive to look for such an exit. In such cases, it’s important for the VCs and management to agree to restructure the preference overhangs to make such exits attractive to management. Otherwise the company is destined to become a zombie.

Every startup founder and employee has to consider three possible outcomes: success, failure and zombiehood. Success is much better than failure, but quick failure beats wasting years of your life on a zombie. If you are a company founder, and you are considering layoffs to extend the runway (perhaps on the advice of your venture investor), you should look in the mirror and ask yourself whether you are cutting away your growth opportunity and just choosing a lingering death over a quick one.

Anand Rajaraman is a co-founder of Kosmix and Founding Partner of Cambrian Ventures. Disclosure: He is also an investor in Giga Omni Media, parent company of GigaOM.

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Call it a coincidence, but over the past few days I have spent a lot of time with folks who used to work for Amazon but are now out doing new things. It all started with Jason Kilar, the CEO of Hulu, who was a keynote speaker at our NewTeeVee Live conference. Then last night I met with Dave Schapell, founder and CEO of TeachStreet, an e-marketplace for teachers. And this morning I had coffee with Jeff Lawson, co-founder of Twilo.

My buddy Dave McClure was the one who pointed out that they are all part of the Ex-Amazon club. Just like the rising number of ex-Google entrepreneurs I wrote about last year, these guys are leaving top jobs at one of the best technology companies in the U.S. Here is a list of just some of those names, their current companies and their previous positions at the e-tailer:

Plus Jason Kilar, CEO of Hulu (Amazon Marketplace)

Now this isn’t even a comprehensive list, and slowly and surely, it is expanding. The easy availability of capital in Seattle certainly helps, but more importantly it speaks to the amount of top-quality talent that Amazon has been able to attract over the years. Lawson, who stopped by for a cup of tea this morning to pitch his company, Twilio, said that one of Amazon’s biggest strengths has always been its ability to recruit and hire great minds.

It is because of this hiring policy that the company has not only stayed ahead of the technology curve, but established itself as the leader in Web 2.0 innovation. That’s in stark contrast to other tech giants such as Yahoo and Google, which have instead taken their cues from small startups. For talented people, the allure of working with Jeff Bezos can be what clinches the deal, according to Schappell of TeachStreet, which counts Bezos Expeditions as one of its investors. His company has essentially developed a place where you can go to find things like a French teacher, or someone to give you trombone lessons. I like to call it the Yellow Pages with brains, and it’s the kind of service a company like eBay should have launched instead of mucking around with things like Skype.

Those who know Bezos well say that he isn’t afraid of losing and wants to win big — and that means making big bets. This “nothing-in-the-middle” attitude is particularly attractive to folks with an entrepreneurial gene.

Of course, it also has its downside. Bezos’ big-play approach frustrates those who want to unleash small ideas, and nurture them over a period of time. Eventually some great people couldn’t live within the corporate structure of Amazon and went on to do their own thing. Like Lawson, who until recently was the CTO of Stubhub before starting Twilio, a company that has developed an easy way for web application developers to add voice capabilities to their offerings using standard web-programming techniques.

Should Amazon be worried about this brain drain? Absolutely not, for the company continues to attract talent the way lights attracts moths. I’ve often wondered what Amazon would do next, and I have a few ideas as to where I think they’re going. Someday I’ll blog about that, too.

Check out my video interview with Jeff Bezos.

At the SC 08 show that ends today in Austin, I was struck by how much the lines between supercomputing and corporate computing have blurred. The show even had a panel on high-performance computing and cloud computing! But after visiting with vendors of all types and sizes, I realized that since supercomputers can be built with commodity chips and networking gear, high-performance computing isn’t really about the hardware like it was back in the days of Cray. Today it’s all about the software.

Heck, IBM’s Roadrunner, currently the fastest supercomputer in the world, runs on AMD x86 chips and the Cell processor found in millions of PlayStation 3 gaming consoles. But it’s the software that integrates those two types of chips together that make the computer interesting. And software is what will enable HPC systems to keep moving out of the scientific niche into corporate offices and even into workstations for traders and researchers.

Reza Rooholamini, director of engineering at Dell, reinforced his boss’s keynote, in which Dell talked about the fourth wave of supercomputing. He pointed out that the next generation of supercomputers would rely most on manageability and other software features to attract customers. That will enable Dell to drive high-performance computing to the level of workstations and smaller professional nodes. “Our strategy from the inception…was how can we take this high-end expensive technology and make it available,” Rooholamini says. “This fourth wave is a focus on manageability, scalability, high availability and tools automation.”

This sentiment was echoed by John Lee, V-P of the Advanced Technology Solutions Group with Appro, a company that builds and delivers custom-high performance computers to customers ranging from Renault to Lawrence Livermore National Lab. Lee said the HPC market is attracting new customers who don’t have the experience or inclination to build and customize their own machines. When it comes to programming and operating HPC systems those corporate customers also lack the free labor provided by students who work at labs or universities, meaning the software and services piece of the equation is more important.

“Instead of a government lab where they understand the bleeding edge, now we’re talking to financial institutions and gas and oil guys who know they are behind the curve and so they rely on the vendors to make sure it will run fine,” Lee says.

So while there will always be niche players such as SiCortex, which is building custom semiconductors for the HPC set, it’s far more likely that the key to growing the market for these systems will be software — a fact underscored by Microsoft’s entry into the space in 2005 and bolstered by the software giant’s push into a desktop supercomputer offered by Cray. “Thirty-three years ago people asked Bill Gates ‘Why are you getting into computers?’” said Jeff Weirer, a senior product manager at Microsoft. “At that time Bill Gates had a vision of a PC on every desk and this is really just the evolution of that vision.”

As HPC moves downstream, plenty of vendors are lining up to make supercomputing look pretty much like personal or corporate computing. Since few people could really define a supercomputer outside of the types of jobs it does, those vendors appear to be succeeding.

Three years ago, when John Battelle and Chas Edwards met with me for a cup of coffee across the street from the old Business 2.0 offices in downtown San Francisco, their company, Federated Media, was still in its infancy, and our company, Giga Omni Media, was little more than a dream.

John, a long-time friend and a peer from the tech media world, asked me if I would sign on with his studio of talent and let them represent my then one-man effort, GigaOM.com, commercially. Naturally, I said yes. In the time that passed we had our ups and downs, successes and embarrassments. But we progressed and prospered together.

John now sits atop a gigantic company that is worth hundreds of millions of dollars and represents everyone from BoingBoing to mommy bloggers like Dooce. And Federated Media has become more than just a studio for technology bloggers, but a leader in the conversational marketing movement.

Progress is often accompanied by a divergence of ideas and ambitions within partnerships. At Giga Omni Media, we have been developing a network that revolves around niche verticals. As our needs became more specialized, we sat down with the folks at Federated to try and figure out how we could continue to work together. But both sides quickly realized that instead it was time to wrap up what has been a successful business relationship.

Now we have teamed up with the IDG Group to represent the sales of advertising on our properties — seven today, and many more in the months to come. IDG has a growing blog ad network and I look forward to working with them. Of course, we will continue to supplement their work with our internal sales team, which has been instrumental in selling sponsorships for both our events and specialized weblogs.

Sure we are parting company with our business partners, Federated Media, but we are not ending friendships that have spanned two bubbles, many magazines and countless memories. Thanks to John, Chas, Jason and everyone at Federated for being part of our dream, and for working tirelessly on our behalf.

Google has finally pulled back the curtain on a new feature that until now has been in restricted beta: the addition of wiki-style functions in standard search results. Once logged into a Google account, this allows you to click a small up or down arrow to move a specific result, click and delete it from your search entirely, or click on a small comment bubble and leave your comments on that result. Google will remember those settings the next time you search for the same keywords, and has said it may even work for similar or related searches. In many ways, Google is taking the same principles that power a site like Digg and applying them to search.

Adding these kinds of features isn’t a universally popular move. When Wikia Search — Wikipedia founder Jimmy Wales’s attempt to do the same thing to search, with editing of results and comments (or “annotations”) encouraged — launched earlier this year, there was plenty of criticism aimed not just at the execution and the lack of usable results, but at the very concept of wiki-style search. Many said that opening search results up in such a way would leave the system vulnerable to the inevitable SEO gaming and trick-playing that hampers many other “crowd-sourced” services such as Digg.

This is a little like complaining that the furnace heating your house is too hot, and that you’re afraid it might burn someone. In many ways, wiki-style search is just an extension of the way that Google has always worked: that is, by aggregating the choices of millions of users and then using the PageRank algorithm to produce something approaching the best result. Voting and commenting features simply give Google more pieces of data they can use to arrive at the best result). They will also provide a fairly rich trove of activity-based information that the search engine could use to improve its regular results — that is, the ones that users who aren’t logged in will see — or to tweak its overall search algorithms based on the behaviour of wiki-search users. Why did so many people move that result up? Why did they move another down? Why did some delete that result and not others?

Will these new wiki-style functions be subject to rampant gaming and manipulation? Of course they will — just like everything else that the search giant touches. When you wield as much power online as Google does, gaming and manipulation follow in your wake like pilot fish following a shark. Presumably, the company has taken that into account, and will use their resources to reduce gaming as much as possible. And meanwhile, they will use the results of all that clicking to teach their engine a thing or two about human search behavior.

The Wall Street Journal this morning had a short article pointing out the somewhat obvious reasons why location-based services on cell phones are still not mainstream. It also helpfully pointed out that carriers were working on it. To recap, LBS services need three main things: a way to get location (which we have thanks to GPS chips and even the ability to triangulate using Wi-Fi networks), software that can make sense of geographic information and do something with it (which are out), and cooperation between handset makers and carriers to enable developers to access such services easily.

It’s the cooperation piece that fails, but the article points to several companies such as Nokia, uLocate’s Where application and SkyHook Wireless that are attempting to bridge that gap by offering a platform that will sit between carriers and smaller developers. For example, uLocate has signed a deal with Sprint to act as the LBS platform for its WiMAX network. Smaller developers can sign on through Where and get access to WiMAX subscribers without worrying about working with Sprint or getting the location information form a provider. I suppose since we’ve waited this long for LBS, most of us can wait a little longer.

image courtesy of Where

Yieldex, a startup that helps online publishers forecast ad inventory, has won the Amazon Web Services Startup Challenge, netting $100,000 in cash and services. Yieldex built its ad forecasting platform using the Amazon Elastic Compute Cloud and the Amazon Simple Storage Service. It won $50,000 in AWS services as well as $50,000 in cash, and may even get an Amazon investment. In addition, it and six other finalists got to pitch their businesses to several VC firm including BlueRun Ventures, CMEA Ventures, Greylock Partners, Hummer Winblad Venture Partners and Madrona Venture Group, who help judge the contest. Last year’s winner Ooyala managed to score $8.5 million in venture funding two months after it won. But those were different times.

If you follow me on Twitter, then you already know that I’m looking for a research assistant, a person whose primary job would be to help me dig up information for longer, in-depth blog posts.

This position doesn’t require a special degree or even a permanent address in San Francisco. What it does require is the ability to quickly ferret out information from various public sources.

When I want to write about a certain trend, for example, I will want help tracking down all the companies in that sector, and to have a coherent dossier written on it that is both short and sweet. It would be a great learning opportunity for a student.

My research assistant will of course be paid a nominal hourly fee for their efforts and should expect to work between 30-40 hours a month. Clearly the part-time money isn’t going to help your retire, but if you make yourself indispensable, it might eventually lead to a full-time job.

So how do you apply? As I said in my tweet, I want you to find my personal email address (the GigaOM.com address doesn’t count.) Use it to send me an email outlining, in 250 words or less, why you are the best person for the job. To tilt the balance in your favor, include a list of five of my favorite brands. The final step would involve an assignment – if I like your work, you’re hired.

I’d better hightail it to Washington, because a reshuffling of Congressional Committee members is poised to herald more regulation for telecommunications firms on issues ranging from rural access to Net Neutrality. Yesterday Rep. Henry Waxman ascended to the head of the House Committee on Energy and Commerce — which you may remember for its investigation into how web firms use consumer data — and convened two hearings into online privacy.

As the head of that committee, Waxman has considerable influence over its agenda. The Wall Street Journal speculates that Waxman will delegate many telecommunications issues to Rep. Ed Markey, of Massachusetts, who has already pushed for a Net Neutrality bill, and has a fondness for consumer issues.

In the Upper House, Sen. Jay Rockefeller from West Virginia will likely be named the head of the Senate  Committee on Commerce, Science and Technology, and as the representative from a heavily rural state, is likely to push for access to broadband. He would replace Sen. Dan Inouye of Hawaii, who will chair the Appropriations Committee. Inouye had supported Net Neutrality rules, as well as the entrance of new bidders into the 700 MHz auction.

Of course, if politicians are willing to float regulations on telecommunications, they’re also likely to float more regulations in general — some of which the pro-Net Neutrality crowd won’t enjoy. Rockefeller wants to introduce legislation to make the FCC regulate television violence, while Markey  has sent letters to the FCC expressing concern about the use of product placement in television shows.

With the recession in full swing, industries across the charts have been laying off hundreds of employees — making the job market increasingly competitive. So what’s a freshly unemployed tech professional to do? Hit the streets and start networking. As the hordes of job-seekers descend upon trade shows, conferences and meetups around the country, a few mobile startups could be poised to profit from their misery: digital business card services.

The last few months have seen the launch of a number of services, delivered via mobile technologies from iPhone apps to text messages, that aim to do away with the business card. Previously, companies may have pitched their product as a “green” alternative to dead-tree info swapping, but in today’s market, the dynamic nature of the digital business card could prove to be a more powerful selling point — at least for a startup that can dispatch updated, social media-connected personal data securely across the range of mobile devices.

The iPhone has been a key driver of the market for digital business cards, at least in terms of visibility. Gabe Zichermann, CEO of rmbrME, says his company, which had previously offered an SMS solution with about 1,000 users, had 10,000 users (and even more downloads) of its beamME application in the first 10 days it was available on the App Store. Other apps include Nameo, Handshake, FriendBook and iCard. Most of the services work roughly the same way: Bring two iPhone users together, pull up the app, and a simple touch command sends information between their devices.

However, Nameo, Handshake and iCard are limited to contacts with an iPhone. But what about those of us without iPhones? Dub, which was launched in beta in June of this year, is another option for the BlackBerry set, and as of this week, its service is also available for Android phones (currently that’s just the T-Mobile G1). (The company says service for the iPhone and Windows Mobile are due out in December.) Perhaps Dub’s biggest claim to fame is that it offers integration with common business services. Data can be beamed to a Salesforce.com contact management system, as well as to mobile devices, and Dub users will soon be able to sign into the service using their LinkedIn login and password.

But even Dub, which allows for limited cross-platform sharing, requires that both users have a smartphone and install the app. For on-the-go information sharing, the “Do you use this app?” conversation can add an extra layer of awkwardness and time. For universal sharing, users might be better off with an SMS service from players such as Dropcard, TextID and rmbrME. Even iPhone app-addicts have an option: While most iPhone apps rely on Wi-Fi networks and geolocation, rmbrME’s iPhone app, beamME, allows users to send personal data from their iPhone to any phone, whether it has a data connection or just a simple voice connection.

I’m still slogging along with a Nokia 2610, so I’m partial to technology that doesn’t leave me (with my pesky  insistence on multiday battery life) out in the cold. I’ve found services like rmbrME and Dropcard to be simple to use, and I could easily send my data to smartphone-carrying folks via shortcode. Better yet, people could send info to me, without even knowing that I still carry a Stone Age-era device.

While there hasn’t been much venture investment in the space just yet, Zichermann says rmbrME has raised just shy of $1 million in angel investment, and DubMeNow has reportedly raised $1.1 million in angel funding. DreamIt Ventures provided seed funding for Dropcard. But the startup founders are optimistic: Zichermann says VCs are exactly the kind of social, tech-savvy users that “get” services like rmbrME, which should make it easier to raise funding when the time is right.

Also promising in this market: None of the services is dependent on advertising revenue. Most of the services use a “freemium” model, and several are working to add enterprise-level functionality. DubMeNow’s BlackBerry-focused, Salesforce.com-integrating app seems aimed squarely at the business-to-business marketplace. Zichermann says rmbrME also has its eye on premium services aimed at the enterprise market, such as offering a branded, customized look and feel for user cards.

You probably can’t throw away your business cards just yet. But if you’re in the market for a new job, sign up for an SMS service and head out to the trade shows.

Image courtesy of rmbrME

Verizon Wireless today admitted that some of its employees had been looking into President-elect Barack Obama’s cell phone billing records. In a release, the company said:

“This week we learned that a number of Verizon Wireless employees have, without authorization, accessed and viewed President-Elect Barack Obama’s personal cell phone account. The account has been inactive for several months. The device on the account was a simple voice flip-phone, not a BlackBerry or other smartphone designed for e-mail or other data services.

“All employees who have accessed the account — whether authorized or not — have been put on immediate leave, with pay. As the circumstances of each individual employee’s access to the account are determined, the company will take appropriate actions. Employees with legitimate business needs for access will be returned to their positions, while employees who have accessed the account improperly and without legitimate business justification will face appropriate disciplinary action.

“We apologize to President-elect Obama and will work to keep the trust our customers place in us every day.”

This is a good enough reason for all of us to question the privacy policies of our phone companies, which have time and again shown that they are ready to play lose-and-easy with their customer’s privacy. Of course, they are known to use underhanded tactics to position themselves as the good guys, though they are anything but. [Digg]

In my opinion, this breach — regardless of what your political leanings — is not a good thing. If President-elect Obama’s records are not safe, who is to say a disgruntled employee won’t mess with those of private citizens with whom they have an axe to grind.

What do you think Verizon’s punishment should be?

Facebook, which is quite a hit on smartphones such as Apple’s iPhone, is making a debut on Sony Ericsson’s Xperia X1 phone as a panel. Panels are special interface mechanisms unique to Xperia; they allow phone users to interact with a specific web service or an application.

With this release, Facebook is now available on the iPhone, Blackberry and Windows Mobile (almost) platforms. No Facebook on Nokia’s Symbian or Google’s Android — not yet, anyway. 

I wonder how many people will actually end up buying the X1 device, which is about to go on sale. I returned the review phone earlier today so I don’t know how this app, which you can download for free, actually works. But I do know you can use it to check status updates, friends’ profiles, pics and notifications. Facebook on the iPhone remains one of the best mobile web apps — and even other versions of Facebook pale in front of its capabilities. (Read: my X-1 Review.)

Economic downturns are hard for everyone, at both work and at home. Week after week there are requests for managers to further reduce budgets, lay off more people and cut projects that were previously classified as “necessary to sustain normal business operations.” These pressures forge managers made of diamond, and those who perform well in both boom and bust are destined for greatness. The very best managers get out ahead of downturns and take action early to minimize shareholder losses and, ideally, create shareholder value.

Here are six simple questions to determine if you are one of these managers.

1. Do you treat economic hardships in your business as a time to relax, or do you look to improve your skills?
2. Do you constantly push back when new budget cuts come along, or are you offering up cost savings ahead of requests from higher level executives?
3. Do you complain that you are too short handed to accomplish your mission, or do you spend time developing tools, systems and metrics that help you determine how to get more done with less people?
4. Are your top performers worried about losing their jobs, or do you spend time nurturing them and growing them to be even more successful in their positions?
5. Do you complain that you need all of your folks, or are you constantly weeding your team of underperformers without replacing them when times are rough?
6. Do you treat hiring freezes as interview freezes, or are you constantly looking to find bigger and better talent so that you can move quickly when it’s time to hire again?

These questions help illustrate some of the steps we believe define exemplary leaders and managers in tough economic times. Put more directly, we think that the following are some of the five things that great managers and leaders do during economic downturns that help prove they are “the best of the best”:

1. Upgrading skills. This can be anything from getting an additional degree in your area of expertise, to getting a degree in a field adjacent to yours (technologists getting an MBA or marketing folks deepening their technology), to taking continuing education courses or just taking some time to become current with your job through professional reading. The best leaders and managers see being “the best” as a journey rather than a destination. We cover this in more detail in “To Get Better You Must Practice.”

2. Make More with Less. Stop talking about being the best and prove it. Put the systems in place that allow you to measure how much shareholder value you create with every dollar you spend on headcount or systems. Show how you can do more next year with the same budget or — better yet — more with less money. If you aren’t doing this as a standard operating procedure, start doing it while the economy is struggling, and you will absolutely be seen as being one of the best.

3. Mind Your Flowers. Whether you are making difficult headcount cuts or not — but especially if you are — you need to take care of the folks who are creating the most shareholder value within your organization. Exit the economic downturn with your best people on your side — not the folks with the longest tenure but the folks who create the most value.

4. Weed Your Garden. The best managers during great times are always looking to remove underperformers from their teams and upgrade them with superior performers. The best managers during economic hard times are ahead of the headcount cuts with a list of the folks who should be removed from their team for poor performance. Don’t ask if other organizations are getting their fair share of cuts; focus on what’s right for the shareholder and get it done ahead of the request!

5. Get Ready for Spring Planting. It may not seem like it today, but things will turn around; if not for your current employer then for your next employer. You need to have that list of great talent with whom you’ve been interviewing ready so that you can quickly augment your existing team as the need arises, or build your next team if your current employer doesn’t survive the downturn. Leadership is as much about people as anything else, and great leaders focus on building great teams.

Marty Abbott and Michael Fisher are partners with AKF Partners.

Today Qualcomm scored a huge coup for its MediaFLO mobile television service by winning the right to broadcast the Victoria’s Secret Fashion Show and to create a 27/7 channel devoted to the event. All MediaFLO subscribers will be able to watch the broadcast when it airs on Dec. 3. The fashion show pulled in a television audience last year of 6.5 million, exactly mirroring the number of people who are watching any form of mobile TV, which includes options other than MediaFLO.

But as the February transition to digital television looms, groups such as the National Association of Broadcasters and the Open Mobile Video Coalition (pushing a jointly developed LG and Samsung standard)  are seeking to develop alternate methods to watch TV on the go to avoid being beholden to wireless providers. The OMVC and it’s backers are branching out beyond cellular networks, hoping to install their technology in cars and laptops. Should those efforts succeed, Qualcomm’s investments in MediaFLO won’t pan out.

With its Ultra Mobile Broadband 4G wireless effort officially shuttered last week, Qualcomm needs to find another way to mint money. It still has a platform effort in Gobi, MediaFLO is still around, and 3G networks aren’t going anywhere for a while, but Qualcomm built its success on controlling the IP for the widely adopted mobile standard CDMA. It can certainly play in other fields, but without a choke hold on some widely needed intellectual property, its negotiating power and royalty rates will be lessened.

Image from CBS

RIM’s recently released Blackberry Storm is a device that tries to outdo Apple’s iPhone by including a beefed-up OS, polishing up the interface and marrying it to a really fast 3G network (instead of AT&T’s pokey 3G network.) The device even has visual voice mail, and a cut-and-paste feature. And oh by the way, RIM got rid of the the keyboard and got itself a touch screen.

Verizon seems to have orchestrated a nice launch and the early reviews give the Storm a thumbs up. If you believe everything reviewers say, then you gotta wonder: Why has RIM only gotten around to making BlackBerrys like the Storm (and the Bold) now? I think it was due to a lack of imagination — and fear of taking risks. Now that that iPhone has made touch screens cool, RIM is jumping on the bandwagon.

Our own James Kendrick has taken an in-depth look at the Storm and has posted his findings on jkOnTheRun, along with a fantastic video that takes you through the pros and cons of the device. He sent in his thoughts for our readers:

The Storm is unusual for a Blackberry as it lacks a physical keyboard of any kind. The screen is a large display that uses SurePress technology from RIM that makes it feel like using a physical thumb board when you type on the screen. In our brief experience it works very well and we won’t be surprised to see the Storm take off in the consumer space.

He seems to like the device a lot (You can find his complete review at jkOnTheRun). I, however, am not sold on it.

While I can live without a keyboard on iPhone, I cannot do the same on a BlackBerry. One of the reasons I like BlackBerry is the physical QWERTY keyboard. The Bold’s keyboard was one of the reasons I gave that device a big thumbs up. The keyboard and push email make BlackBerry a device to love because it allows you to plow through copious amount of email when on the go. The reason I carry both an iPhone and a BlackBerry 8800 is because I use the first one for browsing and talking, while the other is for everything that involves text: Google Talk, Twitter, Facebook messages and of course, staying on top of a steady torrent of daily email.

As Walt Mossberg says, “[U]sing the Storm’s keyboard is much more like using the iPhone’s keyboard than a traditional BlackBerry’s. I found that I could type quite well on the Storm after awhile, but that a greater adjustment, and more practice, were required than with a physical keyboard.” He is also miffed that you get a Suretype keyboard when the device is held in vertical and goes into a QWERTY mode only when the device is held horizontally. I agree — it’s a boneheaded UI feature.

I am of the opinion that devices that stick to their true strengths are the ones that succeed the most. Apple is winning with the iPhone because touch is an integral part of the entire experience. All the applications are being built on top of that experience. In losing its keyboard with the Storm, this BlackBerry device has lost some of its uniqueness.

The Storm reminds me of the St. Louis Cardinals phenom Rich Ankiel, who was an awesome pitcher till he flamed out, got hurt and came back as an outfielder and a hitter. He scored a lot of runs last seasons, but he isn’t a center fielder like Mickey Mantle. He is just another player. Storm will be that — just another touch-screen smartphone.

Photo Courtesy of RIM

Today, Ultra-wideband chip makers Artimi and Staccato Communications announced $20 million in funding and a merger agreement, which seems like tying two leaky boats together, giving them some more gas and hoping they make it to shore. The combination of Artimi and Staccato brings together the two UWB companies that were rumored to be running out of cash (as most of the other players had received cash earlier this year).

I have my doubts about the future of UWB, the high-speed personal area networking technology, after the closure of UWB chipmaker WiQuest, the bankruptcy of UWB chip firm Focus Enhancements and the halt of Intel’s UWB research program, but belief in UWB apparently remains high. Alereon CEO Eric Broockman, earlier this month, told me he believed that cell phones might be the eventual killer application for UWB, as people could use it for high-speed data transfers without sucking up a lot of power. He pointed out that SK Telecom, which had invested in Alereon this year showed a prototype handset with UWB chips inside. Maybe there is hope, but I’m not betting on those boats reaching the shore.

I’ve spent the past few days pretty immersed in the SC 08 conference here in Austin, Texas, but I’m still embarrassed that I missed the formation of a new lobbying organization think tank called The Future of Privacy that’s being funded by AT&T. The group hopes to help policy makers and business leaders figure out how to manage online privacy.

A big source of irony from the group, other than its purported focus on online privacy to benefit consumers and the industry alike, is that Co-chair Christopher Wolf also headed up one of my favorite astroturfing efforts, Hands Off The Internet, the phone company think tank dedicated to Net Neutrality. Somehow, that connection isn’t mentioned in his FOP bio. Wolf is a litigation partner in the Washington, D.C. office of Proskauer Rose LLP, a firm that does work for AT&T. The other co-founder of FOP, Jules Polonetsky (here’s a great interview on his views on Internet privacy), was the former chief privacy officer at AOL. Prior to that he worked at DoubleClick, which was bought by Google.

The creation of the FOP is both a good thing and bad thing. It’s a sign that consumers worried about how their private information is collected and used on the Internet have been taken seriously. On the other hand, the backer and members of this particular organization are highly likely to influence legislators in a direction that will keep consumers’ data in their hands.

I hope that some of the more privacy focused representatives can cut through the corporate double-speak that I have seen firsthand from the telecommunications companies on other issues. Perhaps Google, which is not represented on the board, can start its own privacy think tank and we can watch the fight unfurl between caching private data for later use, and profiting from data as it travels through the ISPs’ pipes.

This issue of Internet privacy has gained more momentum in the last few months after ISPs contracted with a startup called NebuAd to monitor where a consumer surfs the web and serve ads against those visits. Other companies are trying this as well. Since then, Congress has held two hearings on online privacy, with one related to data collection and the other related to deep-packet inspection as employed by NebuAD and its ISP customers.

As the online experience becomes more interactive, the rules around of who’s watching us as we’re watching the web need to be defined. But in addition to worries about corporate spying, legislators and lobbying organizations should also take a close look at what governments can now access and use. For those of you following this space, the advisory board includes:

• Dorothy Attwood, Senior Vice President, Public Policy and Chief Privacy Officer, AT&T, who went before Congress to decry NebuAd’s tactics but noted that perhaps in exchange for lower rates a consumer might be willing to share more data with the ISP
• Chris Kelly, Chief Privacy Officer and Head of Global Public Policy, Facebook, the company that brought you the privacy nightmare known as Beacon
• Simon Davies, Director, Privacy International
• Peter Swire, a law professor at Ohio State University and Senior Fellow, Center for American Progress, who is advising President-elect Barack Obama on technology

I’m a geek groupie when it comes to technology. I can’t actually produce any of these life-changing products, but I can recognize something cool when I see it. And the 100-Gigabit data transfer demo that Ciena was showing off at SC 08 in Austin, Texas, today was very cool. Unlike previous demonstrations, Ciena’s was a 100-Gigabit data transfer over a single channel, rather than one aggregated over multiple channels.

The product isn’t available for commercial use yet (and there’s no date set for when it will be), but when it is, customers will be able to upgrade their existing fiber equipment with the Ciena kit to 100G. Other players, from Infinera to Alcatel-Lucent, are also trying to deliver 100G networks. Those speeds will help the core network handle the anticipated growth of Internet traffic, and lower the per-bit cost of delivering that traffic. In the video below, Dimple Amin, vice president of R&D and special projects at Ciena, talks about the demonstration, what it does and how far such traffic can travel. He also says there’s no technical reason why these speeds couldn’t be delivered at the edge of  the network to consumers’ homes. That would be the day.

After a very successful debut last year, The Crunchies are returning to once again celebrate the best of entrepreneurship and new startups. With the economy being what it is, 2009 is going to be a tough year for everyone and I see events like The Crunchies as a big morale booster for those of us working in the trenches. The Crunchies are a joint effort by us, VentureBeat, Silicon Alley Insider and TechCrunch. More details will emerge in the coming days but for now, here are the rules and some facts.

• Nominations will be accepted from now through Dec. 10 at midnight PT.
• There are 15 award categories to recognize various types of technology innovation.
• Companies will be nominated based on their accomplishments in 2008.
• For each award category, each person is invited to nominate one company.
• The voting will start on Dec. 15-Jan. 5 midnight PT.
• The Crunchies committee will select five finalists per award category based on popular nominations and company accomplishments made in 2008.
• One ballot per IP address per day will be counted in the final vote for the winners.
• The Awards Ceremony will be held on Jan. 9, 2009, 7:30 pm at the Herbst Theater across the street from City Hall in San Francisco. The reception will follow and tickets will be released in December.