This guest post is written by Daniel A. Crane, who is Professor of Law at the University of Michigan Law School. He is an expert in antitrust law.

Google's proposed acquisition of ITA Software, which provides a management system for airfare pricing and shopping services, has become ground zero for the burgeoning coalition of interests intent on stopping Google's perceived dominance in Internet search. The Justice Department is reviewing the deal and is reportedly preparing to block it if Google does not agree to substantial concessions. Meanwhile, an anti-Google coalition has made stopping the acquisition its Maginot line. The "FairSearch" coalition, consisting of a host of anti-Google forces including Microsoft, TripAdvisor, Expedia, Kayak, and Hotwire, presents the ITA deal as Exhibit A on its website, warning that the deal will bring "consumers higher prices and less choice in travel."

These claims are overblown. Google's competitors naturally fear Google's emergence as a formidable rival in travel search, but that is hardly a reason to block the transaction. Indeed, it's a reason to approve the deal. The most likely scenario is that Google's acquisition of ITA would allow Google a quick and efficient entry point into travel search that would expand consumer options and increase rather than decrease competition.

Fairsearch has not articulated a clear and economically supported argument as to how the acquisition would harm competition, but two likely arguments spring to mind. The first is that by acquiring the software "backbone" powering travel search, Google will be able to squeeze out its rivals over time. Google could ostensibly do this by refusing to license ITA's QPX product to travel search sites or by refusing to give them access on terms as favorable as Google's own search site receives.

While there are a number of theoretical arguments suggesting that Google would not have an incentive to do that, the most compelling argument is factual. ITA does not power most of the major travel sites. Out of the top five travel search sites, only Orbitz uses QPX. Expedia uses its own proprietary software, Priceline uses the E-Pricing system (owned by Travelport), and Travelocity and Yahoo use ATSE (owned by Travelocity). It's hard to argue that QPX is the crown jewel asset of travel search when only one of the five major players currently uses it.

The second possible argument is that Google will use its dominance in travel search to steer consumers to its new travel search site. Under this scenario, when a consumer trustingly enters travel-related search terms into Google (say, "New York to Rome"), Google will steer the consumer to the Google travel site and blacklist rival sites.

It's plausible that Google will favor its own service in search hits, but it seems farfetched that such a move would lead Google to monopolize travel search. Only a small percentage of the traffic into travel sites, ranging from 4% for Bing Travel to 12% for Expedia, comes from Google. Consumers are accessing travel search sites from many different origins and it seems unlikely that Google could take over travel search by steering consumers from Google to its own travel site.

More generally, the argument that Google should be prohibited from integrating vertically goes well beyond blocking the ITA deal. If the problem is that by vertically integrating Google might favor its own services, then Google should not be allowed to vertically integrate whether by acquisitions or by internal development. If accepted, that argument would set a dangerous precedent for the entire Internet. It would suggest that once a player becomes dominant in one facet of the Internet, it cannot move into adjacent spaces because the Internet's inherent interconnectedness makes dominance spread easily. Such a principle of economic engineering would freeze innovation and progress on the Internet by forbidding the spread of success.

Google says that it has plans to use ITA to improve the flexibility and quality of travel search. The integration of Google's search tools and ITA's interface to airline travel data has a lot of promise. In the absence of a compelling antitrust reason to block the deal, the presumption should be in Google's favor.

To be sure, antitrust principles have an important role to play in preserving the Internet's openness. Google is under antitrust scrutiny around the world for a variety of its practices. Whether or not "search neutrality" is a viable and legitimate antitrust principle remains to be seen. In the meantime, there is no compelling reason to hold up the ITA deal.

Photo credit: Flickr/BeInspiredDesigns

In mid February, at the Mobile World Congress in Barcelona, Google Executive Chairman Eric Schmidt expressed pride in Google employee Wael Ghonim's brave struggle against the autocratic Mubarak regime to establish political transparency in Egypt. “We are very, very proud of what Wael and that group was able to do in Egypt," Schmidt said in Barcelona. But what Schmidt needs to do now is apply Ghonim's views about political transparency to Google's own search business.

With its 70% control of the global online search market, Google's power to make and break online businesses is unrivalled. So it's not surprising that website owners want more transparency over the reasons why the often autocratic Google sometimes impose penalties on their businesses. But a report issued last week by the newsnavigator OneNewsPage found a distinct lack of transparency in the search business with 88% of respondents saying that paid search advertising costs lacked transparency, while 24% said that they had experienced large, unexplained falls in site traffic as a consequence of changes in their search engine status.

Nor is it surprising that the American Antitrust Institute published a report a week ago calling for US regulators to do a thorough investigation of Google's proposed deal to acquire travel software provider ITA. This deal, the report worries, would enable the dominant search engine to dominate the online travel market, thus muddying the church-state distinction between Google as technology provider and Google as a distributor of content.

Transparency in search is critical to maintain both innovation and fairness in the digital economy. Yes, Google improved the quality of its search engine by targeting content farms with last week's self-congratulatory tweaks to its algorithm. But this remains little more than a cosmetic change. Rather than spam, fairness is the key issue. Given Google's dominance in search, the company has a responsibility to reveal the mechanics of its ranking algorithm—so that everyone understands why some links are ranked higher and more prominently than others.

How can they do that in a way that doesn't invite gaming and spam, so that companies like JC Penny won't take advantage of the system? That is Google's problem. They've cornered the global market in PhD's. If the company can invent a self-driving car then it can certainly figure out how to make its ranking algorithm more transparent without becoming an easy target for content farms like Demand Media.

You see, just as we need our government to play by clear rules, so the same is true with search. Thus, a week ago, in a letter to the DOJ Assistant Attorney General for Antitrust, John Conyers, the lead Democrat on the House Judiciary Committee, encouraged the Department of Justice to "carefully" review the Google ITA deal in order "to ensure competition and transparency will be protected in the online travel industry."

Last week, 1plusV, the French developer of vertical search engines such as EJustice.fr, filed a complaint with the European Union, accusing Google of "pursuing a strategy of foreclosure against vertical search engines" and of illegally tying the Google search engine with AdSense. Bruno Guillard, 1plusV's founder, said on Bloomberg News that it was technically impossible for his own vertical search engines to use AdSense, thus undermining his ability to build viable business models around these new services.

Yes, online transparency—understanding how, exactly, its artificial algorithm works and what information or links gets prioritized for what reasons—matters, particularly given the centrality of Google search in the knowledge economy. In his important new book The Googlization of Everything (and why we should worry), University of Virginia media scholar Siva Vaidhyanathan claims that Google's control of the Internet is comparable to that of Julius Caesar's rule in 48 BC Rome. The all-controlling Google, Vaidhyanathan argues is "omniscient, omnipotent and omnipresent" and thus needs to be controlled if we are to maintain a level playing field in today's knowledge economy.

Unfortunately, however, this is only half of it. Not only is Google's control of today's search engine market omniscient, omnipotent and omnipresent, but it also seems as if the Mountain View leviathan is abusing the very system over which it has such control. That's at least the suspicion of the European Commission which last November, on behalf of the European Union, launched an antitrust investigation into allegations that Google "abused" its already dominant position in search by its "unfavorable" treatment of rival services and by its "preferential treatment" of its own services like YouTube, Google Maps and Blogger.

Yes, as everyone from the European Commission to the American Antitrust Institute remind us, transparency matters. In simple terms, it seems, Google has muddied the already disturbingly murky lines between online content and commercial interests by promoting its own products in its supposedly objective search engine. So, for example, when I enter my own name into Google, the first video link that comes up is a YouTube speech I made at Google headquarters in June 2007—even though there are many more professional and popular videos of speeches that I've made since.

Coincidence? No, I hardly think so. The truth is that Google's manipulation of its secretive artificial algorithm isn't just a reflection of the paranoia of its less powerful rivals in the search business or my own admittedly highly anecdotal adventures in self-googling. Last November, when the European Commission launched its investigation, the Harvard Business School professor, Benjamin Edelman, published a research paper entitled "Hard-Coding Bias in Google Algorithmic Search Results" which proves that Google has "hard-coded its own links to appear at the top of algorithmic search results."

Edelman's scientific research is the real reason why Google sucks. Taking each of the 2,642 terms listed on Google's Health Topics index page, the Harvard academic found that all 2,642 of these individual searches resulted in a link to Google Health appearing in the "absolute top of the page." Edelman discovered the same unnatural biases with stock ticker searches on Google. Here, he found, that the links from any stock ticker search—"the large-type all-caps ticker symbol, the large price chart, and the left-most details link"—will always take you to Google Finance, even though Google's in-house financial service is far from being a market leader in this sector.

Google's bias isn't just limited to finance and health. In a January 2011 paper, "Measuring Bias in Organic Web Search," written with Harvard Business School doctoral candidate Benjamin Lockwood, Edelman found that Google listed its own map service as the first result when a user queries "maps.” It's hardly surprising, therefore, that Edelman and Lockwood discovered that 86% of map searches conducted on Google end up with the user clicking on Google Maps.

So much, then, for the neutrality of Google search, the digital librarian on which we all-too-innocently trust to navigate our way around today's knowledge economy.

Earlier this month, in an interview with the UK newspaper, The Daily Telegraph, Google's former CEO and new Executive Chairman, Eric Schmidt, said that he hoped that the European Commission would "come up with a set of remedies" to the issue of biased search and promised that "Google would consider" implementing. Google, Schmidt told The Telegraph, would be "willing to change some of its algorithm methodology in search" if it led to the quick resolution of the EC enquiry.

But Google doesn't really need any commission, European or otherwise, to identity the remedies to Google's manipulation of the search knowledge economy. Instead, as I've suggested, they should listen to Wael Ghonim's observations about the lack of transparency in the Mubarak regime.

My message to Mr. Schmidt and Google is very simple: stop cheating. Transform your search engine from a murky algorithm that sometimes benefits your own corporate interests into a transparently neutral guide that benefits both the consumers and the all the companies in our knowledge economy.

The need for Google to establish transparency in its search engine and play by the rules is particularly acute today, both in Europe and America. You see, Google isn't quite as omniscient, omnipotent and omnipresent as Siva Vaidhyanathan claims. Indeed, for the first time in over a decade, Google has a genuine online rival challenging its hitherto Caesarian hegemony over the Internet. This emerging superpower in the online economy is Facebook which, with its 600 million members and over $50 billion valuation, is beginning to transform the web from a Google centric network of data to a social network of connected people.

Google's recognition of the growing power of the social web is behind both its failed $6 billion acquisition for the social commerce business Groupon and its rumored $10 billion interest in acquiring Twitter—Facebook's main rival in the social networking business. And given Google's much publicized vulnerability in social media, it's particularly important that this multinational corporation makes its search engine honest so that it doesn't become a disreputable tool in Google's battle with Facebook to control the emerging social web.

In his new book, The Master Switch, Columbia University law professor Tim Wu—the scholar who invented the term "network neutrality"—argues that the modern media and communications industry has a tendency toward monopoly. But, for the 2 billion Internet consumers like you and I reliant on fair and transparent search as their trusted vehicle for navigating the web, the only thing worse than a monopolist is a cheating monopolist. Google needs to clean up its artificial algorithm now and guarantee search neutrality. Otherwise it won't only be the European Commission investigating the self-interested bias of the Google search engine.

Photo credit: Flickr/Dicemanic

Rebtel is offering us one hot little Motorola Atrix to give away this weekend to one lucky reader. How do you win? Well first you have to be very very nice to animals and the environment and then you need to click through to comment.

Read more…

Breakup Notifier creator Dan Loewenherz should just give up on Crate (his actual job) and just make a whole network of these types of things. After having his wildly popular app Breakup Notifier blocked by Facebook, Loewenherz has dusted himself off and is back in the game, trying to “turn a negative to a positive” with Crush Notifier.

From his blog:

“So what does the popularity of Breakup Notifier tell us? I believe it's that human beings, above all else, value relationships. I never knew how many people would end up using Breakup Notifier.

Soon after it a traffic peak, Facebook cut off our API access, and "permanently disabled" our application. This was a huge bummer for me. It was 4:30am for me, so I couldn't really do anything about it until I woke up a few hours later. Since that time, Facebook has only responded twice to us; even now, we still don't know why we were banned. Since we don't know the reason we were disabled, that means we don't know what we should do differently, and for that reason we can't turn back on Breakup Notifier.

In light of the above, I wanted to release something new today that would be 100% positive. Something that helps create relationships.”

Unlike Breakup Notifier, which sent you an email if selected friends had changed their relationship status, Crush Notifier (on a more positive note) allows you to choose people that you are crushing on (you can buy “Crushes” with Facebook Credits) and sends them the below anonymous notification email, replete with a cute love-related quote.

If the feeling is mutual (i.e. if the person you’ve selected also selects you) you get a similar email notifying you of your match. “I’m a fan of creating relationships more than I am ending them,” says Loewenherz. Let’s hope Facebook can keep its hands off this one.

Update: Loewenherz tells me that interested TechCrunch readers can sign up for a special “15 Crushes for 10 Facebook Credits” deal after creating an account, here.

And we’re back again with our now weekly update on the insanity surrounding Facebook’s stock in the SecondMarket auctions. Last week, the stock saw the beginning of a rally back to $27 a share, good for a $67.5 billion valuation (based on roughly 2.5 billion shares outstanding). This week, the good times continued to roll. Facebook’s stock hit $28 a share, to push the valuation of the company back to a cool $70 billion or so.

This is still slightly off the record high of $28.26 a share (a $70.65 billion valuation) set in mid January, but it’s clear that Facebook’s stock is storming ahead once again, and quickly. This was the 11th auction SecondMarket has done on the stock.

Do I hear $75 billion next week?

Below, find the full email sent out of the folks buying this stuff up:

To Facebook market participants:

This week's SecondMarket auction successfully cleared 225,000 shares at a per share price of $28.00. Read more details in the attached auction results report.

Next week's auction will require a minimum sale and minimum purchase of 10,000 shares. If you are bidding for fewer than 100,000 shares, you are required to open a brokerage account with SecondMarket. Please email XXXX@SecondMarket.com to receive a Brokerage Account Opening Form and return the completed form by Monday, February 28, 2011 at 5:00 PM EST.

Please email your completed Seller or Buyer Information Forms to XXXX@SecondMarket.com by Wednesday, March 2 at noon EST. To verify receipt of your order, you must receive a confirmation email from XXXX@SecondMarket.com. If you do not receive a confirmation email, your order has not been received by SecondMarket and may be excluded from the auction. Responses are typically sent within one hour.

Next Week's Auction Timeline:

• Friday, February 25 at 7:00 PM EST – SecondMarket will begin accepting Seller Information Forms, Buyer Information Forms and Brokerage Account Opening Forms

• Monday, February 28 at 5:00 PM EST – Brokerage Account Opening Form due, if bidding for fewer than 100,000 shares

• Wednesday, March 2 at 12:00 PM EST – Seller and Buyer Information Forms due

• Wednesday, March 2 at 5:00 PM EST – Participants informed of auction results

• Wednesday, March 2 at 8:00 PM EST – Transaction documentation distributed to buyers and sellers

• Thursday, March 3 at 5:00 PM EST – Wire of 100% of gross purchase price to escrow account due, if allocated fewer than 100,000 shares

• Friday, March 4 at 4:00 PM EST – Completed transaction documentation due from buyers and sellers

• Friday, March 4 at 7:00 PM EST – Notice sent to Facebook, Inc.

By reading this email, the recipient acknowledges and agrees that all of the information contained herein is confidential and that the recipient will keep this information confidential. The recipient further agrees that it will not copy, reproduce, or distribute this email in whole or in part.

Please contact us at XXXX@SecondMarket.com or XXX.XXX.XXXX if you have any questions.

Please note that the information in this email does not constitute an offer to sell to, nor a solicitation of an offer to buy from, nor shall any securities be offered or sold to, any person in any jurisdiction in which such an offer, solicitation or sale would be unlawful.

Regards,

Terrence

All is right with the world, as genius (and Googler!) Thomas Steiner has made this beautiful Chrome extension that corrects Twitter’s subject/object discrepancy on its “Who to Follow” feature. Grammar snobs (I KNOW WHO YOU ARE AND WHERE YOU COMMENT), rejoice!

In case anyone’s still confused about ”Who” vs. “Whom” usage, here’s a quick tip to differentiate courtesy of Shit You Should Know:

“To determine proper usage of who/whom, separate the who/whom clause and pose it as a question.  If that question can be answered with "he", use "who"; if it can be answered with "him", use ‘whom’.”

You can change your entire life by downloading the extension here. Now if only Steiner would make one that eliminated all the typos on TechCrunch.

I love Kickstarter. It’s maybe the best enabler site ever. In the short time it has been around, we’ve gotten everything from open source Facebook “killers” to iPod nano watches to RoboCop Statues. But one of the aspects of the service with the most potential is movie funding. A few of these projects have popped up already, and it apparently caught the eye of Napoleon Dynamite himself, Jon Heder.

As NewTeeVee points out today, Heder has set up a project on the service to get funding for a movie he hopes to make. Alongside collaborator Nick Peterson (who would direct the film), he hopes to raise $27,000 over the next month or so. Given the fact that he’s well, Napoleon Dynamite, he should blow past that in no time. I mean, the iPod nano watch got almost a million in funding.

If you watch the video they put on their Kickstarter page, you’ll see that the duo hopes to make a half animated/half live-action short film about dripping filth, or something. And while you have to assume that Heder could easily just pay for this out of pocket, it’s interesting that he’s crowd-sourcing the funding.

You can pledge as little as $1 to help out, but if you’re a high-roller and give them $10, you’ll get your name in the credits. Even better, if you pledge just $250, you’ll get an associate producer credit! As anyone in Hollywood would tell you, that’s a total BS credit, but still! The real killer option is for $5,000 or more, you get a full producer credit, a private screening of the film with Heder and Peterson in LA, and everything else they’re offering others (HD copies of the movie, etc).

Wait for it…. lucky!

This week, Affiliated Computer Services, Inc. (ACS) — which was acquired by Xerox (NYSE: XRX) in February 2010 — announced that it’s building a new, electronic toll system on the two busiest highways in Los Angeles, to allow all single car drivers, even those in diesel guzzling Hummers, to shift into carpool lanes for a fee.

When average traffic levels in a carpool lane rise overall, so will the fee. The company and city plan to calibrate the systems to keep traffic at a steady 45 miles per hour in the carpool lane (at least). Once equipped with the new toll system, the carpool lanes along Interstate 10 and Interstate 110 will be called ExpressLanes, instead.

Los Angeles and Xerox are building this project with the idea of reducing highway congestion overall, according to a press statement from ACS and reports by Green.Autoblog.com.

Is the death of the carpool lane as we know it environmentally sound, though?

The faster, wide open appeal of a carpool lane is supposed to motivate Los Angelenos to roll with their homeys, instead of Swingers style; remember that distinctly not-green-scene where Vince Vaughn and his friends drive individually but together to party after party? At least, a carpool lane’s supposed to encourage drivers to buy clean vehicles.

The Department of Motor Vehicles and state law in California allows vehicles with a qualifying “clean alternative fuel vehicle sticker” to drive in high occupancy vehicle (HOV) lanes.

Ken Philmus, senior vice president and managing director of ACS Transportation Systems and Services, believes that a pay-to-switch-lanes system is a win for the environment, of course. Here’s why, he explained:

“When people are stuck in traffic, watching the other lane, they might be encouraged to get into a carpool, later. Only 10 percent of vehicles [in Los Angeles] are multi-occupant, generally. So, there’s under-utilized capacity in [high occupancy vehicle, or HOV] lanes.

With this system, as the HOV lane gets more congested, the toll to shift over goes up, which should result in fewer [single car drivers] going in, and a free flow that’s maintained. It should not damage the occupancy of the lane. But it should maintain or improve environmentally positive aspects of the lane, by getting people out of stop and go traffic. That’s where the air quality situation becomes worse, usuall.”

ACS and Xerox are not charged with studying things like improvements in air quality, or reduction in diesel consumption in Los Angeles, resulting from this project in any official capacity, Philmus said. That job will be up to the likes of the Federal Highway Administration, local air quality management offices and departments of transportation instead.

To participate, Los Angeles drivers will need to sign up for a FasTrak toll account, and install a small transponder in their vehicles. They will be asked to set a switch on the transponder to indicate whether they’re driving solo and the system should charge them; or if they’re part of a carpool and can drive for free in the ExpressLanes. Sensors installed along the interstate will calculate the dynamically priced tolls and deduct the proper amount from a driver's prepaid account, automatically.

The ExpressLanes Project in Los Angeles is projected to open to traffic in late 2012. Similar systems have been installed in Miami, where they’re known as HOT lanes (high occupancy toll lanes), and are averaging around $3.50 or $4.00 a toll during rush hour, and are about 16 miles per hour faster than regular, free lanes according to reports in the Miami Herald.

Image: Traffic on Interstate 10, under creative commons license via Florian

photo © 2007 Kevin Lawver | more info (via: Wylio)Wait wha? According to this SEC form, daily deals site Groupon has raised another $16.2 million. There’s no word on whether this is an add-on to its recent $950 million round or just a smaller mini-round, in any case it seems unrelated to any M&A activity. Listed on the form are Groupon’s board members Eric Lefosky, Brad Keywell and Kevin Efrusy, among others.

Groupon recently turned down an offer from Google, and has raised over $1.13 billion to date when you include the amount on this form. When asked whether this was part of a new round, Groupon CEO Andrew Mason said, “We typically don’t comment on these things, sorry. Ask me something else.”

Groupon recently named Starbucks founder Howard Schultz to the board, who then made a undisclosed investment to the company. Perhaps that’s actually what we’re seeing here — The date of the asset sale is February 10th, the very day that Schultz’s board seat was announced.

Kidlandia, the awesome site that lets you create your own personalized fantasy maps for your kids, has raised $2.5 million led by Alsop Louie Partners with GRP, Net Discovery, Ivan Sutherland and Jim Sandler participating. This brings the startup’s total funding to $3.5 million.

As we’ve reported in the past, Kidlandia lets parents and kids create maps of a fantasy land, where the child is King or Queen of their own eponymous fantasy kingdom. You can insert family members or friends names into the map, so other areas of the land incorporate family members' names. The map also features whimsical characters from Kidlandia’s brand Kreechurs.

Shortly after launching in 2009, Kidlandia signed a deal with Pottery Barn to feature the maps in its catalog, its website, and its retail stores. Since that time, Kidlandia’s reach has grown to a number of other well-known retailers including Snapfish, FAO.com, DisneyStore.com, and NickShop. The startup will actually launch a mini-store at FAO Schwarz's flagship store in New York City in the next few weeks.

And, Kidlandia has also started to create branded maps for kids toy and entertainment companies, and are currently producing products for Disney, Nickelodeon, Lego, and Marvel.

It’s Oscar weekend so of course every social media service, smart phone app and “tech” blog is going to find some movie angle to remind you that they exist. And because I tend to write the more fluffy cultural pieces, I will be stuck writing about them, even though I hate Hollywood and celebrities of the non-YouTube or TopCoder variety.

But Foursquare’s map of 2010 movie checkin frequency (above) is an exception to the “blatant attempt to glom publicity off of an ‘important’ event rule,” and deserves reposting. And yes, the mention of Sex In the City 2 on the pink side of the Venn Diagram here makes me ashamed for my gender. Very ashamed.

Click to enlarge.

It has now been at least a year since I last used the optical drive on any of my computers. And now I’m really starting to believe I never will again. Which I love.

Last October, I noted that I was ready for the launch of the new MacBook Airs because I realized I had never once used the optical drive on my MacBook Pro. It was simply a huge waste of space. And since I’ve switched over to the Air — the best computer I’ve ever owned — I have zero doubt that this optical drive-free experience will soon be the reality for all Mac computing. And now it’s clear that OS X Lion will be the final ingredient needed.

The last time I can remember using my optical drive was to install OS X Snow Leopard, which was released a year and a half ago. But it’s becoming very clear that Apple will use the new Mac App Store to distribute the follow-up, OS X Lion. And despite a rocky start yesterday with the beta release, it makes a lot of sense.

But one thing I was worried about was system restores. It’s an issue that comes up again and again when I talk about the death of the optical disc. Apple deals with this on the MacBook Air by using a USB bootable restore drive. With the Mac App Store, I was thinking they may have to create a way to burn a backup CD or USB for Lion if you buy it over the web. But I was wrong.

As Cult of Mac notes today, there’s a new feature of OS X Lion which brings support for a separate recovery partition of a hard drive. In other words, if you need to restore your system, you can do it from the other area of the drive, no disc or USB drive needed.

Yep, Lion appears ready to maul the optical disc. And it’s unlikely to recover.

Some may wonder about the scenarios when a hard drive is damaged and the other partition doesn’t work. But for most restores, that’s not the case. And if that is the case, it’s probably best to just go to the Apple Store anyway.

In the newly upgraded MacBook Pros announced yesterday, Apple chose to keep the optical disc drive intact across the line. But rumors are already starting that the product may be totally redesigned next year. And I wouldn’t be surprised at all if that design more closely resembled the Air, with the removal of the optical drive (though perhaps the 17-inch model would keep it for those doing video work).

Just like the floppy disk before it, the optical disc will fade into irrelevance. And now you see why Apple has never included a Blu-ray drive in any of their machines.

Another interesting aspect of OS X Lion points to a future that eliminates hard drives with spinning discs as well. Lion brings TRIM support, which optimizes the clean up of data blocks on solid-state drives. Given the Air’s performance with these drives, there’s no question these will be the future of the Mac line as well.

All of this should be fairly obvious when you think about the future: clearly optical discs and regular hard drives will die off eventually. But Apple appears to be moving aggressively to make it happen sooner rather than later. And it will make rival devices seem unnecessarily slow and bulky — perfect prey for a lion.

[image: flickr/fortherock]

How much should a startup spend on marketing? The answer, according to VC Fred Wilson, is zero. The best marketing for a startup when it is just getting off the ground are kick-ass products. Great products market themselves. If you have a line item in your business plan for marketing, you are doing it wrong.

That is not to say that startups don’t need to do any marketing at all. And, let’s be clear, Wilson is taking about consumer Web startups, not enterprise startups or those in other industries. But as he writes in a post today:

Marketing is for companies who have sucky products. If you build something that is amazing (think Flipboard or Instagram or Instapaper) people will adopt it because it is amazing. And you won’t have to do much marketing, at least at the start.

Startups still need to do marketing, they just shouldn’t be spending any money on it until they need to juice adoption. But at the beginning, marketing consists of the founders themselves hustling at live events, on Twitter and Facebook to tell the world about their product. Marketing for a Web startup starts a very personal level. It is the job of the founders to get their product in the hands of potential hardcore users who need the product the most, will fall in love with it, and help spread the word. “Find an obvious group of like minded people who know each other and launch into that community,” Wilson suggests.

What about PR? “Do not hire a PR firm to do your free marketing for you,” he notes. “The best companies know how to become the story and work it,” he adds. So true. Also, being SEO-friendly is fine (lot’s of people find new products from search), but “don’t be a google bitch.”

At some point, after a company finds its natural market, then spending money to enlarge that market or go beyond it makes sense. But in the early days, it’s much smarter to spend money making your product great instead of spending it to convince people that it’s great.

Photo credit: Flickr/Duncan C

Bloomberg is launching a new daily hourly television show called Bloomberg West next week, we hear. It’s on the air daily at 3 pm Pacific and then again at 8 pm. The show will focus on technology, innovation and business, says the promo clip that has been running regularly on Bloomberg. It’s being recorded from their new San Francisco offices.

The show is hosted by Emily Chang, formerly with CNN in Bejing, and Cory Johnson, who was most recently a hedge fund manager and is a long time journalist. It’ll will be available to 250 million people worldwide who have Bloomberg TV.

Bloomberg has significanly stepped up it’s technology news coverage in other ways too. Game Changers, a show that debuted in October 2010, has profiled ten or so tech leaders, including Steve Jobs, Mark Zuckerberg, Larry Page, Sergey Brin and others.

You can also watch Bloomberg TV streaming online, here.

Ask a VC was on hiatus for a few weeks, but your Friday investor-talk fix is back. Our guest this week is Tony Conrad, partner at True Ventures and founder of About.Me, which recently sold to AOL along with TechCrunch.

There was a pent-up flood of questions this week, and Conrad addressed many of them. In case you want to skip around here they are in order:

-Why does True Ventures invest in more product and gadget companies than most VCs? What do they look for?
-True’s views on International investing
-Conrad’s advice on getting into business in Southeast Asia and the moment he knew he’d “gone native.”
-Does Conrad have a secret “formula” for building companies to flip? And did he sell About.Me so early, because he didn’t believe in the business?
-Why True isn’t betting big in the current game frenzy.
-Why True doesn’t bet on education or music companies.
-And a general roundup of questions about how to pitch True.

Apple just can’t get a break. Consumer Reports is, well, reporting that in their testing scenarios the Verizon iPhone 4 has the same “death grip” attenuation issues as the AT&T/GSM model, which means dropped calls and signal degradation if you hold the phone wrong.

Just as with the previous model, the Verizon iPhone 4 suffers from the same conductive gap issues and the problems manifest when you touch the small spot between the two pieces of metal cladding.

Read more…

It looks like recruiting service Pursuit has been gobbled up by Facebook, the latest in a string of acqui-hires, judging by the brief message on their homepage:

“Update: we’ve found a new home at Facebook! Although we’ll be working on stuff unrelated to Pursuit, keep an eye out for great new features from us there and thanks to everyone who helped along the way.”

The San Francisco based Pursuit was just three extremely over-educated guys — Louis Eisenberg, Russ Heddleston, Nicholas Letourneau — who according to their digital “Gone Fishing” sign, will be dropping Pursuit in um, pursuit of other things at Facebook. This is not surprising, as Facebook acquisitions are almost always about engineering talent versus product.

Pursuit took a social angle to the career recruitment process, allowing you to use Twitter, Facebook, LinkedIn or Pursuit itself to refer people for jobs. Users who successfully referred applicants were given monetary bonuses and “karma points.” Hackruiter, Top Prospects and Facebook app Branch Out were also in the space.

I have contacted both Facebook and the founders for more information and will update this post as soon as I hear back.

Update: Both Facebook and the Pursuit founders tell me that no assets were acquired in the transaction and that part of the team was hired at Facebook, not acquired. “We just felt that joining FB was the better opportunity,” founder Heddleson told us.

If you’re like us, you may have a hard time remembering where you placed one of those remotes of yours that keeps secretively slipping away. You may have even given up after searching for it for hours. As a surprise, for this week’s giveaway, we were lucky enough to have Logitech offer to help us give away two, yes two, Harmony Ones.

A Logitech Harmony One is basically the only remote you will ever need. Whether you want to watch a DVD, TV show, or listen to music, the Harmony One makes it incredibly simple to do so.

The guys over at CrunchGear named it one of their favorite things, and Michael Arrington said it was “probably the single best gadget” he’s ever bought.

@arrington
Michael Arrington

Probably the single best gadget I've ever bought. http://bit.ly/fdn2ER

February 13, 2011 12:07 am via webRetweetReply

If you want a chance at winning one of the two Harmony Ones we’re giving away, just follow these steps to enter:

“Like” us on our TechCrunch Facebook Page:

Then do one of the following:

- Retweet this post (making sure to include the #TechCrunch hashtag)
- Or leave us a comment below explaining why you want one and how often you’ve misplaced a remote

The contest starts right now and ends tomorrow, February 26th at 7:30pm PST.

Like previous giveaways, please only tweet the message once. We will choose at random and contact the winner this weekend with more details. Anyone in the world is eligible, as long as you can receive delivered packages. Good luck everyone!