Amazon’s Cloud Crash, Under-the-Radar Inventions, Zillow’s Trend-Setting IPO, & More in the Seattle-Area Tech Roundup

4/26/11Follow @curtwoodward

As we dive into a new week in Seattle, Amazon Web Services‘ big cloud computing crash is still reverberating. The server-farm failure took out countless small sites and apps that rely on Amazon’s (NASDAQ: AMZN) market-leading service, and the company got low marks for its communication while attempting to fix the problem over several days. I talked to a cloud-computing expert and an entrepreneur about one interesting element of the outage: Why some big-name companies, with enough resources to protect themselves, were still taken down by Amazon’s problems. It was also fun to see Seattle startup BigDoor quoted in a New York Times story on the Amazon outage.

Elsewhere in Seattle-area tech and innovation news:

Zillow had been making public overtures toward an initial public stock offering in the past few months, and made good on those hints by filing paperwork for an IPO—the first by a Seattle-area tech company since mid-2010. I talked to investors and entrepreneurs in the region to see what they made of the move and of some of the idiosyncracies in Zillow’s preliminary pitch. There’s a long way to go before any Zillow stock actually hits Wall Street, but early stage tech folks were feeling pretty bullish about what the filing means for the near future and a warming investment market. Just a few days later, RFID maker Impinj filed its own papers for an IPO—at up to $100 million, it’s nearly twice the size of Zillow’s target. PopCap Games also has targeted this fall as its preferred time to go public.

—I took a closer look at some of the inventions being cooked up over at Intellectual Ventures, the Bellevue, WA-based invention and patent company started by former Microsoft CTO Nathan Myhrvold. Plenty of people already know about IV’s TerraPower nuclear reactor, Photonic Fence mosquito-killing lasers, and of course the cookbook on steroids, Modernist Cuisine. But in this tour of Intellectual Ventures Lab, we got up close with some under-the-radar projects—ones that haven’t generated big headlines (yet), but are still showing huge potential. Two of the projects are in the arena of global health, a topic that Intellectual Ventures investor Bill Gates knows well—lab head honcho Geoff Deane says Gates’ ideas on major problems inform some of the projects.

Microsoft (NASDAQ: MSFT) made sweeping changes to its pay system, including a bigger bonus budget and shifting more money into cash rather than stock. This was a clear response to all the Silicon Valley companies moving into the Seattle area with the express intent of hiring engineers and other tech talent— Google, Facebook, Salesforce.com, Zynga, Twitter, and others have branch offices or subsidiaries here, and there will probably be more. The other note to keep in mind is that in two years, for the first time, Microsoft employees are going to have to start paying something for their health insurance.

—Back on the small-company front, we got the scoop on some exciting news for Seattle electronics shopping website Sparkbuy: The startup is now offering products from mega-retailer Best Buy, along with previous selection from Amazon and Newegg. It’s quite a partnership for Sparkbuy, which aims to boost shopping for laptops and TVs as powerful as travel booking by giving consumers more options for narrowing down their choices by features, price, and so on. Sparkbuy is run by Dan Shapiro, the entrepreneur behind photo-sharing service Ontela (now combined with Photobucket). He’s not the only one making a startup play in this sector—UW professor and Internet search guru Oren Etzioni is among a long roster of people behind Decide.com, a stealthy site that seems aimed at a similar niche. Decide announced last week that it had raised another $6 million in financing.

Paul Allen‘s publicity extravaganza continued with a long public interview on the stage at Town Hall. A packed crowd listened to Allen talk about his remarkable life, some early Microsoft anecdotes, his thoughts on the future of computing and the search for alternative energy, advanced brain treatments, music, and more. My takeaway was that Allen had finally given a better sense of who he is to the hometown audience—something that can be in short supply for a famously private guy, even though his hands are all over things in this town. After all these interviews tied to his book, could it be possible that people will actually get sick of hearing Paul Allen talk about himself?

—Finally, Kirkland, WA-based wireless company Clearwire (NASDAQ: CLWR) announced that it had settled a dispute over wholesale prices with Sprint (NYSE: S) in a $1 billion deal. It was a bit of positive news for Clearwire, which has been tearing through board resignations, executive shakeups, and layoffs in recent months. Interim CEO John Stanton, a veteran of the Seattle-area wireless scene, told the Wall Street Journal that the money would allow Clearwire to “operate efficiently over the next couple of years” and plan for expansion. But adding a different set of hardware to its fourth-generation wireless network will cost more money, he said.

Curt Woodward is a senior editor for Xconomy based in Boston. Email: cwoodward@xconomy.com Follow @curtwoodward

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