Rojo

When talking about the micro-messaging service Twitter, a lot of people recently have gotten hung up on its mainstream appeal — or lack thereof. I’ve argued that if current trends continue, this will come eventually (though I’ve also argued it doesn’t really matter for the service to be useful). Today, some data from Compete suggests the same thing.

For U.S. visitors, traffic has almost doubled from February to April alone. The service is now pulling in nearly 1.2 million people per month. Twitter is growing very fast, and just as we’ve noted, Compete believes Twitter’s recent coverage in the mainstream press (for events like helping the American student get out of jail in Egypt and coverage of the China earthquake) is helping to fuel this growth.

Some other interesting notes from Compete’s report:

• Time on Twitter versus time online overall has more than quadrupled in that short span.
• A lot more users use Twitter during weekdays then weekend (hence the valleys in the graph above.)
• Almost one quarter of Twitter users are considered “heavy” (6+ visits a month — which really doesn’t seem all that heavy, for me at least.)
• Twitter users are 10% more likely to be male than the average Internet user.
• Twitter usage is definitely highest in the college/twenty-something age group.

If this kind of growth keeps up, at what point do we consider Twitter mainstream? Of course, Twitter has to stay up long enough for this to happen.

update: A Max from Compete notes in a comment below, they tweaked their “heavy usage” definition because many heavy users use different apps/sites to use Twitter (which Compete doesn’t track). That is very true, I think I’m in the minority as a heavy user who uses the main site almost exclusively.

If you’re Yahoo and you have to respond to billionaire investor Carl Icahn’s letter telling the company he was launching a proxy takeover, you don’t have too many options — you’re going to look weak no matter what you say. The way I saw it there were two options: First, don’t respond. Maybe just pretend you didn’t get the letter and didn’t check the Internet today. Or second, come back with a response so long that it will bore Icahn out of wanting to acquire you. Yahoo chose the latter.

The response, by Yahoo chairman Roy Bostock is really quite incredible when compared to the letter Carl Icahn sent. Icahn wrote four paragraphs to Bostock. Bostock wrote thirteen in response.

So what does it say? Well, I think everyone knew what it would say before reading it. Yahoo disagrees with Icahn’s assessment that Yahoo is better off in Microsoft’s hands. It claims to have been very open to a deal with Microsoft and in fact met with them seven times to try and make something work that would be beneficials to both sides.

Unfortunately, according to Bostock, it was Microsoft, and not Yahoo in the end who was unwilling to compromise. As such, Microsoft walked away. Bostock contends what while Icahn asserts Yahoo’s board is incompetent, the board was very much involved in all stages of negotiations and is still actively looking at ways maximize shareholder value.

This “maximizing shareholder value” has been a running theme played by Yahoo throughout this ordeal. Unfortunately for Yahoo, Icahn is now one of its largest shareholders and he clearly doesn’t feel that his investment has been maximized.

This is really all just back and forth and spin at this point. It’s two sides who have completely opposite viewpoints. It could get interesting again if Google re-enters this picture — perhaps this will push them back into a full pursuit of the search advertising deal with Yahoo that it may have been cooling on.

One thing is for certain: Yahoo is in trouble.

Note: I just had to give Bostock the same LOLcat treatment I gave to Icahn.

April is the coolest month for video game sales.

Sales of the U.S. video game industry grew at a red hot 47 percent in April to $1.23 billion, up from $839 million a year earlier. Brisk sales of “Grand Theft Auto IV” at the very end of the month helped drive sales upward despite a recession that has hurt consumer spending in other areas, according to market researcher NPD Group.

Year-to-date sales are up 31 percent over a year ago at $5.47 billion. During the month, hardware sales grew 26 percent to $426.2 million, software grew 68 percent to $654.7 million, and accessories grew 39 percent to $154 million.

The console war saw little change. The Nintendo Wii sold 714,200 units, more than its rivals combined. The Microsoft Xbox 360 edged out the PlayStation 3, selling 188,000 consoles compared to the PS 3’s 187,100. The PlayStation 2 sold 124,400. In portables, Nintendo dominated with the DS selling 414,800 units versus Sony’s 192,700 for the PlayStation Portable.

Microsoft announced yesterday that it was the first console to hit 10 million consoles sold in the U.S., but analysts shook it off as an irrelevant number, since unit sales of the Nintendo Wii have dominated worldwide sales. More significant, however, is that Microsoft says Xbox Live membership has now topped 12 million worldwide. And to date, consumers have spent $9.7 billion on Xbox 360 overall to date.

Anita Frazier, an analyst at NPD, said that normally at this stage in the hardware cycle, more sales should be coming from hardware. But software sales were hot thanks to GTA IV and other big games. The pipeline of content continues to look good, with big games coming on all the consoles.

I saw Konami’s big PS 3 game, “Metal Gear Solid 4: Guns of the Patriots,” last night at a long press event in San Francisco. Creator Hideo Kojima demoed the game live and many parts of the game clearly live up to its promise as a tour de force. The graphics quality is top notch and you can do a lot of things in that game that you could never do before. (Like read a Playboy magazine, listen to an iPod, and sneak past enemies with a transparent camouflage — the latter in a realistic and graphically cool way). That title is coming June 12 as a PS 3 exclusive. Electronic Arts, Ubisoft, Microsoft, and others also showed off hot titles this week. The hot title for Microsoft will be “Gears of War 2,” which also looked intense and spectacular. That title is coming in November. Nintendo, meanwhile, has “Wii Fit” coming on May 19. These games suggest that the pipeline is full for the industry and there is no reason to expect a content-driven slowdown in sales anytime soon.

Grand Theft Auto IV debuted on April 29, but, based on the way NPD does accounting, the monthly sales captured five days of its sales. Frazier said it is one of the fastest-selling video games in history, and its publisher Take-Two Interactive said it sold $500 million worth of games in the first week. GTA IV sold 1.85 million units on the Xbox 360 and 1 million units on the PS 3. Frazier said that GTA IV sales are likely to lift May results as well.

But it wasn’t all about mayhem. “Mario Kart” for the Nintendo Wii captured the No. 2 sales for the month, thanks to sales to the anti-GTA, non-violent crowd. Controversial or not, April 2008 will go down as the high-water mark for video games. At least until next month.

The California Clean Tech Open (CCTO) stands out as one of the biggest business plan competitions around. Each year, researchers from some of the most prestigious labs in the country meet with entrepreneurs who can dream up ways to turn their work into gold. Out of 45-50 finalists in the CCTO start-up boot camp, five winners receive cash and professional services totaling around $100,000 each, but each finalist comes out with a fully fleshed out business plan and a lot of valuable connections. (You can enter this year’s competition here.)

The competition began with a bunch of MIT alumni getting together to drink and discuss how to save the world for fun and profit. Mike Santullo, who had founded and sold the company that grew into Yahoo! Mail, was a regular at these sessions and in 2005, he and Marc Gottschalk decided that they would find ways do just that. Eschewing the profit part of the equation, themselves, the two incorporated CCTO as a non-profit, and roped in VC firm Draper Fisher Jurveston (among others) to back the competition.

We took the opportunity to talk to Steve Jurveston of DFJ about the his company’s involvement: With its partner fund, DFJ Element, Draper Fisher Jurveston competes with Kleiner Perkins for the title of most active investor in clean tech. Our conversation ranged from the contest to Steve’s fascination with microbial engineering companies that have figured incredible ways to help the environment by playing God.

VB: Why did you choose to sponsor the California Clean Tech Open contest?
SJ: Two main reasons: We like business plan contests as a way to encourage entrepreneurship and cast a net very widely to a population that might not have access to venture funds. The second part is that we really like Mike Santullo. We find that in general these kinds of venues create opportunities to find entrepreneurs that wouldn’t otherwise find their way to venture capital: they might not necessarily have the Rolodex, they might be overwhelmed by the number of venture firms out there and their ideas might not get as much visibility as they otherwise should.

VB: DFJ has been investing in clean tech since 2001; why do you think it’s taken so long for the VC community join the game?
SJ: I don’t necessarily agree with all of that, but if you’re asking why didn’t it occur in 2001 and 2002, there are a couple of factors that tend to play out as a common pattern. When you look at any new industry, and I would say that the same pattern played on in 1994 and 1995 with the Internet and in 2000 for nanotech, you find a handful of firms that are willing to take charge in a new investment wave, but the bulk of firms tend to come in once there’s been some liquidity, so you get things like EnerNoc (ENOC) going public last year and the visibility in the press.

Also, there’s usually a skills-related factor in any sector, especially nanotech, but even the Internet. It usually requires background knowledge to look at the deals, and if it doesn’t fall into the existing industry buckets, it can fall through the cracks. So in 1994, even the internet itself fell through the cracks on many venture firms’ portfolios at the time because there wasn’t clearly a good software investment framework. Consumer software was a bad category for the software investors; they were all doing enterprise plays. And the media investors weren’t looking at technology in the same way, so the internet didn’t fall into squarely into any one category. No one knew which partner to send it to when a deal came in. The same is true in energy. Most venture firms early on didn’t have a competency in investing in industrial projects.

With energy, there wasn’t a logical hop over from hardware or something else. The opportunities for the biofuels and industrial chemical companies weren’t immediately clear: What are the price dynamics? What are the channels for distribution? All the basic business questions you want to know don’t come easily if you haven’t had a presence in these industries for the last few years. With the Element partnership, having 8-10 partners who had done nothing but this for a long period of time, we were pretty comfortable moving more quickly into this area.

VB: By 2006, Clean tech had seen a fair amount of me-too follow on, in biofuels, for example. Do you think a lot of mistakes were made in the rush to get in?
When capital in general follows into a sector, we see more mistakes. This was true at the peak of the internet boom, at the peak of the energy and cleantech investment (and I might say at the peak of the Chinese bubble, if you want to call it that). But if we can double all the venture money going in to energy and cleantech, and instead of these huge projects, we spread it across more companies, it would be good for investors and entrepreneurs.

There’s a ton of innovation going on in the biofuels area, and rapidly. But much of it is not quite ready for mass deployment. A lot of innovation needs to happen to foster growth (finding out which ideas are cost effective, etc) but once you’ve seen this innovation happen, much of the future of the venture capital industry will be getting involved in this very disruptive force. There has been a huge. huge flux of scientific breakthroughs going on around the biological approaches: People re-engineering microbes to filter emissions in a clean and cost effective way, for example. I think if you look forward ten years you’ll see massive shifts occurring and we’ll see a lot of hiccups and misses as well as hits, but the whole portfolio going to be quite exciting.

Q: What kind of categories are you looking to at the moment? What’s really got you excited?
A: I’m specifically most excited in the use of biological solutions for needs in both energy and electronics: The microbial re-engineering kinds of companies. I’m on the board of Synthetic Genomics, which is literally creating life from scratch as though it were a software program and swapping out genomes between organisms. We now get the freedom to write the code of life as if it were a piece of software, as opposed to earlier, when you were only able to do a very limited set of cut and paste operations with a very long and tedious process. Now, it’s a much more free-form kind of design capability coming into place: We treat the DNA as just another organic molecule you can synthesize in the lab, insert into a cell, and have it execute a code.

The huge idea is that the organisms have pathways — if you look at the broad set of microbes out there: fungi, bacteria, algae — these organisms naturally process hydrocarbons, usually in a fluid form: so they suck some in as food sources they send others out as waste products, they absorb energy from the sun, they tend to do it without producing toxic poisons to the environment and they do so in a robust and resilient way. They can be re-engineered to great effect, and cheaply, relative to chemicals and nanotech.

To give you an example of a radical project that’s going on right now, it’s a research product funded by British Petroleum. They’re looking into microbes that exist deep down in the earth - no light, no oxygen — but that consume coal and pull electrons off, to create a whole ecosystem of living organisms down there that create natural gas as their waste product. They’re looking at ways to enhance and improve the yield of this process, but the idea is that instead of digging coal out of the ground and burning it, they’re using microbes processing natural gas, and you have the cleanest burning of all fuels. You build ways to turn coal into natural gas without any infrastructure above ground. This is world-changing stuff.

If a person steals and gets caught, then continues to do so over and over again, what do you call them? Either an idiot or a kleptomaniac, generally. I’m not sure what the name for a compulsive Bittorrent-traffic blocker is, but that or “idiot” is certainly a label that could apply to giant Internet service provider’s Comcast and Cox, according to a new report.

Here’s the boiled-down summary: Last year, the Associated Press caught Comcast “throttling” peer-to-peer traffic under the Bittorrent protocol. Unhappiness from techies and tech companies ensued. Bureaucrats in Washington began talking about fining Comcast, or passing laws to prevent its practices. Then late in March, Comcast relented, saying it would play nice and striking a deal with BitTorrent, the company, to learn how to handle Bittorrent traffic. Most intelligent observers (and I) were suspicious, although a BitTorrent exec told me that there was no reason to believe Comcast would continue throttling.

It seemed likely Comcast would still do a bit of throttling during peak hours, easing off the practice as it learned how to handle the traffic. However, a new study by the Max Planck Institute for Software Systems shows that as recently as yesterday, Comcast and its rival ISP Cox were still gratuitously blocking traffic during all hours of the day.

Now, it’s easy to understand why large ISPs would be concerned with Bittorrent traffic. It consumes more costly bandwidth than other types of traffic, thus lowering their profits. But it’s also increasingly used for all sorts of applications, especially delivery of content like video. P2P is part of the Internet backbone of the future, and heedlessly blocking it is sure to provoke a strong reaction.

Cox, at least, discloses in its subscriber agreement that it may limit certain traffic. But in the long run, that’s not likely to cut the mustard. For one thing, nobody reads those agreements, and for another, consumers in many areas only have one or two choices for Internet access, leaving no alternative to a restrictive ISP. Legislators are beginning to become Internet-savvy, and most won’t be warm to the notion of a couple of larger ISPs stunting growth to preserve their own margins.

This isn’t likely to turn out badly for consumers — if legislation is passed to permanently halt the large ISP’s activities, they’ll be forced to either innovate and fix their problems internally, or they’ll be forced to bow out in favor of stronger companies. Stay tuned for more, and if you happen to notice in the meantime that your downloads are moving suspiciously slowly — you’re probably right.

There has been plenty of noise lately about residential solar financing strategies, like SolarCity’s lease program and Sun Run’s power purchase agreements, in which a consumer agrees to buy power from solar panels on their roof without paying the hefty up-front cost for them. San Francisco may be entering into a similar deal next month for a 5-megawatt installation within the city limits, which would be the country’s third-largest completed project.

The idea of small municipal power plants, built on unused land within cities and thus lowering transmission costs for the power, is quickly gaining popularity in the solar industry. Electricity utilities are also in favor of the idea, because it could save them from the need to build more costly power plants. However, cities and solar panel manufacturers face a challenge in getting projects going, because installations are expensive.

San Francisco’s Public Utilities Commission has nimbly avoided that problem by leaving the financing to Recurrent Energy, a solar services firm that essentially acts as a go-between, contracting out the installation of panels and arranging for funding from outside sources like Morgan Stanley. SFPUC, which provides power to city-owned buildings, will only need to sign a contract to buy energy at a fixed, incrementally increasing rate for the next 25 years.

The plan should work well. Cities shy away from projects that require a lot of capital up-front, but the SFPUC is only agreeing to buy electricity it will need anyway. The city’s board of supervisors still needs to approve the project next month, but without any need for immediate funds, opposition should be minimal.

For Recurrent, the plan also looks like a winner. Because the costs for electricity are determined beforehand, the company can project a repayment schedule for the panels. The actual financing, as noted above, comes from outside sources, with Recurrent just taking a cut of profits. And local solar installers will also benefit from the work, which is expected to be completed in July 2009.

For San Francisco, there are also fringe benefits. The city will benefit from the positive publicity of having a major solar project within its borders. Other cities in the state will likely begin looking more seriously at projects for their own electricity needs. Recurrent’s CEO, Arno Harris, says it won’t be a problem if more customers come knocking; the outsourced setup of his company is “really built to scale,” he told me today. “We’re at an interesting turning point in the history of solar. We’ve seen a lot of districts kicking the tires — there’s going to be a ton of interest from other cities,” he said.

The majority of the panels will be installed on the empty roof of the covered Sunset Reservoir in the western portion of the city (seen at right), with a about 250 kilowatts going into a separate installation at Pier 96. The final board vote is scheduled for June 23rd, with construction beginning afterward if approved.

MySpace, then Facebook and then Google all recently launched services for third parties to access their users’ data through other sites.

Google, though, uses Facebook’s developer platform to distribute Facebook user data through its own service, Google Friend Connect. Now, Facebook has cut off that access.

When Google announced Friend Connect on Monday, I asked the company for clarification on its relationship with Facebook — strangely, Google didn’t offer MySpace data even though those two companies are partners on Open Social. A main point of the announcement, after all, was that Open Social applications could run on other sites, with better access to social networks’ data.

Instead, Google announced that third party developers would be able to access data from Orkut, smaller Open Social member network hi5 and Linked — and Facebook. Google, it seems, wanted to see just how open Facebook’ social network rival was.

For Google’s response to my question, check out this audio clip. As the company tells me in the clip, it has no business relationship with Facebook.

From the Facebook company blog, today:

In the past, when we found applications passing user data to another party (for instance, to ad networks for the purpose of targeting), we suspended those applications and worked with those developers to ensure they respect user privacy. Now that Google has launched Friend Connect, we’ve had a chance to evaluate the technology. We’ve found that it redistributes user information from Facebook to other developers without users’ knowledge, which doesn’t respect the privacy standards our users have come to expect and is a violation of our Terms of Service. Just as we’ve been forced to do for other applications that redistribute data in a way users might not expect or understand, we’ve had to suspend Friend Connect’s access to Facebook user information until it comes into compliance. We’ve reached out to Google several times about this issue, and hope to work with them to enable users to share their data exactly when and where they choose.

Here’s the latest action:

Dell wants greener PCs (now if only their customers did too) — The computer maker says its laptops and desktops should consume 25 percent less energy by 2010. But the Wall Street Journal notes that Dell has an uphill battle in its effort to become the self-proclaimed “greenest IT company”, because many IT departments think environmentally-friendly computers are too expensive.

Atari releases exercise game system to compete with Nintendo’s — The new Wii Fit isn’t the only option for gamers who want to get in shape without leaving the comfort of their living rooms. Atari plans to release Family Trainer, a product for the Wii, this fall. It’s being billed as a simplified Wii Fit; players use an interactive floor mat for outdoor games like river rafting and log jumping.

Mozilla shares a few details about data collection project — As the company tries to expand beyond its Firefox web browser, one of its next projects is a service that could provide a fresh take on web analytics. Mozilla chief executive John Lilly