Apple Withholds Patent From Widget Standard

from the patents-and-standards dept

The idea of standardization around certain technologies makes some amount of sense. Once a standard is set at a lower level, it opens up plenty of innovation opportunities above that standard. However, in the past few years, we've seen a pretty massive problem with the combination of standards and patents. Basically, everyone starts looking for ways to somehow connect a patent to a standard -- but they often try to hide the details so that, once the standard is set, they can start demanding everyone pay up for patent infringement. This is even more likely when companies come up with an agreement to pool patents in a royalty-free manner for the sake of the patent. Companies try to keep their patents out so they can later demand money. It's way too common these days. The latest to do this appears to be Apple, who withheld a key patent on technology for online "widgets", which has recently been standardized. The standard was set by the W3C, who asked for companies to commit their patents royalty-free in order to move the standard forward so that everyone could benefit. Instead, Apple held out a key patent, and can now start demanding people pay up. On the whole, Apple hasn't been that aggressive in enforcing its patents, and hopefully that doesn't change now -- but it does show once again how important patents have become in the standards setting process, and how much trouble they can cause.

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It's Not Ad Standards That Have Killed The Online Ad Business

from the it's-crappy,-annoying-ads dept

We've been pointing out for some time that any business that relies on traditional display advertising to make money is in for a world of hurt because almost no one pays attention to those ads. There's a simple reason for this: they're not at all relevant or useful. They're often annoying. And, most importantly, they're not what anyone is on a page to see. When people surf to a web page, they're looking for the useful content -- and most advertising is not useful content.

This seems rather obvious, but it hasn't stopped some folks who tend to rely on such bad display advertising from trying to rationalize why that market is rapidly shrinking. The NY Times quotes MSNBC.com's president, Charles Tillinghast, who says the real reason that display advertising is drying up is because the IAB agreed to standard sizes for display advertisements earlier this decade. To him, that meant that the display ads were distributed everywhere via ad networks, creating over-supply and commoditization, driving down prices.

While I don't deny that there may be an oversupply -- I doubt that a more limited supply would have made a big difference. The problem isn't with the supply. It's with the demand. Most people don't want such useless advertising, so they ignore it (sometimes with help from Adblock). If you want to make advertising work, the issue isn't getting rid of standardization, or worrying about commoditization, it's about making the advertisements into good content that people actually want to participate with, rather than annoying "ads" that they want to avoid.

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The First Step Is For Microsoft To Admit It Has A Problem

from the hi,-my-name-is-Microsoft-and... dept

Ars Technica brings word of a pair of interesting efforts underway over at the Mozilla Project -- both aimed at improving Internet Explorer, whether Microsoft likes it or not.

You may have heard of the first one already: ScreamingMonkey has gotten some press. It aims to make the core of Firefox's next-generation Javascript engine (originally developed by Adobe) available in IE, providing advantages in speed and standards-compliance.

The other project is a bit more recent, and a bit more far-out: it's an IE plugin created by Mozilla developer Vladimir Vukićević that implements the HTML5 <canvas> element -- something that IE's never gotten around to supporting. Canvas allows Javascript to draw 2D graphics on the client-side. You may have stumbled across it in the form of one or another nifty in-browser FPS demo. It's a potentially powerful tool, but, as Ars notes, one that hasn't achieved widespread adoption by web developers due to IE's lack of support for it.

Both of these projects are impressive pieces of technology. But unfortunately both attempts to improve IE are unlikely to succeed in the ways that their authors would like -- and it's easy to see why. It's safe to say that IE users tend to be among the web's least technically sophisticated. These are exactly the people who can least reasonably be expected to install modular improvements to their browser's underlying technology. It's hard to imagine anyone finding it easier to do this than to simply download and begin using Firefox -- a task that's already clearly too complicated for many people. And that's to say nothing of the difficulty of getting the word out in the first place.

The right solution is the same as it's always been: for Microsoft to fix its abysmally noncompliant browser. They wouldn't even have to do it themselves! As Tom Raftery suggested some time ago, Microsoft could simply open-source IE. Superficially, this seems like a good fix: it's not as if IE is a profit center for Microsoft, and Apple has already shown the viability of the approach with its open source WebKit HTML rendering engine. A bold step like that could go a long way to bolstering what has thus far been a fairly anemic stab at open source on Redmond's part.

But of course it will never happen. As some of Raftery's commenters pointed out, IE probably couldn't be open sourced without revealing critical -- and valuable -- Windows code. More to the point, Microsoft wants a broken browser. Not supporting <canvas> means that no one will rely on it, which in turn means less competition for Microsoft's rich client library Silverlight -- created to solve the problem of missing <canvas>-like functionality (among other things). More broadly, a world of webapps that are perpetually forced to accommodate IE's underachieving status means less time spent by users in the cloud, and consequently a bit more relevance for MS. Put simply, IE's awfulness isn't a bug, it's a feature.

This is hardly an original observation, but that doesn't make it any less true. And that means that the answer to IE's persistence is the same as it's always been: for Safari, Opera, Firefox et al to consistently provide a better browsing experience and thereby compel Microsoft to fix its mistakes -- as it at least began to do with IE7. Unfortunately, that's something that they're going to have to do for themselves.

Tom Lee is an expert at the Insight Community. To get insight and analysis from Tom Lee and other experts on challenges your company faces, click here.

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Is Google's Proprietary Tech Stack Destroying Its Acquisitions?

from the not-invented-at-Google-syndrome dept

While Google has bought plenty of small startups, almost none of those deals have amounted to very much. It almost seems like most of the startups disappear into Google forever. There are a few exceptions such as YouTube and (maybe) Writely. But the list of startups that have simply languished or died is much longer. TechCrunchIT is running an interesting post that suggests one of the key reasons: Google's proprietary tech stack. While Google is a big open source supporter for lower level infrastructure, once you get above that -- it's very much a strong believer in doing everything its own way. I've heard from friends at Google about the difficulty they've had learning to deal with Google's tech stack -- and certainly have heard how it's slowed down the progress of some Google acquisitions while they learn how to "transition."

In fact, some have pointed out that this is one of the side benefits to Google's AppEngine offering. Since it exposes some of Google's tech stack to folks for them to develop and run their applications, it will make it much easier to integrate them into Google at a later date. So, for startups whose strategy is to get acquired by Google (and, I should note, if you start with that strategy, you're probably going to fail), it may make sense to develop on AppEngine just because you're already signaling to Google that the integration costs are significantly lower.

Still, this highlights one of the major downsides to Google's belief that it can do everything much better than everyone else by starting from scratch: in doing so, it actually makes it much harder to capitalize on synergies from many acquisition targets. Yes, there are reasons to go against the "standard" way of doing things, but there are significant costs as well.

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And You Thought The Next Generation Video Standards Battle Was Over?

from the we've-got-a-new-one-coming-on dept

If you thought the questions about what technology standard we'd be using to watch movies was settled when Blu-ray won the next generation DVD standards battle, then you're in for a bit of a surprise. In taking nearly half a decade to decide which standard would make it, the DVD camps left open plenty of opportunity for online competitors to start making their moves. The technology for delivering movies online has been rapidly improving. But, of course, what we didn't count on was that it would just create a huge new mess.

Earlier this week, there was all sorts of talk about Netflix streaming movies to the Xbox as part of Netflix's effort to get consumer electronics companies to build in support for Netflix streaming. As we warned when that announcement was made, it's a bad idea for Netflix to focus on a proprietary streaming solution, as it's only going to set up another standards battle. And, indeed, Blockbuster is working on its own such solution. Then, of course, everyone knows that Apple's in the market with the AppleTV. And don't forget Sony, which is selling a special (extra expensive) TV for downloading movies. And, of course, there are countless startups in the market as well.

Oh, and how could we forget Amazon? The company is now announcing its own proprietary online store for streaming movies and TV. This one piggybacks a bit on Sony's awful plan (meaning if you buy that super expensive internet-connected TV, you'll also be able to stream movies from Amazon).

But the end result is a total mess for the entire market, and that doesn't help anyone. All of the players should take a look at how badly the multi-year DVD standards battle hurt the industry. It makes people unwilling to buy certain hardware, as they don't want to be stuck with the "loser" a year from now. What's wrong with coming up with a single standard for streaming movies from any particular service to various TV-connected devices and computers? Then let the different providers compete on actual services provided? That would increase adoption, and let these companies do what they do best, rather than fighting a can't-win battle against too many other competitors.

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Court Overturns FTC Ruling Against Rambus

from the bad-news-all-around dept

We've been covering the story of Rambus' tricks to get itself a patent that covered a standard by sitting in on standards meetings and then modifying its patents to cover the standard. The rulings on the various lawsuits have gone back and forth on this, and while Rambus has had some wins and some losses in court, last year the FTC stepped in and smacked the company down, noting that it had used questionable means to get itself an effective monopoly on the memory market. Unfortunately, that FTC ruling has now been overturned by an appeals court that said the FTC failed to show evidence of a monopoly. This is unfortunate for a variety of reasons. If the FTC's ruling had been allowed to stand, it would have shown how an ill-gotten patent would be the equivalent of an illegal monopoly. That seems like the proper result, as a patent clearly is a government granted monopoly. So, if the patent is gained through questionable means, then that monopoly should be considered an illegal monopoly. Unfortunately the appeals court disagreed, and that will make us all worse off, as it will give the government fewer tools to crack down on abusers of the patent system.

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Yet Another HD DVD Format Steps Into The Ring?

from the this-will-end-quickly-on-a-knockout dept

Thought the format war over high definition DVD technologies was over and Blu-ray had won? Perhaps you should think again. The NY Times has a story about yet another attempt at a high definition DVD technology, this time called HD VMD. It's not hard to predict where this one is going: it's dead on arrival. While the company behind it insists it's not trying to start a standards battle, it's difficult to see how you can judge it any other way. After all, why would any studio want to go through the same mess from the past five years in arguing over which standard to release their movies on? The folks behind HD VMD seem to be banking their entire efforts on two very weak pegs: first, their system is cheaper than Blu-ray and second, their Chairman is a big shot Hollywood distributor. If that's the case, he hasn't been particularly effective as there are only 17 movies available in the format -- and you probably wouldn't recognize any of them. As for the cost issue, that's dead on arrival as well. HD DVD was cheaper than Blu-ray and that didn't help it survive. Besides, anyone who understands technology advancement curves knows that Blu-ray is going to start getting cheaper and cheaper pretty fast. The cost advantage will disappear before long. But, the single biggest factor is just that the studios know they've lost three or four good years of selling high def DVDs and don't want to bother with yet another format war.

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Which Is More Important For Innovation: A Standard Platform Or Competition?

from the or-a-little-of-both? dept

There's an interesting debate going on in the video game world over the question of whether or not the video game market would be better off if there were a standard console platform, rather than separate walled gardens (Xbox, Playstation, Nintendo). What the discussion is really about is what is more important for innovation: having a standard platform that everyone agrees on or having competition between platforms -- and that debate extends well beyond the video game world. It also isn't a question that has an easy answer -- and, indeed, we're clearly on the record advocating for more competition in some markets and standardization in others. So I thought it might be interesting to explore the arguments for each, and a basic framework for understanding what's likely to make more sense in what situation.

The argument for standardization: A drawn out standards battle between different systems can often seriously harm a market. First off, it makes it that much more difficult to attract developers to build on your platform, because you have to convince them that it's better than the alternatives. Standards battles can also scare off customers who are (reasonably) worried about buying into a standard that later loses and being stuck with mostly useless hardware. Having a standard clearly makes sense when the lack of a standard forces a serious delay in development and adoption. However, if a fragmented market can stand on its own, standardization doesn't necessarily make as much sense. Generally, standardization only really makes sense when you have cases of natural monopolies, where the cost of duplicated efforts is quite high, such that it becomes quite wasteful and disruptive to allow that duplicated effort to occur. It's worth noting there are some who believe there's really no such thing as a natural monopoly, but cases such as railways, highways and laying fiber seem pretty convincing. It's also worth pointing out that the process of agreeing to a single standard is often extremely acrimonious -- as it becomes a "winner take all" market, and no one wants to be on the losing side. That means some standards battles get dragged out for years, harming everyone in the process.

The argument for competition: Most of you (hopefully) know this one already. You don't have to be Adam Smith to recognize that competition tends to drive innovation, as firms compete to out-innovate each other and provide a better and better product that the market is willing to purchase. Competition is a key driver in innovation and economic growth. Preventing competition has been known to stifle growth. It's worth noting, of course, that a fight for "standardization" isn't "anti-competitive." It's just a question of shifting the competition from being between platforms to being on top of a single platform. For example, it's good to have competition in who can sell you lamps, but it wouldn't be good to have competition among different types of electric systems with different outlets. So, we standardize on a single electric system, and it allows all the competition on electric devices on top of it.

So how do the two square up? It helps to separate the market into different factors. First off, standards clearly only make sense when we're talking about some kind of platform on which other applications/business/services are going to be built. Second, there's the natural monopoly question: how big a disruption does it cause if there are multiple competitors and one fails? If we had competing highway systems and one had to shut down, leaving rotting highways everywhere, that's a problem. The third factor is where the biggest economic contribution comes from: the platform or the applications on top of the platform. If it's the platform, then competition makes sense. If it's really the applications on top of the platform then it's going to make sense for there to be a standard to let the competition occur on top of the standardized platform. Finally, it's worth looking at the difficulty for those building the apps/businesses/services on top of platforms to port from and between competing standards. If it's relatively easy to port from one to another, then there's less of a reason to push for a single platform.

The video game market really comes down in the middle on some of these factors. However, in the end, I see little support for the idea of looking for a standardized platform. The disruption isn't that great to their being multiple platforms out there (not much of a natural monopoly). The economic impact point may be up for debate, but so far, the two are more intertwined than most people realize, with many consoles sold at a loss with the hope of making it up in selling high margin games. That makes it difficult to determine how much money really goes towards software and how much is effectively paying for hardware. The final issue may be the most damning: while porting videogames does take time and effort, and isn't always easy, the cost is relatively low compared to, say, the idea of ripping out your entire electric wiring and replacing it with a new standard.

In the end, competition is definitely a key component in driving innovation, but it's important to question where that competition should be occurring, and where it's mutually beneficial to have a standard. It's reasonable that video game developers would favor a single platform to develop on, as it focuses their attention and efforts -- but that doesn't mean it's necessarily best for the overall industry.

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EU Tests Out Its New 'Patent Ambush' Antitrust Law On Rambus

from the patent-ambush-indeed dept

Rambus has been involved in a whole series of lawsuits concerning its patents. If you don't recall, the company has been accused of sitting in on meetings for a standards body and then modifying its patent applications to cover technology included in the standard. Of course, once the patents were granted and the standards were set, Rambus basically went after everyone demanding licensing fees. The case has gone back and forth over the years in courts and in the US Federal Trade Commission -- who ruled that these actions were a violation of antitrust law. Over in Europe, it seems that officials feel that this is the perfect test case for a new kind of antitrust violation: "patent ambush." It's nice to see regulators realizing that abuse of patents should be considered an antitrust violation. Hopefully we'll see more of that going forward. Rambus, of course, claims this is nothing new, but it can't be good for them. In the meantime, as always when we post about Rambus, we wonder how long it will take for the company's stock holders to trash us for daring to question the company. Last time we wrote something negative about the company we got an email saying that "the authorities" had been alerted to our post. We wonder if "the authorities" have been alerted about the awful things European Union regulators are saying about Rambus as well.

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