TechFlash: Seattle's Technology News

A while back, during one of our occasional appearances on the Seattle PBS station's weekly business program, I made a somewhat dismissive comment in response to a question about the Droid, the widely advertised Motorola phone running Google's Android operating system. I had spent quite a bit of time playing with one at the store, but the hardware had impressed me mostly for its clunkiness, and after more than a year with an iPhone, the interface felt like attempting to navigate a foreign street grid.

Well, the Verizon Wireless folks must be big PBS fans, because shortly thereafter I got a message suggesting I spend a little time with one of the Droids they loan out for reviews by media and bloggers. We don't write a lot of traditional product reviews, but having surely lost the Droid the coveted MacNeil/Lehrer demographic in the Greater Seattle Metropolitan Area, I figured the least I could do was give the thing another shot.

So for the past couple weeks I've been using a Droid. And I’ve been asking myself: Would I give up my iPhone for this?

The answer is no. At least, not yet. But deep down, some of the Droid's features kinda make me want to. Or at least they've made me take more seriously the long-term potential of Android devices. And the experience has given me a new perspective on the emerging battle between Apple and Google in mobile phones.

Seattle-based SEOMoz is transferring its search engine optimization consulting practice to U.K.-based digital marketing agency Distilled as part of a deal being announced today. Distilled will open an office in Seattle to support the business, with plans to hire five to six people this year.

Meanwhile, SEOMoz plans to focus efforts on its SEO software tools business, a unit which CEO Rand Fishkin said offers "the best long-term bet for our valuation."

Amazon.com has been battling with publishers over its $9.99 price for electronic books. Now the online retailer is caving to publisher demands to go higher — signaling it will raise the price of some e-books to between $12.99 and $14.99.

Amazon's concession capped a remarkable showdown with Macmillan, one of the big six publishing houses. Amazon on Friday removed all books — digital and physical — published by Macmillan from its website, after the publisher made clear it was moving to a higher-price model on e-books.

But today, Amazon in a message to customers, backed down, saying "we will have to capitulate and accept Macmillan's terms because Macmillan has a monopoly over their own titles, and we will want to offer them to you even at prices we believe are needlessly high for e-books."

It was a huge week in the technology industry. Amazon.com and Microsoft posted strong earnings. Apple released its highly-touted iPad. And, to top things off, there was even a sex scandal involving the co-founder of Bellevue's Intelius. Here's a look at the past week through the eyes of reader comments.

After Apple unveiled the iPad, many dubbed the device a Kindle killer. Reader Darren Erik Vengroff said he probably wouldn't buy an iPad, but he saw trouble ahead for Amazon's electronic reader: "When Amazon ports the Kindle iPhone app to the larger screen size it's over for the DX."

But Madrona Venture Group's Scott Jacobson -- an Apple customer who previously worked at Amazon -- wasn't so sure. He offered five reasons why the Kindle would survive, which prompted Wetpaint CEO Ben Elowitz -- who had previously written a post on TechCrunch citing 10 reasons why it would die -- to note: "Kindle may have a niche - but it's a specialty device for a specialty audience, while Apple is going after changing consumers' behaviors and lives."

Technology executive John Arnold allegedly lied to a grand jury about having sex with dancers at a Seattle strip club, which prompted several readers to refer to the past legal troubles at the Bellevue company he co-founded. Reader Web 3.0 wrote: "Here is a clue, don't lie to a grand Jury or bad things happen." But some readers also noted that the government shouldn't meddle in these types of activities. Nonamesnomas wrote: "Just because he broke the law, doesn't mean he did anything morally wrong. What right does a government in a free society have to ask, even in a court of law, about what a person does privately?"

Our story -- "Old-school Classmates.com forced to face up to Facebook" -- led to comments from people who had abandoned Classmates and others who found the company's mission misguided. Wrote George Anderson: "Classmates has never realized that people resent being forced to pay for information that they themselves entered. Social media must be free because the content is generated by the users, not the companies that control the website."

The appearance of Bill Gates on The Daily Show this past week prompted one reader to suggest that the world's richest man needed a wardrobe overhaul. (Perhaps someone should nominate him for "What not to Wear"). Janet remarked: "I liked how relaxed Mr. Gates appeared to be and totally admire the work his foundation is doing. However, can we take a moment to talk about his clothing? He was wearing a shirt that was at least two sizes too big. I'm all for frugality, but he can surely afford one tailored shirt."

RealNetworks and Apple were the subjects this week in the latest of TechFlash's periodic appearances on KCTS-TV's "About the Money" show. Here's the video in case you missed the segment last night.

Is Amazon.com's clash with publishers over its discount pricing of electronic books entering a new, more high-stakes phase? As VentureBeat reports, books from publishing house Macmillan have gone missing from Amazon's website.

Macmillan is part of a group of major publishers providing digital titles for Apple's new iPad tablet computer. Apple is reportedly letting publishers set higher prices on Kindle e-books ($12.99 and $14.99). Amazon has set a standard of $9.99 for new release e-books — a price that many publishers fear will eat into hardcover sales and lower the value of books in the minds of consumers.

Source: Amazon.com SEC filings

Amazon.com's overall employee count continues to grow, according to the company's annual 10K filing. The online retailer reported 24,300 full-time and part-time employees at the end of 2009, up from 20,700 the previous year. The company, which just reported a sharp jump in fourth-quarter revenue and profit, has been steadily increasing its headcount since 2003, even through the current economic turmoil.

Technology layoffs in Washington state rose more than fivefold in 2009, according to a new study. Even so, the state fared better than other tech hubs across the nation, and staffing firms say the market is improving for job seekers in the Seattle region.

“We’re definitely seeing an uptick relative to last year, especially,” said Chris Berta, a partner at The Laurel Group, an executive search and technology staffing firm with offices in Seattle and Silicon Valley.

Then again, it would be tough to get much worse than last year. More than 7,300 technology job cuts were publicly disclosed in Washington state in 2009, according to data compiled by Chicago-based human-resources firm Challenger, Gray & Christmas. Fueled by Microsoft's first major layoffs, that was up from 1,326 in 2008 and 1,229 in 2007.

Rumors that Amazon wants to acquire Netflix have cropped up a couple times over the past year. Now they're making the rounds again, after the Wall Street Journal's Deal Journal wrote that "Netflix is becoming a lot more attractive to Amazon." The reason? Netflix's success with building its streaming video business. The DVD-rental company recently said 48 percent of its customers watched more than 15 minutes of a streaming TV episode or movie in the fourth quarter, up from 28 percent in the same period a year ago.

Intelius co-founder John Arnold speaking at the DEMO conference last fall.

Intelius co-founder John Arnold has been placed on paid leave following allegations that came to light yesterday that the technology executive lied to a grand jury about having sex with dancers at a Seattle strip club. An email was sent to Intelius employees at 11:02 a.m. today which read:

"Intelius announced today, January 29, that John Arnold has been placed on a paid leave of absence for an indefinite period of time to resolve his current personal legal issues. We respect John and his family's privacy and our thoughts are with them."

Arnold pleaded not guilty to the charges yesterday in federal court in Seattle. The allegations stem from an investigation into the activities of Frank Colacurcio Sr., who operates the Seattle strip club chain Rick's.

Editor's Note: Aaron Broder, 16, a reporter for the Scholastic Kids Press Corps and a regular TechFlash contributor, sent us this guest post from his hometown of Nashville, Tenn. Follow Aaron at allgeektout.com and @allgeektout.

Courtesy Jordan Bennett

Jordan Bennett with his rare MacBook Pro, Steve Ballmer Signature Edition -- which he says he plans to keep, for now, unless someone makes the right offer.

Microsoft CEO Steve Ballmer is known to react strongly in the presence of Apple technology, and not always in a good way. Take, for example, the time when he pretended to stomp on an iPhone after a Microsoft employee tried to take his a picture with it.

Jordan Bennett, a 20-year-old sophomore at Nashville's Belmont University, had heard these stories, but when Ballmer came to town last week to speak to the Nashville Technology Council, they didn’t stop Jordan from coming up with an idea -- asking Microsoft's top executive to sign his Apple MacBook Pro.

The video of this incident has gone viral, getting more than half a million views in just over a week. I recently had the opportunity to talk to Jordan about what he called a “crazy and surreal” experience.

The tech community has been buzzing this week with news of the iPad, Apple's highly-touted touchscreen tablet computer. And while many bloggers and journalists have wondered where the new device will fit in the gadget landscape, we were curious what actual developers had to say about the contraption.

One of the key moves by Apple was making the device compatible with the nearly 140,000 third-party applications already built for the iPhone. So, we reached out to a few Seattle area iPhone app developers to get their take. For the most part, they were left wanting more from Apple's latest release.

The DigiPen Institute of Technology plans to move to larger digs in Redmond this summer, with plans to open a 100,000 square foot campus on Willows Road. The school -- the first to offer a bachelor's degree in video game development -- currently is located near the Nintendo and Microsoft campuses at 5001 150th Ave NE.

DigiPen founder and CEO Claude Comair said that the new facility will put students and faculty from various fields under one roof. Since 2000, more than 700 people have graduated from DigiPen. There are currently about 830 students enrolled, with about 120 full and part-time faculty and staff.

William Lansing is president, CEO and board member at InfoSpace Inc., the Bellevue internet search company. A former NBC internet executive with an e-commerce background, he joined InfoSpace in February 2009. He spoke to the TechFlash about the company’s plans for acquisitions, working with Jack Welch at GE, and the great outdoors.

Dawn Lepore, CEO, drugstore.com

Drugstore.com is launching three new websites, as it seeks to extend the reach of its e-commerce business amid growing competition in the online health and beauty markets.

The Bellevue-based company recently launched a men's health and grooming site called At His Best and another one called The Natural Store selling "natural" health and beauty products and household cleaners . Spokeswoman Anne Marshall said a third site is coming soon that will be a “medicine cabinet” for a specific, unidentified medical condition.

Drugstore.com has been increasing its use of so-called “micro sites” around specific product categories to drive sales. Such websites use the company’s existing product selection, e-commerce technology and shipping infrastructure, and thus are relatively inexpensive to launch. The main cost is marketing the new websites to consumers.