Some people don’t like ads. But a new class action lawsuit in California against Facebook (embedded below) thinks it should be illegal for teenagers to like any ads without first obtaining parental consent.

We’ve written before about the legal implications of using the likeness of Facebook members in advertising, but this time it is not a joke. And the issue is Facebook’s “Like” button, not using the likeness of a person to plug a product. On Facebook, you can “like” any status update or post in your stream, but you can also “like” ads. When you do so, it can appear as a status update to all your friends if that ad is linked to a Facebook page, thus turning the “like” button into a social endorsement. (If it is not linked to a page, liking an ad is simply used by Facebook to help them determine the quality of an ad, and it will not appear in your stream).

The class action lawyers claim that in the case of teenagers, Facebook is “misappropriating the names and pictures of minors for profit.” Facebook might say that it is in its terms of service, that’s how the site works. But the lawsuit hinges on a loophole in California law which requires parental consent in order to obtain a minor’s consent for using their name or likeness for an advertisement, And Facebook doesn’t do that. Lawsuits like this one could result in anyone under 18 having to get their parents’ permission to sign up for Facebook, which might not be a bad idea.

Something tells me that the lawyers are more outraged here than the teenagers (in so far as outrage can be fueled by greed). This is not the first class action lawsuit against Facebook, and it won’t be the last. I’ve asked Facebook for a response.

Shanzai performed some decidedly sober analysis of the tablet market and came away with one simple conclusion: no matter how much LG boasts, no matter how much Samsung leaks, no matter how many Notion Inks ship, the tablet market is sewn up this year. Why? Because no one will have product in pipeline for the holidays and thus the only things selling in the slate form factor will be the Kindle, Nook, and iPad, in that order, and you’ll note that two of those items aren’t tablets.

Read more…

Location-based game SCVNGR has had a big week of news, first with its partnership with AT&T and then the release of its secret social mechanics playdeck. Today the company has announced that it now sports full integration with the recently launched Facebook Places — you can send your SCVNGR checkins to Facebook, and you can import your checkins on Facebook Places into SCVNGR.

Facebook launched its location API as part of the Places launch earlier this month, but only opened ‘read’ access broadly, which allows developers to import checkins from Facebook Places and use them in their own apps.  However, ‘write’ access, which works the other way around and lets developers take checkins from their own applications and syndicate them to Facebook Places, is only available to a select number of partners. So far these include Foursquare, Gowalla, Booyah, and Yelp, so SCVNGR is in good company.  When a user uses one of these third-party apps to send their location data to Facebook Places, it appears with a ‘via’ tag next to it, which can expose the apps to new users.

SCVNGR still isn’t talking user numbers so it’s hard to compare to the likes of Foursquare and Gowalla, but it’s keeping pace from a feature and, increasingly, partners perspective (it also has more robust game mechanics). In addition to its AT&T deal, the company also recently landed one with Journeys and the Patriots.

This obviously adds to the momentum of Facebook Places, which is looking to become a hub for location-based checkins. Games like SCVNGR are going to increasingly focus on gameplay elements and keeping users engaged, while the basic checkin itself will become commoditized. Facebook isn’t the only company looking to become this central hub for location though — Twitter also offers a location API, as does Google, and there are services like SimpleGeo looking to simplify things as well.

Mozilla this morning introduced the Alpha release of the next version of its mobile browser Fennec for Android and Nokia N900. Fennec, which serves as the codename for Firefox mobile, comes with add-ons and is also built on the same technology that powers Firefox for the desktop. An earlier version had surfaced back in April this year. Fennec Alpha for Android and Nokia N900 comes with Firefox Sync built right into the browser, which means your smartphone browsing experience should closely match the one on your desktop.

Here we go again-again. HP just offered $2 billion, or $30 per share in cash for data storage company 3PAR. This morning, Dell announced that 3PAR had accepted its increased offer to acquire the storage leader for $27 per share in cash, or approximately $1.8 billion. Dell had previously signed an agreement to acquire 3PAR for $18 per share or $1.13 billion, with a provision for matching competing bids. HP then effectively outbid the company and offered $1.6 billion, but Dell matched that offer yesterday, after which HP made a renewed bid for $1.8 billion.

Here’s something you will not read every time an acquisition deal collapses at the last minute: an account of what happened, and why it did. Let alone why it happened twice over.

Backblaze, an online storage and backup startup based in Palo Alto, this morning published a blog post about not one but two acquisition deals that fell through, ‘breaking down the breakup’. They don’t name names, but other than that it’s a refreshingly open account.

The first acquisition offer for Backblaze came from a software company they are or were partnering with – they refer to them by the fictional name Spacely – and was low enough for the startup to contact other potential buyers in order to see if they would be inclined to make a better offer. One of the companies they approached (‘Cogswell’) went along for the ride and also bid for the company.

After considering both offers, Backblaze finally decided to accept the ‘Cogswell’ offer. Months of further negotations, due diligence, ironing out the details and mocking up the definitive agreement ensue – and then everything blew up at the last minute anyway.

As for the other potential acquirer: evidently, ‘Spacely’ wasn’t keen on buying the startup anymore after months of silence, and that’s how Backblaze was almost acquired, twice.

This is a summary of a long blog post, and it’s intentional because every entrepreneur (and decision makers at companies in a position to acquire smaller companies) should read it in full.

It’s a story that’s played out tens of thousands of times in the past – it’s part of the business game – but you usually don’t read or hear about it from one of the protagonists in public, and especially not in such detail.

Read it and learn, young Padawans.

The bidding war continues. Dell announced today that 3PAR has accepted its increased offer to acquire the storage leader for $27 per share in cash, or approximately $1.8 billion. Dell had previously signed an agreement to acquire 3PAR for $18 per share or $1.13 billion, with a provision for matching competing bids. HP then effectively outbid the company and offered $1.6 billion, but Dell matched that offer yesterday, after which HP made a renewed bid for - you guessed it - $1.8 billion.

YouTube has launched a fresh Movies category on its website, gathering about 400 full-length films for your on-demand viewing pleasure, all free of charge.

The renewed section, which is actually more like the next step in previously announced projects, comes courtesy of deals the Google company struck with U.S. studios like Lionsgate, MGM and Sony Pictures and UK service Blinkbox.

Update: Google checked in to clarify this is a UK announcement only and doesn’t affect the US Movies section announced last year (see link above).

In addition, the company wanted to make clear that the MGM / Lionsgate / Sony Pictures content is currently only available in the US, not in the UK.

What can you find there? Loads of Bollywood flicks, a bunch of Bruce Lee and Jackie Chan films, obscure horror movies and cartoons, among many other sections.

“This is one of many efforts to ensure that people can find all the different kinds of video they want to see, from bedroom vlogs and citizen journalism reports to full-length films and TV shows,” YouTube head of video partnerships Donagh O’Malley told The Guardian.

“We hope film lovers enjoy the range of titles in this free library, whether catching up on a mainstream hit or delving into the vast archive of classic films from decades past.”

Personally, I haven’t spotted many mainstream hits or real classics in the catalog, but maybe it’s just me. Ah well, off to watch Teenage Devil Dolls.

Those of you stuck using boring old stable builds of Google’s Chrome web browser are missing out. Chromium (the open source browser that Chrome is based on) is where it’s at. Sure, it may not be as stable as Chrome, but it has some cool new things that Google is working on.

For example, the latest builds of Chromium (already into version 7) include the new “Apps” area above the “Most visited” area on the new tab page. Here, you’ll find a new placeholder for the Chrome Web Store, which just began initial testing with developers and is due for consumers later this year. Right now, clicking this icon just takes you to the Chrome Extensions Gallery page. But in this Apps area you can also install the apps that Google includes with Chrome, including Gmail, Docs, and Calendar. (Though this is a little tricky to do currently.)

Even cooler is the new Labs area of Chromium. As spotted by the Google Operating System blog earlier tonight, if you type “about:labs” into the Omnibox in Chromium, you’ll see a new page showing “some crazy experimental stuff” that you can enable. Currently, for PCs, this is the “Tabs on the left” feature which does exactly what it says. For Macs, there’s a “Tab Overview” feature. It’s awesome.

For the past month we’ve been gushing about Mozilla’s “Tab Candy” feature, which has now been renamed “Panorama” and included in the latest Firefox 4 builds. Chrome Tab Overview is similar in that it gives you an OS X Expose-like look at all the browser tabs you have open. But what’s really awesome is that this works with your multi-touch trackpad on Macs. Simply use three fingers to swipe down and it will appear.

You can then click on any tab to go to it. Or swipe back up with three fingers to go back. As Google notes, this is perfect for fullscreen browsing.

It’s not quite the tab clutter-remover that Panorama is, but it’s still awesome nonetheless. This Labs area is undoubtedly going to be all kinds of fun going forward. Again, all of these features currently only work in Chromium, not Chrome just yet.

A few days ago, we noted that Facebook Questions, one of the service’s latest products, had mysteriously vanished. Naturally, this led to questions on rival service Quora about whether or not the service had been killed. Considering that the product wasn’t yet a month old, that seemed silly. Sure enough, it was silly. Facebook Questions has risen from the “dead” and reappeared this evening.

To be clear, the service is still only turned on for a fraction of Facebook’s 500 million users (we’re talking single digit percentages). But as Facebook told us on Monday, they shut it off for some of those users as they ran some tests. Product lead Blake Ross, meanwhile, left us a comment noting that “We change test groups with Facebook Questions all the time. The original test group will regain access to the product tomorrow afternoon.“

Well, it ended up being a little later than that (the blog Inside Facebook just noted the rollback yesterday, for example), but it is back now.

On top of being back, things also look a bit more polished and seems to run a bit smoother. That said, I’m seeing way too many questions asking “How would Facebook be different if it were run by Sarah Palin?”

Update: I also posted a Facebook Question a few minutes ago asking what percentage of Facebook had access to the service. None other than Blake Ross responded quickly. “Around 0.02% of the Facebook userbase has access to the product. I quoted a higher number earlier this evening, but that was off by a bit,” he wrote.

Update 2: Humorously, below in the comments, Ross notes that he’s the one who asked the Palin question as a test earlier.

[thanks Orli]

A couple days ago, I wrote a post wondering if it wasn’t time to change Facebook’s social graph dynamic? Specifically, I called for a simplified system that had two layers: your friends and your followers. I think that their current social management system which relies heavily on friend lists is highly flawed. And guess what? Mark Zuckerberg agrees.

Tonight at a Facebook Developer’s Garage meeting at Facebook’s headquarters in Palo Alto, Zuckerberg fielded a question about the service’s privacy controls. He said that the ideal solution for sharing different things with different people is to make a friend list. “But guess what? Nobody wants to make lists,” Zuckerberg admitted.

Exactly. While the idea behind friend lists is great, for the average user (in other words, 99 percent of Facebook’s 500 million users) it’s simply not something they’re going to do. Or even if they make them at first, it’s not likely something they’re going to keep up with. Facebook has tried to lower the barrier to entry a few times (most recently a couple days ago) but they are still simply too time-consuming to set up and maintain.

My solution is the two tier system: either someone is a friend and you have to accept them as such. Or they’re a follower — meaning they can opt-in to following your public updates without you having to okay them. When you update on Facebook, there would then be a big switch to decide if you want something to go to just your friends or to your followers (which would include your friends).

I see no reason why there couldn’t be an option to use lists that further filter things beyond that. But friend/follower would be the main list/function that everyone used.

Zuckberg is clearly thinking a different way to solve the lists issue. He thinks it still has to be something like friend lists, but done a different way. He noted that they have to come up with a way for people to control each thing they want to share, but do it in a way so that the tools are really easy to use.

Again, even with such a vague statement, I’m worried that this is going to be too complicated.

To be fair, it’s an insanely difficult problem Facebook is facing — and Zuckerberg knows it. He notes that after over six years of adding various privacy controls over features, things became “really hard to use.”

But he still believes in the idea of sub-groups of friends because the average user has something like 50 friends now — and people who use Facebook more often, have a lot more. Those users might not want to share all their information with even just those people. Or worse, he noted that ”the people who you are most afarid of seeing [some item] are on your friends’ list.”

He also spoke to the fundamental idea of friending someone and them accepting it as what they need to look toward going forward. He also believes the problem may simply come down to design. Again, the idea behind friend lists is correct in his mind — it’s just the implementation that isn’t. I still like my idea.

As seen by the entire Internet, the August 19th premiere of Cee-Lo Green’s “Fuck You” will go down in history as the day the phrase “fuck you” became totally benign and commonplace.

But, in another case of loud web hipster chatter not resulting in a proportionate amount of viewers, “Fuck You” did not get to the 1/2 million or 1 million mark faster than glossy stuff like Lady Gaga’s ‘Telephone,” which had surpassed the Cee-Lo video’s current 2,822,225 million views IN A DAY.

While YouTube would not comment on the stats of any individual video, YouTube Product Manager Hunter Walker did answer our inquiry on Quora.

“Love the Cee-lo video but it’s nowhere close to the fastest growing music video of 2010, or even this month. Check out Eminem’s “i love the way you lie” — 63 millions views in three weeks.”

In testament to the overwhelming appeal of this video among a certain tastemaking segment of the online population, Quora Co-Founder Charlie Cheever even got in on the armchair viral video quarterbacking.

And in case you are a nerd and were wondering what the Cee-Lo font is, it’s Champion Gothic.

Crafty commerce site Etsy just raised another $20 million in its fifth venture round (that would be the Series E). Index Ventures is the new investor leading the round, with partner Danny Rimer getting an observer’s seat on the board. (The board is made up of founder Rob Kalin, Caterina Fake, Accel partner Jim Breyer and Union Square Ventures partner Fred Wilson). Previous investors Accel and Hubert Burda Media put in some money as well in this round.

The round gives Etsy a pre-money valuation of just under $300 million, about triple the valuation it got during its last, $27 million round in January, 2008. Most of the shares sold—nearly $14 million of the $20 million—were secondary shares held by some of the early investors. But unlike other rounds we’ve seen lately, this wasn’t a liquidity event for founders. Kalin says he did not sell any shares, nor did any employees.

Etsy started turning a profit at the end of last year, just when Kalin took over as CEO again. Kalin projects revenues this year to be between $30 million and $50 million and expects the company to continue to be profitable. The company has 125 employees. He expects the total gross value of goods traded on the site to double this year to $400 million, and hopes to hit $1 billion next year.

Earlier this evening, Facebook held a developer’s garage event at their headquarters — sort of like a State of the Union for third-party developers. Notably, they announced a new partnership with Y Combinator that has the goal of creating new startups with deep integrations with Facebook’s newest tools. But there was also a Q&A session with Facebook CEO Mark Zuckerberg, CTO Bret Taylor, and Y Combinator’s Paul Graham that was pretty interesting.

One question asked if Facebook was working on their instant personalization technology for mobile devices. Taylor fielded the question noting that mobile brought about some interesting technology problems in this regard. Most notably, he said the issue is with password entry on mobile devices. According to Taylor, that’s something they have an entire team focused on right now.

Taylor noted that this team is called the “Platmobile” team (as in: platform + mobile, and said like ‘Batmobile’). This brought some laughs from the audience, but while the name may be somewhat of a joke, their goal is very serious.

Taylor noted that many people have three-letter passwords that they use for mobile services to keep things fast and simple. But obviously that’s not ideal from a security perspective. He noted that many of the developers in the room likely had long passwords that included weird characters for this very reason. But Taylor said that this “10 minute process” was a “really negative part of the user experience.“

“The Platmobile team is focused on improving that experience. I don’t know the exact timeline on that, but it’s something we’re really focused on because the user experience on the phone right now is sub-par,” Taylor said.

Zuckerberg chimed in to say that the mobile experience is obviously different, so instant personalization would be different too. Perhaps you’d have a group of apps that you set different privileges for (such as password memorization) with such a feature, he noted. “The general trend though is that all of this stuff is going towards less friction to get to social interaction,” Zuckerberg concluded.

Formspring, the Q&A service that lets users invite their friends to “ask them anything”, has had a wild year: since officially launching last November, the service has skyrocketed to over 16 million registered members, 40 million monthly uniques, and it’s now closing in on one billion questions answered.  Because the company is still quite small and has had to deal with actually scaling the site, Formspring’s feature set has been pretty spare until recently. Now the company has a few key new features in the pipeline.

The biggest upcoming feature, which will be launching in the next few weeks, is called ‘Connections’. Before now Formspring has had a very limited social graph — you could ‘follow’ other users, but you couldn’t see who was following you (nor could you see who was following anyone else for that matter). Visiting someone’s formspring profile has been largely a dead end, and there hasn’t been a convenient way to find interesting new people to start following. Connections should help change that.

The system won’t use the traditional ‘follow’ model seen on services like Twitter. Instead, you’ll automatically establish a connection with a user whenever you answer one of their questions or they answer one of yours (there’s more to it then this, as the system will also use weighting to show your strongest connections). Of course, many of the site’s questions are asked anonymously, and no connection will be created if you ask or answer an anonymous question.

Another highly-requested featured has been an iPhone application. Formspring still doesn’t have its own official application, but third party developer Taptivate has used Formspring’s still-private API to build one themselves. It’s called Spring, and it’s slated to land early next week — expect it to be quite popular. Formspring says that this isn’t the official app, and that it will consider building or buying one itself down the line.

The site has also just rolled out Facebook’s Like button, which should help drive as more questions get shared to users’ Facebook News Feeds. One other thing to note: Formspring’s traffic has actually dipped in the least couple months, but the company says that this is seasonal.

Now that TweetDeck’s Android app is out in beta mode, with its multiple streams (notably Facebook, Foursquare, Twitter, Google Buzz) and blended options, many users want to know when TweetDeck will overhaul its iPhone app. The company’s CEO and founder, Iain Dodsworth, who dropped by TechCrunch’s headquarters on Wednesday, says it could be a “good couple of months.”

So, what is taking the British startup so bloody long?

According to Dodsworth, his 15-man team is pretty strained, from working on updates to the desktop client, the Android app, the iPhone app and new features like User Streams (which delivers tweets in virtual real-time).

Dodsworth, a self-proclaimed perfectionist, also has a few tricks up his sleeve— you can bet that the iPhone version will be more than just a mirror of the new Android app. Right now, the TweetDeck lab is working on several “stealth” ideas and although Dodsworth was generally vague during our off and on camera interviews, he seemed especially excited about the idea of allowing nearby TweetDecks to talk to each other.

He doesn’t want to create a separate TweetDeck social network per se but such a function would certainly transform the social stream service (See video above). As he explains:

“One thought that we’re having is about applications, is about Tweetdecks that are aware of other TweetDecks. Be that any other version of TweetDeck. So if you can say walk into a bar and your phone is in the background communicating with other TweetDecks and seeing who is a close friend on Twitter and Facebook and LinkedIn and whatever, that’s kind of interesting, there could be some sharing of information there. And some of this is dodgy ground as well, it’s like where is the privacy limit to this as well…It’s about these apps doing things without you having to get involved and perhaps say look there’s a friend of a friend in a bar down the road, you seem to follow the same people, do you know that this person is following person X who you’re not following…We don’t have to do our own networks, we don’t have to build a TweetDeck social network in any way, our mission here is to provide the tools and to provide hopefully the UI to consumer social media in a very powerful way.”

As evidenced by his statement, the function is not ready for prime time and it may not be ready for the next version of the iPhone app (or ever). However, it is an interesting concept that sheds light on Dodsworth’s larger strategy for TweetDeck. During our off-camera interview, Dodsworth said it was about “serendipity,” getting TweetDeck in the geo-location game and enhancing a users’ ability to find unexpected connections. As an aggregator of the major social streams, TweetDeck has a lot of data at its disposal to connect these dots.

During our chat, we also got a look at TweetDeck’s numbers. Since the Android’s debut earlier this month (it’s still in a very beta release), there have been 50,000 downloads. That’s far less than the 2.6 million iPhone downloads and the number of iPad downloads (which Dodsworth says is well north of 50,000). However, engagement is very high for the Android. According to Dodsworth, despite fewer downloads, 4x more tweets have been sent from the Android TweetDeck app versus the iPad app.

Those numbers should hopefully rise across the board as TweetDeck enhances the real time nature of its service. This week, the company announced that the User Streams Preview is now available to all users. You can download the free preview here.

When it comes to trademarks, Facebook is proving to be a bully. It is going after Teachbook in court for using a similar name, and already forced Placebook to change its name. But that is only half the story.

It is not just the word “book” at the end of a company or product name that Facebook might object to. If it has its way, the word “Face” at the beginning of a name might also bring out its lawyers. In fact, Facebook is currently trying to register the word “Face” as a trademark. (It already owns the trademark on “Facebook”). Facebook took over the trademark application for “Face” from a company in the UK called CIS Internet Limited, which operated a site called Faceparty.com. Presumably, Facebook bought the application sometime around November, 2008, which is when its lawyer started dealing with the USPTO.

However, at least one person is objecting to this trademark: Aaron Greenspan. Yup, that Aaron Greenspan, Mark Zuckerberg’s classmate at Harvard who laid a claim to helping create Facebook, which he later settled. Greenspan now has his own company, Think Computer, which is behind the mobile payments app called FaceCash (watch the TCTV interview with him).

If Facebook gets the trademark for the word “Face,” that could spell trouble for FaceCash. “The possible registration has implications for my company (not to mention hundreds of others, including Apple, Inc.), so I’ve decided to ask the USPTO for an extension of time to oppose it,” he explains in an email. Apple, of course, owns the trademark to “Facetime,” the video calling feature on the latest iPhones.

Although Greenspan owns the trademark to “FaceCash”, he wants to protect his ability to use the word “face” in future products. He also wants to make sure Facebook won’t go after him. Given it’s track record of vigorously defending its trademarks (which it is encouraged to do by the law or else risk losing them), that could become a very real possibility.

Getting an extension of time to file an objection is not the same as actually blocking the trademark. But “face” is a pretty generic word and Facebook doesn’t actually use it on its own, only in combination with “book.” If Facebook doesn’t get “face,” maybe it will have better luck with “like.” It has at least 14 applications to trademark that word as well.

Startups that enter the Y Combinator program don’t generally do it for the money alone — most companies receive $20,000 or less in seed funding. Instead, they do it for the exposure, connections, mentors, and resources that the YC program affords. And they just got one more major perk: Facebook has announced that it will be working to help YC companies create “transformative social experiences”, and it’s going to give them preferential treatment and access to company resources. From the Facebook post:

We'll provide product, technical and design resources to support new Y Combinator companies interested in working with us to build deeply social products, whether a website or an application on Facebook.com. These companies will have priority access to our technologies and programs such as Facebook Credits, Instant Personalization and upcoming beta features. Y Combinator will be publishing a "Request for Startup" focused on social startups and is now looking for interested entrepreneurs for their winter 2011 funding cycle.

This sort of treatment from Facebook is by no means a guarantee for success, but it’s still a big deal. Early access to key features like Credits and Instant Personalization could help these startups leapfrog their competition, and Facebook will also be able to help startups boost their virality with tight Facebook Connect integration and News Feed Optimization.

This isn’t the first time Y Combinator has partnered with a hot social service — last year Twitter decided to give YC companies priority access to its stream.

The news comes on the heels of YC’s latest demo day, which featured a whopping 36 startups.

Remember Diaspora? You’ll be forgiven if you don’t. Since they received a lot of hype as the open-source “Facebook Alternative” this past May, they’ve been quiet. In fact, they hadn’t given any updates on their progress since early July. But today they’ve re-emerged with some updates. Notably, they say: “We have Diaspora working, we like it, and it will be open-sourced on September 15th.” That’s just three weeks away.

That’s good news. But even though it has only been three months since the initial buzz began about the project, the online world has slightly changed. Back then, it seemed as if everyone with a voice on the web was screaming bloody murder about Facebook and their privacy issues. That plus a timely New York Times profile helped Diaspora raise over $200,000 from the crowd-sourced fundraising site Kickstarter — the most ever raised on the site and an amazing $190,000 more than Diaspora’s original goal. But today, again, just three months later, Facebook is still growing like a weed. Controversy keeps bubbling up, but it just as quickly subsides.

We all forgot to quit.

And so the question remains: will a project like Diaspora be able to get any traction given Facebook’s 500 million person head start?

At the very least, Diaspora is being realistic about what they can and cannot do. In the post today they’ve noted that they have for now scrapped the idea of plugins and APIs in favor of “simple and high value features.” I like the sound of that.

Further, they write:

We are spending a good chunk of time concentrating on building clear, contextual sharing. That means an intuitive way for users to decide, and not notice deciding, what content goes to their coworkers and what goes to their drinking buddies. We know that's a hard UI problem and we take it seriously.

And while the open-sourcing of the project begins on September 15, they won’t be done working on it. Two of the members of the core four-person team are taking a leave from their studies at NYU (this was a Summer project for all of them) and the work will continue long-term.

Meanwhile, the team notes that it is time for some R&R, as three of them will be attending the Burning Man festival in California. Presumably, those pictures will only be shared with their “drinking buddies” list in Diaspora.

If you’ve been on the new Digg at all in the past day or so you’re probably already familiar with the above “Fail Ox” image, especially if you’re trying to use Digg search. The image is new, and is the result of Digg designer Tyson Rosage‘s obsession with the old school computer game The Oregon Trail.

Digg’s Kevin Rose told TechCrunch and Twitter last night that Digg experienced over 1 million unique visits on its launch day (the site has been averaging about 8.7 million unique visits per month, according to Comscore) as well as “a handful of new bugs.”

“We hope to have all the major issues fixed in the next 24hrs,” says Rose, which might affect the ubiquity of the “404″ page. Consensus among users I’ve talked to is that the site seems to be moving forward from the scaling issues it had yesterday both in terms of speed and in terms of frequency of “Fail Oxen.”

Hey, having a twee “something is broken” image seems to have worked out for Twitter.

Editor’s note: The following guest post is by Kim-Mai Cutler.

Nearly four years after Apple launched the iPhone and two years after Google open-sourced the code for its Android operating system, Microsoft is finally set to re-enter the mobile market this holiday season in a serious way with Windows Phone 7.

It is trying to catch up to those more modern smartphones the only way it can — with cold, hard cash.

The company could spend a half-billion dollars or more in marketing costs and payments to developers and handset manufacturers to subsidize the expense of building phones and apps, so that the Windows Phone 7 ecosystem is well-seeded at launch.

Jonathan Goldberg, a telecommunications analyst at Deutsche Bank, estimates that Microsoft will spend $400 million on marketing alone for the Windows Phone 7 launch. That doesn't include the millions it has already committed to pay for "non-recurring engineering" costs that help offset development costs for handset manufacturers.

"This is make-or-break for them. They need to do whatever it takes to stay in the game," says Goldberg. "It's still wide open. They don't have to take share from Android or Apple, so long as they can attract enough consumers switching from feature phones."

On a visit earlier this month to the company's headquarters in Redmond, Goldberg says company executives told him that Microsoft, along with its carrier and manufacturing partners, would likely spend "billions" of dollars in the first year for marketing and development. Another source familiar with Microsoft's manufacturer and carrier agreements says the company will spend $1 billion on the launch, half on marketing and half on other development costs.

"We have a long-term view and Microsoft has been in this position before in other businesses where we’ve had to take a long-term view," says Microsoft senior product manager Greg Sullivan, who would not comment on the estimates. "The mobile phone market is growing by leaps and bounds, but it’s still in the early stages."

In some cases, potential manufacturing partners have accepted payments only to later back out.
Out of the original eight handset manufacturers that Microsoft announced Windows Phone 7 with in February, there’s serious traction left at just three—HTC, Samsung and LG, according to Goldberg. (The others were Dell, HP, Sony-Ericsson, Garmin-Asus, and Toshiba). Sullivan didn't comment on the launch partners either. But HP, which was set to design and sell Windows Phone 7 handsets up until it acquired Palm in April, had a contract covering development costs over several years that could have been worth up to $20 million, according to a source familiar with the deal.

Sullivan declined to comment on the nature of its deals with handset makers. "We have a broad range of interactions with our partners and sometimes that involves our engineers working closely with their engineers," he says.

Not only that, Microsoft has been offering financial support sometimes in the form of revenue guarantees to developers so that there will be enough apps in its store at launch, according to Microsoft senior product manager Anand Iyer. Apple and Google, in comparison, have accumulated enough natural momentum for their mobile platforms to attract developers for free.

Iyer counters that  already there has been 300,000 downloads of Microsoft's development tools, suggesting strong interest. Indeed, Microsoft has hundreds of thousands of developers it can tap through the relationships it's built over the years with the Xbox and Windows.

But the reality is that Microsoft has been outmaneuvered by a team a fraction of its size over the last five years at Google in a space it rightfully should have owned. It initially focused on enterprise consumers when RIM commanded the smartphone market with the Blackberry, but had to switch gears once Apple blew open the doors with the ultra, consumer-friendly iPhone. It also originally focused on phones with resistive touchscreen interfaces (the kind that work with a stylus) and only recently started supporting capacitive touch, years after Apple launched it.

Its most recent efforts in the mobile space have bombed. The company took the much-hyped Kin phone off the market after reportedly selling fewer than 10,000 units. Furthermore by spending hundreds of millions of dollars, it is effectively competing against its own business model. It licenses out its software for a fee of roughly $15 per OS shipped to manufacturers, unlike Android, which is free and lacks the same software restrictions. A big question for Microsoft is whether it will be able to keep its licensing model afloat   (Even at $10 per device, 100 million Windows 7 phones will have to ship before it recoups $1 billion in marketing and engineering subsidies, not counting revenues from search advertising or its cut of app sales).

That said, Microsoft has come from behind before. It entered the console market years
behind Sony and Nintendo; the Xbox is now the top-selling console in the U.S. this year and Xbox Live, its online gaming service, generated an estimated $1.2 billion in revenue last year.

Windows Phone 7 has also won positive reviews from tech blogs across the board with its
sleek interface. MobileCrunch's Greg Kumparak praised the OS, calling it "the little girl who was kind of a punk to you in second grade somehow managed to grow up kind of cool — and to top it off, she's actually sort of hot." Many manufacturers also don't necessarily want to be wholly dependent on Android and want to diversify by supporting Windows phones.

Sullivan says the company's OS would marry the best of Apple's tightly-controlled platform model, with a consistent user experience and elegant design from device to device, with the best of Android's horizontal model, which lets consumers choose their handsets and carriers.

Plus, the marketing dollars do make a difference. The $100 million Goldberg estimates that Verizon, Motorola and Google collectively spent on marketing helped turn the Droid line of phones into a serious stable of competitors against the iPhone. (Compare that to Google's fizzled Nexus One launch, where the search giant pinched pennies on marketing.)

So a half a billion could do even more. At this point, Microsoft doesn't have any other choice.

Photo credit: Flickr/Michael David Pedersen.

Digg Head of Business Development Matt Van Horn is leaving Digg to move over to the “stealthish” startup Path as VP of Business Development. This Friday will be his last day at Digg, which just this week announced its V.4 redesign.

From Van Horn’s announcement email to colleagues:

When I graduated college in 2006, it was a crazy dream to move to the bay area and join a tech start-up. So I took it upon myself to stalk Kevin and crew repeatedly until they created a position for me. It’s now been more than three years since I started here and I have learned so much and am so grateful for the chance that everyone took in bringing me on board. This has been the opportunity of a lifetime and I am excited for what the future has in store for Digg and will continue to support it in any way I can.

After this Friday, I will be joining up with Dave Morin, Shawn Fanning and Dustin Mierau on a new stealthish project called Path.  I used to work with Dave at Apple and I’m excited to be working with him on this new project.  We haven’t announced what we’re doing yet, but it’s going to start on the iPhone – you can sign up for more information at Path.com.

The latest we heard about the much buzzed about list-making service was a tweet from investor Ashton Kutcher about his Path anticipation, until today.

From Path CEO and former Facebooker Dave Morin,

“Matt’s focus on distributing the Digg brand throughout the internet makes him a perfect fit for Path as we turn our eye towards launch. At Path we are focused on building a beautiful experience through great design and a focus on quality. We think that Matt will approach the partnerships and relationships that we build with design in mind and are excited to welcome him to the Path team.“

Key takeaway from Van Horn’s email: Path will be launching on the iPhone first. Stay tuned for updates.

Back in June, we noted a couple of websites that existed for the sole purpose of revving up mayor battles on Foursquare: When Will I Be Mayor? and Be The Mayor. Today, Foursquare itself has just rolled out a small feature which should also entice users to battle for the crown.

Now, when you check-in to a venue on Foursquare via a mobile app if you’re within 10 check-ins of becoming the mayor, Foursquare will alert you how close you are on the check-in confirmation screen. But the way they do it is a bit different from simply “you need X more check-ins”, instead they tell you that “you’re now X days away from becoming Mayor”. This is an important distinction as it shows that it’s about more than raw number of check-ins.

Foursquare’s post on the issue further clarifies this:

To become Mayor of a place, you need to have checked in more days than anyone else over the last two months (60 days), so only one check-in per day counts.

That’s the way it has been for a long time, but people likely thought they could check-in over and over again in the same day to get mayorships. That’s not the case.

But is this emphasis on days something more?

Leading up to the launch of Facebook’s entry into location, Places, Foursquare’s line seemed to be that location services need to be about more than check-ins. We agree, but it might be hard for Foursquare to break away from being the “check-in service” as they popularized the term. This could be a first small step toward emphasizing prolonged loyalty at venues rather than simply the vague check-in concept.

Check-ins are now more of an overall metric (both on these post-check-in screens and on venue pages on foursquare.com).

This idea of moving towards “days there” is also in-line with Foursquare’s long-term business strategy of rewarding customer loyalty.

Either way, Mike is cheating. There’s no way he’s the mayor of TechCrunch HQ. No. Way.

MIT researchers tested the first prototype of the Seaswarm, a pack of robots that use nanotechnology to suck up oil from the surface of the ocean for immediate processing.

When completed, the robots will be able to travel along oil-spilled waters, collecting oil more cheaply and efficiently than oil skimmers. The robots are large: 16 feet in length and seven feet in width. They push a conveyor belt wrapped by an oil-absorbing nanowire mesh that repels water while slurping up to twenty times its weight in oil.

Once the robot is full, the material can be heated up to remove the oil and sent back into the waters to collect more. MIT’s SENSEable City Lab Associate Director Assaf Biderman likens it to a “rolling carpet” that could be able to clean for weeks on end in the right conditions. The robots are powered by solar panels and need only 100 watts of electricity to operate.

Seaswarm’s name refers to how a team of robots behave when they’re sent out on a mission together. The robots communicate wirelessly with one another and use GPS to sense where other robots in the fleet are working. This lets them spread evenly to clean the spill with more precision. The robots can also detect the edge of the spill and work their way inward.

This video explains how the robots clean up oil and collaborate with one other:

Researchers estimate that 5,000 robots could clean a spill as large as the one in the gulf in a month. The group plans to enter its developments to the X Prize competition for oil cleanup.

The prototype comes after months of development. Researchers planned to present Seaswarm at the TEDxOilSpill conference, but were apparently stopped last-minute due to an “unresolved intellectual property dispute at MIT.”

Another group of researchers at Texas Tech has been working on a similar oil-absorbing material we mentioned before as a solution to oil spill cleanup.

We can hope there will be no future oil spills, but in case there are, the Seaswarm could offer hope for a quicker cleanup.

Last month we reported on a new experiment Yelp was running that put it in competition with the likes of Groupon and LivingSocial: time-sensitive daily deals, offering steep discounts at local businesses that users can pre-purchase. Reached for comment at the time, the company said that it was “always testing new things” and also pointed out some of the previous marketing programs it’s run over the years (it was essentially downplaying the experimental local deals).

Today, the company is making things a bit more official: it’s announced a new sneak peek on its blog that says it’s now offering local deals in San Diego, with plans to expand to San Francisco, New York, and other cities in the near future.

As we’ve noted before, this is a perfect fit for Yelp (and doesn’t really come as a surprise). The site has a sizable audience of 36 million users a month who already view it as a hub for information on local businesses — deals, which have proven to be immensely lucrative for Groupon, are a logical extension of that.