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Google has released its new version 5.8 of its Google Desktop software for Windows, with a focus on speed.

Google unveiled the software as Google Desktop Search in 2004, shortly after going public. It expanded into the widget domain later, and Google continues to refine that ability. The new version of Google Desktop can detect which widgets are bogging the system down and offer the user the option to shut them down, for example. It also erects some security barriers between widgets and permits widgets that were built using Flash technology.

Google said it tested the code on many machines to find the bottlenecks and integrated feedback sent by an optional mechanism by which the software can send anonymous diagnostic information to Google.

The software indexes a computer’s files so users can search their machines and provides a mechanism to house small applications called widgets, but Google heard gripes that Google Desktop was too big and slow. “We heard the message loud and clear and decided that the Google Desktop 5.8 for Windows release would be based entirely on performance,” Jói Sigurðsson, Google Desktop tech lead, said in a blog post Monday.

Google’s shares had been sailing to what seemed like never-ending heights, hitting a record high of $747 last November. However, they have lost 30 percent since trending downward late last year amid a larger market downturn, and have fallen by a third since their record high.

Google’s shares closed Monday at $495.43, the first time they’ve closed below $500 in about six and a half months. The dip follows news that Google’s two main competitors could possibly merge. It also comes as employees take a company trip to the Southern California amusement park.

Maybe a roller-coaster ride is just the distraction Disneyland-bound Googlers need to get their minds off the company’s falling share price.

The recent shock to Google shares came on Thursday evening after the company announced fourth-quarter results that just missed Wall Street expectations. The shares got dinged again on Friday after Microsoft announced a $44.6 billion offer to buy Yahoo.

Digg Recommendation Engine from Kevin Rose on Vimeo.

Anton Talks About The Digg Recommendation Engine from Kevin Rose on Vimeo.

The other important factor to look at here is the apparent benefit that the recommendation engine will be giving to websites. Making content more discoverable on Digg means more traffic for the sites that the content has been submitted from. I suspect that more and more sites will begin to feel the Digg effect as a direct result of the launch of this feature.

Digg's new recommendation engine lets you compare your tastes with the tastes of other users.

The social news/video/photo site, Digg, will be rolling out their long anticipated recommendation engine to users this week. The rollout will be starting with a random sampling of users and eventually moving towards the entire user base at the end of the week. Digg’s recommendation engine will try to engage more users in the upcoming section of the site by recommending stories from similar users.

Digg’s upcoming section, where stories wait for enough diggs in order to get promoted, has been very intimidating for users to jump head first into, given the volume of stories being submitted. It was fairly hard to sift through all of the crap in order to get to the real gems. Hopefully the introduction of a recommendation engine will make it a lot easier for users to find the quality submissions.

The introduction of a recommendation engine should give Digg a nice jolt. I haven’t seen the feature in action yet, but if it is implemented correctly, I see Digg becoming a much more valuable resource and frequented by a lot more people. Kevin Rose posted a couple of videos on the Digg Blog which you can see embedded below. The first is an overview by Kevin of the recommendation engine, complete with graphics and the second features Anton Kast, Digg’s Lead Scientist, talking about the new engine. You can read his whitepaper on the subject here.

I believe that the addition of a recommendation to Digg is going to significantly help with the usability of the site and direct people towards the long tail of submissions. By adding a lot of new eyes to the upcoming section, Digg’s homepage will certainly get a much fresher look than we have seen recently.

(Credit: Digg the Blog)

Glitches continue to trouble Citigroup, as the financial-services company said Monday that some credit card customers were unable to access their accounts via the Web.

Reuters reported that an undisclosed number of Citicard owners could not access the card’s online account service. This is the second such malfunction of one of Citigroup’s sites in a week. Citibank saw intermittent outages to its Web site last Tuesday.

Reuters was not able to determine when the outage began.

The company issued a statement to the news service: “This is a temporary interruption and we anticipate that the site will be back up in the next few hours.”

Citigroup is the largest company in the world with $2.2 trillion in assets.

commentary

In all the hype around Software as a Service (SaaS) as a way to bring down prices and drive value to the customer, one thing is conveniently overlooked: SaaS is the ultimate lock-in platform.

As Chris Keene, CEO of Wavemaker, suggests, however, SaaS may well succumb to the same forces that are driving software to open up:

Although SaaS development platforms like SalesForce and Coghead have gotten a lot of attention, this market has so far been remarkably closed and proprietary. The Platform as a Service leader, SalesForce, has both a draconian hosting policy (host your apps and data anywhere, as long as it’s with us!) but also a proprietary language (who needs Java when you’ve got Apex!?).

Moving forward, the same trends driving open source adoption everywhere else in the industry will ultimately drive SaaS adoption of open source, particularly by ISVs whose business plan does not include a low multiple sale to their proprietary hosting provider. Future SaaS platforms will converge with traditional tools, offering on-demand development based on traditional programming languages with built-in tools for mash-up based development for basic users.

Who will drive this move to open? Well, Chris clearly feels that his company, Wavemaker, will be among them (though I have money on Bungee Labs to help fuel this move, as well: Bungee is not nearly as closed as Chris’ post would suggest). But the real driver of this will be Google.

Google already has open-source Gears, and is also increasingly opening up its App Engine. Over time, Google will determine this market, and its stance is increasingly open. Open source, open APIs, and open data.

At that point, service will determine who wins the most customers and operational efficiency will determine who profits most from them. The former will be increasingly influenced by those vendors who make “software” easy to use. The latter will be influenced by those who quickly learn to manage scale through tools like Reductive Labs’ Puppet, Amazon’s EC2, etc.

Disclosure: I am an advisor to Bungee Labs.

Today’s New York Times has a timely trend piece about the rise of “hyperlocal” news sites–those that aim to create or aggregate news down to the neighborhood (or block). The angle: will these sites take over as an increasing number of local newspapers go under?

If you read tech news regularly, you probably won’t find much that’s surprising in the article, since sites like Outside.in and Placeblogger have been around for years now. But the question of what will happen, now that struggling newspapers are cutting back on their print editions, or even shutting down altogether, is now a not-so-local issue.

The Times story raises the usual concerns: thoroughness and accuracy. It spotlights one hyperlocal news site, Patch, which was founded and funded by incoming AOL Chief Executive Tim Armstrong and which aims for a hybrid of the user-generated and traditional news models by hiring community reporters.

What it doesn’t mention: that The New York Times Company itself has threatened to shut down one of its regional newspaper properties, The Boston Globe.

By the time Apple officially releases the OS X 2.0 update in June, there will be no doubt that the
iPhone will have turned both the personal computing and mobile communications industries on their head in just one year.

Let’s be clear: Apple didn’t invent the concept of the smartphone. People have been making calls, checking corporate e-mail, surfing the Internet, watching videos, and playing games on handheld devices for years. What Apple has done, however, is put together the most complete and compelling combination of those features and wrapped it with a breakthrough in user interface design.

The enterprise-friendly features and roadmap for third-party applications unveiled Thursday at its Cupertino, Calif., headquarters bring Apple two steps closer to that point. And when the final piece–the 3G iPhone–arrives at some point in the upcoming future, Apple will have developed the first truly mobile computer.

Apple CEO Steve Jobs explains how the iPhone is about to enter its second chapter.

(Credit:
Corinne Schulze/CNET Networks)

At least, for now. Will all mobile developers find it as easy to build iPhone applications as the five developers highlighted during Thursday’s event? Does the addition of push e-mail make the iPhone more attractive than the BlackBerry? And how soon will it be before the rest of the world figures out Apple’s secret: it’s the software, stupid. The answers to those questions will dictate the second chapter of the iPhone.

Let’s review what was introduced Thursday. The new enterprise features are a slam dunk. Licensing Microsoft’s ActiveSync is a move as important to the growth of the iPhone as developing a version of iTunes for Windows was for growth of the
iPod. iPhone users will now have secure and reliable access to Microsoft’s widely used Exchange e-mail server, turning their iPhone into an extension of their desktop.

roundup
iPhone opens up for business Click here for complete coverage of Apple’s iPhone SDK announcements, which give the hot-shot gadget its entree into Corporate America and even the gaming world.

No one will be able to say, after the release of OS X 2.0, that the iPhone isn’t suitable for businesses. It will have a laundry list of enterprise features, starting with ActiveSync. That protocol allows for the secure, wireless syncing of e-mail, calendars, and contacts data. It turns the iPhone into a BlackBerry or Treo.

IT departments cautiously testing the iPhone waters will also be able to breathe easier with features like Cisco’s IPSec virtual private network technology (IPSec is an encryption standard), “remote wipe” technology that can erase sensitive data if an iPhone is lost or stolen, and better wireless security with 802.1x support.

This is an unquestioned win for Apple in the enterprise, as IT managers will get almost everything they want in a mobile business device. Software developers might not be quite so ecstatic at their portion of Thursday’s news, but it could have been worse.

Developers swarmed Apple’s Web site in the immediate aftermath of the company’s presentation, trying to get more information and to download a beta version of the SDK. Several Apple blogs reported very slow load times on Apple’s developer Web pages.

Developers will get access to the iPhone for $99 a year, as part of Apple’s iPhone Developer Program. The program, however, will only be available to U.S. developers at first, and only “a limited number” of developers at that. Apple declined to elaborate on the exact definition of “limited.” A separate $299 “enterprise” developer program will be available for corporations creating in-house applications.

Cocoa Touch is the key
The actual development process itself should be very familiar to anyone who has developed a
Mac application in the past, as Apple’s in-depth presentation on OS X confirmed that the mobile operating system shares many of the same underpinnings as Mac OS X. The difference, however, is a tweaked version of Cocoa, Apple’s programming environment, called Cocoa Touch.

Cocoa Touch is the key to iPhone applications. It will allow developers to take advantage of the touchscreen interface that has been key to early iPhone demand. EA’s Spore and Apple’s Touch Fighter games demonstrated just what innovative developers will be able to do with that technology.

But while the games should be interesting, there are countless other possibilities. I was struck by Epocrates’ concept applications involving the iPhone as a diagnostic instrument, allowing doctors to check for drug interactions, obtain patient history, or even check the picture of an unknown pill against a database of pills.

As expected, Apple is going to control the distribution of the applications through either the iTunes Store or the App Store, which will allow iPhone users to wirelessly download applications. Apple gets a 30 percent cut of the revenue of any iPhone or iPod Touch application sold through the stores, which sounds like a lot to me but apparently didn’t faze some developers. Free applications will be listed free of charge on the App Store.

An Apple representative confirmed that the company will certify every application made available through the App Store. That will be a ton of work–and might explain why participation will be limited at first–but Apple CEO Steve Jobs said it’s necessary to ensure security and reliability. All applications will have to be electronically signed by their developers, a process similar to what is required by Symbian, the most widely used smartphone operating system.

The devil, as always, will be in the details of that application certification program. Wireless unlocking applications? Of course not, Jobs said. But voice over Internet Protocol (VoIP) software will be permitted, he said, so long as it only uses the Wi-Fi chip for communication, not the EDGE cellular network.

So where will Apple draw the line? This was perhaps the key unanswered question from Thursday’s presentation. Apple seems open to quite a few different types of applications, but if it’s planning to certify them individually, some patterns might emerge and provide some hints of where Apple wants to go with its own software applications. As developers get their hands on the beta SDK, I expect a lot more of those questions to be answered, at least in part.

A wide-open race
To me, the most interesting thing about the development of the smartphone industry is the wide-open nature of the race. This time around, a winner is not going to be picked in the early stages of the competition. Several huge important companies–Apple, Microsoft, Google, Nokia, RIM, and don’t forget about Palm just yet–have already had an impact on the development of the product, and will continue to do so well into the future.

Despite sitting out the first few years, Apple has arguably vaulted ahead of its competition in just 12 months. The other players in this industry came into smartphones building them for businesspeople and their IT masters. Then they tried to woo the consumer.

Apple has done the complete opposite, hooking those who had never used a smartphone before with the iPhone’s interface, and now giving them the opportunity to use it for both work and play.

The first era of the mobile-computing industry was about hardware. The second part will be about software. And right now, no one is developing mobile software like Apple.

We’re creeping up on a year since I first got a hold of the Slacker Portable Player at SXSW in Austin. I’m pleased to see that the fledgling company has not lost track of its vision, and is indeed making good on all the hype. That’s right, folks: we’ve finally got our hands on a real, honest-to-goodness, working Slacker Portable Player. It’s about darn time, too. Actually, it’s in the knick of time, because the units have also just gone on sale to the public, and I want to make sure you all get an in-depth review (coming soon) before you snap one up. In the meantime, check out these shots of our unboxing. Stay tuned later in the day for a complete slide show, which will give you a better idea about the size and function of the device and what you you can expect from the screen.

The 4GB player lets you upload up to 25 stations. Any left over space can be used for other digital music.

(Credit:
Jasmine France)

A sticker gives you a preview of the playback screen.

(Credit:
Jasmine France)

Slacker includes the player, a syncing/charging cable, some basic plastic earbuds, and a case that we think looks rather like a leather diaper.

(Credit:
Jasmine France)

Updated at 1:55 p.m. PT with additional details, and at 3:20 p.m. with further details from the conference call.

Apple blew away expectations for its second fiscal quarter, reporting revenue and net income far beyond what the Wall Street community was expecting amid a poor economy.

For the period ended March 28, Apple recorded $8.16 billion in revenue, up from $7.5 billion in revenue during the same period last year. Net profit was $1.21 billion, or earnings per share of $1.33. Analysts had been expecting revenue of $7.96 billion and earnings per share of $1.09.

Apple sold 2.22 million Macs, 11 million iPods, and 3.79 million iPhones during the quarter, meeting or exceeding expectations from financial analysts. CFO Peter Oppenheimer called it “the best nonholiday quarter revenue and earnings in our history,” in a statement announcing the results.

As usual, Oppenheimer provided third-quarter guidance below what analysts were seeking. The consensus Wall Street estimate for Apple’s June quarter was $8.28 billion in revenue and earnings per share of $1.12, while Oppenheimer said Apple expects to record between $7.7 billion and $7.9 billion in revenue and earnings per share between 95 cents and a dollar during the current quarter.

Apple CFO Peter Oppenheimer said the company has just had its "best nonholiday quarter revenue and earnings in our history." Click the image for a full chart, with sales figures for product categories and year-over-year percentages.

(Credit:
Apple)

During Apple’s earnings conference call, Oppenheimer attributed that lower guidance to, among other things, the fact that Apple has stopped recognizing revenue from
iPhone sales after the March 17th iPhone OS 3.0 event, and does not plan to recognize iPhone revenue again until the company ships that software sometime this summer. Apple accounts for iPhone sales on a subscription basis, meaning the company defers the initial revenue from the sale of an iPhone over a 24-month period in order to satisfy an obscure accounting rule.

Mac shipments fell 3 percent compared to last year. It’s the first time Mac shipments have fallen year over year, but some had expected worse. Desktop shipments fell 4 percent, and portable shipments fell 2 percent, but revenue was way off: 22 percent in desktops, and 12 percent in portables. Still, as with last quarter, international Mac sales were stronger than U.S. Mac sales.

Apple COO Tim Cook said during the company’s conference call that shipments to educational customers are weak right now, given the budget crunch that many U.S. states are facing. He also said that shipments of Apple’s most expensive Macs–the Mac Pro and MacBook Pro–were off during the quarter, but that the less-expensive consumer-oriented Macs held up reasonably well.

The
iPod lineup appeared to get a clear boost from the launch of the new iPod Shuffle, with Apple selling about 1 million more iPods than analysts had expected. iPod shipments were up 3 percent compared to last year, as revenue fell 16 percent, suggesting that sales of the $79 iPod Shuffle made up a greater amount of Apple’s iPod mix than usual.

iPod Touch sales doubled compared to last year, Cook said, and Apple has now sold 37 million iPhones and iPod Touches combined. In March, Apple said it had sold 30 million of those two devices since their introduction.

And as had been foreshadowed earlier on Tuesday, Apple sold 3.79 million iPhones, which Piper Jaffray’s Gene Munster predicted based on AT&T’s activation numbers for the quarter. iPhone shipments were up sharply compared to last year, but they fell coming off the holiday quarter.

When asked to comment on whether there was any update concerning CEO Steve Jobs’ return to the company, Oppenheimer reiterated the company’s usual statement: “We look forward to Steve returning to Apple at the end of June.”

Apple’s recent announcement of the
iPhone application software development kit is drawing criticism from Net neutrality activists. While the company has previously angered many for its practice of bricking unlocked phones, it is now being accused of anticompetitive behavior.

Could Apple take Comcast’s place as the poster child for the Save The Internet movement? Furthermore, by blocking competing Web browser
Firefox, could Apple draw Microsoft-like antitrust lawsuits?

Control

Thursday, Apple released its eagerly awaited iPhone software development kit. Putting an end to hopes of user choice, Apple has declared that the only way for users to install applications will be through its App Store via the iPhone or iTunes. If the company doesn’t like an application, it will be removed from the store, with no other way for a user to install it.

In a Q and A session with reporters, CEO Steve Jobs was asked if voice applications such as Skype will be permitted. Jobs replied by saying that VoIP (voice over Internet Protocol) will be allowed when the iPhone is using a WiFi connection, but forbidden over AT&T’s cellular data network. How this will be enforced remains unclear. At the very least, Apple can blacklist from iTunes any application that doesn’t play nice over AT&T’s network.

In addition to the anti-VoIP rules, Apple seems to have also set its sights on the Firefox Web browser. Deep in the legal agreement for developers, Apple states:

“No interpreted code may be downloaded and used in an Application except for code that is interpreted and run by Apple’s Published APIs and builtin interpreter(s)…An Application may not itself install or launch other executable code by any means, including without limitation through the use of a plug-in architecture, calling other frameworks, other APIs or otherwise.”

As a member of the Firefox development team has already noted, this is a big deal.

Both the Firefox and Opera Web browsers, which compete with Apple’s pre-installed
Safari browser, are forbidden as they support hundreds of user-created add-ons. Furthermore, the Web browsers support Javascript, which is a key component of most Web 2.0 content. Javascript is an interpreted programming language, and thus forbidden as per Apple’s terms of service.

Also banned from the iPhone: programming languages Ruby, Python, Perl, and Java. Quake, the video game engine ported to practically every platform (including Google’s Android), as well as Microsoft’s Word, Excel, and .NET are also persona non grata.

Sun announced last week that it is readying a version of Java for the iPhone. Once the restrictive iPhone license was pointed out, Eric Klein, the vice president of Java marketing at Sun, backpedaled somewhat on his own personal blog, writing that “I’ll leave those (legal) questions to another forum, but we really do want to deliver a JVM if at all possible.” This alone should make for an interesting fight, as Sun is no stranger to filing antitrust complaints.

Net neutrality complaints

Apple’s blocking of Skype and other voice applications raises the same Net neutrality issues as Comcast’s blocking of BitTorrent. Critics have argued that Comcast does this because the P2P video apps compete with the cable giant’s own video programming.

Apple is now engaging in a similar practice, blocking any VoIP application that competes with the voice services offered by AT&T–the company with which Apple signed an exclusive five-year contract.

The company will be unable to borrow Comcast’s line, and claim that the restriction is “reasonable network management.” After all, watching a couple YouTube videos eats up far more data than a VoIP call.

This is not the first time that a company has attempted to block VoIP traffic to protect its own business model. Madison River Communications, a North Carolina ISP was fined and forced to change its behavior by the FCC when it started blocking VoIP providers like Vonage in 2005.

Paging Congressman Markey

Apple’s sexy iPhone has attracted the attention of those in power before. Congressman Ed Markey (D-Mass.) held up an iPhone during a congressional hearing last year, before he sharply criticized the practice of locking such devices to a specific carrier’s network.

Just a couple weeks ago, Markey introduced the Wireless Consumer Protection and Community Broadband Empowerment Act of 2008, which would require wireless carriers to sell unlocked phones without contracts for reasonable prices. In introducing the bill, Markey clearly had the iPhone in mind.

Markey’s other well-publicized cause is Net neutrality. The congressman spoke at the Comcast/BitTorrent FCC hearing just a couple weeks ago. He has previously held hearings on the subject, and introduced legislation in February to stop ISP data favoritism.

With Apple’s recent adoption of Comcast-style filtering, Markey can combine two of his passions: wireless phones rules and Net neutrality regulation.

Antitrust

Microsoft’s bundling of Internet Explorer back in the late ’90s led to major antitrust lawsuits brought by Department of Justice and 20 different states. While consumers were free to install Netscape and other competing browsers, it was the preferential treatment of its own browser that lead to legal problems for Microsoft.

Apple is now engaged in an even more egregious practice. It bundles the Safari browser with its iPhone, it makes it impossible for consumers to remove the browser, and the company now forbids competing companies from making their browsers available to the millions of iPhone users. Firefox has over 40 percent market share in some European countries, but it forbidden from making a version for the iPhone platform.

If Apple doesn’t rapidly backtrack on its anti-Firefox and VoIP rules, I predict that it will soon be looking at investigations from multiple government agencies, both here in the U.S. and EU. The FCC and Congress will most likely look into the Net neutrality complaints, while the European antitrust regulators will probably take a keen interest in the Firefox issues. This would, of course, not be the first time that the Europeans have investigated Apple’s iTunes store for dirty tricks.

Disclosure: I worked for Apple as a summer intern in 2005. While I love Markey’s positions on Net Neutrality, he did publicly call for my arrest back in 2006. He changed his mind two days later.