Silicon Valley sees the upside in the downturn

Bring it on. So says Keith Rabois, vice president of strategy and business development at hot Internet start-up Slide.

He's not afraid of the economic slowdown that has put a damper on once ebullient venture capitalists who are seeing their young companies producing lots of frills and no bills. "I don’t believe the cycle of innovation is ever done. The best time to start a company is in an economic recession," he told me a few months ago.

In fact, Slide is counting on it. The San Francisco company, which makes entertaining features for social networking sites called widgets, recently lapped up $50 million in funding at at a valuation of a cool $500 million. That means Slide has a giant war chest to not only ride out tough times, but to use them to their advantage.

As other start-ups begin their inevitable decline, Rabois and Slide's founder and chief executive, Max Levchin, hope to recruit talented engineers and interesting technologies. For example, one of Slide's most successful widgets is Super Poke, invented by three young Microsoft engineers from Seattle in their spare time. Levchin recruited the engineers and bought the widget.

"I do believe that people may become more risk averse as the economy becomes more difficult. Generally entrepreneurial risk-taking requires a fair amount of confidence. I am hoping at Slide that a lot of the potential entrepreneurs decide to come work for us because we have capital," Rabois said. "That was the genesis of the last round of financing, to hire as many as we could in advance of the market becoming more difficult."

Of course, Levchin is the poster boy ...

XXX marks the spot kids (and politicians) should avoid

On any sane politician's don't-do list in an election year, being photographed with a well-known porn star ranks right up there with crossing state lines for a rendezvous with a high-priced prostitute.

So with former New York Gov. Eliot Spitzer's career-ending sexcapade fresh in everyone's memory, it was really no surprise that there wasn't a member of Congress to be found when adult-film performer Stormy Daniels appeared in Washington, D.C., this morning.

Although she was there to highlight the adult entertainment industry's efforts to protect children from inappropriate online content (e.g., the stuff the industry produces), and lawmakers love to tout anything that helps keep kids safe on the Internet, appearing with Daniels at the National Press Club was rated NC-17, as in: No Chance a politician would get within 17 miles of it.

Daniels was showing off ...

Where SoCal techies let loose

If you go by stereotypes, techies who sit behind the computer all day aren't the most social people (current readers excepted, of course). So what's the best way to get SoCal techies to get together and check out promising local start-ups? Dim the lights. And serve alcohol.

That's the idea behind Twiistup, the year-old party/conference that picks promising SoCal start-ups, invites them to a fancy club and brings VCs and tech-heads to take a look. People drink. They dance. They talk about things like behavioral targeting. What could be more fun?

On Wednesday its organizers announced the 11 start-ups that will be featured at the fourth Twiistup July 17 at the Viceroy hotel in Santa Monica. The seven local companies and four from elsewhere help you do things you never knew you needed to: like insert a 3-D avatar of yourself into famous movie scenes, rent a book online or compose music even if you are tone deaf. For a complete list, check here.

Sound like your idea of a good time? Too bad. The $50 tickets sold out immediately, which Twiistup founder Mike Macadaan said...

Facebook perk was apparently just a rental

Is there no such thing as free rent anymore at Facebook?

Word has leaked from gossip blog Valleywag that pampered employees of the popular social networking company might lose the coveted $600 monthly housing stipend they received for living within one mile of the its Palo Alto headquarters.

In Silicon Valley, where perks help recruit some of the top tech talent, the stipend seemed a stroke of genius. Facebook Chief Executive Mark Zuckerberg is proud of the urban campus he has created in downtown Palo Alto, a string of buildings that's fast filling up with new employees and just a hop, click and a jump from Google's first corporate offices.

That means Facebook's headquarters is smack in the middle of one of the priciest real estate markets in the world, out of reach to many of the company's less-well-paid staffers such as customer service reps and even to many of its more handsomely compensated engineers. So the stipend seemed a small price to pay to give employees an incentive to shorten their commutes and spend more time in their cubicles pounding out code.

Cost-saving measures seem a bit odd for a company that last fall nailed an eye-popping $15 billion valuation. But Valleywag says former Google exec and new Facebook Chief Operating Officer Sheryl Sandberg, hired in March, is implementing a bit of fiscal discipline.

Apparently those employees who already get the subsidy can keep it until they sign new leases or move. But the subsidy slashes and burns new employees.

Facebook declined to comment.

Not that Facebook employees lack for perks. The latest: Free food. The Facebook cafeteria, run by Josef Desimone, a former Google executive chef, is already a real crowd pleaser. Following the Google model, it serves up ...

Yang: Nothing motivates quite like a takeover threat

Yahoo CEO Jerry Yang today predicted great things to come for the Internet mainstay, saying that the possibility of Microsoft buying the company had convinced everyone that they needed to show what Yahoo could accomplish on its own.

He spoke at the All Things Digital conference in Carlsbad a day after the tech-oriented crowd heard from Microsoft CEO Steve Ballmer, who broke off takeover talks May 3. Yang said he had "mixed feelings" about the collapse of those negotiations.

But although Microsoft's pursuit dragged on for three months -- and although that baton has been passed to agitator investors now speculating in Yahoo's stock -- Yang said the outside view that his company is in chaos was unfair.

"The perception of us as a company under siege is not accurate," Yang said. He said that after experiencing some stumbles before he retook the CEO job last year, Yahoo had refocused on serving as a great homepage for users and providing great search, e-mail and mobile functions.

Lost in all the takeover noise, Yang said...

Murdoch: I'm not helping Microsoft's non-bid for Yahoo

Back when Microsoft was trying to buy Yahoo -- which, the CEOs of both companies went to some trouble in the last 24 hours to stress, was a long time ago -- some of the permutations involved Rupert Murdoch's News Corp. The company owns top social networking site MySpace and is one of the biggest media companies on the planet.

Among the possibilities getting kicked around was Microsoft getting Yahoo's search operation and Murdoch getting the rest. MySpace might have changed hands as well.

Even though Microsoft officially stopped trying to buy Yahoo almost three weeks ago -- ages ago! -- quite a number of folks, including some with non-trivial amounts of money at stake, think there might yet be a reconciliation.

So it seemed worthwhile to ask Murdoch, who will speak tonight at the All Things Digital conference in Carlsbad, Calif., a hypothetical: If Microsoft shocked nobody by making a new bid, would he want to participate?

Herewith his answer to The Times, which translates roughly into deepening shades of "no."

"It's not being discussed. It would depend on price. If it's paying part of $45 billion, it seems way out. It may not be much money to them, but it's a lot to me."

With what some might have called ruefulness, he concluded, "If I can't afford Newsday, I can't afford that."

-- Joseph Menn

Photo: News Corp. Chairman Rupert Murdoch. Credit: Evan Agostini / Associated Press

Firefox spreads to Guinness World Records

It's not the heaviest weight dangled from a swallowed sword. Or the most Ferrero Rocher chocolates eaten in one minute. But on the tech scene, setting a Guinness World Record for the largest number of software downloads in a single 24-hour period would still be a mean feat.

That's the goal for Mozilla on what has been dubbed Download Day, a grassroots initiative to get people to pledge to download Firefox 3, the latest release of the popular open-source Web browser. People are also being encouraged to host download fests, collect pledges from friends and place Download Day buttons on their websites.

Since 2004, the Firefox community has grown to more than 175 million users, the company says, and is available in more than 45 languages and in more than 230 countries.

To take part: Sign up to get Firefox 3 on Download Day. The actual day has not yet been scheduled, but the great download will take place sometime in June.

Image courtesy of Mozilla

Google lands Earth software in your browser

Google has parted the clouds to make its 3-D software, Google Earth, available to developers who want to embed the aerial images into their Web sites, the way they can with Google Maps. The Internet giant made the announcement today at its annual conference for software developers in San Francisco. Google says 2,900 developers are showing up at the Moscone Center to take part in Google I/OTM.

lt's all part of Google's big push into Web-based computing, or what it calls "cloud computing" (Google executives like to call it the war between Microsoft Windows and the Web). Basically, that means that Google is trying to deliver software over the Internet that runs inside your browser.

More than 150,000 Web sites have created applications that use Google Maps, including ones that direct friends to parties or pinpoint the location of homes for sale or apartments to rent. With the visualization software, Google Earth, developers will be able to create much more lush applications, said Google's technical lead on the project, Paul Rademacher. Users won't have to install Google Earth on their computers to view the applications.

Rademacher said that in the three years since Google introduced its mapping software, the company had transformed the mapping landscape from static to dynamic. Google Earth has transported users into a whole new three-dimensional realm by giving them access to sophisticated, high-resolution satellite imagery. It's all part of Google's mission to make the online world useful and universally accessible, he said.

"We don't hold all the world's best ideas ourselves," he said. "If we can build the technology and let other people build on top of that technology, then we will have a better product, and you will have creations that would never have happened before."

-- Jessica Guynn

Google Earth Image courtesy of Google

Amazon CEO Bezos: Printed books are for Kindling

Amazon.com founder Jeff Bezos is so excited about the e-commerce giant's Kindle, an electronic book reader, that he comes off a bit scary. Speaking at the Dow Jones All Things D conference today in Carlsbad, Bezos predicted that the "vast majority" of books in the future would be read on electronic screens. Physical books, he added not very kindly, "won't go away -- just as horses haven't gone away."

Sony CEO Howard Stringer, speaking from the same stage later, defended not the 500-year-old printing process but the animals: "Here we are in a global oil crisis," Stringer deadpanned, "and he's knocking the horse."

Bezos declined to say how many Kindles, whose price was cut by $40 to $359 on Tuesday, have been sold. But he did let drop one fairly impressive statistic: Of the 125,000 titles, including 100 bestsellers, that are available on Amazon in digital and print formats, more than 6% are now sold electronically.

Bezos seemed less certain about the ultimate routes into the home for music and video. The record labels are helping make Amazon, which is selling unrestricted MP3 songs, into a more serious competitor to Apple's iTunes. The company also is selling movie downloads through its Unbox service.

But Bezos announced that Amazon would be hedging its bets on the delivery method consumers want. In a few weeks, the company plans to start charging for streams of video that start playing immediately and have no commercials.

"I don't know if it's the right way to go," he said with a shrug. "Most markets are not winner-take-all."

-- Joseph Menn

Photo: Amazon CEO Jeff Bezos at the Kindle launch in November. Credit: Mark Lennihan / Associated Press

Microsoft still not buying Yahoo, for now

Microsoft really isn't trying to buy Yahoo anymore, at least not right now, Chairman Bill Gates and CEO Steve Ballmer said late last night in a rare joint appearance at Dow Jones' All Things D conference in Carlsbad.

The pair, who generally are kept from being in the same place outside of Redmond, Wash., for security reasons, stuck to the script Microsoft has been using for a while. That is, they are exploring a smaller partnership with the Internet power, they aren't bidding for the whole caboodle and they reserve the right to bid for said caboodle in the future (here's video from the conference).

But the men gave off an air of finality to the situation. That surprised some in the audience who had seen the standoff as a tactical ploy, especially now that the Yahoo board has come under intense pressure from Carl Icahn and other activist shareholders to get back to the table.

"I'm not frustrated at all," Ballmer said. "We couldn't agree on price, basically."

"I still think it's a scale business," he said. "We must think there is something of mutual benefit," or Microsoft wouldn't be trying to cut a new deal.

Under steady needling by interviewers Walt Mossberg and Kara Swisher, Ballmer and Gates, in their own pro-Microsoft way, also conceded that the latest version of Windows, Vista, wasn't all that they'd hoped.

"We have a culture that's very much about `We need to do better,'" said Gates, who has one more month to go as a full-time Microsoft employee. "Vista has given us more opportunity."

That line brought a chorus of laughter from many in the audience. Dell founder Michael Dell, whose computers rely on Microsoft's operating systems, was seated near the front. He didn't come close to smiling.

-- Joseph Menn

Photo: From left, Kara Swisher interviews Bill Gates and Steve Ballmer at the All Things D conference in Carlsbad. Credit: Loic Le Meur via Flickr