When it comes to deploying databases — or any infrastructural pieces, really — at web scale, many large sites opt to “go cheap, go custom or go home.” Given their unique needs, this credo makes sense, but I wonder if the companies following it aren’t making more work for themselves than is necessary. Might the resources spent developing open-source projects or building tools from scratch not become extraneous if companies could buy solutions that would work just fine?

Isn’t it plausible that a proprietary vendor –- Oracle, let’s say –- could launch a webscale database or analytics solution that would do the trick for a company like Facebook? If there’s one thing Larry Ellison knows better than relational databases, it’s how to make a buck. Hypothetically speaking, Oracle could offer database and data-analysis solutions that could save a company like Facebook from having to act like a software company itself. It certainly hasn’t hesitated to buy its way into alternative markets in the past.

Another consideration is where web companies draw the line regarding commercial solutions: Is an open-source but subscription-based vendor like Red Hat out of the question? What about any of the emerging startups tackling file systems, memcached and other issues?

I’m not suggesting that Facebook et al are heading down the garden path with their current approaches, or that there’s a glut of proprietary products on the market, only that it’s not inconceivable that commercial vendors could meet the needs of these companies. You can read my full column over at GigaOM Pro (subscription required). What do you think? Are open-source and DIY solutions really the best bet for webscale companies?

Ten years ago this week, online music pioneer Justin Frankel released a little application dubbed Gnutella that enabled file sharing through a distributed P2P network. Frankel, whose previous claim to fame was programming the then hugely-popular Winamp MP3 player software, supposedly named the client after his favorite hazelnut cream spread, and the first version published online was really more of a proof of concept than anything else.

Still, Gnutella hit a nerve. Napster had been sued three months before, and many file sharers were rightfully fearing that the music industry would eventually prevail in court and force Napster to switch off its servers. With Gnutella, no such switch existed, as the client was allowing direct P2P connections without the help of any centralized server. Add to it the fact that Gnutella, unlike Napster, allowed users to swap videos and software as well as MP3s, and you begin to see why many immediately viewed Gnutella as the next step in P2P file sharing.

A step, one should add, that made Frankel’s employer AOL more than a little nervous. It only took the Internet giant a day to force Frankel and his colleagues to take down Gnutella – but even that was too long, as countless sites quickly started to first mirror, then build upon Frankel’s official Gnutella client. There’s always been a little bit of mystery surrounding the exact happenings of those days, but some people have been musing that a person with a surprising amount of insider knowledge showed up in one of the first IRC chat rooms dedicated to Gnutella soon after AOL pulled the plug, only to provide some very detailed information about the inner workings of the client’s P2P protocol.

Speaking of IRC: Early versions of the software didn’t really have any way for users to connect, save for entering another user’s IP address, which is why IRC quickly became an integral part of the early days of Gnutella. It was also in those IRC chat rooms that the myth of Gnutella as a seemingly invincible P2P protocol was born, and the fact that AOL tried but couldn’t contain the software seemed to fit right into that picture. Gnutella was one of the very first P2P apps I ever wrote about, so I lurked in those chat rooms as well, where people were cheering the fact that someone finally found a file sharing solution that couldn’t be shut down. I still remember one IRC user saying: “We’ve started a damn cult again!”

Only Gnutella wasn’t really ready to be a cult. The network routed search requests from peer to peer, leading to an exponential growth of traffic as its network became bigger. Napster programmer Jordan Ritter described the problem early on in a paper titled “Why Gnutella Can’t Scale. No, Really,” and Frankel himself, who has hardly ever gone on the record about Gnutella, once stated that he was fully aware of “how poorly it would scale” when he released the client.

Still, Gnutella captured the imagination of many, one of them being Mark Gorton, founder of the New York-based Lime Group. Gorton was at the time pursuing a vision of automating businesses through structured data, and Gnutella, as something that could, for example, distribute real estate listings wrapped in XML, seemed to fit that image quite nicely. Early versions of the Gnutella client of Gorton’s LimeWire venture were still written with this vision in mind, hoping to build a P2P network that could eventually be used to do all kinds of things with which we’re now familiar on the web, thanks to web services.

LimeWire’s engineers joined a growing group of developers loosely connected through web sites like the long-defunct Gnutella.wego.com (whose admin Gene Kan tragically committed suicide in 2002) and mailing lists like the one for the Gnutella Developer Forum, and one of the first issues to be tackled was scalability. The introduction of a two-tiered system of ordinary clients and so-called Ultrapeers helped grow both the network as a whole and each user’s search horizon. The idea was also later adopted by the developers of KaZaA, whose own take on this two-tiered approach still lives on in Skype’s P2P network.

Technical improvements like these helped Gnutella to grow, but the competition was quick to catch up. Bram Cohen unveiled a first version of BitTorrent only two years after Frankel had published Gnutella, and BitTorrent quickly became the file sharing client of choice for sharing videos online. Part of BitTorrent’s quick rise to fame was its modular simplicity: Cohen had outsourced much of the search and indexing of files to torrent web sites, only handling the actual distribution of data within the client. Gnutella on the other hand was meant to work without any web server. That made it much more invincible, but also much less accessible to users who migrated from apps and clients to a world of web services.

Another issue that has plagued Gnutella from the beginning is not technical, but legal. The protocol was supposed to outsmart trigger-happy lawyers, but the mere fact that there wasn’t a central switch to turn off the Gnutella network didn’t stop rights holders from going after people and companies associated with it. Lawsuits and legal threats forced Morpheus, Xolox, Bearshare and a number of other companies and developers to throw the towel.

LimeWire got sued by the music industry as well in 2006, but that hasn’t stopped the company from continuing with the development and monetization of its client. LimeWire’s client also utilizes BitTorrent these days, but LimeWire’s VP of Product Management Jason Herskowitz told me during a phone conversation that Gnutella has “worked really well” for the company, and that its engineers are looking into ways to make Gnutella once again more attractive to developers by exposing some of its functionality through web services. “There is still a long future ahead for Gnutella,” he predicted.

Not everyone agrees with that outlook. Adam Fisk, who was hired by LimeWire as one of its first developers in the summer of 2000, but left the company in 2004 to eventually start his own P2P venture dubbed Littleshot, believes that some core assumptions of the Gnutella protocol are outdated. “I don’t think that distributed P2P search makes any sense,” he told me, explaining that the very server-less search functionality that made Gnutella superior to Napster also ended up being its biggest burden, and that it would be much easier to have servers handle search and just use P2P to deliver data – a recipe that has already helped BitTorrent succeed.

Sure, LimeWire and some other Gnutella clients could still stick around for a long time, Fisk admitted, but he was skeptical that we would ever see any significant new project based on Gnutella. “That would be shocking,” he said.

Photo courtesy of (CC BY-SA) Flickr user Jessica  Diamond.

Related content on GigaOm Pro: What’s Next for the Cloud? Distributed Architectures (subscription required)

In the world of technology, drama is a valuable commodity. Disruptive change may happen in the minutiae of software code or the gradual execution of a business plan, but we see its effects in the dramatic narratives of companies rising and falling, or getting locked in combat with each other. Which is why the rivalry between Google and Apple is such a compelling story.

It’s so tempting to get drawn into the ego battles between Steve Jobs and the Google triumvirate while placing bets on who will win that it’s easy to forget a deeper truth about this rivalry: Google and Apple need each other.

They both have a deep desire to stake out claims on the mobile web, but the mobile web is in a nascent stage. In order to develop, it needs to have both rigid structure and a sometimes reckless creativity. Structure is necessary to provide a strong foundation and a set of standards everyone can understand. And creativity is essential to bringing the innovative potential of the mobile web into full bloom.

This dichotomy was present when the Internet began to develop in the early 90s. Many people who came online then did so through America Online’s walled gardens, a safe little enclave where consumers and content providers alike could create the rules of a new medium. Then the web itself took off and sites like Yahoo and GeoCities offered a much more creative environment to explore what else could be done.

Now it’s happening again, only with Apple and Google. Apple’s stern and unforgiving approach to the iPhone offers the structure this new medium needs to succeed. Cupertino’s control-freak tendencies stretch from enforcing adherence to ever-changing app guidelines to banishing plastic screen protectors from its retail stores.

Google’s approach is nearly the opposite, much more open and free-wheeling. Its Android OS, based on the Linux kernel, has so many versions available the company is struggling to consolidate them. The Android Market is such an unregulated affair that it’s hard for anyone to count the number of apps on sale.

Google’s culture has built into it a tolerance for the failures that come with creative experiments. Its 70-20-10 rule seems rooted on that spirit of tolerance — how many companies require employees to spend time on something that may never fly? — and Google has floated so many failed ideas it’s hard to keep track of them all. Apple, by contrast, starts with an instinctive idea of how consumers will experience its products and fits everything, even the ecosystem of apps that extends beyond its corporate walls, into making it work.

It’s in the tension between these two companies and their respective cultures that the mobile web is being forged. But as America Online found out, the walls eventually come down as consumers grow more comfortable with the new medium and desert the walled garden. That would suggest the balance will tip in favor of Google.

But I would be surprised if Apple isn’t anticipating this evolution. Right now, iPhone owners are experiencing the mobile web through the 150,000 or so apps it offers through the App Store. But Apple has also backed HTML5, which allows a smartphone browser to have rich app-like features without requiring any new software to be downloaded. Just as people stopped downloading AOL’s software and switched to browsers, we may well abandon most of the apps on our phones today.

Both companies will continue to play a major role on the mobile web, but I doubt either will ever gain the upper hand. This dramatic tension between Apple and Google may be around for a long time. So executives at both might as well get used to it.

Image courtesy of Wikimedia Commons.

Related content from GigaOM Pro (sub req’d):

With The iPad, Apple Takes Google To the Mat

It wasn’t too long ago that the path to success for mobile carriers was a straight one: Simply offer compelling handsets at competitive prices and maintain a top-notch network and your customers would be happy. And for those that weren’t, manage a competent customer-care division. That model is rapidly changing, though, as we reach the point of market saturation.

Carriers in Western markets have precious little room for growth unless they poach customers from their competitors. Cell phone penetration in the U.S. stands at 89 percent, according to CTIA, and Chetan Sharma pointed out earlier this month that mobile’s market penetration in America is 99 percent for people over than the age of five. The increase of machine-to-machine connections and the coming wave of connected consumer electronics (non-phones) will help, but carriers will have to evolve beyond being simple network operators if they’re to thrive in the coming world of mobile data.

Another factor beyond market saturation is at play here, too. Mobile is no longer just about being a provider of wireless phones and connectivity; it’s about adding value with applications that leverage Web 2.0 features like presence and community and combining them with mobile’s unique characteristics, such as portability and location awareness.

While the rise of mobile Web 2.0 is a looming threat for network operators, it also presents an opportunity to develop and market more compelling “over-the-top” offerings — applications and services from carriers that can be targeted at users on other networks. In my weekly column over at GigaOM Pro, I’ve taken a closer look at this topic, with a special focus on AT&T’s Buzz.com offering. I’m sure we’ll see more examples as carriers attempt to make a very difficult transition beyond their established business model into uncharted waters. What kind of opportunities do you see?

Image courtesy of Flickr user kevindooley

Google this week took another step toward getting its own Android-based handset, the Nexus One, on as many U.S. carriers as possible. Originally released on the T-Mobile network, the device was added to AT&T next, and then Verizon. Sprint said this week that it will become the fourth major carrier to support the Nexus One — which should help boost the lower-than-expected sales numbers of what many feel is the best Android phone on the market.

Google Buzz is one of those services that folks either love or hate. Those in the pro-Buzz camp will love the new Google Buzz widget, which can be placed on the home screen of any Android phone, where users can post text and photos to it with a single tap. The widget also supports geolocation. Posts submitted through it are uploaded in the background, and as such do not impact performance nor usage of the phone.

• The 3 Best Things I Saw at SXSW Tech Insider
• Lessons in Phone Marketing, or Why the Nexus One Is Sucking Wind Tech Insider
• Why Microsoft Should Allow Third Parties to Sell WinPhone Apps Tech Insider
• The Nexus One Needs More Hype Tech Insider

And the Android OS may be coming to a TV near you! Google, Intel and Sony have entered into a partnership to create Google TV, a venture aimed at bringing social networking into the set-top TV box space. Google TV will be based on the Chrome web browser, which doesn’t currently work with Android. Launch is slated for this summer.

The Telx Group, a New York City-based data center operator, has filed for an initial public offering that could see it raise as much as $100 million from the public markets. The last major data center operator to go public was RackSpace, and that was back in 2009. With the demand for data centers and Internet services on an upswing, Telx’s attempt to go public is very timely.

The company is well known for owning 60 Hudson Street, an iconic wired carrier hotel in Manhattan where more than 250 networks converge. Owned by private equity firm GI Partners, its other assets include The Planet and EV1 Servers.

Telx has 15 data centers with about half a million square feet of data center space. The company had revenues of $98.3 million in 2009 and net losses of $9.9 million. Telx, which also provides global interconnection and co-location services, has about $130 million in debt. The IPO is being underwritten by Goldman Sachs & Co. and Deutsche Bank Securities. Telx has applied to trade on the Nasdaq market under the ticker TELX.

When I think about the lowest common denominator of mobile communications, text messaging follows close behind voice. Obviously, every phone offers voice capability by definition, but texts are nearly as ubiquitous. Email is catching up as consumers leave basic feature phones for smartphones — and many feature phones offer either a native or add-on email solution. But text messaging capability is still farther along in terms of reach across handsets. Brightkite, a location-based social network service knows that, which explains the company’s new GroupText feature.

GroupText reminds me of an old-school party line amongst friends that uses text messaging instead of voice communications. Looking to get a group of friends all together in one location? You could send emails, make phone calls, or use an online invitation service. But I keep coming back to that lowest common denominator of the text message since it’s instant and most everyone has access to the service. GroupText bundles the text message conversation in a chat-like view, making that lowly text function social and powerful — think threaded text messaging with multiple people.

The whole concept is perfect fit for Brightkite, given its location-based bent. If I want to chat with a bunch of folks about a topic, I’ll have the conversation in medium like email. But if I’m simply trying to get a group in one location, I’m going to shoot venue info and other event details in brief text — something I can’t easily do in Foursquare, which is my current LBS service of choice. GroupText doesn’t require my friends to have a Brightkite account, so there’s no mandatory network registration hassle. Each GroupChat can handle 25 friends and responses are sent to all in the group — folks can also attach pics or indicate their location so there’s no need to ask “when are U getting here?” And the entire group interaction is available on the web for those who aren’t currently mobile or for “Monday Morning Quarterbacks” that want to replay the conversation — after a wild night on the town, I see some after-the-fact entertainment value here.

Brightkite recently submitted a software update to Apple that includes the GroupChat feature and anticipates arrival in the iTunes App Store soon. Until then — the lowly text message lives on!

Images courtesy of Brightkite

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Crashed web sites, stolen credit card info — imagine seeing the damage caused by Internet viruses and worms unleashed on a fleet of vehicles. The results could include vehicle location data used with malicious intent, the prevention of a plug-in vehicle battery from recharging, remote starting of a car, or even — as a disgruntled young former car salesman in Texas has demonstrated this week — stranding drivers with a car that won’t start and a horn that won’t quit.

Here’s what happened in Texas, as Wired and the Austin News report: A terminated employee from a car dealership called the Texas Auto Center logged into the company’s web-based system and was able to remotely wreak havoc on more than 100 vehicles. The dealership’s system is able to disable the starter system and trigger incessant horn honking for customers that have fallen behind on car payments. It’s meant to serve as an alternative to repossessing the vehicle, and the ex-Texas Auto Center employee, arrested Thursday on charges of computer intrusion, was able to set off the horn command at will and make it so drivers couldn’t start their cars.

Cars are growing ever more connected to communication networks, and upcoming generations of electric vehicles will take it a step further with connections to the power grid. Already, electric car makers have unveiled smartphone apps designed to let users to remotely control certain vehicle functions and battery charging. Down the road, we’ll likely see not only electricity flowing to cars from the grid, but also the flow of data between cars, the grid, home energy management systems, utilities and third-party service providers.

As Ford’s director of connected services Doug VanDagens told us recently (GigaOM Pro, subscription required), “For electric vehicles, connectivity to the web and data are “required over and above what gas engines require.” Apps can use data — about topography, traffic, battery and vehicle health, infrastructure availability, driving behavior — to help orient drivers in the nascent world of electric mobility, both in and out of their vehicle.

While these tools and technologies could help reduce fuel consumption, make electric vehicles more convenient, and enable utilities to prevent excess strain on the power grid as plug-in cars create new demand, that shift to an increasingly digital transportation system brings with it (as Katie has explained in the context of the smart grid buildout) one of the banes of the Internet: hacking.

The stakes, of course, are very different. Certainly nobody wants a virus on their PC. But the prospect of a hacker seizing control of some aspect of a car — a ton of metal capable of going 60-plus MPH, that costs tens of thousands of dollars, and that maybe has a battery in its belly that requires a sophisticated system of thermal controls – is a far scarier thought.

The potential consequences of cyber attacks on a digital power grid could be similarly frightening. Andy Karsner said back in 2008, when he was with the Department of Energy: “This isn’t the cyber-attacking that you think of just for passwords. This is the capacity to destroy hardware in your home, at airports, at military bases, your car, if its connected through the grid.”

We should note that remote immobilization systems like the one involved in the Austin incident have been in use for a decade or more, and yet we have not seen vehicles crippled en masse by hackers. But companies should realize this could be a sensitive issue among consumers, while both companies and regulators need to recognize risks that go along with the transition to increasingly digital and connected systems for transportation and power.

Image courtesy of Defragged’s photostream Flickr Creative Commons.

Nuance is killing the SpinVox service, informing its users, which are located in the UK, via text that their accounts will expire within a week. The move — which prompted an outcry on Twitter — marks the end of a very popular voice-to-text service from a very controversial company.

SpinVox was founded in 2003 as a London-based startup aimed at transcribing voicemails into text. The company landed $200 million in funding — including $100 million at a $500 million valuation two years ago — thanks to a customer base of large carriers, which resold the service to their users. But the wheels started to fall off last year when SpinVox struggled to repay a $48.8 million loan and allegations surfaced that transcriptions were being done by call center staffers — not a speech-to-text algorithm, as the company had claimed. Nuance ended up pocketing SpinVox last December for a mere $102.5 million in an effort to better compete in the voice recognition space against Google and Microsoft.

The acquisition was largely driven by SpinVox’s list of corporate customers, which includes Bell Mobility, Rogers Wireless, Vodafone Spain and Skype. Nuance, in explaining its decision to shut down SpinVox’s service, said its mission is to market offerings “as a standard feature in mobile service plans locally and globally.” Indeed, pulling the plug on the consumer service is logical given SpinVox’s inability to develop a viable business model. But as all those tweets indicate, investors aren’t the only ones hurting from SpinVox’s demise — so are many of its soon-to-be former users.

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Image courtesy Flickr user jp.ubiqua.

The first time you walk into an Apple Store and pick up an iPad, you’ll understand the hype: Apple has managed to create a beautiful, thoughtfully designed, compelling product in a space where mediocrity was, until now, status quo. But odds are you probably won’t buy one — at least not yet. And that’s OK.

For despite the high level of anticipation for and proclamations associated with the launch of the Apple device, the fact remains that outside of a few select vertical uses (like medicine), tablets are constrained by their own form factor, stuck in the nether realm between productivity and portability. Standing onstage during the device’s unveiling, Steve Jobs himself posed a question that acutely underscores the tablet dilemma: Is there room for a third category of product that sits between your two most essential devices, the laptop and phone? As much as I’m looking forward to the iPad, I’m still not sure there is.

To date, no one’s been able to scale tablets as a core personal computing product, though it’s certainly not for lack of effort. Just about every player in the electronics world has given tablets a go, from Nokia with its Maemo-based N-series Internet communicators to Dell with its Android-based mini-slates to all manner of Windows-based convertible and slate tablet PCs. But the problem with all of them — and the iPad may also be included — isn’t that they’ve been unable to offer fundamentally differentiated experiences from the devices we already own and carry.

Think back to the iPod — before it existed, there wasn’t such a thing as taking your entire music (and eventually, video) library with you wherever you went. But the concept proved to be so elemental that it transcended the iPod as a device, and became a staple in nearly every product Apple makes, from iTunes on the Mac to the iPhone. In his iPad launch presentation, Jobs seemed pretty clear about the fact that the iPad won’t replace your phone or laptop (at least not any time soon), and yet Apple has still been deficient in demonstrating more than scaled-up iPhone experiences (like browsing, light email, and gaming) or scaled-down desktop experiences (like iWork).

Of course, it would be a failure of imagination to assume there won’t eventually be something built on the iPad platform that simply couldn’t be hosted on a phone or laptop. But so far Apple hasn’t shown it to us, which may be why so many are still lukewarm on the device’s prospects. This also might be why iBooks was January’s dark horse announcement — it was the only app Apple showed off that seems to call out for the iPad by name. But long-form reading is still arguably better suited to devices like the Kindle and Nook, which benefit from E Ink displays, while shorter-form media (namely periodicals) went all but ignored by Apple, which punted to publication-specific apps like the New York Times reader. Had Apple attempted to create a new, ubiquitous, standard format for magazines and newspapers, and leveraged its sales infrastructure for subscription content, the iPad might have been hailed as the iPod of publishing.

There’s no question Apple has (re)defined the tablet dialog and raised the bar for the space moving forward. For browsing the web, the iPad experience is second to none; the product itself almost seems to melt away, leaving the user to feel as though they’re literally reaching in and touching the content. And by the time the iPad’s price drops in a year or two, Apple may be able to parlay a groundbreaking product into a market leadership position. But in the mean time, the countdown to launch has begun and Cupertino’s set its sights on building yet another market, we’ll have to see just how many people are ready to put their money where Apple’s tablet is.

Ryan Block is the co-founder of gdgt and the former editor in chief of Engadget. Disclosure: gdgt is backed by True Ventures, a venture capital firm that is an investor in the parent company of this blog, Giga Omni Media. Om Malik, founder of Giga Omni Media, is also a venture partner at True.

Given how bad most people are at driving, I have to wonder why car companies keep giving us tools of distraction — ways to make phone calls when driving, to watch DVDs when driving, etc. Add to that list sharing your geo-location when driving. After adding real-time news headlines to the dashboard of its cars, BMW has added social networking features which can be accessed via the iDrive feature. You can even email your location and destination. Putting aside my snark hat, this feature could actually be useful as it can tell your friends and family where, exactly, you are — though at a cost of $199 a year.

Here’s how it works:

And now watch some stupid human car tricks.

Drivetm

Uploaded by luvnews. – News videos from around the world.

Photo courtesy of The Diesel Driver.

An interesting patent of Apple’s relating to a social networking app surfaced recently. Dubbed iGroups, the app aims to solve the pitfalls of traditional social networks, like Facebook, that require users be a member before being able to participate. Instead, iGroups creates a virtual social network based on proximity.

To set the scene, imagine a casual weekend enjoying drinks at a bar. Your device would be able to detect others nearby and allow for easy communication by the tools already built into your device: SMS, email or by phone. If you’re a Mac user, you could loosely term this as Bonjour for your iPhone.

The idea of a network based on proximity is intriguing considering the technology built into mobile devices that can help facilitate this. Bluetooth and Wi-Fi, for instance, both allow for discovering new devices that are within range. But the problem arises when a user leaves. If they are out of range, they are excluded from the network.

iGroups attempts to solve this issue when it first detects other users. At this point, the devices exchange a token (or handshake, if you will). These tokens are tagged. If there happens to be a trusted source at this venue, for example, like a wireless access point or perhaps a website setup for this purpose, devices can exchange tokens with it. Before this gets too technical, let’s agree to call the trusted source “Wilma.”

This accomplishes two important things. The first is that Wilma can match or correlate tokens to determine groups and their members. When my device approaches and exchanges tokens, Wilma now knows what group I’m part of and similarly, I’ll know other group members that have checked in with Wilma. This process allows the network to grow by allowing its users to infer other users through this daisy chain process. Further, tokens can be exchanged through a variety of mechanisms: Wi-Fi if available, Bluetooth if desired or even 3G. By supporting all of these, it becomes much easier to visualize a realistic image of the network and prevents the network from being stifled because users are not exchanging tokens by just one method that not all devices may support.

The second important goal that this serves is solving the issue of users leaving range and thus losing the whole social networking aspect. If a user interacts with Wilma either at the event or afterwards (through something similar to MobileMe, perhaps), the user can see the entire group. Even if they are just uploading exchanged between Fred and their self, the inferring process described earlier will allow the rest of the network to be recreated. As Fred moves on and continues to exchange tokens, even after our user has left, they are still connected to the same event and will appear as part of the group. Mac users? Think of this as being similar to Smart Folders. The group “knows” who its members are by this process of exchanging tokens, even if not all of the users are present at the same time.

It’s worthwhile to mention that any sort of implementation of such a technology would of course be completely optional and protect the privacy of users if they did not wish to participate. Further, the patent sheds light on the fact that the tokens themselves do not contain information that would identify any particular user or device. Merely the tokens act as a way to tag an association with a specific group.

Still, the idea of creating these virtual social networks on the iPhone is appealing. In some regards, there are applications on the market that attempt to deliver similar functionality, like Loopt. However, as mentioned earlier, these solutions still require users to have an account with them which can be problematic if you meet someone and want to exchange information but they are not a member of Facebook or LinkedIn. Instead of waiting for them to sign up and register a profile, iGroups solves the whole problem faster.

This definitely isn’t Apple’s first foray into patents on social interactions, but none of them have seen the light of day. With rumors of iPhone 4.0 around the corner, however, perhaps there is a substantial social component waiting to be unveiled. What do you think about the potential of iGroups?

Palm shares plunged in late trading Thursday after the company posted yet another dismal quarter and warned that revenue for the current one will fall far short of Wall Street expectations. The company will have to take substantial charges to help its carrier partners eat through excess inventory, and whatever luster once existed for its flagship Pre is long gone. The question now is, who’s going to pick up Palm?

Palm’s last-ditch gamble on webOS has been a disaster. The operating system — which debuted last summer on the Pre — has received solid reviews, but an utter lack of effective marketing from Sprint — and more recently, Verizon Wireless — shackled handset sales. And an upcoming partnership with AT&T — which looked to be Palm’s last chance at redemption — is reportedly fizzling already after the carrier delayed the launch of webOS handsets, slashed its order and cut its marketing budget.

So what are Palm’s options? CEO Jon Rubinstein is projecting a “stay the course” attitude, saying better training of Verizon Wireless sales staffers will begin to pay off — a questionable theory given the flat-line demand for the Pre Plus and Pixi Plus so far. Producing a tablet would be an interesting strategy, as James over at jkOnTheRun suggested yesterday. But the market for tablets is still very uncertain, and there’s little reason to believe Palm can move a different kind of hardware when it can’t sell phones. So a suitor will likely sweep in and pick up Palm, snatching up webOS — the company’s most valuable asset — and a sizable patent portfolio. Here’s a quick rundown of the most likely (or most highly speculated) candidates for acquiring Palm — including their odds of doing so:

• Google : The most intriguing play on the board, Google might be compelled by Palm’s patent portfolio, as Gizmodo noted yesterday. What’s more, Google and Palm both operate Linux-based mobile operating systems, which would make it easy for Google to cherry-pick the best features from webOS and add them to Android. Google could easily afford Palm, and as a bonus would keep it from falling into the hands of a competitor. Odds: 7-1
• Dell : The Texas computer vendor joined the smartphone space a few months ago, launching handsets in Brazil and China, and will soon launch an Android-based device through AT&T. But its late entry means Dell will have a hard time differentiating its hardware, and coming to market with its own mobile operating system, app store and developer community could be a great way to stand out from the crowd. Odds: 7-1
• Hewlett-Packard: HP’s tiny smartphone business is dissolving in the superphone era. Picking up what amounts to a turnkey mobile OS would be a huge — if costly — move to attract attention and breathe life into its mobile business. Odds: 11-1.
• Nokia : Nokia has long been mentioned as a potential buyer for Palm, but successfully marrying the two has become an increasingly difficult proposition. Nokia already claims the world’s most popular smartphone OS in Symbian, and its Maemo — um, sorry, I mean MeeGo – operating system appears to be its long-term strategy. What’s more, Ovi has gained impressive traction in recent months. Adding another platform to the mix would only serve to distract Nokia just as it finally appears to be regaining its focus. Odds: 25-1
• Motorola : Another hardware maker that might be compelled by the idea of owning its own OS, Motorola’s $8 billion in cash ensures plenty of capital to pocket Palm. Yet despite what Om suggested earlier this year, taking on a mobile operating system would likely be more than Motorola could handle, given its difficulty in regaining its once-dominant market share in smartphones. Marriages of two weak players from different spaces rarely end up happy. Odds: 30-1
• Microsoft : Palm and Microsoft seemed like a great fit just a few months ago. But that was before the gang from Redmond went public with its plans to scrap Windows Mobile in favor of Windows Phone, an impressive, consumer-targeted platform set to debut late this year. Windows Phone may fail gloriously, but there’s no reason to bring another OS into the fold — and webOS is largely considered to be Palm’s most valuable asset. Odds: 35-1
• Cisco : An acquisition of Palm would enable Cisco to immediately expand beyond infrastructure into the mobile consumer market. Such a move wouldn’t exactly be unprecedented for Cisco, which last year bought the maker of Flip Video camcorders for $590 million, but maintaining a mobile operating system is a far more sophisticated endeavor than simply churning out camcorders. Odds: 40-1.

This is only a partial list, of course, and new potential suitors are sure to emerge as Palm begins to circle the drain. The clock is ticking, and there’s almost no hope Palm can reverse course at this point. So someone in the mobile space might be able to do very well by picking up a dying company at a cut-rate price.

Related content from GigOM Pro (sub req’d):

Could Games Redeem Windows Mobile and Palm’s webOS?

Image courtesy Flickr user nathangibbs.

The fact that many people love games isn’t really that new. Retailers and even our own governments have used our love of games to sell us products and hook us on lotteries and whatever else they can think of to boost revenue. But the rise of online games such as World of Warcraft and the social and “casual” games popularized by Zynga and other companies on Facebook, such as Mafia Wars and Happy Aquarium, has arguably made gaming a far bigger part of our culture than it has ever been — not to mention location-based apps such as Foursquare and Gowalla, which have explicit game-like features built in. Online payment giant PayPal said that Zynga was its second-largest merchant last year, and PayPal does business with some of the largest companies in the world. And get ready for even more games: Flurry Analytics says that its research shows almost half of the apps that are being developed for the upcoming Apple iPad are games.

What is the impact of all that gaming on our society? One academic, Lee Sheldon of Indiana University, says the generation that has grown up with ubiquitous online gaming is bringing that culture with it into the educational system, and ultimately into the workforce. “As the gamer generation moves into the mainstream workforce, they are willing and eager to apply the culture and learning-techniques they bring with them from games,” Sheldon, an assistant professor at the university’s department of telecommunications, told ITNews. He said older managers will have to “figure out how to educate themselves to the gamer culture, and how to speak to it most effectively.”

Sheldon is already experimenting with that: over the last year, he started grading two of his classes (both involved with game design) using a system based on “experience points” or XP, similar to the way gamers in World of Warcraft and other massively-multiplayer games award points for various tasks. Students started the year at level one, with zero XP and then gained points — and higher grades — by completing “quests” and “crafting,” which corresponded to giving presentations and doing exams and quizzes. Students also formed “guilds” similar to the gaming groups that rule WoW and other multiplayer games, and Sheldon says that his students seemed far more engaged than they had been before.

A similar phenomenon was the topic of a panel at the recent SXSW conference in Austin, where Christopher Poole, the founder of the controversial discussion forum known as 4chan, and Web historian Jason Scott discussed the site and its culture — which in some cases consists of offensive material, but also involves public advocacy through offshoots such as the Anonymous group. According to a description from Austin360, Scott compared the behavior at 4chan to a game, but one in which the objective was to come up with something more shocking and/or hilarious than your competitors.

Scott noted that another site behaves in almost the exact same way: Wikipedia. And he’s got a point — the “crowdsourced” encyclopedia relies in many cases on unknown and unpaid editors and writers to produce and structure and verify its content, people who to some extent compete for the recognition of their peers on the site, and in some cases wind up “levelling up” to become senior editors and members of the internal Wikipedia “cabal” of site managers. Although Wikipedia doesn’t explicitly award experience points, the concept is the same, and it motivates people in similar ways.

The moderation of comments at Slashdot is based on a very similar system: users are able to gain “karma points” through positive actions such as posting sensible comments, voting on other comments and flagging abusive comments. When they get enough points, they are selected by the site’s algorithm to be official moderators, and can then “spend” the points they have removing comments. In such a system, it doesn’t ultimately matter whether someone is anonymous or not, because there is an incentive for them to follow the rules and behave properly (although there are always users who don’t care about the rewards and try to “troll” or disrupt any site).

The bottom line is that good games take advantage of people’s innate desire to compete with each other, but balance that with their need to receive rewards, including the approval of their peers — rewards that in some cases can be used to modify their behavior in certain ways. Those are principles that don’t just apply to games. Jesse Schell, a former creative director at Disney Imagineering Virtual Reality Studio, had a great presentation at the DICE 2010 conference last month in which he talked about the rise of social gaming and what we can learn from it, which is embedded below.

Post and thumbnail photos courtesy of Stock Xchange and Flickr user chanchan222

Plastic Jungle, a Mountain View, Calif.-based company that runs a gift card exchange says it has raised $7.4 million in a round led by Redpoint Ventures with participation from previous investors, Shasta Ventures, First Round Capital and Bay Partners. The company raised $6 million in 2009.

Plastic Jungle is one of the many companies who are trying to solve the problems around the gift card economy, as I highlighted in my post about CardPool, a San Francisco-based very early stage start-up. According to some estimates, nearly $5 billion worth of cards go unclaimed every year. It allows consumers to get cash for unwanted gift cards for up to 92% of the unused balance and buy gift cards at up to a 30% discount.

In the 2009-2010 holiday season, Plastic Jungle saw 450% year over year revenue growth from 2009-to-2010. The company gets 118,000 monthly visitors to its website and is growing at about 60 percent per month.

With the release of court filings in the three-year old copyright infringement suit between Viacom and YouTube, we’ve seen the video share site argue that it is not liable for infringing videos uploaded to its site, as it claims protection under the safe harbor provision of the Digital Milennium Copyright Act (DMCA).

But in Viacom’s filing for a partial summary judgment, it makes the case that the site’s founders — and later executives of acquirer Google — turned a blind eye to copyrighted material in an effort to drastically grow the site’s user base. And since YouTube’s founders were aware of infringement and chose to do nothing about it, Viacom argues that the company is liable under the Supreme Court’s Grokster decision, which found that a site operating with the intent of infringing should not be protected by the DMCA.

Using internal emails that were passed between YouTube founders Chad Hurley, Steve Chen, and Jawed Karim, Viacom paints the picture of YouTube as a young company whose leaders were willing to grow its user base at any cost. For instance, the filing states that Chen urged his associates in one email to “concentrate all of our efforts in building up our numbers as aggressively as we can through whatever tactics, however evil.” The comment notably contrasts with future purchaser Google’s “don’t be evil” mantra — but more importantly, that attitude set the stage for a number of decisions that the YouTube founders made to grow at the expense of rights holders that it was infringing on.

YouTube didn’t always ignore the sensitive copyright issue. At one point during the summer of 2005, for instance, the site’s founders removed “some of the most obvious infringing video from YouTube to give the impression of copyright compliance,” the Viacom filing claims. However, they also chose to leave a good deal of infringing content up, believing that enabling users to search for less high-profile content was worth the risk. According to the filing, Chen wrote in an email, “That way, the perception is that we are concerned about this type of material and we’re actively monitoring it. [But the] actual removal of this content will be in varying degrees. That way . . . you can find truckloads of . . . copyrighted content . . . [if] you [are] actively searching for it.”

And at one point, YouTube founder Jawed Karim even uploaded infringing content to the site himself, which drew some criticism from Chen. In an email, Chen acknowledged, “We’re going to have a tough time defending the fact that we’re not liable for the copyrighted material on the site because we didn’t put it up when one of the co-founders is blatantly stealing content from other sites and trying to get everyone to see it.”

But for the most part, Viacom argues that the founders mainly did nothing about the copyright issue, even though internally they knew it was driving a large portion of their traffic. In an email exchange between the founders, Chen estimated that 80 percent of the site’s traffic was driven by pirated videos, and opposed taking them down proactively because, “if you remove the potential copyright infringements . . . site traffic and virality will drop to maybe 20% of what it is.”

While Viacom tries to make the case that YouTube’s founders knew the extent of the infringement taking place and chose to do nothing about it, it argues that Google was also well aware of the site’s infringement issues at purchase. As part of Google’s due diligence into YouTube, financial advisor Credit Suisse analyzed the site’s content and estimated that more than 60 percent of video views appeared on premium content, but YouTube only had a license for about 10 percent of those videos, according to Viacom.

Furthermore, Viacom claims that Google not only acquired YouTube despite those problems, but it chose initially to take the same approach as YouTube’s founders by ignoring copyright issues. Rather than screen videos prior to putting them on the site, as Google had done with its own video site, Google Video, it allowed YouTube to continue operating without any pre-emptive enforcement policies in place.

All this, Viacom argues, suggests that YouTube and Google should not be protected by the DMCA. Like Grokster, the company argues, “Google and YouTube were not just innocent and unwitting accomplices to infringement perpetrated by YouTube users. Defendants operated YouTube with the unlawful objective of using infringing material to explosively build their user base and become the dominant video website on the Internet.”