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NEW YORK (Fortune) — If your favorite book happens to be Seabiscuit, you already know the answer to the following question: What are the three legal forms of online gambling in the United States?The Federal Unlawful Internet Gambling Enforcement Act, passed in 2006, put the kibosh on all kinds of online gambling, with the exception of fantasy sports, online lotteries, and horse/harness racing. It actually wasn’t the betting that was outlawed, but the transfer of money from a bank to an online gambling site. In any event, for online betting houses in the U.S., the party was over — sort of.Online gambling in the United States still goes on — billions of dollars every year — it just happens via offshore outfits and offshore accounts. Strictly speaking, in ain’t legal, but when you have a feeling about a big football game, or you have a poker itch to scratch, well, you’ll find a way to scratch it.Goldman Sachs in a recent research note to investors estimated that online poker and casino games alone could be worth up to 12 billion in the U.S. The white-shoe investment bank also concluded that because of the tax implications alone, the U.S. market is likely to be legalized sooner rather than later.That is exactly what U.K.-based Betfair, one of the world’s largest Internet gambling companies, is betting on. But rather than wait for all forms of gambling to get the green light, it’s making its initial push in the U.S. via horseracing. “We want to bring the Facebook generation to the track,” says Gerard Cunningham, who heads up Betfair’s U.S. operations.0:00
/4:19Andreessen launches fundIn January, privately-held Betfair acquired Los Angeles-based American TV Games Network, an online horse race betting company for 50 million. The price tag was so hefty in large part because TVG has its own television channel that broadcasts horse racing to 72 million households across the United States.Cunningham is currently staffing up in Silicon Valley. The plan is to build a technical team that can combine that television property with a brawnier website, which can stream live horse races to viewers and add all the social media bells and whistles, including Twitter feeds, chat and blogging — to make the horse-racing experience more akin to watching an episode of “Lost” on Hulu.In the United States in 2008 about 14 billion was bet on all forms of horse-racing — 1.5 billion was bet online. Betfair’s TVG handled about 500 million of the online transactions. And while it is currently restricted to so-called parimutuel betting in the U.S. (where the house takes a cut of the overall pool of bets), what it hopes to do, as laws allow, is to bring exchange betting to the U.S.Exchange betting is where Betfair has made its name outside of the U.S., and is what makes Betfair one of the largest pure-play Internet companies in the world. In concept the model is similar to eBay (EBAY, Fortune 500), only instead of providing a marketplace where buyers and sellers are connected, Betfair’s model matches up people on both sides of a bet. That bet can range from a match at Wimbledon to the outcome of a political contest. One person proposes a wager and another person (or group of people) take the other side. Betfair makes its money on a 2% to 5% commission paid by the winner. In the year ending April 2008, that amounted to 396 million in revenue and 69.5 million in profit for Betfair.Like the Goldman Sachs analysis, the Betfair team believes that online gambling will be expanded in the United States, probably on a state by state basis rather than with a sweeping federal law, Cunningham says (hearings on a bill proposed by Massachusetts Congressman Barney Frank that would undo most of the 2006 Unlawful Internet Gambling Enforcement are delayed until at least September).The technical team he is building in Silicon Valley is therefore taking a very modular approach to what its building online so that various components of online gambling can be turned on and off depending on the laws in individual states (or even countries). So that might mean poker and horseracing in one state, and sports betting in another.Right now, Betfair is focused exclusively on horse racing in the United States, because that is what is emphatically legal, Cunningham says. “When other forms of gambling become legal, we’ll be ready,” he says. “Until then, if it’s even a grey area we’re not going to touch it.”
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Source:CNN

NEW YORK (Fortune) — It’s highly unlikely that the operating system Google announced yesterday — dubbed Google Chrome OS — will rocket to the heights of its chief competitor, Microsoft, right away. But it doesn’t really matter. In a world obsessed with all things Google, the new OS will certainly get its fair share of attention, and the frontal assault on Microsoft that it represents will serve at least as a great distraction to the tech behemoth.We only know a few details about Google’s plans for the operating system, which won’t actually launch until the fall of 2010. It will target netbooks initially and then expand to the larger PC market. It will combine the Google Chrome browser with a Linux kernel. Though there’s some overlap with Android, the company’s operating system for mobile devices, this system is intended for computers. And it will be fast, accessible, efficient, and — though Google (GOOG, Fortune 500) hasn’t said as much — it’s likely the operating system will be free.Google’s announcement is riddled with subtle jabs at its Seattle rival, even going so far as calling the Chrome OS necessary because “the operating systems that browsers run on were designed in an era where there was no web.”But there’s a lot to suggest Google won’t be able to pull this off. The company’s only breakthrough success has come with the AdWords and AdSense products related to its core business — search. While Google’s launched plenty of products over the years, it’s sometimes hard to tell immediately whether they’re designed to dominate a field or entertain technologists.And many of those products have not risen to prominence. Google Apps just came out of beta this week, but it’s hardly affected Microsoft Office’s dominance in productivity. Google product search — you may remember it as Froogle — was a flop. Google Checkout hasn’t overtaken PayPal, and Knol was far from a Wikipedia-killer. Does anyone even remember Orkut, an early contender for the market Facebook has captured? And the list goes on.0:00
/4:19Andreessen launches fundStill, Google’s announcement should worry Microsoft (MSFT, Fortune 500). It’s the biggest threat yet to the tech giant’s crown jewels, and it’s more evidence of the growing agitation in the tech industry: Google joins a number of other large tech companies that have quietly begun work on their own operating systems. (Intel (INTC, Fortune 500), for example, recently announced Moblin, a Linux-based operating system for netbooks.)Microsoft has yet to publicly react to Google’s announcement of the Chrome OS, which will debut at the same time as the much-anticipated new version of Microsoft’s own operating system, Microsoft Windows 7, this fall. Early reviews of Windows 7 have been promising, but Microsoft faces a significant hurdle with the poor reception of its last offering, Vista. Now, it will also have to launch in the shadow of a new competitor that — while it doesn’t even exist yet — has already begun to steal the show.

Source:CNN

NEW YORK (Fortune) — Digg, the once-hot social news website, has become the middle child of the premiere web 2.0 companies.Facebook has attracted an older, loyal following, and Twitter is the darling of tech and media circles. Now Digg is pushing through growing pains — the company is adding a slew of new features and its executives are aggressively promoting the site — in the hopes of winning more users and recapturing some of its earlier buzz.CEO Jay Adelson says Digg’s overhaul of new features will build a stronger experience for its current 36 million users — and attract newcomers.”I want Digg to be an international force in providing a global pulse of what’s happening in the world,” Adelson says. “All our focus is on users of the community and giving them what they want.”0:00
/4:19Andreessen launches fundThe features Digg has rolled out in the past few months reflect this: creating story suggestions, making it searchable and enabling a toolbar. But two of the projects under development — fresh efforts to attract online advertising and a push to become a “real time” service (a la Twitter) — seem squarely aimed at making sure Digg remains relevant to marketers and influencers alike.During its launch five years ago, Digg was credited with redefining the way people read online news. Founder and chief architect Kevin Rose gave the power back to the people. A simple “digg” meant the reader liked the story and the piece with the most “diggs” made its way onto the home page. To date, about 20,000 stories are submitted a day, 150 of which make it onto the home page.Traffic has soared, quadrupling from 2006, and now, most news sites let readers “digg” a story. It has definitely proven its place on the Internet, even creating what is commonly referred to as the “Digg” effect, where sites temporarily crash because Digg directs so many readers there. It was considered revolutionary.Much has happened in the 2.0 world since. That’s not to say Digg isn’t loved — the geek squad still chases and screams after Rose like he’s Brad Pitt — but Digg just isn’t…”it” now.”They don’t have that sort of vibe of being the darling of Silicon Valley anymore,” said Charlene Li, digital strategy thought leader of Altimeter Group. “The problem is people don’t think about going to Digg. They go to Facebook and Twitter.”And that’s the strange and tough position Digg is in. It’s doing well — with tens of billions of Digg button impressions a month — but all day long the Internet world hears how great Twitter is at this or how wonderful Facebook did that. It’s always Facebook, Facebook, Facebook, as Jan Brady would say.Even though its reach has gotten broader and bigger through the years, Digg’s growth or traffic numbers don’t really stack up next to Facebook and Twitter. In May, Digg came in at the 301st most-visited site in the country, compared with Twitter at 42 and Facebook at five, according to Hitwise, an online traffic measuring company. (Google (GOOG, Fortune 500) is number one.)It’s not entirely fair to compare Digg to these two social media giants, which both CEO Jay Adelson and analysts say serve a different purpose. With Facebook and Twitter, that’s a place to engage in conversation, while Digg is more a bookmarking and aggregation tool.By comparing Digg to its bigger (and different) Web 2.0 brethren, it’s easy to forget that Digg is the champ in its division — and pounding the competition. Digg had almost 25 million unique visitors worldwide in May, according to ComScore figures, slaughtering its closest rival Yahoo Buzz, which only had 9 million visitors for the same month.Digg stays above the fray because of its dedicated user base and strong algorithms that have made “tons of imitators fall by the wayside,” Li says.That’s why they’ve gotten so much attention over potential acquirers through the years. Persistent speculation about possible deals with Google and Microsoft (MSFT, Fortune 500) penetrated the web (rumors ranged from 200 to 300 million), and then there was talk that Digg might go public. But Digg’s done with all that for now, saying all the talk was too much of a “distraction” from work, and now Digg’s concentrating on its new features.Its lineup includes Digg Ads, which industry analyst Josh Bernoff says is “brilliant,” where users can Digg or “Bury” ads in the same fashion that they do with stories now. These sponsored placements will rotate through what is commonly referred to as the “river,” or Digg’s home page. Some power users are already skeptical of how it’ll change Digg’s appearance and wonder if it’ll actually work, considering how easy it is to Bury on the site. Either way, Digg’s already got big names like Intel involved, and Bernoff says Digg Ads will finally give advertisers an opportunity to get direct, immediate feedback.”If you have an ad that is pretty interesting or attractive, you’ll have an opportunity to be recognized or promoted in every atmosphere,” Bernoff says.Rose says the Digg team is also developing an algorithm, based on current user patterns, that will “find the hot stories before they become hot” so it’ll be more real-time, although they don’t have a clear mobile plan as of yet. That’s expected more in the next six months or so.So will these features solve Digg’s identity crisis? Analysts think it’s the step in the right direction, but Digg needs to look further and be careful. Bernoff thinks the most important part of the equation is Rose, who should be celebritized more for the Digg brand, whereas Li says Digg should watch its growth because its most interested buyer, Google, doesn’t typically buy big companies.Regardless of how innovative these features may be or how much it’s ruling the pack of social bookmarking, Digg should worry about its bigger competition. Only makes sense to, says Mikolaj Jan Piskorski, associate professor of strategy at Harvard Business School.”Twitter is kind of like Digg, but on steroids,” Piskorski says. “Twitter can replicate the functionalities of Digg. Suppose Twitter wanted to generate a Twitter page with the most tweeted links for the hour, then what does Digg do?”

Source:CNN

NEW YORK (Fortune) — A year ago this week Apple opened the floodgates and began letting software developers sell software for the iPhone, and geeks everywhere caught iPhone fever.Since then Apple’s iTunes App Store has swelled to more than 50,000 titles, logged more than 1 billion downloads, and inspired an entrepreneurial surge that’s reminiscent of the dot-com gold rush — only without the illusion that everyone is making tons of money.In fact, aside from Apple (AAPL, Fortune 500) and AT&T (T, Fortune 500), it’s hard to point to many folks that are raking in a pile of iPhone cash quite yet. Matt Murphy, a venture capitalist at Kleiner Perkins Caufield & Byers, guesses that as many as 95% of the developers building iPhone apps “aren’t trying to build a company on the iPhone” — they’re just hobbyists making a little money on the side, or companies using fun iPhone apps as marketing vehicles.The world is still waiting for the equivalents of eBay (EBAY, Fortune 500), Amazon (AMZN, Fortune 500) or Yahoo (YHOO, Fortune 500) — the groundbreaking new companies that will redefine and inspire the mobile ecosystem.Not that people like Murphy are discouraged. Murphy manages the 100 million “iFund,” which is primarily dedicated to iPhone apps, making him the most high-profile mobile investor in Silicon Valley these days. (He hasn’t handed out much investment capital yet — Kleiner Perkins has funded just over a half dozen startups so far.) And during a recent visit to his office in Kleiner Perkins’s tree-shaded headquarters on Sand Hill Road, he sounded upbeat about the iPhone’s progress.A year in, Murphy still believes smartphones will open rich new markets for software and services, much as the PC and the web did before. “It’s shaping up way beyond anyone’s expectations as far as I can tell — mine, Apple’s, the industry’s at large.”0:00
/1:42On-the-go projectorsStill, it takes some imagination to see how we get there from here. A casual observer surfing through the offerings on iTunes today could easily mistake it for a digital dollar store. Though the place is crowded with options, the app store bestseller list is dominated by 99-cent games like the Moron Test and Sally’s Spa — hardly the foundation of a new mobile economy. That stands in contrast to the more mature list of PC software bestsellers at Amazon.com, where serious titles like Microsoft Office, QuickBooks Pro and Photoshop Elements sell for closer to 100.But there are already signs that things are changing on iTunes, and that more serious apps are beginning to command a price premium.The best example might be Quickoffice Mobile Office Suite, a five-week-old program for creating, editing and syncing documents and spreadsheets. It’s currently the most expensive title on the top 100 list at 12.99. “Good to see some of these apps emerging that aren’t just going to be used five or eight times and then be thrown away,” Murphy said. “What we’re going to see over the next year is people wanting applications that have a bit higher engagement, that are a bit sticky.”Those applications won’t all be on the iPhone. Competitors like Palm (PALM), Research in Motion (RIMM) and Google (GOOG, Fortune 500) also have their operating systems on smartphones. Murphy said given that Palm still has to prove itself and RIM has struggled to attract developers, the dark horse could be Google’s Android. Major phone makers including LG, Motorola (MOT, Fortune 500) and Samsung have announced Android-based handsets due out soon. And while the first Android phone from HTC got mixed reviews for its heft and unfinished software, the newest crop is earning positive buzz.”The notion that Android might actually start to get a lot of device penetration — a year ago it was too early. Now I think it’s an area to watch more closely,” Murphy said. “I think if Android can get enough devices out there and get enough market share, then Android will be likely the second platform.”If that happens, the next year in the mobile economy could be even more dynamic than the first. And who knows — maybe by next July, Silicon Valley will have even minted a few more mobile multi-millionaires.

Source:CNN

NEW YORK (Fortune) — Price competition is coming to the rarified world of genome sequencing.For 48,000, San Diego-based Illumina (ILMN) will sequence your genome — in other words, your entire genetic code.Until now, the only other company offering personal genome sequencing services is biotech startup Knome. It charges 99,500.Genome sequencing can alert individuals if they have inherited genes that cause illnesses like diabetes, Alzheimer’s or cancer. Using the information as a guide, people could alter their lifestyles in an attempt to dodge potentially latent diseases. They also could find out the probability of passing along a genetic disease like cystic fibrosis to their children, or uncover interesting details about their ancestry.Illumina is tossing in an iMac computer loaded with a customer’s genetic data to round out the deal. But spending nearly 50K on a genetic code will not fit most people’s budgets, even though that pricetag is hundreds of millions of dollars cheaper than sequencing the first human genome in 2003. Illumina says it expects just tens, perhaps hundreds, of people to sign up for the service within the next year.”It will be people who want to be among the first 100 people ever to be sequenced on the planet,” says company CEO Jay Flatley. “Or it may be people who have particular diseases like cancer who want to see if there is any way to uncover novel information.”0:00
/1:42On-the-go projectorsIllumina is a leading manufacturer of life science research tools. Last year the company reported a net income of 50.5 million with 573.2 million in revenue, up 56% from 2007. Illumina entered the sequencing business after acquiring Solexa, a gene analysis systems maker, for 600 million in 2007. Since then the company has continued to invest heavily in the technology.So far, personalized genomics make up just a small fraction of Illumina’s revenue. High costs keep sequencing out of reach for most people. But prices will fall substantially as the technology improves. In fact experts say costs could reach 1000 within three to five years, making more people privy to their entire genetic code.For now, the benefits of accessing one’s entire genome are limited to what scientists have already uncovered about our DNA. In the meantime, persons with less cash floating around could opt to get a smaller portion of their genome analyzed for a fraction of what Illumina is charging for the entire genome. The much-hyped genetics startup 23andMe, for instance, will analyze nearly 600,000 genetic markers for just 399.Despite the high costs, Illumina is selling its genome service now with the hopes of getting a jumpstart in the market. It also wants to work out glitches before the service becomes mainstream. Illumina is developing tools to make the service user-friendly in anticipation of that growth.An iPhone application, which the company says could be available within a year, is one plan in the works. Flatley envisions the app as a handy way to access genetic information when visiting a physician or genetic counselor. Illumina also plans to set up a website where clients can voluntarily blog about their sequencing experiences.To gain wider appeal, Illumina foresees customers someday measuring up their genetic makeup to famous people, like bioscience gurus Craig Venter and James Watson.”There are probably a lot more people who would rather compare themselves to George Clooney. But he isn’t in line to be sequenced now,” says Flatley.One area Illumina is not diving into is sequence analysis. Instead, it is partnering with genomics companies Navigenics, 23andMe, deCODE Genetics (DCGN), and Knome, which are developing platforms to decipher the data generated by Illumina. So far, the partners are keeping mum on how much they plan to charge the customers Illumina sends their way. Based on the costs of their current genotyping services, prices could range from a few hundred to a few thousand dollars.Ultimately Illumina could be missing out if analysis doles out sizeable earnings. Indeed, interpretation of genes will become even more relevant as researchers uncover additional information about the human genome. Sequencing the entire genome could be a one-time endeavor, but genetic analysis could continue to reap payoffs for a long time to come.

Source:CNN

NEW YORK (Fortune) — You say, “potato,” I say, “netbook.” That’s a bit how I feel when Michael Rayfield, who heads up the mobile computing effort at graphics chip specialist Nvidia, drops a tiny computer on my desk. Branded Mobinnova, it had an almost 9″ diagonal screen and a solid keyboard that folded around a tube stuffed with batteries and various connectors.It is light enough to toss across the room like a Frisbee (not recommended, by the way). If I carried a purse, it would fit inside no problem. “It’s a netbook, right?” I ask Rayfield. “No, it’s a smartbook,” Rayfield replies.Right…a smartbook. I haven’t heard that one yet.There are notebooks, netbooks, mobile internet devices (MIDs), and web pads. There are smartphones and not-so smartphones. There are media players like the iPod Touch and the Zune. Last week I was shown a Hewlett Packard ultralight. Today, it was a smartbook from Mobinnova, which is the consumer brand of Foxconn, the Taiwan-based computer manufacturing giant that makes gear for pretty much everyone.Why isn’t it called a netbook? Not sure. What the champagne and black-colored machine on my desk is — what all these gadgets are — is a mobile computer. And for chip manufacturers like Nvidia (NVDA), it’s the future.0:00
/2:46HP laptops smaller but strongerThe Mobinnova is set up to run Windows CE, a lightweight operating system, so it’s not for someone looking to do heavy-duty computing. The ideal user performs mostly web-based tasks: e-mail, messaging, and game playing. It is based on ARM architecture, not Intel’s competing x86 design, so it won’t run Office or Windows 7 when it arrives.It does play video like a champ, and claims 10 hours of HD quality video due to its battery-sipping design. When it hits the market around the holidays, the Mobinnova “lan” ought to sell in the range of 100 to 200, Rayfield estimates. So one notable difference in the “smartbook” category is price; Rayfield’s quote is a marked discount to the 300 to 700 most netbooks cost today.The other difference is that Nvidia is doing all the processing inside this machine with what it calls Tegra.Tegra is an all-in-one-computer on a chipset — a system-on-a-chip — that rolls eight different processors into one tiny package. Nvidia’s core business is graphics processors; its chips power the graphics inside Apple’s entire lineup as well as other computers either as standard equipment or aftermarket upgrades.With Tegra, Nvidia doesn’t need Intel or AMD (AMD, Fortune 500) processors alongside its chips. Tegra is the whole package, and with more than 500 million invested in its development it is by far the largest commitment Nvidia has made to a technology outside of its core graphics business.The reason for spending that huge chunk of change is that Nvidia is betting that mobile is going to be the growth engine of its business. At a financial analysts meeting earlier this month, NVIDIA CEO and co-founder Jen-Hsun Huang said that Tegra will comprise about half of the company’s revenue within several years. For the twelve months that ended January 25 Nvidia posted 3.4 billion in sales.Like Intel (INTC, Fortune 500), and every other chipmaker out there, Nvidia sees the traditional computer industry changing, shrinking before its eyes — both in terms of size and the price that machines and their chips inside can fetch. “A year ago you could get a mediocre laptop for 1,000 Rayfield says. “Now you can get a kick-ass laptop for 400 — the market is never going back.”That is true, but at the moment the great variety of form-factors and capabilities in these machines is more bewildering than anything else. Do I want a smartbook? A netbook? An ultralight? Do I just stick with my Blackberry and a laptop? What the hell is a web-pad?Today, there are compromises inherent in all those devices. You need to weigh price against portability and performance. But what Tegra promises, as well as Intel’s future generations of Atom, and Qualcomm’s Snapdragon, is a mobile future without much compromise.The way gizmos are being cranked out like Mobinnova’s “lan,” it seems like the time will come very soon (my guess, two years tops) where all the marketing monikers disappear. You will be able to pick the size mobile computer you want — pocket-size or purse-size — and the features you need at a price that rivals what most people pay for spiffy smartphones today. Will these be a primary computer? For many people, yes. For those with heavy computing tasks, say video editing, you’ll need a beefier machine.It’s a future PC makers and PC chip companies like Nvidia are scrambling to adapt to, to plant their flag in the mobile marketplace. The stakes are simple: they either win huge, or watch their business slowly but surely shrivel. And while it is a bit confusing at the moment for consumers, hang in there. It’s about to be a great time to go shopping for a computer that fits your wallet and your needs perfectly.

Source:CNN

SAN FRANCISCO (Fortune) — Concepts like “smart grids” and “intelligent metering” are difficult for the non-expert brain to grasp. So instead, wrap your mind around a simpler set of facts. Utilities experience peak demand for example, on blistering hot days when air conditioners are pumping all out just 2% of the year.Yet to serve their customers on such days, the utilities will incur as much as 15% of their total costs for the year while using their oldest, dirtiest generating plants to satisfy the demand.In other words, it’s a dirty, costly affair to keep us comfortable for a relatively short period of time.Imagine, then, the benefits of an electric network – often called a grid because of the wired interconnections among power plants, homes and businesses – that “think” intelligently.Such a smart network would tell customers things like the cheapest time to wash the dishes or charge an electric car. It would represent huge savings, financially and environmentally.0:00
/2:06Save money with ‘green’ lightingIt’s the vision, anyway, behind a wave of companies funded by Silicon Valley venture capitalists. It’s also the strategy of energy and technology behemoths like General Electric (GE, Fortune 500) and IBM (IBM, Fortune 500), who see the same potential gold mine as tech-industry entrepreneurs. (Jeffrey M. O’Brien’s smart-grid feature on IBM offers a good primer on how the big boys are approaching the task.)In between the tiny startups and the giants aiming to exploit a niche are some early leaders in making dumb power grids smart. One is Silver Spring Networks, a Midwestern transplant in Silicon Valley funded by Foundation Capital (which got in early) and Kleiner Perkins, which invested more recently.Silver Spring named for a street in Milwaukee, where the company started in 2002 makes software and other technology that turns electric systems into the equivalent of an Internet network. By installing its cards into traditional utility metering technology, utilities have near-perfect information about their customers’ usage. Customers, in turn, get helpful data from their power provider about how to save money.”Billion of devices have been deployed that need to be managed on the network,” says Scott Lang, Silver Spring’s CEO. The company’s technology, he says, manages that process across the network in a secure manner the latter a nontrivial concern given that the equipment resides in or near the homes of millions of customers.A private company that doesn’t disclose financials, Sliver Spring clearly is preparing for an initial public offering. Lang says the company will be cash-flow positive this year on the strength of large-scale pilot projects it has put together with major utilities including PG&E (PCG, Fortune 500) and Florida Power & Light (FPL, Fortune 500).An IPO would be welcomed by investors; Silver Spring already has raised 175 million and employs more than 250 people. In fact, a Silver Spring IPO would be resonant of the dot-com era: a fledgling company pursuing a big idea with the tailwind favorable public opinion.As an added bonus, the company stands to benefit from the Obama Administration’s stimulus plan, which will apportion “smart grid” funds to utility customers. “Utilities are lining up to apply,” says Lang, who adds that state regulators around the country have been “invigorated” by the prospect of their utilities finding alterative sources of funding from Washington.Utilities that pollute less while lowering prices to their customers. There. That’s an easy concept to like.

Source:CNN

NEW YORK (Fortune) — General Electric is marshalling its considerable resources as it tries to win lucrative contracts to digitize medical records.The company, whose 17 billion-a-year healthcare division offers information technology services for hospitals and medical practices, this week said the conglomerate’s financing arm is setting aside 10 million to provide 0% interest financing to customers who use GE’s solution for electronic health records.GE (GE, Fortune 500) says the bills will come due in 2011. That’s when the federal government, which has made digitizing medical records a key part of its stimulus and health-care reform plans, will begin reimbursing providers who have gone digital. The company also says it will offer customers a guarantee that the solution it deploys — a product called GE Centricity EMR — will qualify for reimbursement by meeting government standards and guidelines that agencies are just now formalizing.GE’s new program addresses two major obstacles that have slowed adoption of electronic health records: the upfront financial burden of purchasing the software (some estimates put the cost to a small provider at 40,000-60,0000) and concerns that the system will qualify for reimbursement. (Also of concern: that the systems deployed by various IT shops allow different providers and insurers to easily share and transfer data.) Vishal Wanchoo, CEO of GE Healthcare IT, explains, “There’s uncertainty: Are they going to get the product that will meet and keep pace with the requirements?”0:00
/4:22Geithner: Health care’s criticalGE is hardly the only company with a digital offering for health-care providers. Tech giants such as IBM (IBM, Fortune 500) and Hewlett-Packard Co. (HPQ, Fortune 500) are pursuing the space, as are specialty shops such as Allscripts-Misys Healthcare Solutions Inc. (MDRX), Cerner Corp. (CERN), Quality Systems Inc. (QSII) and Athenahealth Inc. (ATHN) And while GE’s financing package is a nice incentive for cash-strapped small providers, some analysts think a more practical solution would be to embrace technology that delivers records and other health-related applications over the Internet, a phenomenon known in the tech world as cloud computing.Athenahealth, for one, has been deploying its technology via the Internet, or “the cloud” since its inception. Athena’s technology not only reduces its customers’ upfront costs (all the software and data are housed on centralized computers maintained by Athena, not the hospital or medical practice), it also has come up with an innovative payment model; customers pay Athena a percentage of the claims the company helps them recoup. “Most of the other companies in this group sell [only a] software [solution],” says Piper Jaffray analyst Sean Weiland, who estimates that the market for electronic medical records hasn’t even reached 10 billion. “Athena sells a 50% reduction in accounts receivable and an 11% increase in cash flow.”"If you’re selling software, you need them [customers] to have a problem, and you need them to come to you, and you need them to buy another module. That’s how they make money,” contends Athenahealth CEO Jonathan Bush.By going with a traditional software solution, GE and others may have a hard time winning small and mid-sized companies who increasingly seem to be considering Web-based software solutions for everything from payroll administration to e-mail. But physicians and hospitals remain woefully unsophisticated about computerization. The federal Office of Health IT Adoption reports that only 4% of physicians’ offices and 2% of hospitals have fully adopted electronic medical records. It may be too much to ask these newbies to leapfrog to Web-based applications; in the end, it may not be financing but GE’s sterling name that ends up helping the company sell its systems.

Source:CNN

NEW YORK (Fortune) — Things are grim at MySpace. The number of U.S. visitors has dropped off to just 70.24 million in May. Rival Facebook has finally surpassed MySpace, logging 70.28 million visitors. The site is bleeding cash — News Corp reported an 89 million loss in the unit that includes MySpace in its most recent quarterly report. And on June 16, MySpace laid off 420 employees, roughly 30% of the staff.But don’t give MySpace up for dead just yet. Many tech businesses have stumbled only to be reborn through smart innovation and business execution. Both Apple (AAPL, Fortune 500) and Amazon (AMZN, Fortune 500) floundered and nearly failed before launching the products that brought them success.MySpace has a passionate user base — members spent an average of 218 minutes on the site in May. (Compare that to Facebook, on which members spent an average of 149 minutes.)And News Corp (NWS, Fortune 500) CEO Rupert Murdoch isn’t one to accept failure, to put it mildly.0:00
/2:40The future of radioAs part of Murdoch’s turnaround strategy, he has amassed an incredible amount of old media and new media savvy in his new hires this spring. He brought in former AOL chief Jon Miller in April to overhaul the digital business. By the end of the month, Miller replaced co-founder Chris DeWolfe with a talented triumvirate: Facebook’s former chief operating officer, Owen Van Natta, became CEO; former AOL exec Mike Jones became the COO; and Jason Hirschhorn, once the chief digital officer at MTV Networks, took the role of chief product officer.Already, the new leadership has worked quickly to bring costs down. The staff reduction comes after MySpace decided against a costly office move to Los Angeles’ tony Playa Vista neighborhood; the company will attempt to sublet the space instead, recouping the cost of the lease.Now they must focus on creating a new vision for the site and developing new features that will keep and hold attention. Miller knows this.As he told an audience at the D: All Things Digital conference in May, “The tendency when you fall behind in product areas is to think that you have to catch up by checking boxes. I think that’s wrong. You should leapfrog and focus on emerging behaviors, and go for the big moves.”This will involve a degree of risk-taking that MySpace has long avoided. The site rose to prominence not by identifying new features, but by responding to what its members requested. Many of social networking’s most intriguing new elements — applications, news feeds, and experimental advertising — migrated to MySpace after bubbling up on competing sites.”Think about how many times Facebook has pissed off users,” explains Charlene Li, an analyst and thought leader who has long covered social networking. “They keep pushing their audience to places they don’t always go. They’re not always right, but they keep taking tremendous risks.”Miller and team must apply that same innovation to their advertising strategy. With 2008 revenues of 600 million, MySpace has brought in more ad dollars than the other social networks, but it continues to fall short of Murdoch’s billion-dollar target for the site.And as much as half of that amount has come from an advertising deal the company struck with Google (GOOG, Fortune 500) that expires in the fall. Google executives have expressed public disappointment with their returns from the deal, and it’s unlikely the terms will be as favorable to MySpace if the two companies renew the deal at all.MySpace has won over hearts and minds before. It was, after all, the first social networking site to rise to international prominence — it has close to 130 million members globally — and it introduced the concept of creating a social networking profile to a good portion of the world. With sharp minds and deep pockets, Miller, Van Natta and the team have little doubt the site can do so again.

Source:CNN

NEW YORK (Fortune) — The world’s most famous golf tournament, the Masters, takes place at Augusta National Golf Club every year. And so while relatively few golfers ever play the highly exclusive course, any fan is familiar with its signature features, from “Amen Corner” to the “Big Oak.” The U.S. Open, by contrast, never appears at the same course consecutively, and that poses a challenge to tournament organizers: How to familiarize the viewing public with a new course every year and thereby increase the excitement around the event?Last year, the United States Golf Association posted high-definition panoramic shots on USOpen.com of each hole at San Diego’s Torrey Pines. But for this year’s event, which takes place next week, the organization turned to a San Francisco tech startup called World Golf Tour (WGT) with a far more ambitious mandate: Capture the entire venue — the Black course at Bethpage on Long Island — in exhaustive detail, and run a virtual tournament online where gamers can experience every bunker, break, and ridiculous cut of rough. “We thought, wouldn’t it be cool if you could just click on a button and play every hole on the course for free,” says Alex Withers, the USGA’s managing director of digital media. “And that evolved into, why don’t we have a tournament and call it the Virtual US Open?”0:00
/03:33Dodgers survive without MannyHigh definition golf. Unlike most golf video games, the virtual Bethpage course, which can be played at USOpen.com and WGT.com, isn’t rendered by animators on high-end workstations. Instead, it consists of manipulated HD photos and countless data points reflecting everything from topography and friction coefficients for various cuts of grass to stimp meter readings that demonstrate how far an unaided golf ball will roll across a putting green. “We spent just under three weeks there with a crew of 18 people. With the combination of helicopters and people on the ground, we took about 100,0000 photographs and scoured every single inch of that course,” says YuChiang Cheng, WGT co-founder and CEO. The WGT crew did its work last September — Bethpage officials sculpted the Black course to pro conditions specifically for this project.The team measured sunlight, shadows, wind speed at various points of day, took laser scans, and overlaid all the data on the photography. “It’s a fully functional physics engine as advanced as any console game out there,” says Cheng. “But instead of drawing objects and surfaces, we take photographs and bend them into a 3D world.” The result is an immaculate recreation of the course with none of the cartoon-y feeling of console golf games; every shot plays as it would in real life.The heart of what makes this possible is a proprietary software engine that Cheng and his team spent three years developing. The first course WGT captured was the Ocean Course at Kiawah Island, South Carolina, and the company is close to announcing several more.Keeping the pros on their toes. But with Bethpage, the intent was a bit different. The USGA wanted to capture the track precisely as the pros will experience it. So the course superintendent grew out the rough, lengthened the tees to exact specifications, and made the whole thing extraordinarily difficult. “The pin positions are different,” says Cheng, “because we didn’t want to give that away to the pros.”The Virtual US Open tournament has already begun and will culminate a week from Monday, the day after the US Open champion receives his trophy. Virtual participants can log as many scores as they like, and the top 156 players will compete in a one-round playoff. The winner will receive a replica of the US Open trophy and a trip for two to Pebble Beach for next year’s event. “We’ve got over 60,000 people playing now and it’s not even championship week,” says USGA’s Withers. “We’re running [commercials] on ESPN and NBC during the tournament, and will have a lot of online support next week.”The tournament and the commercials should provide great exposure for WGT.com. The company, founded in 2006, generates revenue through advertising, sponsorship, and by selling virtual clubs to players as a way to increase distance or control, for example. The site sees about 300,000 unique visitors a month, many of whom have never played a video game in their lives. “Fifty percent of our players don’t consider themselves gamers,” Cheng says. “They’ve already played our game for 100 hours in the last month, and you ask them if they’re gamers, and they still say no.”