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Posts Tagged ‘business’

When I came to the U.S. in 1980, I was young and naïve. I used to think that corruption and ethical lapses were just a third-world ill. Eventually, I became a tech CEO and learned the harsh realities of American business. Yes, standards are much higher, and breaches are punished, but the temptations are just the same here as they are in any other country. Ethical lapses (which are a form of corruption) are quite common.  You watch stories about these on TV every other day and read about them on TechCrunch.  It was the ethical lapses of our financial institutions that threw our economy into a tailspin, and for which we are paying the price, after all.

It is best to be aware of the temptations and to prevent the lapses from occurring. As Enron, Bernie Madoff, and Lehman Brothers have shown, it’s a slippery slope. Once you start compromising your values for short-term gains, there is no turning back. Business ethics are not something you need to start worrying about when your company reaches a certain size; they need to be sewn into the fabric of your startup from the get-go. The lessons are the same for tech businesses as they are for investment banks and for third-world economies.

Harvard Business School professor Michael Beer researched the difference between companies that perform at high levels for extended periods and those that implode when they reach a certain size. When analyzing the spectacular failures in the recent financial meltdown, he found that:

• Of the original Forbes 100 (named in 1917), 61 had ceased to exist by 1987.  Of the remaining 39, only 18 stayed in the top 100, and their return during the period 1917 to 1987 was 20% less than that of the overall market.

• Of companies in the original Standard & Poor’s 500-stock index of 1957, only 74 remained in 1997; of these, only 12 outperformed the S&P 500 in the period 1957 to 1998.

• The average CEO tenure in the U.S. is 4.2 years, less than half the 10.5-year average in 1990.

Beer posited three core reasons for the failure of so many Wall Street firms in the fall of 2008: the firms lacked a higher purpose (in other words, they were focused on short-term gains, profits, and bonuses); they lacked a clear strategy; and they mismanaged their risk. Companies like Charles Schwab and US Bancorp were able to avoid the fallout by having a laser-like focus on customer service and on honesty and transparency. Neither company touched the subprime mortgage securitization market, because they saw it as risky and simply not the kind of business that served the company’s long-term interests.

Even outside Wall Street, companies like Cisco Systems, Southwest Airlines, and Costco Wholesale, with the strongest sense of higher purpose, achieved the greatest success. Take Costco. Wall Street analysts have long chastised Costco’s management for paying high wages and keeping employees around for a long time, because this results in higher benefits costs. But the company’s CEO, Jim Sinegal, lives by his belief that keeping good employees is strategic for Costco’s long-term success and growth. The company’s per-employee sales are considerably higher than those of key rivals such as Target and Wal-Mart; customer service at the stores is phenomenal and fast; and Costco continues to expand, both in number of warehouses and in products and services for business and consumer customers. The culture of the company flows downward from Sinegal and his focus on employees and, by extension, to customers.

One of the problems that Beer found with the failed banks was that their employees lacked the ability to “speak truth to power”. Employees felt intimidated by superiors; the institutions’ internal voice of conscience and purpose was silenced by a maniacal focus on short-term profits and whatever scheme would bring them in. The silencing of employees who sought to challenge strategy and risk-management practices likely also undermined the banks’ moral authority and emboldened those who already felt inclined to do the wrong thing. With a muted internal voice, these organizations lacked a moral compass. As a result, they drove off a cliff with astonishing speed.

The same things happen in Silicon Valley companies.  I asked management guru — and head of the CEO Institute of Yale School of Management — Jeff Sonnenfeld for his advice on how startups can sow the seeds for building a Cisco or Costco. Here is Jeff’s advice:

1)  Create a culture of openness and welcome dissent – Internal constructive critics are your best friends — too often, founders are blinded by their own enthusiasm for their creative vision and then are surrounded by sycophants, kissing up. Founders who fall out of touch rapidly lose their ethical bearings. At Intel, founder Robert Noyce and Gordon Moore did not look for sycophantic followers in selecting the brilliant, contentious, but relentlessly honest Andy Grove as their colleague and successor. Similarly, Craig Barrett and Paul Otellini have consistently fought for different points of view internally — without undermining the enterprise, and always reinforcing Intel’s self-critical core ethic.

2)  Lead by example.  The authenticity of the leader’s character is essential — if colleagues don’t believe you, they will not take needed risks on your behalf — such as training subordinates to be able to do their own jobs.  Startups are often defined by the hip clichés of VC firms, adoring press, and HR consultants — but the startups don’t really practice what they preach.

3)  Learn from immediate peers or distant models. Too often, founders atrophy because they believe that the unique quality of their business or technological mission means that they too are truly unique in leadership values.  Steve Jobs has patterned himself after Polaroid founder Ed Land — and tried to learn from Land’s strengths and weaknesses.  Henry Ford regretfully once claimed “History is bunk” but in reality revered Thomas Edison.  Michael Dell put legendary tech entrepreneur (Teledyne) and educator Dr. George Kozmetsky on his board right from the start to learn from this brilliant then septuagenarian.

4)  Recognize your own fallibility as a leader, know your limits, and beware of the myth of immortality.  Entrepreneurs often are horrified at the thought of leadership succession. The founders of great firms such as Google, Cisco, Amgen, and Microsoft have known that they would need to prepare for a day when they no longer could be the lone day-to-day internal boss, primary external ambassador, and symbolic cultural icon. The founder of the original (pre-Starbucks) coffee house chain Chock-Full-o-Nuts started his first café on Broadway 43rd Street in 1923 and was a great national success.  Sadly, sixty years later, as a dying man who had been flat on his back for two years at Massachusetts General Hospital in Boston, he still clung to the job of leader of the enterprise, his full-time physician serving as acting president.

5)  Remember that institutional character — like a liquid cupped in your hand — is fragile; easily lost; and hard, if not impossible, to regain. Egomaniacal moves, personal grandiosity, greed, and deception create impressions that are hard to erase.  Whole Foods founder, John Mackey, sabotaged the integrity of his own exalted brand, damaging the company’s internal pride and customer admiration far more badly than any competitor could have, due to his self-inflating and his misleading “anonymous” blogging, hiding his identity through an anagram of his wife’s name, “rehodab.”

I’ll add another very important point: Establish an independent board. Venture firms often demand a majority of board seats as a condition for their investments. Conflicts invariably arise. The board begins to serve the needs of VCs and management, rather than of the company itself, which loses the independent voice to warn it not to do the wrong things. The inconvenient truth is that all board members have a fiduciary duty to act in the interests of the company, and not in their own interests. Board members must not engage in transactions in which they or their partners stand to gain. They are legally required to avoid these conflicts of interest.

Finally, remember that in business, you have to make tough choices at every juncture. Though business decisions usually have clear consequences and outcomes, ethical decisions are always hard. Making the right choice doesn’t always bring success, but ethical lapses almost always lead to failure. No matter what the consequence, doing what’s ethical and right is always the better long-term strategy.

Editor’s note: Guest writer Vivek Wadhwa is an entrepreneur turned academic. He is a Visiting Scholar at UC-Berkeley, Senior Research Associate at Harvard Law School and Director of Research at the Center for Entrepreneurship and Research Commercialization at Duke University. Follow him on Twitter at @vwadhwa.

During my recent trip to India, I flew down to Bangalore for one reason: To meet N.R. Narayana Murthy. Murthy is the co-founder, executive chairman and former CEO for 21 years of Infosys, the first Indian company to go public on Nasdaq and effectively the company that began the $30 billion Indian IT outsourcing market.

Murthy’s idea was so successful that it quickly became controversial—not only within the United States where some Americans feel Indians are “stealing jobs,” but also in India where many are concerned about a tech economy that doesn’t make anything. I wanted to meet with Murthy, because in many ways he’s the best person to address what Indians at home and abroad are facing and where Indian entrepreneurship goes from here.

Here are a few highlights from our meeting:

His Day Job. Murthy thought he was stepping down from Infosys back in 2002, but he couldn’t fully let go. As such, he still works pretty much full time for the company, traveling to meet with customers and running a lot of the company’s mentoring and training programs. The more surprising aspect of his job: He personally signs off on the architecture of every building on each one of Infosys’ campuses that employ some 17,000 people around the world. The one we were sitting in was spread of eight acres and had some remarkable buildings, including one that looked like the Luxor casino in Las Vegas.

I asked why this was a top priority—after all, many Valley campuses are plush but from an architecture standpoint look about the same. He said when GE and other American multinationals were starting to come into his business everyone thought Infosys would lose the local talent war. So Murthy studied why people want to work at a particular place. One of the results was the comfort and design of the facilities. That was in 1994 when Infosys was designing the very building we were sitting in as we had this conversation. “I’ve been in charge of every building since– all over the world,” he says.

Hurting or Helping Local Entrepreneurship? Given exactly how plush Murthy and his colleagues have worked to make Infosys, has he indirectly hurt Bangalore’s entrepreneurship scene by making the risk of leaving so daunting? He smiled when I asked this and said, “We may have unwittingly. But I do feel like the spirit of entrepreneurship is alive and kicking in Bangalore.”

Further, I asked about Bangalore’s Zippo-flipping, free-spending generation of young techies who’ve graduated to a huge wave of multinational jobs that pay them far more than their parents ever made, in many cases more than the rest of their families combined. Murthy didn’t deny that that instant-gratification, “gimmie” contingent was strong in the city he helped build, economically speaking. But he blames the Internet and the mass-cross-pollination of Western pop culture, not the bigger paycheck from companies like his.

“We are moving towards a uniform, global culture with an intense competitive spirit and an intense desire for instant gratification,” he says. “But I have a firm belief that each generation is better than the previous one. The Indian entrepreneurs today are more daring than we were.” (This from a man who became a capitalist after after hitchhiking across communist Eastern Europe and getting thrown in jail for chatting up someone’s girlfriend on a train. “More daring” is a tall order, young Indian techies.)

Is India’s Tech Community Too Addicted to Services? Clearly, services has been a great business for Infosys and the hundreds of dollar-millionaires and even more rupee-millionaires that the company’s generous stock program has created. But a lot of Indian CEOs and investors complain that in most cases services-based tech businesses are a great way to get revenues quick, but not a way to build a huge, high-growth business. There’s a big question of whether India’s tech sector has a worrying lack of product-building know-how.

Murthy says it’s a progression. “India missed the industrial revolution, but Indians had intelligence,” he says. “We had to make do with pen and paper. We were always forced to look at the abstract. What is happening in India today is the creation of jobs. Let’s create jobs as long as they are legal and ethical, it doesn’t matter, as long as we make money. The time will come for creating products. I wouldn’t lose sleep over this. If we create enough jobs we’ll raise the confidence of the youngsters and they’ll create products.”

India’s Infrastructure. Here’s something it’s hard for even Murthy to be upbeat about: India’s shoddy physical infrastructure. Murthy has traveled the world and it’s frustrating that so much money has poured into the country he loves, and yet, the infrastructure is still so shockingly bad.

There is progress—Infosys for instance has benefited from a new overpass that cuts down on the drive to the campus by more than thirty minutes. (See!) But it’s not moving nearly fast enough, he says. “I don’t know if we will reach the level of the United States or China,” he adds.

Murthy gave a more nuanced explanation than the usual “it’s corruption” answer you get in India. He explained that 65% of India’s population lives in rural areas and 35% live in cities. And there’s such polarity between the quality of life that politicians have to appear to be doing more for the villages than the cities if they want to get re-elected. That leaves prosperous economic cities blighted by poor sewage systems, pollution spewing generators and beggars weaving through traffic tapping on car windows. “Different emerging nations take different paths,” he says. “In China, they chose to emphasize giving people economic freedom first and political freedom second. In India we chose the opposite path.”

Hurting or Helping US-based Indians? All you have to do is read the comments on one of Vivek Wadhwa’s posts to see the ugly, anti-immigrant, anti-Indian fervor that’s been whipped up in America, post-recession. A lot of it has to do with outsourcing. I asked Murthy if he felt his company and industry’s huge success has indirectly made life harder for Indian-Americans. He turned the blame on xenophobes like Lou Dobbs and grandstanding politicians who use the wedge issue to get viewers and votes.

But it’s an issue he has to address a lot. He answers it by saying every morning he gets up and gets a Pepsi out of his GE Fridge and drives his American car to work where he sits down at his Dell computer. India used to have companies that made soft drinks, refrigerators, cars and computers. But the American ones were better. Allowing them in hurt Indian workers in the short term, but provided a far better quality of life for a much bigger swath of Indians long term. He argues outsourcing has done the same thing for US companies. Greater efficiencies and cost-savings enables these companies to stay competitive and there’s no reason they can’t—in theory—plow those savings into better local jobs or job training.

This argument isn’t going to pacify hate-mongers, because nothing will. Murthy knows that too and while he regrets it, he seems to accept it as reality.

Advice for Entrepreneurs. Murthy has started a $170 million venture fund, so although he spends most of his time still at Infosys, he clearly cares about encouraging the next generation of entrepreneurs. He had two big pieces of advice for them. One, be able to articulate what you do in one sentence. If you can’t, you don’t have a good idea. And two, make sure the market is ready. Businesses are killed, not congratulated, for being ahead of their time.

Back in June, Google launched Sputnik, a suite of tools that runs over 5,000 tests to check a web browser’s JavaScript conformance. Last week, they made the tool a lot easier for anyone to use, with a version that works in the web browser. The results are interesting.

Notably, both the Opera and Safari web browsers beat Google’s own Chrome browser in the test. As you can see in the picture above, Opera is the clear leader, with only 78 failures (the closer to the center, the less errors). Safari came in second with 159 errors, with Chrome in third with 218 errors. Firefox is close behind with 259 errors, while Internet Explorer is the outlier with 463 errors.

These tests were run on Windows machines, with the latest released version of each browser. Using the web tool on my Mac, though, shows similar results (at least for Opera, Chrome, Safari, and Firefox — there is no IE for Mac anymore).

While much of the focus on JavaScript is about speed (that’s what the SunSpider test measures, for example), Sputnik is interesting because it focuses on conformity, making it more like the Acid3 test, which tests web standards compliance. Chrome, Safari, and Opera have all passed Acid3, with Firefox getting very close (94/100 for Firefox 3.6). IE, meanwhile, again lags behind with just 20/100 for IE8. And even the new IE9 preview only scores 55/100.

Speaking of IE9, I tried to run the Sputnik tool in the preview build of the new browser on Windows 7. Unfortunately, it completely shut down several times after getting up to about 50 failures after only a few hundred of the 5,000+ tests — not a good sign. But again, it’s just a very early preview release of the browser, and early SunSpider results for the browser have been good.

Ankeena Networks, a Santa Clara, CA-based provider of new media infrastructure solutions, has raised approximately $16 million in new VC funding, according to a regulatory filing (via peHUB).

No word about who backed the company with this third round of financing, but Ankeena Networks was listed by one of its main business partners, Juniper Networks as one of their investments when they announced their $50 million fund recently, so that’s one name at least. Ankeena had previously raised $15.2 million from Clearstone Venture Partners, Mayfield Fund and Trinity Ventures, so this brings its total to a healthy $31.2 million.

Ankeena Networks’ flagship product is a content delivery platform dubbed Media Flow Director, which enables mobile operators and other service providers to take advantage of rising consumer demand for mobile content and other rich media content across mobile devices, PCs and televisions.

MFD aims to ensure users receive a smooth viewing experience without buffering or stuttering despite of varying network conditions, regardless of the viewing device, over mobile as well as wire-line broadband networks. Ankeena does this by dynamically detecting the available bandwidth and varying the delivery bit-rate.

Ankeena Networks was born under another name, Nokeena, back in 2008. The company was co-founded by CEO Rajan Raghavan, chief strategy and technology officer Prabakar Sundarrajan, chief strategy and technology officer, VP of Engineering Kumar Narayanan and Jaspal Kohli, chief architect, along with Deepak Srinivasan, VP of Business Development.

Collectively, this team brings leadership expertise from companies like Akamai/Speedera, Cisco, Citrix/NetScaler, Exodus Communications, HP, IBM, InSilicon/Virtual Chips, Intel, Level 3 Communications, Mirapoint and Yahoo.

One to watch closely.

We’re still poring over the hundreds of pages of documents that were just released in the YouTube/Viacom litigation. One document that offers extensive insight into YouTube’s early operations is Viacom’s Statement of Undisputed Facts, which contains quite a few emails from the site’s three founders: Steve Chen, Chad Hurley, and Jawed Karim (sometimes referred to as YouTube’s ‘forgotten’ founder). For what it’s worth, YouTube dispels the notion that these were really undisputed; a YouTube spokesperson said “This statement of undisputed facts is a statement of undisputed fiction.”

One of YouTube’s defenses in this case is that it has virtually no way to tell if a piece of content has been uploaded with the authorization of its owner. Which is true — Viacom has even admitted that it requested that YouTube remove many of the videos that its own personnel had uploaded. Because of the DMCA, YouTube was allowed to keep this potentially infringing content online provided it responded in a timely manner to takedown requests.

But these Emails, at least as presented by Viacom, don’t make it sound like YouTube’s founders and employees were necessarily worried about depriving content owners of videos they may have rightfully uploaded. Sometimes, it sounds like they’re pretty sure that they weren’t authorized, and were just relying on the fact that they didn’t have to do anything until they received a takedown notice. Instead, they were worried about prematurely cutting off the bulk of their traffic.

There’s some talk of creating the perception that YouTube was concerned with patrolling such content. In one memorandum, Jawed Karim told YouTube’s Board of Directors that the 10-minute length restriction the site was imposing would “reinforce the official line that YouTube is not in the business of hosting full-length television shows”, but that it “probably won’t cut down the actual amount of illegal content uploaded” because users could easily split shows in half or upload the “Juiciest bits of television shows”. Which begs the question, what was the point? Also, note that he refers to it as “the official line”.

Of course, YouTube says this is all “undisputed fiction”, and they’ll probably argue that the quotes were taken out of context (and they may well have been). If YouTube did follow the DMCA to the letter of the law (regardless of their underlying motivation), they may not have much bearing on the case.  And there’s also the fact that Viacom is being hypocritical with all of this, because it too offered user-generated video sites that relied on the DMCA, and it uploaded many videos to YouTube itself.

But it makes for some very interesting reading.

Here are from some of those early Emails and IM conversations (you can find the full document here:

On July 4,2005, YouTube co-founder Chad Hurley sent an email to YouTube co-founders
Steve Chen and Jawed Karim titled “budlight commercials,” stating “we need to reject these
too”; Steve Chen responded by asking to “leave these in a bit longer? another week or two can’t hurt;” Jawed Karim subsequently stated that he “added back all 28 bud videos. stupid. . .,” and Steve Chen replìed: “okay the video they upload, first, regardless of people are going to be telling people about the site, therefore making it viral. they’re going to drive traffic. second, it adds more content to the site. third, we’re going to be adding advertisements in the future so this gets them used to it. I’m asking for a couple more weeks.”

In a July 10, 2005 email to YouTube co-founders Chad Hurley and Steve Chen,YouTube co-founder Jawed Karim reported that he had found a “copyright video” and stated: “Ordinarily I’d say reject it, but I agree with Steve, let’s ease up on our strict policies for now. So let’s just leave copyrighted stuff there if it’ s news clips. I still think we should reject some other (C) things tho. . .”; Chad Hurley replied, “ok man, save your meal money for some lawsuits! no really, I guess we’ll just see what happens.”

In a July 19, 2005 email to YouTube co-founders Chad Hurley and Jawed Karim, YouTube co founder Steve Chen wrote: “jawed, please stop putting stolen videos on the site. 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 the co-founders is didn’t put it up when one of blatantly stealing content from other sites and trying to get everyone to see it.”

In a July 23, 2005 email to YouTube co- founders Steve Chen and Jawed Karim, YouTube cofounder Chad Hurley responded to a YouTube link sent by Jawed Karim by saying: “if we reject this, we need to reject all the other copyrighted ones. . . . should we just develop a flagging system for a future push?”; Karim responded: “I say we reject this one, but not the other ones. This one is totally blatant.”

In an August 9, 2005 email to YouTube co-founders Steve Chen and Jawed Karim, YouTube co-founder Chad Hurley stated: “we need to start being diligent about rejecting copyrighted/inappropriate content. we are getting serious traffic and attention now, I don’t want this to be killed by a potentially bad experience of a network exec or someone visiting us. like there is a cnn clip of the shuttle clip on the site today, if the boys from Turner would come to the site, they might be pissed? these guys are the ones that will buy us for big money, so lets make them happy. we can then roll a lot of this work into a flagging system soon.”

On August 10,2005, YouTube co-founder Jawed Karim responded to YouTube co-
founder Chad Hurley (see SUF i1 (previous para)): “lets remove stuff like movies/tv shows. lets keep short news clips for now. we can become stricter over time, just not overnight. like the CNN space shuttle clip, I like. we can remove it once we’re bigger and better known, but for now that clip is fine.” Steve Chen replied, “sounds good.”

In response to YouTube co-founder Chad Hurley’s August 9, 2005 email (see SUF i146) YouTube co-founder Steve Chen stated: “but we should just keep that stuff on the site. I really don’t see what wì1 happen. what? someone from cnn sees it? he happens to be someone with power? he happens to want to take it down right away. he get in touch with cnn legal. 2 weeks later, we get a cease & desist letter. we take the video down”; Chad Hurley replied: I just don’t want to create a bad vibe… and perhaps give the users or the press something bad to write about.”

In a September 1, 2005 email to YouTube co-founder Steve Chen and all YouTube
employees, YouTube co-founder Jawed Karim stated, “well, we SHOULD take down any: 1)movies 2) TV shows. we should KEEP: 1)news clips 2) comedy clips (Conan, Leno, etc) 3) music videos. In the future, I’d also reject these last three but not yet.”

On September 2,2005, in response to an email from YouTube co-founder Chad Hurley reporting that he had taken down clips of the TV show “Family Guy,” YouTube co-founder Steve Chen stated: “should we just assume that a user uploading content really owns the content and is agreeing to all the terms of use? so we don’t take down anything other than obscene stuff?”

In a September 3,2005 email responding to YouTube co-founder Chad Hurley’s concern
that “the site is starting to get out of control with copyrighted material” (see SUF i154),
YouTube co-founder Steve Chen stated to the other two YouTube co- founders that, “what’s
the difference between big-boys/stupidvideos vs youtube? . . . if you look at the top videos
on the site, it’s all from this type of content. in a way, if you remove the potential
copyright infringements, wouldn’t you still say these are ‘personal’ videos? if you define
‘personal’ to be videos on your personal harddrive that you want to upload and share with
people? anyway, if site traffic and viralìty will drop to maybe what it is. . . i’d hate to prematurely 20% of attack a problem and end up just losing growth due to it.”

In response (see SUF i155), YouTube co-founder Jawed Karim wrote: “well I’d just remove the obviously copyright infringing stuff. movies and tv shows, I’d get rid of. . . .leave music videos, news clips, and clips we’ll of comedy shows for now. I think thats a pretty good policy for now, no?”

In a September 3,2005 email to the two other YouTube co- founders, YouTube co-founder
Steve Chen responded to Jawed Karim’s suggestion that YouTube remove “obviously copyright infringing stuff’ (see SUF i156) by stating that “i know that if (we remove all that content. we go from 100,000 views a day down to about 20,000 views or maybe even lower. the copyright infringement stuff. i mean, we can presumably claim that we don’t know who owns the rights to that video and by uploading, the user is claiming they own that video. we’re protected by DMCA for that.we’ll take it down if we get a ‘cease and desist”‘; Jawed Karim replied: “my suggested polìcy is really lax though. . . . if we keep that polìcy I don’t think our views will decrease at alL. “

In a September 7, 2005 email, YouTube co-founder Steve Chen wrote to YouTube cofounders Chad Hurley and Jawed Karim, and Roelof Botha of Sequoia Capital (and later a
YouTube board member) that YouTube had “implemented a flagging system so you can flag a video as being inappropriate or copyrighted. That way, the perception is that we are concerned about this type of material and we’re actively monitoring it. The actual removal of this content will be in varying degrees. We may want to keep some of the borderline content on the site but just remove it from the browse/search pages. that way, you can’t find the content easily. Again, similar to Flickr, . . . you can find truckloads of adult and copyrighted content. It’s just that you can’t stumble upon it, you have to be actively searching for it.”

In a January 25,2006 instant message exchange, YouTube co-founder Steve Chen
(IM user name tunawarrior) told his colleague YouTube product manager Maryrose Dunton
(IM user name maryrosedunton) that he wanted to “concentrate all of our efforts in
building up (YouTube’sJ numbers as aggressively as we can through whatever tactics, however evil,” including “user metrics” and “views,” and “then 3 months, sell it with 20m views per day and like 2m users or something. . . I think we can sell for somewhere between $250m – $500m . . . in the next 3 months. . . and there *is* a potential to get to $1 b or something.”

In a February 17,2006 instant message conversation, YouTube systems administrator Bradley Heilbrun (IM user name nurblìeh) asked YouTube product manager Maryrose Dunton (IM user name maryrosedunton), “was it me, or was the lawyer thing today a cover- your-ass thing from the company?” Dunton responded, “oh totally. . . did you hear what they were saying? it was really hardcore . . . if we even see copyrighted material on the site, as employees we’re supopsed (sic to report it”; Heilbrun replied, “sure, whatever,” and Dunton said “I guess the fact that I started like 5 groups based on copyrighted material probably isn’t so great”; in response Heilbrun said “right exactly. . . but it’s a cover your ass . . . so the board can say we told maryrose not to do this.”

In the same instant message conversation,YouTube product manager Maryrose Dunton
(IM user name maryrosedunton) reported the results of a “lìttle exercise” she performed
wherein she “went through all the most viewed/most discussed/top favorites/top rated to try and figure out what percentage is or has copyrighted materiaL. it was over 70%.” She added, “what I meant to say is after I found that 70%, I went and flagged it all for review.” When deposed, YouTube product manager Maryrose Dunton confirmed in reference to the February 28,2006 instant message exchange with YouTube co-founder Steve Chen (see SUF i195) that she was being sarcastic and did not actually flag any of the copyrighted videos for review.

CrunchBase Information

YouTube

Viacom

Information provided by CrunchBase

Despite criticism, and an overall frustrating experience, Google is definitely not ready to give up on Buzz. The latest indication comes today by way of a new Android widget that makes it easier than ever to post updates to the service.

The new Google Buzz widget for Android allows you to post text or photos to the service without having to launch any app on the device. And, if you choose, you can easily tag your location to your buzz, as well as determine if it should be public or private. This widgets extends the already solid support the Android platform is offering the young service. For example, Buzz is built into Google Maps on Android, as well.

This new widget looks very slick — easily one of the best widgets for Android yet. And it furthers my opinion that Buzz should have been launched as a location-based service first. Of course, this simple functionality wouldn’t be possible on the iPhone, which doesn’t allow for widgets (and who knows if they’d even accept a Buzz native app at this point — or if Google would even create one for them).

Google talked about Buzz quite a bit this past week during a panel at SXSW. They apparently are thinking about letting users pre-test new features now.

This new widget works on Android 1.6 and later. To find it, search for “Google Buzz Widget” in the Android Market.

Every few weeks (and sometimes even more often than that), dozens of techies gather together for regional Startup Weekends —  fast-paced code writing frenzies where entrepreneurs and developers conceive of and build a new application in less than 60 hours (and lose quite a bit of sleep in the process). Many of the apps die off soon thereafter, but some of them live on. And now they’re becoming acquisition targets: Learn That Name, a game that uses your LinkedIn contacts to help you remember the names of your business acquaintances, has been acquired by Gist. Terms of the deal aren’t being disclosed, but the LTN guys say they’re “very, very happy” with the result.

Learn That Name was built last August at a Microsoft-sponsored Startup Weekend and won top prize (which was amusing, because it was built for the decidedly non-Microsoft iPhone). The app’s idea came from lawyer Eric Koester, who was inspired to create it after he failed to remember someone’s name earlier during the event. A team of 14 people came together to build the app that weekend, and since then, a subset of the original LTN team has continued working on it, releasing an updated iPhone version, Palm WebOS app, and Flash app.

The deal is for LTN’s tech assets, and the proceeds are being split among the 14 original team members. Going forward, the standalone iPhone and Palm applications will still be available, and the game is also integrated into Gist’s own iPhone application, which you can find here.  The Gist version will tap into Gist’s database of contacts (the original uses LinkedIn).

For those that haven’t used it, Gist offers services that help you keep tabs on the people in your professional network. The service’s web interface allows you to see past messages and attachments from each contact, news about their company, and their recent messages on services like Twitter. Gist also offers an Outlook plugin that shares similarities with Xobni. Given the business oriented nature of Learn That Name, this seems like a good (and fun) fit.

Given the success of the Learn That Name team, it will be interesting to see if more Startup Weekend teams continue working together following the conclusion of their events.

Fwix, a startup that offers a stream of local news that’s updated in real-time, has landed a deal with The New York Times Company to use Fwix’s hyper-local news wire across The New York Times Company’s Regional Media Group’s 15 newspapers, as well as other business units such as Boston.com and NYTimes.com.

Fwix, which launched its realtime API a few weeks ago, aggregates news articles and blog posts that are relevant to a certain region (the site now features support for over 80 cities in the United States and Canada). To do this, the Fwix team selects news sources and blogs that it thinks are related to each city, and also uses automated algorithms to determine when other content might also be relevant. Fwix has also recently tweaked its algorithm and offerings to include “nearby” local content features. So content on Fwix displays relationships between both topics and nearby location. For example, after reading a story about a robbery that took place in the Mission district of San Francisco, you’ll be able to find any other crime and or stories about the Mission neighborhood.

While its still unknown how Fwix will be implemented across all of the New York Times’ properties, the startup’s local news content is already being used in the publishing company’s Northern California newspaper, the Santa Rosa Press-Democrat. In the “YourTown” section, the Fwix feed is set to a current location and feeds realtime news about the San Francisco Bay area. However in some instances, the Fwix news feed might show the reader his or her own local news by autodetect location via an IP address (say, at a global-reaching site like www.nytimes.com).

There is a revenue agreement with The New York Times Company, says Fwix founder and CEO Darian Shirazi, but he declined to reveal the exact amount involved in the deal. And the deal is not exclusive, so Fwix can be incorporated on other news sites as well. Fwix’s local news stream has also been integrated on integrated on WeatherUnderground.com and UPI.com. And the startup also launched the Fwix News Publisher app on Facebook, which lets any Facebook Page add local news of any variety of subjects (business, sports, politics, living, entertainment, etc.) to their page’s feed. The deal with the New York Times is a huge coup for a startup that launched less than two years ago.

Ash Patel, a senior Yahoo exec and one of the company’s longest serving employees, will shortly be stepping down. His last day will be next Monday.

Patel was one of Yahoo’s first sixty employees, and joined shortly before the company went public in April 1996. There are just six current Yahoo employees who joined before Patel, the company says.

His first job at Yahoo was “technical Yahoo,” a title given to all engineers. He created the My Yahoo product and also built Yahoo’s first instant messenger client. He stopped coding for a living in 2002 and has since been in a series of product and engineering executive positions.

His current role is EVP Product Architecture & Strategy. He has also served as Chief Product Officer and has run the engineering group at Yahoo.

I met with Patel this morning for a little over an hour to talk about his time at the company the early days at Yahoo.

One of his favorite moments was summer 1996, he says, when cofounder David Filo would stay up all night watching the news and manually updating results from the Summer Olympics in Atlanta. Most updates to Yahoo’s website were manual in those days, he says, although there were a few partners sending in content in a variety of formats.

Patel also talked about how annoyed he would get trying to test Yahoo’s instant messenger client during the wee hours of the night when no one else was awake. He couldn’t test new features on his sleeping friends, so he added a feature where a user could add themselves as a friend. That feature is still part of Yahoo Messenger.

Says Filo, “Did you know that you can add yourself as a contact in Yahoo! Messenger? Well, you can. Why? Because Ash needed a way to test the code to see if it was actually working the way we wanted it to while Messenger was first in development. He couldn’t wait. He wanted that feedback immediately and he wanted that chance to get things right on the fly. That’s the kind of ingenuity Ash brought to Yahoo!. He helped us to move faster than we thought we could and to find new ways to look at our work from the user’s point of view.”

Patel says Yahoo is in a transition period but is building the infrastructure it needs to compete in the future. Everyone is focused on social right now, he says, and so is Yahoo. But they have product plans for “what’s next after that” as well.

I asked Patel about Yahoo’s current troubles, saying that Yahoo sort of feels like England in 1940, surrounded by the Nazis (I’m not sure who the nazis are in my analogy, but we met very early this morning and it was the best I could come up with). His response – “Well, look who won the Battle of Britain…Things turned out ok.”

We also had a side discussion about whether Carol Bartz could play the part of Winston Churchill. But like I said, it was early.

What’s next for Patel? He says he’s going to take a few months off with his family and start to think about the future this summer. He advises a few startups, he says, although he doesn’t seem to be suggesting, yet at least, that a startup is in his future.

One thing is clear – Patel will be missed. He is a genuinely likable and intelligent guy who’s seen a lot over the last 14 years. It’s a loss for Yahoo that he’s leaving, but this guy clearly will continue to bleed purple.

Nobody is safe in the House of Murdoch, especially on the Internet side of the house. Yesterday, News Corp’s online games business, IGN Entertainment, announced layoffs to its staff. Cuts were pretty even across all parts of the company, and we’ve been able to learn that about 65 people in total lost their jobs, or roughly 20 percent of staff.

Joystiq was the first to get a hold of the layoff memo from president Roy Bahat, who wrote:

We are losing colleagues who played an important role getting us to where we are — #1 in games and men’s lifestyle, and growing 40% over last year in the total size of our audience. We are deeply grateful to our colleagues for everything they’ve done. We as a company are absolutely headed in the right direction, and while today will be hard, it won’t stop us.

In other words, don’t let the door hit you on the way out. The layoffs at IGN follow larger cutbacks last year at sister site MySpace, which laid off 30 percent of its U.S. staff and two thirds of its international staff last summer. More recently, MySpace replaced its CEO.

Murdoch is definitely not enamored with the Web anymore.