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Those shows reach the audiences they want to reach, and the bank doesn’t have to be broken to participate. But what a devastating blow to local economies.

I don’t disagree with any of this. Webcasts, viral marketing, and so forth do indeed offer additional, and much lower-cost, ways of reaching out to customers, partners, and developers. And, in Apple’s specific case, it doesn’t especially strain credulity to at least accept that Macworld is no longer as good a marketing fit as it once was. However, if one takes the broader perspective, I’m not at all sure that this says all that much about the trade show business in general.

That’s because the trade show business has always been a bit of a racket. A former boss regularly complained about the money he wasted on trade shows in which he had to participate. And that was more than 10 years ago.

Companies often effectively have to exhibit because it’s expected. (Hmm. ACME isn’t at the show this year; it must be in trouble.) Participation might also be seen as a cost of doing business with an important partner. (Want Oracle to work with you? Better exhibit at OracleWorld.) There isn’t necessarily a quantifiable return on the investment.

But the reality is that there’s a natural tendency toward structure in such things. I’m sure that we’ll all have plenty more opportunities to partake of bad convention center food.

In fact, I have this pleasant fantasy that the IT industry could replace its most lumbering shows with get-togethers in nice locales. No need for all the big exhibits at the expensive, antiseptic convention centers. Throw in some unconferencing. (One example somewhat along these lines in Sun Microsystems’ CommunityOne. It will be interesting to see how CommunityOne East fares, given that it marks the first time one of these events has been run independently of JavaOne.)

Inertia and general politics are other factors. Lots of groups both inside and outside of companies have a strong vested interest in keeping the trade show gravy train going. And that includes, as much as anything, attendees, for whom shows can be as much about getting out of the office for a week as they are genuine business value.

That’s not to say that the real-life interaction that happens at these events has no value. Anything but. For me, one of the greatest values of shows is that they offer a convenient focal point for lots of face-to-face discussions, both formal and less so.

I hadn’t really thought too much about it, but it only makes sense that the Internet’s next victim would be the trade show. Think about the outreach tools that companies have at their disposal these days.

I’ll leave speculation about the back story behind Steve Jobs bailing on the upcoming Macworld–and Apple bailing on future ones entirely–to others.

Rather, I’d like to poke a bit further at what this says about the trade show business. ZDNet’s Sam Diaz writes:

Webcasts have become online events where people from around the globe can attend without booking a flight, hotel room, or restaurant reservations. Viral videos are being produced by companies to showcase their products and technologies in real-world environments. Brand names are creating loyal followings via “fan memberships” on social-networking sites such as Facebook. And, increasingly, there are smaller, intimate shows that cater to crowds with specific interests–conferences dealing with social networking, cloud computing, open source, and more.

I hung out near the red carpet as long as I could, but was urged to move it along so John Mayer could get his turn in front of the cameras. (Mayer and Apple fans alike will note he has made more than his share of appearances onstage with Steve Jobs but now stumps for RIM).

(Credit:
Ina Fried/CNET News )

(Credit:
Ina Fried/CNET News)

There was the full runway action, as paparazzi photographed celebrities going down the red carpet on their way into the club. As I arrived, a couple of cast members from the new 90210 show were making their way down the carpet. (Perhaps my favorite line of the evening was one of the show’s cast members saying she hadn’t actually seen the original show, but had “seen pictures” of the show’s stars).

In the VIP section, while the celebrities largely drank and took in the Foo Fighters, there were a few geeks that also managed to score a coveted white wrist band (often friends of friends of friends of the VIPs). They could easily be spotted tapping away on one of the many demo Storm devices at the event.

Since I know, I’d get comments along the lines of “Pix or it didn’t happen,” I’ve included a number of shots I took with my own BlackBerry (a Curve, alas). The pictures that were taken with the Storm’s 3.2 megapixel camera look a lot better than the ones I took with my Curve, but well, there you have it.

HOLLYWOOD, Calif.–The BlackBerry Storm got its chance to be a child star Wednesday as Research In Motion threw it a coming-out party at the legendary Avalon Hollywood club.

Foo Fighters performing at Wednesday's LA launch party for the BlackBerry Storm. (Photo taken with a BlackBerry Curve.)

Here’s a video, taken with my BlackBerry Curve, of the paparazzi giving instructions to David somebody as he walks down the red carpet. (Hey, I’m better at recognizing tech execs than celebs.)

The phone, which is exclusive to Verizon’s network, is expected to launch shortly, though nobody at the event was promising an exact launch date.

“It’s still in beta” was a phrase I heard on more than one occasion from those offering the demos.

Annalynne McCord of the new ‘90210′ show walks down the red carpet at the BlackBerry Storm party. (Photo taken with a BlackBerry Curve.)

Follow me on Twitter @daveofdoom.

(Credit: Chubby Brain)

iPhone investments

The iPhone is a great mini-computer and may be the next big gaming platform, but I’m still struggling to get the math to work in terms of what a typical VC expects as their return on investment.

Even as an iPhone fanboy, I find it hard to see how that $100 million turns into $1.5 billion considering the low barriers to entry for new apps, the low-cost of sale, the lack of micro-payments and few subscription-based applications.

Investment: $102 million
5x: $510,000,000
10x:$1,000,200,000
15x: $1,500,300,000

The full report from Chubby Brain is worth a read.

Are there any iPhone-specific applications that will hit $5 million this year? Or is the money really in converged applications such as iControl that leverage the iPhone as part of a larger platform? I tend to fall in the latter camp but it’s way too early to tell if anyone besides Apple will make money from the iPhone.

But, developing an iPhone application still seems like a good business move, provided you can market effectively and not fall into the boom and bust cycle that many applications find themselves in.

Chubby Brain asks the right question:

So, this seems like a pretty big bet considering most VCs are looking for a 10 to 15 times return. Considering the lack of exits, lets start with a 5x multiplier as the threshold for a positive VC return:

Recent data from Chubby Brain identifies $102.49 million in total VC/angel investment divided among 17
iPhone application start-ups.

Macworld’s App Guide lists more than 58,000 apps available for download with more coming online every day, though it’s not clear that downloads are equating to sustained revenue for developers.

But what about the middle of the spectrum? Who are the startups looking to build scalable businesses with the iPhone at the core, and more specifically, who is funding such efforts?

The investments highlighted by Chubby Brain are diverse, with social networking and games outpacing other categories by roughly 10 percent. But only a few of the investment categories (advertising and monitoring for example) have already been proven.

As an Associated Press article explained, “a high school student touring the sixth U.S. president’s archives recently noticed his bite-sized diary entries looked a lot like tweets.” Most of the entries in question date back to Adams’ days as a U.S. minister to Russia, which makes you wonder if @AKGovSarahPalin (or whatever her post-gubernatorial Twitter username may be) will be tweeting that she can see him from her house.

Adams died in 1848, right around the time that people first started flooding the San Francisco Bay Area in search of quick money. Except then it was in the form of gold, not venture dollars from Sand Hill Road.

Don't worry, John Quincy Adams will not be tricking you into clicking on the Rickroll video.

John Quincy Adams might not be re-tweeting Ashton Kutcher and Shaq anytime soon, but he does have a Twitter account now. The Massachusetts Historical Society has launched a Twitter account, @JQAdams_MHS, and will officially start tweeting Adams’ personal diary entries on Wednesday.

A sample: “Thick fog. Scanty Wind. On George’s Bank. Lat: 42-34. Read Massillon’s Careme Sermons 2 & 3. Ladies are Sick.” Yup, sounds about right.

(Credit:
Think Global)

The company is also looking at a handful of states in the U.S. where it would produce the Think City, which has a top speed of 65 miles per hour, for sale in the U.S. The Think City is a two-seater hatchback, but the company is also working on a four-seater big enough for two adults and two children, Andrews said.

The Think City: rearing to go.

Think, which plans to make a small all-electric car, expects to secure a fresh round of funding and emerge from bankruptcy next month, according to a company representative.

Settling its debts and boosting its capital will allow Think to start producing its electric city
car by the end of year. If all goes as planned, the company hopes to start shipping the Think City, a highway-capable electric car with a 100-mile range, to European customers by the end the year, company spokesperson James Andrews said Tuesday. Already, 2,500 people have ordered cars.

Coda Automotive will introduce its China-manufactured sedan in California next fall. Other planned all-electric sedans include Mitsubishi’s iMiev and Detroit Electric namesake car.

Think, originally formed when Ford sold it to outside investors, hit financial problems in December and had to stop production. It has spent the last months rebuilding and expects to have a court date in August that should allow it to emerge from bankruptcy protection, Andrews said.

Norway-based Think is at the forefront of a wave of electric sedans that are expected to come to market in the next few years. Although the range is limited in on these electric cars, automakers expect it’s sufficient for consumers’ daily commuting needs.

“We’re the only one out with a fully integrated E.V. drive system,” Think’s CEO, Richard Canny, told The New York Times. “It’s an opportunity to get further volume and scale on the technology we already have. And it helps us get better pricing on components and further our development of E.V. drivetrain systems.”

Nissan on Monday said the Leaf, an electric sedan with a 100-mile range and a set of online features . will be available for sale next year.

It also has developed a business to sell its power train to third parties. The Japan Postal Service, in a deal initiated by battery supplier EnerDel, has signed on to test the power train in thousands of its vans.

Spoiler? Build a direct line to your customers using open source and then ensure an excellent product to pave the way to adoption, then usage, then sales. According to the Journal article:

A competitive triathlete, Fenton has turned the standard marathon of open-source business-building into a sprint, churning out four big open-source sales–JBoss ($350 million), Zimbra ($350 million), XenSource ($500 million), and SpringSource ($420 million)–while most investors have yet to turn a profit on any.

No other investor has had as much success in open-source software as Peter Fenton, general partner at Benchmark Capital.

Having a well-received product not only results in plenty of downloads, users and developers, it also makes the sales process that much easier. With SpringSource, “anyone the company sold to was already using the product,” he said.

Follow me on Twitter @mjasay.

Sounds easy, right? Well, no, not if you’ve ever been involved in an open-source business. Building a great product is hard enough, but doing so in a transparent fashion while encouraging active adoption without appearing faux to your community…? That’s hard.

Peter Fenton

Rather than “expensive sales efforts and negotiations with the upper management to get the most money possible,” the people that will be using the software can easily download and try the product. This helps the best products proliferate and weeds out the underperformers.

Not that Fenton is a one-trick pony. He also just sold FriendFeed to Facebook and sits on the board of Twitter. It’s fair to say that Fenton can now afford a second Aston Martin.

(Credit:
Peter Fenton (Benchmark Capital))

But Fenton is still busy, sitting on the boards of open-source companies Pentaho, Terracotta, and Engine Yard. He’s also willing to share the secrets to his open-source success, telling The Wall Street Journal the key to building a winning open-source business.

(Credit:
Peter Fenton (Benchmark Capital))

In this presentation Fenton calls out two strategies for investing in either “farm-raised” or “free-range” businesses. Think of these categories as company-led (e.g., Zimbra) or community-led (e.g., SpringSource) open-source businesses. Neither is better than the other: they simply refer to whether an open-source community predates a company set up to monetize it.

For “farm raised,” Fenton’s strategy looks like this:

Perhaps this is really the key to Fenton’s success, after all is said and done: he knows how to attract top-tier entrepreneurs to top-tier open-source communities. That’s not something one accomplishes with a jog or casual bike ride. That’s the work of a triathlete, which makes Fenton perfect for the job.

“If you don’t have the best product, you’re not going to make it in open-source,” unlike traditional enterprise software, where customers often flock to good-enough products.

Venture investing may be more art than science to some, but Fenton has done more than most to turn open-source investing into a science, as VentureBeat reports. For instance, many open-source companies are ecstatic to have widespread adoption, but Fenton is careful to call out the difference between adoption and actual usage, as he does in this Benchmark presentation (PDF).

All of which means your next open-source investment or company should be a snap, right? Maybe not. It’s one thing to call the correct shots–and quite another to make them. Part of the reason Fenton has been so successful is that he has invested in exceptional operators at each company, including Marc Fleury and Rob Bearden (JBoss); Satish Dharmaraj, Scott Dietzen, Andy Pflaum, and John Robb (Zimbra); and Rod Johnson and Rob Bearden (SpringSource), among others.

commentary

The strategies Fenton takes depends. For “free range,” it looks like this:

Schmidt recently left Apple’s board after three years, citing concerns that Apple and his own company’s businesses were beginning to overlap too much. Both are players in the mobile phone market (Google’s Android operating system competes with Apple’s
iPhone) and soon will compete in desktop operating systems, when Google releases its Chrome OS.

The board could bring in a new director from the outside, but there has been talk that Chief Operating Officer Tim Cook, who assumed the helm for CEO Steve Jobs while he was on a six-month medical leave of absence earlier this year, is at least being considered.

Besides Jobs, the board has six other members: Intuit Chairman Bill Campbell, J.Crew CEO Millard Drexler, former Vice President Al Gore, Avon CEO Andrea Jung, Genentech Chairman Arthur Levinson, and former CFO of IBM and Chrysler Jerry York.

On Tuesday, Apple’s board of directors will gather to take up the question of who will replace Google CEO Eric Schmidt, according to a report in The Wall Street Journal.

There’s a new Contacts sidebar, although the old Address Book is still available by hitting CTRL+2 or going through the Tools menu. The new Web services option, also available from the Tools menu or the Advanced Settings tab under Options, gives you more granular control over which Web services you’re logged into through Postbox. This is useful if Postbox isn’t your main Twitter manager, so you can keep your API count from exploding and preventing tweet updates.

(Credit:
Screenshot by Seth Rosenblatt/CNET)

Postbox beta 14 for Windows and Mac has its own build of Lightning, which should allow users to communicate with both local and networked calendars. While Lightning works perfectly for me in Thunderbird, it wasn’t able to talk to CNET’s Microsoft Exchange server in Postbox. The Provider for Google Calendar plug-in, which gives users bi-directional Google Calendar access, works fine in Postbox–albeit with a slight hiccup when first loading the calendar.

Postbox gets it's own version of Lightning in beta 14, but it's still a bit buggy.

Postbox isn’t the only Mozilla-based software to charge for downloading, but the list of programs that do isn’t exactly long. Rafael Ebron, spokesman for Mozilla Messaging, pointed out that some of them include TuneUpTwitFactory.

Postbox’s latest update builds on the add-on functionality that was introduced in the previous beta, supporting Thunderbird’s calendar plug-in Lightning, among others, and also comes with an announcement that the days of Postbox-for-free are coming to a end.

Postbox now natively supports Gmail-style conversation threading and e-mail message counts. So if you’ve got a collapsed thread, where you can only see one message, there will now be a number next to it telling you how many unread messages are in the thread. Unfortunately, when I clicked on the first message, even if it had already been marked as read, it automatically marked all the unread messages in the thread as read, too.

The full list of Postbox extensions is available here, and release notes for Postbox beta 14 are available here.

Postbox Inc. also announced that they’re expecting to take the program to a premium-only status in early September, when the program graduates from beta development. A single-user license will cost $39.95, with a family pack option consisting of licenses for five people living at the same address costing an additional $19.95. A lifetime upgrades option can be bought for another $24.95. These prices are currently discounted for a beta sale good until August 31, at $29.95, $9.95, and $19.95 respectively.

Once the deal is completed, Perot Systems will become Dell’s services unit, headed by Peter Altabef, current Perot Systems CEO. Ross Perot Jr. is expected to be considered for a slot on Dell’s board of directors.

In Monday morning trading, Perot Systems’ shares were up by essentially that same margin, to $29.60. Dell’s shares were down about 4 percent to $15.92.

Perot Systems, founded by one-time presidential candidate Ross Perot, provides IT services and business solutions to customers in health care, government, manufacturing, banking, and insurance. The company has built a large customer base in North America, Europe, the Middle East and Africa, and Asia.

The two companies expect to provide a broad range of IT services and packages, expanding the global reach of Perot Systems and selling Dell computer systems to additional Perot customers. The move could be a shot in the arm for Dell, giving it a way to diversify beyond its bread-and-butter business of selling hardware.

Dell and Perot Systems say that over the past four quarters they have taken in a combined $16 billion in enterprise hardware and IT services revenue, with about $8 billion from enhanced services and support.

One of the largest computer makers in the world, Dell has been hit hard by the global recession as its business customers hold off on upgrading their banks of servers and arrays of desktop and laptop PCs. In its most recent quarter, Dell’s earnings were down 23 percent year over year to $472 million, on revenue of $12.76 billion, also down just over 20 percent.

Under the agreement, PC and server maker Dell will acquire all outstanding common stock of Perot Systems for $30 a share in cash, a 65 percent premium over Friday’s closing price. Subject to the usual government approvals, the deal is expected to close in Dell’s November-January fiscal quarter.

“This significantly expands Dell’s enterprise-solutions capabilities and makes Perot Systems’ strengths available to even more customers around the world,” said Dell CEO Michael Dell. “There will be efficiencies from combining the companies, but the acquisition makes such great sense because of the obvious ways our businesses complement each other.”

Dell announced Monday that it will buy IT services provider Perot Systems for $3.9 billion.

“Today’s announcement is the next step in formalizing a relationship that has flourished for some time,” said Perot Chairman Ross Perot Jr. “When my father founded Perot Systems he envisioned a global information-technology leader. The new, larger Dell builds on that promise and its own successes by taking Perot Systems’ expertise to more customers than ever.”

Dell and Perot Systems have worked together in the past. In April, for instance, they teamed up to get in on the ground floor of electronic health records, a field that is expected to grow substantially in coming years as hospitals and physicians increasingly digitize patients’ medical records. The companies also talked about the ability to run some medical applications in a hosted, “private cloud” offering to help make costs more manageable.

Update 9:40 a.m. PDT: Added details of the movement of shares for Dell and for Perot Systems.

To run through some of your options, we offer this photo gallery with room-by-room advice and recommendations ranging from low effort to high effort. The best place to start is to schedule an energy audit, which will help you forge a plan.

This green home heats itself
Save money while greening your home
Students build solar home that’s no gimmick
My year as a green-living beta tester.
Photos: GE’s smart-grid kitchen of the future

Photos: A greener home, room by room

For most of us, it will be a mix the low tech–insulating, air sealing, changing our habits–and high tech–solar panels, smart grid appliances, and LED lighting.

A California start-up recently announced plans to manufacture “net zero-energy homes,” a term that is starting to enter the national vocabulary. But what if you don’t plan on buying a new home anytime soon?

So how do you keep your energy bills under control and lighten the environmental footprint of your home?

It is true that it’s far easier to make new construction green than to retrofit existing homes. At the same time, residential energy use is only expected to climb, as we fill our homes with more electronic gadgets and, most likely, as energy prices trend upward.

For previous green home coverage, see: