TechFlash: Seattle's Technology News

Microsoft CEO Steve Ballmer got lots of attention yesterday when he announced that the company has sold twice as many copies of Windows 7 as it did any previous version of the operating system in its first month. It's "a fantastic start," he told shareholders at the company's annual meeting.

People who have been around the industry a while tend to roll their eyes at these kinds of statements, because such comparisons don't take into account the organic growth in the computer market in the years between Windows releases. It's not hard to sell millions more copies of Windows when millions more PCs are being sold.

In fact, Microsoft floated the same claim about Windows Vista when it was released -- saying it "made a splash" with more than twice the sales of Windows XP in its first month. Ultimately, of course, Windows Vista didn't exactly set the market on fire.

But a closer look at the current situation suggests that Ballmer's positive outlook about Windows 7 might actually be justified.

Root Wireless, a Bellevue startup making online maps that show how the four major wireless networks perform in major cities, has raised more than $3 million in new funding, according to a filing with the Securities and Exchange Commission.

Root Wireless spokesman Mike Brennan confirmed the new funding but declined to specify the amount, saying it would be announced Monday. He described it as an oversubscribed Series B round.

The company makes color-coded online maps that show how AT&T, Sprint Nextel, T-Mobile and Verizon networks perform down to the granular street level. It's meant to give consumers a way to compare the strength and reliability of network plans where they live and work. That could be useful information, at a time of competing claims about wireless coverage and high-profile outages.

I had the pleasure of moderating the Washington Technology Industry Association's technology predictions dinner on Wednesday night. It was a lively discussion. And at times I just let our panelists -- Bill Bryant, Andy Sack, Glenn Kelman, Greg Gottesman and Kelly Smith -- have at it. My first question certainly prompted a fun debate on the value and revenue potential of Twitter, as you can see in the video below taken by Tim Reha. (The fireworks begin in minute 14).

More video in the segment below, including Kelman and Smith debating the value of Amazon.com's Zappos acquisition and Bryant predicting that the online retailer will buy Netflix, Hulu and Blockbuster. Sack also suggests that Redfin, Picnik and Cheezburger Network will get gobbled up in 2010.

Amazon's Kindle just improved its chances of being the stocking stuffer of choice this holiday season. Barnes & Noble says its new Nook reader, a highly anticipated "Kindle killer," has sold out, and won't be shipping again until Jan. 4. That follows news that Sony's latest e-reader, the Daily Edition, may or may not get to customers in time for the holidays.

Kindle, of course, has had its own supply issues in the past. But if Amazon can keep Kindles in stock through the end of the year, it may have a leg up on its rivals.

[Post updated with Amazon comment]

Randall Reina of McGraw-Hill Education/Dan Schlatter photo

Publishing giant The McGraw-Hill Companies Inc. has been quietly building a digital center in Bothell, hoping to tap the Seattle area’s technology talent to develop online education programs for elementary and high school-age students.

McGraw-Hill isn’t entirely new to the area. It acquired the Bothell office back in 2000 when it purchased Tribune Education, a maker of education materials. But this June, New York-based McGraw-Hill renamed the Bothell operation its Center for Digital Innovation, with the goal of building new web-based learning products for K-12 schools.

RealNetworks and Viacom's MTV Networks are talking about restructuring their Rhapsody joint venture -- aiming to possibly reduce the Seattle company's ownership stake and end its majority control of the music service, according to a regulatory filing.

"These negotiations are focused on a potential restructuring of RealNetworks' and MTVN's relative economic rights in the joint venture and on their relative abilities to exercise control over decision-making to enable Rhapsody to operate more independently of either party," says the filing, made public last night. "If these discussions result in a definitive agreement, RealNetworks may agree, among other things, to adjust the corporate governance and/or management structure of Rhapsody and to reallocate the ownership of Rhapsody between RealNetworks and MTVN such that RealNetworks' percentage ownership of Rhapsody could be reduced from 51% resulting in both parties owning 50% or slightly less."

Google's dominance has perplexed Microsoft executives for years, but it sounds like Pastor Ken Hutcherson of Antioch Bible Church in Redmond has got this whole Internet search thing figured out.

Hutcherson, who has clashed repeatedly with Microsoft over its support of gay-rights initiatives, made his annual appearance at the company's shareholders meeting yesterday to speak on behalf of a resolution that would have required Microsoft to disclose in more detail the recipients of its charitable giving. The Stranger has the audio, in which Hutcherson plays the role of spiritual business consultant.

After hearing about Microsoft's plans to let LinkedIn and other social networks integrate with Microsoft Outlook, one of the first questions that popped to mind was the potential impact on Gist. The service from the Seattle company, backed by Paul Allen, combines email, contacts, calendar items, online links, social-networking feeds and other data.

"Buh-bye Gist," one TechFlash reader observed yesterday.

Not so fast, says Gist CEO T.A. McCann. Answering our questions via email, he said the company has known about the Outlook Social Connector for some time, and doesn't see it as a direct challenge to its business. McCann pointed out that Gist offers much more than an Outlook plugin. The Gist service, currently in beta, also works inside Salesforce.com, via a Web dashboard, and an iPhone app.

The Cheezburger Network of comedy websites, which includes I Can Has Cheezburger, Fail Blog, and Engrish Funny, kept its hold on the number 1 slot in the Seattle Startup Index for the month of October, followed by Zillow, Picnik, BuddyTV and Wetpaint. The list of web startups, compiled by Marcelo Calbucci, added another 17 companies, and now totals 373.

Kelly Smith, Greg Gottesman, Glenn Kelman and Andy Sack. Not pictured: Bill Bryant.

What should Twitter do in 2010? Where will the stock prices Google, Amazon, and Microsoft end the year? Which companies will be acquired in the next year? And which cloud-computing platform will dominate?

Those were among the burning questions last night as TechFlash's John Cook moderated the WTIA 2010 Predictions event -- reprising a role that has become an annual tradition in the local tech community. On the panel were Kelly Smith, founding partner, Curious Office; Greg Gottesman, managing director, Madrona Venture Group; Glenn Kelman, CEO, Redfin; Bill Bryant, venture partner, Draper Fisher Jurvetson; and Andy Sack entrepreneur and general partner in Founders Co-op.

Read on for notes from the panel, gleaned from John's recording.

Wal-Mart is hitting back against allegations of "predatory pricing" in its book war with Amazon.com and Target. Wal-Mart CEO Raul Vazquez told Bloomberg that the heavy discounting wasn't intended to drive others out of business and is consistent with Wal-Mart's overall retail strategy.

The American Booksellers Association, a group representing independent booksellers, has asked the Justice Department to investigate the online price skirmish that broke out last month between Wal-Mart, Amazon, and Target. The three companies engaged in back-and-forth discounting on some of their top-selling preorder books. When the dust settled, the titles were selling for $9 or slightly less, which is far below list price and cheaper than what many smaller booksellers would pay for them at wholesale. The booksellers association said the price war is damaging to the book industry and to consumers.