Google is a big proponent of HTML5, especially for video and rich graphics in the browser. To show off what HTML5 can do, Google Chrome teamed up with the Arcade Fire and director Chris Milk to create a custom interactive video for their song, “We Used To Wait.” The experience is called The Wilderness Downtown and is best viewed in Chrome or other HTML5-compliant browser.

You start by typing in the address of the house you grew up in, then it loads a video of a guy in a hoodie running through the streets. Different windows pop open on your screen, some with graphics, some with videos. Google Maps and Street View images of your old neighborhood are incorporated into the video. All the video is in HTML5, different windows open up triggered by the music, and you even see a fly-over of your neighborhood based on Google Maps’ routing API.

The graphics are pretty impressive too. Shadows of birds are superimposed over the Google Maps birds-eye view of your neighborhood, and animated trees are plopped into the street using the Street View image and some boundary detection software. You can also write a note to your former self in a beautiful tree-root font or draw a picture, all using HTML5 font and drawing tools. These notes and drawing will be used in future Arcade Fire concerts.

The video is almost as cool as playing Quake in your browser. Except that it is very processor-intensive, and it suggests that you close all other tabs and quit other programs before starting. But that’s why it’s called an experiment.

Google is partnering with U.S. Bancorp Community Development Corporation (USBCDC), a division of U.S. Bank; to create an $86 million Low-Income Housing Tax Credit (LIHTC) fund. According to a release issued today, the funding will be used towards the construction and operation of 480 affordable rental housing units for low income families and senior citizens in seven communities throughout the West and Midwest.

It’s unusual for a technology company to get involved with these types of loans; banks and insurance companies usually help fund these credits. While the money doesn’t cover the total cost of these developments, these tax credits help them complete a project.

Of course, Google has plenty of cash on hand and the affordable housing aspect is in line with Google’s social initiatives. As an added bonus, the company will be able to offset its federal tax liabilities over several years with these credits.

The housing complexes being built with the fund include a range of one to four-bedroom apartments, and offer a shared laundry facility and community gathering area; effectively creating 500 new units of affordable housing. The release says that Google has also recently invested in two other low-income housing projects for senior citizens, one in the San Francisco Bay community of Sunnyvale, and the other in the Los Angeles County community of Inglewood.

Media and communications fund Syncom Venture Partners annonuced a series A investment of $3 million in ShowUHow, a San Diego based business that could make the traditional instruction manual obsolete.

ShowUHow provides official online video instruction guides, web-based sales and customer support tools. ShowUHow’s clients make and sell products that are advertised as “some assembly required,” or that general consumers may find complex, initially.

According to the company’s website ShowUHow clients include brands sold at BestBuy, CostCo and ToysRUs within the categories of consumer electronics, toys, outdoor recreation and furniture.

Other providers of online instruction manuals, like NeedInstructions.com, offer user-contributed, and editorially crafted “how to” content.

ShowUHow claims its online videos, software and services can help manufacturers reduce customer support costs, and avoid product returns.

Giles Bateman, a co-founder of Price Club/Costco, and formerly a chairman of CompUSA, has joined the ShowUHow board of directors.

The venture-backed company is not, apparently, related to T-Pain the hip hop artist who performs the song “Show U How.”

Looks like “>BlackBerry maker has provided the Indian government with "proposals for local security agencies to monitor BlackBerry service" so that, when necessary, the Indian government can tap into BlackBerry users' email. And while that may not sound too positive a development, it was either that or risk an outright ban.

Internet telephony and chat service provider Skype is officially launching Skype Connect 1.0 (formerly Skype for SIP), to the public (you can see the release here). The service has been in beta since last year.

Skype Connect allows a business’ employees to make domestic and international calls using regular office telephones (PBX systems) instead of using a computer and a headset for VoIP calls. Users can receive and manage inbound calls from Skype users to SIP-enabled PBX systems, enabling them to offer click-to-call functionality on websites.

Outbound calls from desktop phones to landlines and mobiles worldwide are billed at Skype's standard per-minute calling rates and users can receive inbound calls from Skype connected users worldwide by placing Skype's Click & Call buttons on their Web sites. Skype calls to your SIP-enabled PBX are free of charge to people using Skype.

Pricing for the use of the Skype Connect is €4.95 per channel per month with long-distance calls charged at Skype’s standard per minute call rates (with call rounding). Each channel purchased allows for either one inbound or one outbound call at any time. You can buy up to 300 channels per SIP Profile. Skype Connect can be launched and managed via Skype Manager, a web-based tool that allows IT managers to control Skype usage in a company.

Skype says that approximately 37% of Skype users reported that they use Skype for business-related activities and this particular offering could bring significant revenue from the enterprise sector.

Skype, which filed for an IPO earlier this month, is looking for revenue channels and unsurprisingly sees potential in enterprise use of the service. Of course, it should be interesting to see if the rumors pan out and Cisco ends up buying Skype.

The news page on Digg, and particularly the Technology category, is currently plastered with links to discussions and images posted on rival Reddit instead. That’ll bring Reddit some traffic this morning, but more importantly it’s a bit of an embarrassing situation for Digg.

The Next Web speculates that Reddit is ‘gaming’ Digg, but there seems to be something else at play here, namely (ex-)Digg users actively displaying their discontent with the recently launched new version of the site by using it to promote links to its competitor.

We’re digging (wink wink, nudge nudge) into what’s going on here.

Here’s a link to the relevant discussion on Reddit and here’s a link to their Digg publisher profile (those diggs are sure piling up quickly).

Update: also check out the slightly revised Reddit logo.

Update 2: as pointed out by many, the Reddit publisher account on Digg linked above auto-submits the RSS feed for Reddit content, so every dedicated discussion or image link URL automatically gets pushed onto the new Digg.

Ironically, the new version of the site happens to make it very easy for publishers to get links to their content on the front page of the site. This is one of the main complaints Digg users / fans have with the updated version of the service.

Between online video, DVRs, and on-demand cable the amount of time people spend watching live TV (you know, with all of those commercials that advertisers spend $70 billion a year on) is shrinking fast. Only 52 percent of American’s viewing time is spent on live TV compared to online and time-shifting alternatives, according to a new survey of 1,000 American consumers by market research firm Morpace. And that percentage decreases the younger the audience, with the key 18-to-34-year-old demographic watching live TV only 41 percent of the time, versus 64 percent of the time for those 55 and older.

The alternatives to live TV are growing and basic cable is under assault, but no one single competing technology is taking over. People watch DVDs 14 percent of the time, online (including streaming video from services like Netflix) 13 percent of the time, saved programs on their DVRs 12 percent, and on-demand cable 6 percent. The survey breaks down online viewing into video from online sources like YouTube (9 percent) and streaming video from services like Netflix and Hulu (4 percent). For 18-to-34-year-olds, online video makes up 16 percent of their viewing time, and streaming video makes up another 7 percent.

Those numbers are the share of all viewing time devoted to different channels. The share of audience who views ate least some online video is much larger. Half of all people surveyed (51 percent) watch at least some online video, and 23 percent watch at least some Netflix-like streaming video from the Internet.

One of the major reasons viewing habits are changing is because people are watching video on a lot of different devices. While 96 percent of respondents watch TVs, 59 percent use at least one other media-viewing device. These include laptops (40 percent), desktop computers (36 percent), mobile phones (9 percent), dedicated media players (8 percent), netbooks (4 percent), and tablet computers (2 percent).

Cubic Telecom, the TechCrunch40 company behind the traveler-friendly SIM card MAXroam, has partnered with popular European airline Ryanair to slash roaming costs for travelers. Cubic Telecom's MAXroam allows users to use their unlocked cell phones in over 180 countries, saving around 60-80% on roaming charges.

Starting today, Ryanair will slash mobile phone roaming charges by up to 70% via a 3 year exclusive partnership with MAXroam. Passengers need to purchase a MAXroam SIM card, which will provides one fixed roaming rate across 43 European countries.

Ryanair passengers can also buy a 'roaming bundle' which includes a phone, SIM card and €10 call credit for just €29 on Ryanair.com. Similar to the partnership the startup made with Dopplr (which was eventually acquired by Nokia), this deal is a win for MAXroam, whose service is based upon connecting with travelers who don’t want to pay expensive roaming charges issued by carriers.

Cubic Telecom also recently unveiled an iPad 3G SIM card, and launched a partnership with Qik last year.

Apple has an event on the books for this coming Wednesday and it’s widely expected that Steve-O will announce new iDevices, specifically an iOS-version of the Apple TV and new iPods. Most of the pre-iTV news is purely speculative as we really don’t know much about it, although it should hit at a lower price point and a new cloud-based iTunes should debut alongside the device. Forget about the cable TV assault for a quick minute though. Let’s talk about these new iPods. If things go down as the leaks seem to say, you might actually want a dedicated PMP device again. The iPod is set to have a second coming.

You know Infineon, right? They make those tiny baseband chips inside smartphones (like the iPhone 3G). You know, the chips responsible for communicating with the cell towers on your network. Yes? I'm glad we're on the same page. Well, today, Intel bought Infineon's Wireless Solutions Business -- WLS -- for $1.4 billion of your American dollars. Why'd they do it? Well, Intel have been trying to get into the phone CPU market, but are having trouble competing with the likes of Qualcomm and ARM, who are able to offer all the communication options -- that is, WiFi, Bluetooth, GSM, 3G, 4G -- as well as the CPU/GPU, on a single chip. This makes the chips not only smaller (and therefore easier to fit on a logic board), but also more energy efficient.

BizArk, a Chinese e-commerce company specialized in international trading solutions, has now made its debut and announced that it has secured ‘tens of millions of dollars’ in financing from IDG Ventures (up to $40 million according to several reports).

The press release announcing the investment is one of the strangest I’ve ever read.

In it, BizArk says that outsiders speculate about the possibility that IDG Ventures is financially backing BizArk to make up for its failure to invest in rival Alibaba. The company cites a two-year old quote from one of the firm’s senior VPs to back up those speculations.

Maybe I’m missing something, but it seems peculiar for a company that has just raised tens of millions of dollars from an investor to point out its partner’s apparent failure to correctly assess an investment opportunity in a competitor years earlier.

The company also remains vague on its international partnership agreements with the likes of Google and PayPal, for no apparent reason.

From the press release:

Besides IDG, BizArk also attracts the attentions of big companies, such as Google, TrustWave, Paypal and LinkShare.

It is reported that, BizArk and Google have attained a cooperation to build up a tailored platform for trading companies which have a narrow product range but intend to develop overseas markets according to its product characteristics and market situation.

Reported by whom? And what does this cooperation with Google entail, specifically?

At the bottom of the press release, finally, the company also casually mentions that its CEO is Jason Gu, former Google general manager of the Eastern China Region, and that it currently employs some 400 people.

Bizarre.

Twitter search and advertising startup platform operator TweetUp has announced today that its search engine for Twitter will be expanding to include bios and updates posted to other social networks, including LinkedIn and Facebook. Because the company will no longer be solely based on Twitter, TweetUp is changing its name to PostUp.

In April, TweetUp, which was incubated by incubated by idealab, opened registration for its bidded marketplace for real-time search, and in May the company launched its search capabilities on a number of sites at the TechCrunch Disrupt event, including at TechCrunch, Topix.com, and Businessinsider.com.

TweetUp's search algorithms and marketplace aim to address the needs of both users and tweeters in a single search mechanism. In addition to algorithms that combine a variety of factors to determine relevance, tweeters will soon be able to bid on keywords in a marketplace very similar to what now occurs at search engines. TweetUp also offers any publisher embeddable widgets and other contextual layers filled with relevant live tweets based on given keywords. Now users will be able to source public updates from LinkedIn and Facebook.

Bill Gross, CEO of PostUp says that because most of the authorities that TweetUp are sourcing in its results post comments on multiple networks, it made sense to expand results to LinkedIn and Facebook. Gross adds that over the past few months, more than 12,000 tweeters have registered over 200,000 keywords to date, and impressions have been growing ar 100% per month. To date, PostUp has served over 700 million impressions in three months.

The company has also been making acquisitions, most recently buying Twitter Android client Twidroid and news aggregator service popurls.

The change in strategy for PostUp isn’t surprising; it’s better to diversify your business model rather than being tied down to one platform (Twitter).

TweetUp has recently closed a $3.5 million first round of funding led by Index Ventures, and have taken investments from SV Angel (Ron Conway), First Round Capital, Betaworks, Steve Case, Jason Calacanis and Jeff Jarvis.

Yottaa, web analytics and performance platform, has raised $4 million in series A funding from General Catalyst Partners, Stata Venture Partners and Cambridge West Ventures. Co-founded by chairman of Nexaweb, Coach Wei, Yottaa offers a free service that monitors and tracks web site performance. The company's first product, Yottaa Insight, is being released to the public today to allow any user to track the performance and user experience over time, and across multiple geographies. Yottaa Insight also enables users to link their Google Analytics account. And the service will identify problems such as third-party widgets, or network latency or errors with DNS.

iContact, a company that provides email marketing services for small and medium sized businesses, has raised $40 million in Series B funding from JMI Equity. This brings the company’s total funding to $53.3 million.

iContact’s email marketing software automates the process of creating, sending and tracking email communications for businesses. iContact also allows users to track email campaign effectiveness, accessing data around opens, clicks and more.

Currently the company has over 65,000 customers, including clients in the non-profit and political world who use the service to manage their database of members, and communicate with their donors, or constituents. iContact says the new investment will be used for sales and marketing and product development.

Plex, the Mac OS X media center, has just made all of its competitors obsolete. A new version, dubbed Plex/Nine, will be released today at midnight EDT, and it introduces a number of new features that make it the media player for Mac OS X—and for the iPhone, iPod touch, and iPad. That’s right: there’s an iOS App for that, and it’s pretty awesome.

You might say the company's just a tad late to the party, but Miniclip has finally seen the light and is expanding its casual gaming empire by entering the world of mobile games. With a self-declared user base of more than 57 million casual gamers worldwide and a library of more than 600 online games, it's a wonder really that the London-based company hasn't made the move sooner. After all, Apple's App Store for one now offers roughly 250,000 apps, many of which are of course casual games and have been available for years.

On Saturday, I attended WISH 2010 in Tokyo (where I live) to see a total of 15 Japanese startups presenting their services onstage to a panel of judges and an audience of 550 people. The event was organized by online marketing company Agile Media Network (“Japan's Federated Media“).

Eight of the companies won prizes from various national media (i.e. TechCrunch Japan), and there was one big winner (an e-book publishing platform called Puboo). But here are thumbnail sketches of all of the companies that presented at WISH 2010. (Please note that not all of these services are available in English.)

WISH 2010: Winners

Puboo (Winner: Grand Prix and Mainichi.jp Award)
Puboo is a free e-book publishing service provided by major Japanese book review community Booklog (which currently counts more than 300,000 members). Launched in late June, Puboo has so far allowed individuals to publish 3,000 books (one example) through its interface. The books can be published on Booklog, as PDFs, or in EPUB format (and can be read on the iPad or the Kindle as well).

Conyac (available in English / Winner: TechCrunch Japan Award)
Conyac is a social translation service that requires "requesters" to pay a certain fee upfront, upload a text (or image of a text) and indicate which languages the text should be translated into. Registered translators accept texts they think they can handle to earn “Conyac points”, a virtual currency. Those points can then be converted into real money via Paypal, with the service itself getting a 20% cut. Prices start at $0.3 per letter.

Cacoo (available in English / Winner: Impress Watch Award)
Cacoo is a free online drawing tool that allows multiple users to create diagrams and other graphics (wireframes, software design diagrams, network diagrams, UMLs etc.) collaboratively and in real-time. We covered the entirely browser-based tool (which now boasts 55,000 users worldwide) in more detail here.

Orihime (Winner: Open Network Lab Award)
Orihime is an online shop set up by a female college student who sells self-designed and made-in-Japan PC bags and accessories on the site. The shop encourages buyers to take part in the design and production process by leaving comments and wishes for future products on the site.

Calil (Winner: Asahi.com Award)
Calil is a vertical search engine that lets users find books in over 5,000 public, university and special interest libraries in Japan. The service also provides rankings of the most popular books in those libraries, shows them facilities in their vicinity, lets users create lists of books they plan to borrow and alerts them once they become available.

Garapon TV (Winner: Agile Media Network Award)
Garapon TV is a video recording service that lets users record and store TV programs in the cloud (“on all channels, 7 days a week”). All recorded programs can be watched anytime later on Internet-enabled devices, including the iPhone, iPad or Android phones (3GS demo video). Programs can be tagged, searched and recommended to other Garapon users.

Togetter (Winner: TechWave Award)
Launched a year ago, Twitter-based content aggregation and communication platform Togetter currently boasts over one million unique visitors and nearly five million page views per month, according to creator Yoshida. Togetter lets users submit comments to a certain topic through tweets, pulls relevant tweets into a dedicated page on Togetter and sorts them in a thread. On the page, users can further discuss the topic, contribute tags or add the page to their favorites or bookmarks (example page for a discussion thread on WISH 2010).

Cerevo (Winner: Nikkei Award)
Hardware startup Cerevo is best known for its social camera Cerevo CAM live!, the world’s first digital camera with Ustream live streaming capability (currently sold in Japan only). AT WISH 2010, the company introduced the Cerevo Ustream Box, a small battery-powered and Wi-Fi-enabled device that makes any camera Ustream-compatible (without using a PC). The box (pictured below) will go on sale in Japan this fall.

WiSH 2010: The best of the rest

AQUSH (information in English)
Launched by Tokyo-based Exchange Corporation in December last year, AQUSH is a peer-to-peer lending service that is similar to ZOPA in the UK. Lenders set their desired investment amount and interest rates from 4% to 15% for 5 classes of borrower credit risk, as denoted by AQUSH itself. AQUSH loan applicants are screened based on their credit histories, financial situation and FICO scores.

Loctouch
Loctouch is a Foursquare-like LBS application that’s available for the iPhone and Japanese feature phones. Launched by major web portal Livedoor six week ago, Loctouch lets users “touch” spots to indicate their location, recommend interesting places to others and earn badges over time (called “stickers”). Here‘s the web view of a burger restaurant someone “touched” in Tokyo.

Tabereko
Tabereko for the iPhone aggregates information from printed Japanese “gourmet magazines”. Thanks to Google Maps integration, users can not only access the digitized contents but also find stores in their vicinity. Tabereko itself is free but monetizes via in-app purchases.

Lifepalette
Lifepalette is a health-oriented social network. The idea is to help users connect with others through writing diaries on the site, sharing news, asking and answering questions etc. (here‘s an example for a typical diary entry).

Twitnovels (available in English)
Twitnovels is a Twitter-based community for “crowdsourced” novels that launched last month. Users can begin writing a novel and let others continue the story line from any point to create group-edited works (here‘s an example of a Japanese novel in the making by 14 different authors). More information on Twitnovels can be found here.

Decomoji
Decomoji is a Japanese “web font service” for FireFox, IE, Safari, and Chrome. Web site owners can choose between 250 CSS3 fonts for a monthly fee (there’s also a free trial version).

TwiTraq
Launched last month, Twitter analysis tool TwiTraq currently boasts 27,000 users. Twitraq can be used for “self-analysis” (i.e. how often did I tweet in the last days, which hash tags and keywords do I and my followers use most often, etc.), visualizing data in a number of ways (all data can be downloaded as CSV files). The free tool also provides insight about other TwiTraq users, for example by breaking down when, by whom and where tweets about a certain keyword were posted (this page shows the results for keyword “golf”).

From the 15 participating companies, ten were pre-selected, while five (TwiTraq, Conyac, Twitnovels, Tabereko, and Togetter) were voted in by users. For completeness, click here for a list (in English) of the 27 startups that didn’t make the cut.

The transformation is now complete. Our favorite random video chat site Chatroulette has gone through a redesign over the past week and is now back up, in what founder Andrei Ternovskiy and those who believe in second chances hope will be a more nudity-free i.e. more monetizable version.

The “renewed and updated” Chatroulette is reportedly one of many recent efforts at shaking the Chatroulette penis stigma and hopefully improving the site’s advertising and investment prospects.

Chatroulette, a platform which allows you to video chat with strangers, has had many stumbling blocks on its way towards becoming a full fledged business including reportedly losing Shawn Fanning as an advisor as well as having a difficult time attracting investors weary of the site’s propensity for porn and other seamy shenanigans.

I’m trying out the sparser and more confusing interface right now and the first user I hit was masturbating. It’s also very difficult to tell how you can hit “Next” on the new Chatroulette — the next bar is apparently the unlabeled gray box directly below the video and above the text chat. Other accoutrements include bars for volume control, drop down menus for what video camera and microphone to use, and a resize option at the top right of the screen.

At the moment the site is really flaky, but when the video chat does work it seems like the penis problem is far from gone both in my own initial experience and what I am hearing from other users. It actually looks like it has gotten worse (see screencaps below).

The fact that not much has changed in this latest redesign adds some credence to rumors that Chatroulette was not down voluntarily but in fact went offline in order to patch a security hole that allowed an IP sniffer released by Chatroulette HOF (link: NSFW) to mine data from Chatroulette users. I’ve contacted Ternovskiy for comment and have not yet received a response.

Screenshot of the first thing I encountered:

Screenshot of the first thing encountered by a TechCrunch reader:

Top image: UBC

Cisco has made an offer to acquire Skype before they complete their IPO process, says one of our more reliable sources. We have not been able to confirm this rumor one way or another via other sources, which isn’t surprising. A company in lock down during the IPO process is usually even more tight lipped than normal.

But if true this would be one very big acquisition. Skype insiders are hoping for an out of the gate valuation of $5 billion or so, we’ve heard. Presumably Cisco would have to bidding in that range to make it interesting.

Google was also rumored to be sniffing around Skype, but antitrust concerns may have persuaded them not to make an actual offer.

More as this develops.

This isn’t tech related, other than the fact that I’m writing this post 20,000 or so feet in the air thanks to Gogo on Virgin Flight VX746 from San Francisco to Seattle. But if I’m going to rightly trash Delta for their atrocious behavior on a recent set of flights then it is only fair that I give a high five when I see an airline fail to fail its customers.

Virgin and Southwest Airlines tend to have happier employees, and that translates to a much better customer experience. I’ve found Jet Blue and Alaska to also be decent, but with occasional flaws. None of them are perfect, but it sure feels nice to be on a flight where common empathy isn’t nonexistent.

Case in point – I had just boarded the flight with my carry on luggage (the luggage that Delta says is too big, but Virgin seems not to mind). I was just about last on again, and even up in first class the luggage racks were mostly full. A women in coach with a violin came up and asked a flight attendant if she could find space for her instrument. Because the last thing you want to do is put an extremely fragile violin into the vagaries of the mysteriously brutal checked luggage system.

Molly Choma, the flight attendant, managed to coordinate the first class passengers to move their luggage around to accommodate the violin. There was a touchy moment involving the woman across from me and her Gucci bag, but otherwise everything went just fine.

I can tell you with certainty that any Delta flight attendant (at least any of the ones I’ve met) would have scoffed at a customer asking for assistance stowing their violin. That violin would have been thrown out of the cabin and, maybe, made its way to checked luggage. On a different plane, of course, probably one off to Europe or something.

Anyhow, after we took off Molly came up to me to say she was an occasional TechCrunch reader. Which just goes to show that statistically speaking, TechCrunch readers are nicer, more empathetic and intelligent than the general population.

ps – TechCrunch reader Derek Johnson is sitting next to me on the flight as well, and reading TechCrunch. He’s just started pitching me on HometoPhone. I’ll let you know how it goes.

“Publishers are all cohorts of the devil.
There must be a special hell for them somewhere.”
- Goethe

If I were a commissioning editor in a major publishing house, I'd be feeling a little unloved right now. Like the wife of a guy who runs over his neighbour's cat: why does everyone hate me? What did I do?

Maybe hate is too strong a word: hate is when you hope that someone will burst into flames and die. The current feeling towards publishers isn’t quite that: no one wants them to combust – it’s just that, well, they wouldn’t urinate on them if it happened.

To see what I mean, witness the glee with which the news has been greeted that Seth Godin is abandoning his publishers – Portfolio (Penguin) – in favour of self-publishing. "More and more evidence backs up his decision," gushes Kit Eaton at Fast Company, "E-publishing is the future."

And it's not just Godin's move that has elicited cheers; over in the UK, Ray Connolly has written a column for the Guardian, explaining why he too is “Doing a Dickens“: quitting his publisher and instead self-publishing (in installments) his new novel: The Sandman. Again, the response has been overwhelmingly positive. Says one blogger: "It's these types of innovative approaches, along with online social marketing, that can help authors stand out from the crowd. I'm seeing it happen all the time, and it can work for you too!"

Hmmm.

Some quick background to my life in publishing: I started my career as an author when, at the age of 19, I got my first book contract from Prentice Hall (part of Pearson, who also own Penguin). A few years later, I briefly became a self-publisher when my business partner, Clare Christian, and I decided to turn a London city guide that we published online into a real book. This was pre- ebook readers so we had to go door to door selling to book stores as well as promoting directly to our existing audience (we did just slightly better than break even). Shortly after that, with sales and distribution backing from Macmillan, we set up a full-fledged publishing house (since sold to Harper Collins) which was nominated for a Bookseller Industry Award for its digital strategy. And now I'm an author again, published by Weidenfeld & Nicolson, part of the Hachette empire. When it comes to professional publishing vs self-publishing, then, I can understand all sides of the debate.

And yet, as I read the crowing of Godin, Connolly and the various other authors who are suddenly turning their backs on their publishers and going solo; and as I hear the rising chorus of abuse directed at the women and men (mostly women) who toil in the world's – I dunno? Third-? Fourth-? – oldest profession – I'm pretty sure which side of the barricades I belong on.

You see, I love my publishers. Absolutely adore them. Couldn't live without them.  Furthermore, I think anyone who willingly abandons theirs in favour of self-publishing, is either delusional, a peremptory jackass – or both.

To explain why I feel that way, I need to break down the various arguments offered by Godin and Connolly for quitting their respective publishers.

The catch-all argument is that, thanks to today's technology, publishers are redundant: anyone can write, publish and market an ebook. As Connolly puts it: "Anyone who is computer savvy can become a publisher these days. I know, because I’ve just become one. I’m now Ray Connolly, writer, editor-in-chief and head of marketing…" Godin meanwhile criticises publishers' digital strategies and their ignorance of things like free PDFs and discussion forums. "None of these things are supported by the core of the current corporate publishing model" he says.

I have plenty to say on this one, but fortunately most of it has already been said by Ursula Mackenzie, chair of the Trade Publishers Council at The Publishers Association, who rebutted Connolly's article, pointing out that publishers provide a whole host of services including: “editorial input; marketing and publicity expertise; first-class sales contacts and proper remuneration”. They also take care of tricky legal matters: "Protecting copyright and ensuring authors are properly paid is a key function of every publisher: publishers have created and manage anti-piracy schemes and contractual rights for e-books, often taking legal action where an author’s copyright is breached."

Messrs Godin and Connolly might be excellent writers but as anyone who compares the number of careless errors in your average blog post (including, probably, this one) with those in a professionally published book will testify, most authors are terrible editors of their own work. For example, a good editor would probably have gently pointed out to Mr Godin that he means “none of these things is supported” not "are", and would probably drop a note to Mr Connolly asking whether he really intends to describe himself as "Doing a Dickens" when in fact Dickens had a publisher (William Hall) for his serialised works. The same editor might ask whether it's quite right for one of the characters in The Sandman to be described  - quote – "holding her iPod to one ear".

Snarkiness aside, I've written before about the importance of publishers (or broadcasters, or record labels) as filters: how in a world where anyone can publish a book, we're more likely than ever to be drawn to titles put out by recognised publishing houses. We simply don’t have time to sift through the millions of options available to us, so a good first filter will be titles we know have been edited by professionals, which a major publishing house has deemed of sufficient quality to warrant making a financial investment. Those of us lucky enough to have a W&N or Harper Collins or Portfolio logo on our title page will automatically hop to the front of the attention queue, both in terms of end readers and the still-very-important book reviewers.

There's a second – arguably even more important – benefit to the professional-publisher-as-filter principle: authors of professionally published books instantly have more credibility when it comes to securing lucrative speaking engagements, journalism gigs and a whole host of other money-spinners for which knowledgable talking heads command top dollar.  Compare the number of professionally published authors you see opining in print and on television (or on stage) with the number of ebook-only authors you find in the same locations. Exactly. In a world where we’re being constantly told that piracy will kill sales and that authors, musicians and the rest will have to rely on live gigs – these bookings become even more critical.

Which brings me neatly to the marketing argument: that most professionally published books are woefully under-marketed by publishers, who seem obsessed with throwing millions of dollars at billboard advertising for a small number of superstars, while everyone else is left to organise their own book tour, or plug their titles on their Facebook fan pages. Authors – particularly those with pre-existing fanbases – can now cut out the publisher altogether, market their titles directly online and enjoy all the financial spoils.

That's absolutely true, of course, providing you're a professional marketer. Seth Godin is a professional marketer and as such has built up a fan base of people who will buy – as he puts it – "five or ten copies at a time and distribute them to friends and co-workers". Go Seth! (Also: worst secret Santa EVER).

For most authors, though, building up an audience – creating viral campaigns, building up word of mouth, arranging book tours, book radio and TV appearances – falls outside their core skill-set. They need whatever marketing and sales support a professional publishing house can offer. After all, there is only a certain number of times that authors can get attention by writing an article about how they're – gasp! – abandoning publishing (the exception to this rule is Cory Doctorow for whom the physics of attention don’t apply). It's a testimony to Godin's genius that he's now pulled the same stunt twice – the first being back in 2000, when he announced he was abandoning traditional publishing and instead self-publishing his book ‘Unleashing the Idea Virus” on Amazon.com and BN.com. A short while later, he changed his mind: the paperback was published by Hyperion. Maybe this time he really means it.

Ok, what else?

How about the timing thing? Says Godin: "The timeframe for the launch of books has gone from silly to unrealistic. Today, even though all other media has accelerated rapidly, books still take a year or more [to be published]. You need to consider what the shelf life of your idea is." Surely that one's unassailable: publishing is sloooow, with a year between manuscript submission and publication being far from unusual a lead time. By contrast, an ebook can be conceived, written and put on sale in a couple of days.

And so yes, Seth, you're right: you definitely should consider what the shelf-life of your idea is. And if you find it's so short that it'll be redundant in a few weeks, let alone a few months, then you shouldn't – mustn't – wait!  You should Tweet it immediately. If, on the other hand, your idea is likely to stick around for a while – like the ideas of, I dunno, Orwell or Postman or Keynes or, well, any of a hundred thousand other authors whose ideas are still relevant today, then maybe it's worth taking the time – and the multiple rounds of copy-editing and revising and proof-reading and checking and double checking that causes publishing to the so slow – just to make sure you get it right before you publish. 1984 was an instant classic; 1983.5 sucked balls.

Which just leaves the hard financial argument: publishers are slashing advances, and yet still only pay a very small royalty on each sale to authors – a couple of dollars tops on a $10 paperback, often far less. Amazon's Kindle store pays 70% – $7 – on that same title – straight into the author’s pocket. Only a fool would shun the opportunity to switch to electronic self-publishing!

Ok. In 2009, the American Association of Publishers estimates the net revenue of US publishers was $23.9 billion. Of that, ebook sales – at their highest estimates – contributed $313 million and $192 million came from audiobooks. The rest – around $23.4 billion – came from print. $313 million vs $23.4 billion -  I know which market I'd choose. Although, actually, given that my publisher also distributes via the Kindle, I don't have to.

(In terms of individual book sales, the numbers don't look much better, even for eagerly awaited titles. When Dan Brown's latest title – The Lost Symbol – was published last year, it sold 100,000 electronic copies in the first week. Impressive! Hardcover sales in the same period? 1.9 million.)

But of course, the market for ebooks is growing fast: perhaps Godin et al are just way ahead of the game? Perhaps. And yet even if we assume that all book sales will eventually be electronic (they won't – at least not in our lifetime), the numbers still aren't all that attractive for the self-publishers. A first time author at a major publishing house can reasonably expect an advance of $10,000 dollars (although some get waaaay more) – a payment that's guaranteed no matter how well their book sells. After that, publishers are increasingly heading towards a 50% royalty (on net receipts) on ebook sales, up from 25% at the moment.

By comparison, Amazon pays self-published authors using their Kindle platform a whopping 70% royalty per sale, but of course with no advance. On a $10 ebook, self-published Kindle authors receive $7 (Connolly is giving his away free in installments, or readers can pay $7.50 for the whole thing; other self-published authors seem to be gravitating to the $5 or less price point).

The self-published author has to cover their own time spent writing, plus all the other costs – marketing, legal, cover design, layout etc etc etc – before they make a dime. And even without these costs, they still have to sell 1429 books at $10 before it becomes a good idea to turn down that advance. On a $5 ebook the number is 2858 copies; on a $2 ebook it's 5000 – or on a freebie it's – uh – infinity.

Those numbers seem manageable, until you look at the average sales of ebooks. Amazon won't release sales figures for Kindle titles, but Apple boasted that 1.5 million titles were downloaded from its iBook store in the first month of its existence, when it contained about 50,000 titles (including free public domain titles). That number is for downloads – many of which will have been free – rather than actual sales, and yet that’s still an average of just 30 downloads per available book a month: 360 a year. (Some have suggested that Amazon is selling as many as 600,000 Kindle books a week, but with 600,000+ plus titles in their catalogue, that's still an average of one of each title a week or, uh, 52 a year.) Sure, some super-authors will sell millions of copies – while others will sell none – but the window of authors who will sell enough ebooks to justify self-publishing, but not enough to want a fully fledged hard-and-paperback contract like Dan Brown – is a very, very small one.

There are many reasons why self-publishing an ebook makes sense, particularly if you have no hope in getting a publisher (Cat-Stuffing For Dummies? Definite ebook) or if you don't have an agent but want to get the attention of proper publishers (most good commissioning editors regularly trawl the Internet looking for undiscovered talent).

But abandoning your publisher if you already have a book deal?

Please.

For all of the reasons above, there are really only two types of person for whom it makes a jot of sense to tear up their book deal and abandon the professionalism, billion-dollar print market, and immeasurable cachet of traditional publishing. The first are highly skilled self-promoters like Godin who have successfully identified their entire (niche) audience and who know they will only ever sell a certain number of copies of their books to that same audience. Marketers like Godin tend to make the bulk of their money with speaking gigs anyway – books are just a throwaway promotional tool, full of ideas that even they admit will be out of date by this time next week.  Might as well take the money and keep running.

The second type of person is more tragic: authors who, for whatever reason, fear they’re about to be dumped by their publisher (or at best paid a tiny advance for their next book) and who want to save face by using innovation as an excuse. Of course I'm not suggesting for one moment Mr Connolly falls into the category. But, well, I’ll just quote from his Guardian article…

"For as long as anyone has been writing books, authors’ careers have rested on the judgments or whims of publishers. Would the novel that took so many months, or even years, to write be read, let alone chosen, by editors? Who could tell? Who knew what publishers were looking for? This was bad enough when editorial departments had the authority to buy manuscripts themselves. But then came the endless rise of marketing departments, and soon novels were increasingly being selected according to which genre they fitted."

Just sayin', as one of his iPod-wielding characters might put it.

As for me, right now, I feel fortunate to be in neither of those camps, and so there's no way on earth I'm going to abandon traditional publishing. Did I mention that I love my publisher?

But still, given my track record of screwing up relationships, be sure to check back this time next year for my bold announcement of why I'm abandoning traditional publishing – and how it can work for you too!

Google, Apple, Microsoft, Netflix, Amazon — when you hear these names, you usually think about how these tech giants all compete with one another. But what if they all teamed up for one cause? They’d be unstoppable, right? We’re about to find out.

All of these companies are currently sitting in the same boat about to storm the beaches. Which beaches? Those belonging to the the cable television providers in the U.S. It has only just begun, but the assault is underway.

Let me start by saying that of course the cable companies aren’t about to go away. Even if the mega assault by the tech juggernauts is successful, it will be many years before everyone’s addiction to cable gives way to something else. But it will. And that something else will be content served over the Internet.

And in that regard, the cable companies have positioned themselves fairly well because many of them are among the largest ISPs in the country now. But it’s their core business, cable television, that is facing this assault.

Just take a look at the big picture. Everyday there is a new story about how one of the aforementioned tech giants is on the verge of something new meant to control our time spent watching content — and much of it from the living room. Today’s story is about Google’s big pay-per-view movie plan for YouTube, a new service they’re hoping to debut later this year with full Hollywood studio support. If they land it, it could be huge. But that’s just today’s example.

On Wednesday, at an event in San Francisco, Apple is widely expected to debut their next iteration of the Apple TV — which will likely now be called the “iTV”. Alongside it, they’re expected to unveil a new layer of iTunes that will allow people to rent television shows for $0.99 a pop. Again, that too could be huge.

But it doesn’t really matter if one of these individual things doesn’t hit it big (and certainly the current Apple TV hasn’t). It’s the fact that all of these giant companies are clearly focused on this one thing: invading the living room and changing the way we consume video entertainment.

And they absolutely should be focused on that space. It’s a multi-billion dollar goldmine of potential that is sitting around begging to be disrupted. Consumers want this — even if many don’t realize it yet.

You see, there are plenty of us more tech-savvy consumers who have long thought about severing our ties with cable television — and some of us already have to varying degrees. Most average consumers simply don’t realize there are better alternatives out there yet, because the truth is that there is no singular better alternative right now. But these services from the likes of Microsoft, Apple, Netflix, etc. keep moving forward. And as more enter the game, they keep pushing each other to improve at a more rapid pace.

Cable is vulnerable because for far too long they’ve screwed us all with ridiculous prices for a crapload of content that we simply don’t want. Despite the ever-present promise of a-la-carte pricing, it has never come to fruition. And so our cable bills remain close to (or over) $100 a month. We’re paying for so much stuff we simply don’t want. But we have no choice.

Further, the vast majority of consumers would agree that the cable companies have just about the worst customer service imaginable. They’re continually promising to get better, but they never do. They’re always over-billing, service is always going out, and their phone lines are always jam-packed with complaints that fall upon deaf ears. Compare this to a company like Netflix which actually reaches out to you when they think they might have screwed up — even in the smallest way.

And on top of the garbage customer support, there’s the actual user experience of cable. It’s awful. Each company seems to be competing with the others for who can pick the worst cable box with the shittiest software. For a little while it looked like TiVo may solve that problem with their own DVR box that provided a layer on top of the cable box. But the cable companies put a quick end to that when they started including DVRs in their own boxes — complete with true-to-form god-awful UIs — for far cheaper.

It’s almost unbelievable to me that in this day and age that the user interface many of us have in our cable boxes looks as if it was designed with a crayon by a 6-year-old. This is how we interact with the device that is for many, the most-used in their home: the TV. A lot of kitchen appliances now have better UIs.

Apple, Google, Microsoft, Netflix, Amazon — all of these guys offer experiences that are a million times better than cable. The only thing that’s holding them back is the content. Netflix is the one arguably making the most headway here, but that’s mainly for movies and older television shows. But Netflix is smart in that they’re not trying to do their own thing. They’re great as a supplement to something like the Xbox 360 and soon, undoubtedly, the iTV. If Xbox Live really can get live sports programming too, it will be another step.

The same is true if YouTube gets major Hollywood rentals. Undoubtedly, this will be a part of the Google TV package that will launch later this year. It’s an interesting model because Google TV is a platform that’s meant to lay on top of existing cable. But in that regard, it may end up being a great bridge to move people away from their cable addiction, and towards content over the Internet.

And if Apple’s iTV comes with the television show rentals, it will also be an important step. For most people, buying each television show you want to watch doesn’t make a lot of sense. But renting them for a cheaper price does. As a person who only is interested in a handful of shows, I expect such a solution to be a fraction of a fraction of the cost of my cable bill. I can’t wait.

Amazon has a pipeline into the living room through a few set top boxes already, but they’re also likely working on their own solution — in the same way they have their Kindle solution for digital books. People probably never thought the Kindle and other similar devices would lead to a changing of the book industry as quickly as it has — but it’s happening, just ask the Borders down the street from me which is going out of businesses.

And with cable, it’s going to happen too.

The music industry has already been disrupted. The book industry has been disrupted. The mobile industry has been disrupted. Now it’s time for the cable industry to be disrupted. There are too many major players with too many billions of dollars worth of resources for something not to hit and change the industry. It’s amazing that all of these guys are focusing on the same thing at the same time.

I, for one, cannot wait for the day when cable has to surrender and fall back into its role as a dumb pipe for the Internet. Innovation always tops greed and complacency. Always. The assault is underway.

[images: Dreamworks]

It’s time for this week’s episode of OMG/JK, the TechCrunch TV show that features fellow TC writer MG Siegler and myself discussing the top stories in tech.

In this episode we cover the integration of Gmail with Google Voice (which is awesome), the launch of Digg 4 (finally), and a peek into our crystal ball to weigh in on next week’s Apple event (MG is already prepping his double rainbow reaction to whatever Steve Jobs holds up). We also take a second look at Facebook Places, which we discussed at length last week.

Here are some links relevant to the stories we discuss this week:

• Google Voice Integrated Into Gmail. Make And Receive Calls From The Browser
• Digg's Kevin Rose: "One Of Us Has To Leave"
• New Version of Digg Goes Live For Everyone This Morning
• Apple Special Event Taking Place September 1
• The Apple TV Is Dead: $99 Next-Gen Model To Be Called iTV, Run iOS, And Play Back At 720p
• Apple Looking To Slice Up Cable 99 Cents At A Time
• The Cloud Is Nice For Music, But Vital For Video
• Facebook Partnering With Gowalla And Foursquare For Places
• SCVNGR Launches Support For Facebook Places

As I was writing this, news of the HP / Dell bidding war for 3PAR broke on the front page of Yahoo. This made me laugh, as it typified just how crazy this story has become—few things outside of a bidding war make a storage acquisition sexy enough for mainstream news.

At $30, HP's current offer is the sixth bid, a 200 percent premium over 3PAR's previous $10 share price. Not only is this insane, but it's also nearly unprecedented in M&A history. And since 3PAR is trading above $32 the market thinks Dell will bid even higher.

First Off, Is 3PAR Really THAT Unique?

Yes and no.

3PAR is a classic disruption play, its value proposition based on the premise that unused storage is wasteful—often times just 10% to 25% of allocated disk space is actually used.

3PAR's "thin provisioning" technology enables disk space to be allocated only when applications need capacity, greatly reducing IT management costs. Think of it as storage on a just-enough and just-in-time basis.

In the cloud era, pre-allocation of storage is especially wasteful, because on-demand storage and computing services delivered via the internet have wide variability and less deterministic usage patterns. This makes 3PAR a great fit for data centers, and it’s partly why the technology is suddenly perceived as very valuable.

Not surprisingly large storage vendors have been slow to adopt technologies like 3PAR's for a simple reason: making storage more efficient ultimately means selling less gear and is essentially akin to committing commercial suicide.

EMC CEO Joe Tucci actually once went on record admitting as much saying “If I only have hardware and I just keep helping to make you more and more efficient at less and less cost, eventually I’m going to hit a wall and it’s going to be tough for me to make money.”

HP's Vanishing R&D Budget and The Mark Hurd Effect

This classic "Innovator's dilemma" definitely applies to HP. But something else has hamstrung its ability to innovate in high-end storage, a market HP has been a leader in for many years.

And it's correlated to former CEO Mark Hurd's recent firing. Word on the street is Hurd wasn't let go for his affair or even for his embellishment of trivial expense reports. Instead the board kicked him out because his employee approval rating was absolutely atrocious.

And the reason employees hated him is because he traded short-run profits for long-term innovation by laying off entire design teams and killing HP's R&D budget—take a look at this chart and compare HP to Cisco and IBM, both storage leaders.

In this way, I believe acquiring 3PAR is actually the beginning of a secular trend for HP in using M&A to "make good" on the company's lack of organic innovation.

Yes that's right, believe it or not, the real reason why HP's board is obsessed with 3PAR is closely correlated to Hurd's departure—divisions like HP's storage group simply haven't kept pace with peers. I used to sell to HP's storage groups (as well as Dell and 3PAR) and have plenty of friends who tell me that projects have been canned and innovation has languished.

Dell is Desperate for Similar Reasons

Innovation within Dell is even more of an oxymoron. If you thought HP's R&D allotment was low, compare it to Dell's. Dell is not an engineering driven company. They are a system integrator desperate for growth outside of the personal computing market.

And storage consolidation threatens Dell for another reason. Storage has traditionally been like a cross selling catalog, with vendors filling in their product portfolios by OEM'ing equipment from others—Dell actually resells EMC's high-end storage gear today. But these cross-sell deals are becoming more tenuous to defend as vendors build out more complete portfolios.

This is because cloud computing requires complex virtualized resource allocation, management and provisioning. Vendors are increasingly moving up the stack in providing services beyond hardware, which is all but a commodity.

Owning 3PAR would give Dell a chance to stay in the game and complement the low end storage solutions it acquired from EqualLogic in 2007. And the Dell board is prepared to break the bank since there is a scarcity of other good high end storage virtualization plays (Pillar Data and Compellent are two of the largest, but don't have 3PAR's traction).

Why HP Will Probably End Up with 3PAR

So there you have it. With its DNA as a system integrator, Dell doesn't have a hope in hell of organically growing complex ASICs and software like 3PAR has, and is desperate to move up the food chain and stop reselling EMC's portfolio. And the HP board is tacitly admitting it needs to rectify the fact that Mark Hurd sort of killed the "HP. Invent" culture. 3PAR would give HP several hundred R&D focused engineers and a talented ASIC team.

The interesting thing about this bidding war is that it conveys a larger lesson about why M&A often fails.

It's easy to listen to investment bankers and overpay on acquisitions. But it's much harder to actually handle post-merger integration. Dell is the perfect example. They have essentially no precedent for running an ASIC team, and would take a company like 3PAR that spent 25% of its revenue on R&D and eventually starve it.

3PAR is a better fit for HP, and in the end it's likely that they will prevail. It sure seems that way anyway. HP’s board is set out to make up for lost time and right its innovation ship regardless of cost to shareholders. But the synergy premium for 3PAR will be enormous, and history suggests that deals with such a massive allocation of acquisition goodwill generally fail to pay for themselves.

_________________________

Contributor Steve Cheney is an entrepreneur and formerly an engineer & programmer specializing in web and mobile technologies.

Japanese watch maker Haruo Suekichi is famous for his unique, steampunk style timepieces. Each of the amazing watches is handmade by Suekichi himself, even though he doesn’t have any formal education and actually started his career by hawking the first watches at flea markets. Guest writer Natsuki Yamada sat down with Suekichi in his studio in Tokyo earlier this month to conduct the following interview for CrunchGear.

Continue reading…