Long hours, breakneck deadlines, high stakes, and conflicting advice—it’s all part of the package when entrepreneurs submit a few months of their life to an incubator program in hopes of creating the next big thing. Not surprisingly, some groups crumble under the pressure, says TechStars Seattle director Andy Sack.

“The number one risk facing your company—whatever your business is—is internal combustion. That means team breakdown,” Sack said last night at a preview of the Mirosoft Kinect Accelerator program in Seattle.

Microsoft is partnering with TechStars for the three-month accelerator, which will be housed in Microsoft offices in the South Lake Union neighborhood—right next to Amazon headquarters.

Teams that qualify for the program will be developing businesses that use the Kinect on the Xbox 360 video game console and the Windows operating system. They’ll get access to a star-studded cast of mentors, including people inside Microsoft who are pushing some of the boundaries of the Kinect device, and a $20,000 investment from TechStars in exchange for 6 percent of the company.

Applications are due by tomorrow (Feb. 8), and hundreds have already poured in, with ideas ranging from advertising and entertainment to healthcare, education, and even manufacturing. The final 10 proto-companies to make the accelerator will begin their work in Seattle on April 2.

Sack and 2011 TechStars Seattle alum Russell Benaroya, co-founder and CEO of EveryMove, were on hand to give possible accelerator applicants an idea of what’s required to thrive in a TechStars-style program. They didn’t pull any punches, describing an intense experience that doesn’t always end well.

“There is nowhere to hide when you are surrounded by nine other teams that are, while collaborateive, also competitive,” Benaroya said.

One unnamed team in the last TechStars Seattle group “blew up” on the first day, Benaroya said. Another, LikeBright, broke apart shortly after the program’s Demo Day in November and has regrouped with one of the original founders taking on a new technical partner, Sack said.

Even groups without significant internal conflicts can run through huge changes to their idea or approach at a dizzying pace, and face what Sack called “mentor whiplash” from getting opposing advice from seasoned entrepreneurs and investors helping out with the program.

It’s the entrepreneurs’ job, Sack said, to take all the criticism and advice, but make their own decision about the best path for their startup. That instantly reminded me of this recent story about TechStars Seattle 2011 grad Romotive, which said a lot of mentors didn’t think their concept for a smartphone-driven toy robot would fly until a campaign on Kickstarter showed significant support for the idea.

But I don’t want to give the impression that their advice was all a huge buzzkill. It was candid advice for people considering taking the plunge into an intense experience that can hone their ideas into viable businesses. Seven of the 10 TechStars Seattle companies from last year have already raised financing, Sack said, with another apparently on its way. That includes Benaroya’s company EveryMove, an online platform where workers can earn rewards for healthy behavior—it’s raised $1.5 million so far, and is on track to make about $500,000 in revenue this year, he said.

“I guarantee you will put in more energy and effort—I don’t know if I’ll say more than you ever have in your life … but we are going to have fun while we work hard,” said Dave Malcolm, a former Microsoftie and TechStars mentor who is directing the Kinect Accelerator.

Here’s a short video of Microsoft’s JP Wollersheim showing off the Kinect hardware with Windows via the iClone 3D animation software from a company called Reallusion.

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This is a story about what goes on under the hood of your smartphone or tablet device. It’s also about Yahoo, the troubled Santa Clara-CA based advertising and information giant. But Yahoo doesn’t make a single mobile gadget of its own. So what’s the connection?

It turns out that Yahoo (NASDAQ: YHOO) has ambitious plans to help publishers get more efficient about how they push content out to mobile devices. Specifically, Yahoo wants to become the new middleman of the mobile publishing world, giving media companies software that they could use to reach users of iPhones, Android devices, Windows phones, and other gadgets without having to bow to the programming approaches favored by their powerful makers—namely Apple, Google, and Microsoft.

To show how the system might work, Yahoo launched a fancy personalized news app back in November called Livestand. The app lets you select feeds from Yahoo partners like Forbes and ABC News and browse their stories on customized, magazine-like pages. It’s full of nifty user-interface elements like a 3D sideways-scrolling publication gallery. So far Livestand only runs on the Apple iPad, and at first glance it’s pretty similar to Flipboard, Zite, Google Currents, and a number of other social news reader apps. But Livestand’s true importance is as a demonstration of what’s coming. The unique and potentially revolutionary thing about the app is its software design: it may look and act like a native iOS app, but it’s mostly written in Javascript and HTML5, the languages of the Web.

Bruno Fernandez-Ruiz

How Yahoo pulled this off, and what it could mean for content owners who don’t want to put all their eggs in Apple’s basket—or Google’s, or Microsoft’s—was the focus of a long Xconomy interview last week with Bruno Fernandez-Ruiz, chief architect for Yahoo’s platform technology group in Sunnyvale, CA. I’d heard Fernandez-Ruiz speak before about how Yahoo is betting on HTML5—the next-generation version of the markup language underlying all Web pages—as an antidote to overreliance on proprietary operating systems like Apple’s iOS. “If you only work in iOS you are bound to the rules of iTunes,” he said at a December talk in San Francisco. “Publishers want pixel-precise, ‘Cupertino-like’ experiences—and we can do that, but also make layouts fluid,” he said.

I wanted to know more about exactly how Yahoo can do this, so I invited Fernandez-Ruiz to my office and quizzed him about the state of mobile software architecture, the role of the Platform Technology Group inside Yahoo, and the true significance of Livestand. The story he told will be eye-opening for anyone who was under the impression that the future of mobile apps is in Apple and Google’s hands alone. Those two companies may control the lion’s share of the smartphone market at the moment, but if Yahoo goes through with plans to share the tools behind Livestand with outside developers, it could help push the siloed mobile-app world back in the direction of the open Web, where no single company is able to dictate how online software and services should work.

The first thing you need to understand about Yahoo’s publishing vision is that it’s coming from the Platform Technology Group. This is the same part of the company that created and then open-sourced key technologies that are now part of the Web’s infrastructure, such as Hadoop, which allows companies to run big, distributed software systems, and YUI, a library of JavaScript tools for building rich Internet applications. Yahoo built many of these tools as part of an effort that began more than half a decade ago to reduce what Fernandez-Ruiz calls a “technical debt.” The company was weighed down by all of the separate technologies its engineers had built to support services like Yahoo Music and Yahoo Movies, and it needed a central platform. “There was a realization around that time that we had to switch the company from being vertical to being horizontal, and start creating reusable technology that we could deploy across the whole place,” he says. “That is how Hadoop got started, for example.”

Technologies created by the Platform Technology Group, such as Yahoo’s Content Optimization and Relevance Engine (C.O.R.E.), also help the company and its partners tailor content to appeal to specific users based on their demographics. Fernandez-Ruiz says click-throughs increased 300 percent after Yahoo applied C.O.R.E. to … Next Page »

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There’s a new big tech company in town. In fact, it’s arguably the world’s biggest technology company (by revenue), and it’s joining the ranks of IBM, EMC, Microsoft, Google, and, most recently, Amazon, in expanding to the Boston-Cambridge area.

Palo Alto, CA-based Hewlett-Packard (NYSE: HPQ) has set up a new office in Cambridge, MA. The operation will serve as a center for technology development, licensing, and outreach to local startups, investors, and researchers. The 37,000-square-foot facility at 150 CambridgePark Drive, near the Alewife subway station, is spread over two floors. The building serves as the new headquarters for Vertica, the Boston-area big-data analytics firm that HP bought last winter. Vertica is in the process of moving its 150 employees from its offices in Billerica to the Cambridge facility this month, and it is currently hiring.

HP already had a sizable presence in Massachusetts, with its campus in Andover. But the new Cambridge office represents an unprecedented investment by HP in outreach and partnerships with local entrepreneurs, venture capital firms, and the academic research community in the Boston area. The company hasn’t specified a firm commitment of future dollars, but just setting up the new space—including a state-of the art lab and all its associated infrastructure—has cost more than $10 million, says Chris Lynch, the chief executive of Vertica. (His HP title is vice president and general manager.)

Lynch, who is leading the new facility, calls it a “big-data center of excellence” for HP. The idea is it will be a technology hub for the firm, a bit like HP Labs in Palo Alto—but different. (Lynch wouldn’t go so far as to call it “HP Labs East.”) The center will be a base from which HP could make deals to license its technology or invest in early-stage startups alongside venture firms, he says. The center also plans to bring in students and early-stage entrepreneurs for hackathons and other tech-themed events. And it will serve as a base for other types of outreach, such as to local K-12 schools, Lynch says.

So why Alewife instead of, say, Kendall Square? “We wanted to bridge the gap between getting access to the younger people living in Cambridge … Next Page »

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Microsoft is joining several other notable corporate names throwing their support behind full marriage rights for gay couples in Washington state, a move that could give a final push to gay-marriage efforts at that state Capitol this year.

The companies—including RealNetworks, Concur, and Paul Allen’s Vulcan—announced their support for a possible state gay-marriage law on Thursday. The Seattle Times has a copy of the letter the firms sent to state officials.

Microsoft further explains its position in a blog post by its head lawyer, Brad Smith, who says that granting full rights to same-sex couples would reflect the company’s values and be “good for our business and good for the state’s economy.”

“As other states recognize marriage equality, Washington’s employers are at a disadvantage if we cannot offer a similar, inclusive environment to our talented employees, our top recruits and their families. Employers in the technology sector face an unprecedented national and global competition for top talent,” Smith wrote.

Smith noted that gay marriage is legal in six other states, including Massachusetts and New York. California’s gay-marriage laws are still tied up in court, after one federal judge overturned a previous gay-marriage ban.

In a short statement on its Facebook page, Vulcan said supporting gay marriage “is part of our company’s core values, which include appreciation and support for employees with diverse backgrounds. We believe that everyone has the right to be valued on their merits and contributions, not on their sexual orientation.”

Microsoft’s support for gay marriage in Washington is hugely significant.

Legislators in Olympia are now just one vote shy of being able to pass a bill legalizing civil marriages for same-sex couples, and one of the state senators representing parts of Microsoft’s hometown of Redmond, Republican Andy Hill, has been among the undecided.

As a humongous publicly traded corporation with tens of thousands of employees, Microsoft also has to sound a bit of a cautious note, saying that it respects the views of employees who might disagree with the company’s embrace of gay marriage rights.

“We’re not asking anyone to change their views to conform to the company’s position,” Smith wrote.

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From cloudy Seattle to the vast suburbs of Silicon Valley, we covered a lot of ground on MIT Sloan’s recent technology trek, which concluded with a leg in Boston.

The first stop was Seattle where it was predictably raining. Visiting Amazon, Microsoft, and Adobe, we came away with an appreciation for how much tech activity is actually going on in that city.

At Microsoft, we got to talk to alumni about what it’s like to work there. Yes, it’s a large company and therefore bureaucratic, they confessed. But, the huge plus is that they have the resources to work on some very innovative projects. Amazon also was big, but the theme there was its quirkiness. In addition to all of the desks being made out of doors, they also have whiteboards everywhere, even in the elevators. I made sure to leave an “MIT Sloan was here” tag in one of the elevators!

Adobe seemed like a more typical office where they provide a pleasant work environment with lots of exposed brick and wood. Overall, I could really see myself enjoying working in Seattle.

Moving on to Silicon Valley, it was noticeably sunnier and warmer. It was also a lot bigger. In Seattle, you could probably get by with just a bike and public transit, but good luck to anyone who tries that in Silicon Valley. Here, you definitely need a car. Being settled with a family might help too, as the area is comprised of endless suburbs punctuated by large office parks where the tech companies are located.

If you want to live where the action is, you’d need to get a job in San Francisco or do the 40-minute commute each way and hope for no traffic. I guess I should point out that Palo Alto does have a downtown, but it’s just two or three streets and most people would still have to drive there.

As for the tech companies, most of the ones we visited were in Silicon Valley and all offered quite a lot of amenities compared to what we saw in Seattle. Free food, gyms, yoga classes, dry cleaners, and acupuncture were just some of the perks you get at most of these companies. I guess they need these things to entice people not only to live away from the city, but also to work some pretty long hours.

For example, the employees at Facebook—who all seemed to be in their 20s—joked that working at some firms in the Valley is like working in a sweatshop. Employees are expected to work extremely hard, but they also provide an endless amount of food that includes a rotating candy of the week. Facebook keeps its employees well fed, caffeinated, and hydrated with the largest cafeteria of all the tech companies we visited.

Google had a similar environment with lots of … Next Page »

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My initial response to this question was, “Chinese!” I was only half joking. English is the most popular second language in the world and in our increasingly connected world, the people who have an understanding of other languages—particularly Chinese—will be better equipped.

As far as computers go, I studied computer languages in school and even though I wish I had studied different “human” languages, I think understanding computer languages will become even more important in the future, since computers are the universal tools of our time. Practically every aspect of our lives has a computer of some sort embedded into it. Having an understanding of how computers work as well as a curiosity about how to tap into their future potential will be important.

This need is especially true when you consider all of the potential applications that could be created to help us better understand biology and how the world works. We are living in an age where information technology and computing are driving the economy, and I predict computer-driven advances in synthetic biology promise to be even potentially more dramatic for the balance of the century.

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Some big-company-related news to report in the Boston area. Let’s get right to it.

—Microsoft Research New England has made three new hires in its social media research group, joining danah boyd. They are professors Nancy Baym from the University of Kansas (specializing in personal connections and online communities); Kate Crawford from the University of New South Wales (mobile media and youth culture); and Mary Gray from Indiana University (youth sexuality and digital media).

—Speaking of Microsoft (NASDAQ: MSFT), the software giant is working with Ford Motor Company (NYSE: F), Watertown, MA-based BlueMetal Architects, and Boston mobile-health firm Healthrageous to do research on extending health management to people’s vehicles. The companies are building a prototype system that collects biometric data and sensory information from a car that can be uploaded to a person’s health and wellness database.

—PayPal, the subsidiary of eBay (NASDAQ: EBAY), is looking to add staff in the Boston area, according to a report by the Boston Globe’s Scott Kirsner. The report says Scott Thompson, formerly president of PayPal and incoming CEO of Yahoo (NASDAQ: YHOO), visited Boston last fall to discuss PayPal’s expansion in the area. PayPal, which may or may not get spun out by eBay (I’ve heard rumors), acquired Boston mobile firms Where and Fig Card last year. Thompson, a Raynham, MA, native and Stonehill College alum, was also a board member of Vertica, the Boston-area big-data company acquired by HP (NYSE: HPQ) last year.

—My colleague Curt Woodward spoke with Facebook engineering director Jay Parikh about the social network’s ongoing upgrades to its technical infrastructure. If his name sounds familiar, that’s because Parikh is an eight-year-plus veteran of Cambridge, MA-based Akamai (NASDAQ: AKAM). He served as a vice president of engineering for the Web content-delivery firm from 1999-2007. No word on why Facebook hasn’t set up an engineering center in Boston yet.

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Microsoft’s “Android isn’t free” campaign continues to roll along, with the Redmond software behemoth today announcing a patent licensing deal with handset maker LG to cover Google’s mobile operating systems.

With this deal, Microsoft says it’s got licenses covering more than 70 percent of all U.S.-sold smartphones running Google’s Android operating system. The LG deal also covers the Chrome operating system, a web-based system for laptops.

Prices were not disclosed, as usual, but Wall Street analysts have pegged previous licensing deals at $5 per handset or perhaps more—which means that with Android’s massive market share, Microsoft is making more on Google’s mobile phones than its own, which have a sliver of the market.

It’s the 11th licensing deal covering Google OS products—previous licensees who have paid up to Microsoft include major manufacturers HTC, Samsung, and Acer. “We are proud of the continued success of our program in resolving the IP issues surrounding Android and Chrome OS,” Microsoft deputy general counsel Horacio Gutierrez says in a statement.

As has become typical with these deals, Microsoft executives are on Twitter boasting about the deal. VP and general counsel Brad Smith announced the deal this morning on his feed, and quickly followed up with this gem, somewhat bizarrely inspired by the Occupy protests against concentration of wealth:

Microsoft claiming it’s the 99 percent by getting a patent licensing fee? Somewhere, a protester’s head just exploded.

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At his curtain call—for the moment anyway—at this year’s International Consumer Electronics Show, Microsoft CEO Steve Ballmer hyped his company’s efforts to innovate and compete across multiple platforms. Microsoft announced previously that after 2012 it will no longer give the keynote at CES. As they waited for seats Monday evening, some members of the press corps voiced doubts about the weight of Ballmer’s anticipated final keynote. But the Microsoft boss still drew a throng that came to see if the company had any new tricks up its sleeve.

CES, hosted by the Consumer Electronics Association, is an annual conference held in Las Vegas where device makers, software developers, and others in the consumer technology world present their newest offerings and give a glimpse of what is in the works. Though many hopes are raised at each CES, not every gadget or promised innovation arrives on schedule or meets expectations.

For the past 14 years, Microsoft has delivered the keynote address that gets the week-long conference under way. But even though Consumer Electronics Association CEO Gary Shapiro said that Microsoft would “take a break” from the keynote stage, he added that the association would continue its relationship with the company. “I would be shocked if a Microsoft leader does not return to the stage in the next few years,” Shapiro said.

Ballmer, with some help from “American Idol” host Ryan Seacrest, chatted about the development of the upcoming Windows 8 operating system and ways Microsoft wants to compete across phones, televisions, PCs, and other devices. “Nothing better than good competition,” Ballmer said.

Perhaps in an effort to shake up the stodgy feel and look of the Windows desktop, Microsoft is taking a new approach in its next version of the platform. “The Windows PC has constantly changed and reinvented and spurred other technology innovations,” Ballmer said. While he talked up the ubiquity of Windows among computers, he noted that users want new features and options. “With Windows 8, we’ve reimagined Windows from the chipset to the user experience,” he said.

Much of that change is being borrowed from the mobile world. It is called the Metro … Next Page »

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The Ford Motor Company announced Friday that it plans to open its first-ever dedicated R&D center on the West Coast in Silicon Valley early this year—a move in line with the automaker’s vision of becoming a company that builds mobile computers on wheels.

K. Venkatesh Prasad, senior technical leader for open innovation with Ford Research and Innovation, the company’s advanced engineering arm, says the idea of opening a research lab in the Bay Area has been percolating for some time, waiting for the technology that facilitates programmable interaction between devices and cloud computing to mature.

“We’re ready to be in the Valley to shape and accelerate the delivery of automotive features,” Prasad says. “The timing is appropriate now.”

Ford intends for the lab to serve as a hub for independent technology projects, as well as a base from which to seek new research and investment partners located throughout the region. Prasad imagines that the Silicon Valley location will link the existing supply base with “new friends—not the people who would typically show up here in Detroit.”

“The most exciting thing is the potential for really interesting interactions with startups,” Prasad says, adding that if a startup has a particularly compelling idea that’s not up to scale, Ford is willing to step in and co-create.

The ultimate goal is for the new Silicon Valley lab to create an “innovation network” connecting Ford’s Advanced Design Studio in Irvine, CA, and Ford employees working with connectivity-platform partner Microsoft in Redmond, WA. Ford also plans to partner with Stanford and other Bay Area universities.

Competitor General Motors opened an “advanced technology” office in Palo Alto, CA, in 2006. Numerous European and Japanese carmakers also have outposts in Silicon Valley.

Prasad says that, like a typical startup, the Ford lab currently has two employees. He expects to have an infrastructure in place by the middle of the year. Ford plans to recruit local employees in addition to rotating in employees from other existing Ford locations.

Prasad emphasizes the Silicon Valley office will be dedicated to “new experiences in the marketplace,” whether they involve mobility, connectivity, safety, energy storage, or affordability.

“We don’t want to duplicate efforts in other areas, but to look and learn from Silicon Valley,” Prasad says. “There’s a whole new opportunity in consumer demand. Now we have a passport to enter a new frontier and explore together.”

Ford President and CEO Alan Mulally will elaborate on the new areas of focus for the Silicon Valley lab, plus Ford’s latest technologies, in Las Vegas at the consumer electronics tradeshow International CES on Wednesday.

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Since when is naming your startup and posting a job ad news? When your name is Ray Ozzie, that’s when.

The former Microsoft chief software architect and Lotus veteran has surfaced after a year of working behind the scenes. Ozzie reached out to the Boston Globe‘s Scott Kirsner with a teaser about his new project: a startup called Cocomo that he has co-founded in Boston and Seattle. The company is developing communications software and tools for social interaction, and it is recruiting engineers—in particular, a lead user interface/experience designer with mobile chops. That’s about it for specifics so far, though Kirsner reports that the company doesn’t yet have office space, and that ex-Microsofties Matt Pope and Ransom Richardson are part of the team.

Ozzie left Microsoft at the end of 2010 after four years on the job (a move that I foreshadowed a year earlier). He had joined Microsoft with its acquisition of his collaboration software firm Groove Networks. Ozzie was Bill Gates’s handpicked successor as software architect, and he led Windows Azure among other projects, but ultimately Microsoft wasn’t a great fit for his talents. We’ll be watching closely to see what he builds at Cocomo.

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[Editor's Note: We asked selected Xconomists a series of questions designed to zero in on the big issues of the year, including "What would you be willing to throw a punch over?"]

What would I be willing to throw a punch over? Solving the small-cap IPO bottleneck … to unleash the job creating potential of emerging growth companies.

For more than 25 years, America’s entrepreneurs have benefited from a capital system that has uniquely supported their independence and innovation. Once they had developed their products using private capital, emerging growth companies could capture markets or invent wholly new ones by accessing public capital to continue their growth and compete successfully across the globe. High-growth companies that go public create more jobs, generate more revenues in the U.S., and grow at a faster pace than their public peers.

But because the hurdles and costs of going public are higher today than ever, more and more companies delay or cancel their plans to go public. In fact, most turn to being acquired—a job killer in the short run as redundant positions are eliminated. If you look at the number of venture-backed company IPOs as a proxy for all small, high growth companies, there was a 75 percent decrease in IPOs between the last two decades. The result is a dangerously threatened ecosystem that is delivering fewer jobs, creating less wealth, and delivering lower tax revenue. Like any healthy ecosystem, the American economy needs new companies and competitors to continue a prosperous cycle of growth and replenishment.

So how are we starving this engine of growth that has served the U.S. economy for decades?

Over the last 15 years, market regulations intended for large public companies have disproportionately impacted emerging growth companies—those very same companies that deliver the job growth our economy so desperately needs. For example, accounting scandals from massive public companies like Enron, Tyco and WorldCom forced legislators and regulators to respond with an understandable “never again” approach. However, the accounting and reporting compliance designed for the complex accounting structures of large conglomerates like these are not scaled to fit newly public companies.

But it’s not just recent legislation that has impacted the growing companies of the innovation economy. Truth is, the bulk of financial market regulation that guides public companies today was created before the computer had been commercialized or the polio vaccine invented. These rules and requirements should simply be … Next Page »

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A lot has happened in the technology world in the past year. So let’s take a minute to reflect on the defining moments of 2011 and where we stand now, as a local tech community with increasingly global impact.

This is by no means comprehensive, or even a summary of the most important stories of the year. It’s just a select few of the biggest highlights and lowlights, organized in spaghetti western fashion (cliché alert).

The Good: Oracle Buys Endeca

Some might argue this wasn’t necessarily “good” for the local tech scene, but Oracle’s $1B+ purchase of Cambridge, MA-based Endeca, the enterprise search and business intelligence firm, was one of the biggest deals of the year, and was kept under wraps pretty well. It will be interesting to watch whether Endeca’s technology and talent give Oracle a leg up in its competition with IBM, SAP, Microsoft, and Google. Endeca, which started in 1999, stands as a testament to the notion that billion-dollar tech companies can be built—and are being built—in Massachusetts. (See Acme Packet, Progress Software, Wayfair, and others on their way.)

Honorable mention: Carbonite, TripAdvisor, and Zipcar each went public with successful IPOs in 2011. That’s three more publicly traded tech companies in Boston that seem to be thriving in a tough market. Who will join them in 2012?

The Bad: RSA Gets Hacked

No one would argue this isn’t bad—and not just for local companies. In March, RSA Security reported a data breach involving its authentication products, which are widely used by big companies and government agencies. The Bedford, MA-based division of data storage giant EMC said it had … Next Page »

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Mobile industry leaders are looking for big moves in 2012 from the Seattle area’s two technology heavyweights, taking the lead from a surge by Google’s Android operating system, according to a new survey from Issaquah, WA-based Chetan Sharma Consulting.

Sharma’s 2012 Mobile Industry Predictions Survey, compiled from about 150 responses through the consulting firm’s global mailing list of industry insiders, also predicts that mobile payments and commerce will remain a big focus for businesses and consumers alike, further roiling the waters for retailers.

When asked what the biggest storyline of 2012 would be, survey respondents put Amazon’s entry into mobile in second place, with a Microsoft and Nokia “resurgence” close behind in third (the top story was the continued growth of mobile data usage worldwide).

The interest in Amazon certainly owes a lot to the newness of the e-commerce pioneer’s move into mobile computing, with the late 2011 debut of the Kindle Fire tablet. So there’s clearly a lot more room for Jeff Bezos and company to grow.

The company is also pretty well-regarded for its focus, and it has shown an ability to execute very well with Amazon Web Services, another business not directly tied to its Internet retailing niche.

Sharma says the extension into tablets, and perhaps a mobile phone in the near future, is just part of Amazon growing to become a “super-retailer for everything. They are already into groceries. Electronics is very heavy—they sell a lot of phones online.”

Amazon’s newly unveiled business model with tablets, which (at least currently) sells the device at a small loss and makes up the margin on content sales, is very hard for other companies to replicate, Sharma says. And the company’s retailing expertise means it knows shoppers’ tastes better than almost any other company.

“Amazon is very, very well placed, and they’re just starting to show their hand as to what their ambitions are,” Sharma says. “I think they’re sitting very pretty for many years to come.”

Microsoft’s role in the future of mobile has a lot to do with the success of Nokia, its main hardware partner for the refreshed Windows Phone operating system. The immediate stakes are higher for the Swedish phone-maker than they are for Microsoft, Sharma says, because cash-rich Microsoft can afford to play a bit longer game with the mobile market. But he notes that initial response for new Nokia phones has been “tepid” in Europe so far, and needs to show much better response when devices start hitting the U.S. market.

“If they don’t do that successfully by Q4, then definitely they’re in trouble—some of the same trouble that RIM is in,” Sharma says. Without success selling newer handsets, he adds, ”Nokia might not survive, or it might have to morph into something else.”

That possibility was surely on the minds of survey respondents who placed Microsoft No. 1 among the companies expected to make the biggest mobile acquisitions of 2012, with more than a quarter of the responses. Google and network operators broadly grouped together were in second and third place, with Amazon thought to be the fourth most likely to make a big M&A splash.

Sharma said one response that surprised him was the low rank given to Windows in the tablet sector. The latest version of Windows for tablets isn’t a reality for consumers yet, but Sharma asked respondents to look out two years—and they still saw Apple’s iOS and Google’s Android platform taking most of the market.

“People still didn’t think Windows would make a big dent. That was surprising,” he says. “I think they can have a decent impact on the marketplace, because in the enterprise especially, there you have to have create tablets versus consume tablets,” the difference between filing out a spreadsheet and watching a YouTube video, for instance.

“Mobile is starting to become very important for Microsoft longer-term,” Sharma says. “Even if they are not doing that well today, five years out they have to be doing really well.”

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I don’t want to read too much into the arbitrary turn of the calendar, but it seems like we’re in the middle of a pretty interesting moment for Seattle’s technology scene.

One of our mega-companies may be on the wane, while the other appears to be headed for much bigger things. The startup scene is growing and gaining the connective tissue it needs to expand in the years ahead. And Silicon Valley companies big and small continue flocking north to grab high-tech talent, seriously diversifying the gene pool.

At the same time, this region hasn’t escaped national questions about the vitality of early stage fundraising and the market for new public companies—not to mention the generally stagnant economy and need for more higher education. To get a jump on the year ahead, we’ve put together this list of a dozen questions to keep your eye on. In no particular order:

How healthy is the VC sector?
Recent numbers for venture capital firms nationally were not very encouraging: The amount of money raised by VCs was low, and limited partners showed a preference for investing mostly with the biggest-name funds, according to reports from analysts and industry groups.

Here in the Seattle area, we saw Polaris Venture Partners close up its branch and head for Silicon Valley. On the positive side, Voyager Capital filed paperwork for a new fund that could be worth up to $125 million. Another notable trend was the volume of investments for Bellevue’s Ignition Partners in the cloud computing sector, particularly in the Bay Area—attributable in large part to the addition of Frank Artale, who brought his connections to the firm.

Some big acquisitions, or even a big IPO or two, would certainly cure a lot of the uncertainty for the VC sector overall. If that doesn’t happen, keep an eye out for firms fading away or having difficulty shaking the trees for new money.

Where will our big companies go for acquisitions?
Microsoft took the cake in 2011 with its $8.5 billion mega-buyout of Skype, helped along by a desire to keep some of its considerable offshore money out of Uncle Sam’s hands. Beyond that, there were a few smaller deals—Austin, TX-based game studio Twisted Pixel, San Mateo, CA video technology company VideoSurf, and enterprise software partner Prodiance, based in Pleasanton, CA. Will Redmond make more big buys in 2012 with its almost unfathomably big cash horde of $57 billion? Despite its protestations otherwise, there’s plenty of speculation that Microsoft might need to actually grab phone hardware partner Nokia to really make a dent in the mobile market.

Amazon wasn’t as prolific, with only Europe’s Lovefilm listed on its official acquisition roster this year. Amazon has typically made a handful of acquisitions a year in the recent past, but it was focused quite powerfully on ramping up the hardware side of the business this year with the Kindle Fire. That, of course, helps buttress reports that Amazon may be interested in HP’s Palm assets.

And of course, both companies have been rumored to be looking into buying Research in Motion, the struggling maker of BlackBerry smartphones.

Will we get more angels?
One of the most frustrating things for tech entrepreneurs in the Seattle area is the impression that a ton of tech-created wealth is sitting on the sidelines of the startup scene. The continued vitality of the TechStars program, big-company veterans jumping into early stage companies, and further efforts to develop the seedbed for angel investors will all help.

As we see more out-of-towners move north to poach talent, we are seeing some very interestingwatch connections take hold in the startup community. While technology and infrastructure keeps getting cheaper, the Seattle area probably needs to keep working to cultivate a larger group of early stage investors who can take advantage of this increasingly rich network of people and ideas.

What happens to T-Mobile?
The spectacular flameout of the $39 billion AT&T takeover might have brought some sighs of relief to folks working at Bellevue’s T-Mobile. But any calm was probably short-lived, since parent company Deutsche Telekom doesn’t want the company long-term.

So what happens to the No. 4 U.S. carrier? It looks like the near term could see a bit of refocusing on the core business—boosted by the spectrum assets reaped from AT&T’s breakup penalty—while waiting for new partners or acquirers to get their offers ready. It’s probably a good enough bet that another carrier won’t be making the buy, since Verizon would run into the same antitrust problems that doomed AT&T, and Sprint has a completely different technology stack—not to mention its own problems. Look for an interesting bid by TV providers, who have been trying to get their hands on the mobile phone market for some time.

When will we see another tech IPO?
This past year’s big IPO victory was Zillow (NASDAQ: Z) finally going public. But it’s hardly a new company, in startup terms, and it had been a long time since a truly home-grown company had hit the stock markets before then.

The IPO market has been seen as up and down through the rest of 2011. If it gets a little more solid in 2012, we’ve got at least three companies that are pretty close to getting their own ticker symbol: Traffic-data provider Inrix, semiconductor laser maker nLight Photonics, and RFID maker Impinj, which filed its preliminary paperwork this summer but hasn’t done much with it since then.

Which small company the next big (or even medium) thing?
Game developer PopCap’s purchase for up to $1.3 billion by Electronic Arts and mobile software startup Swype’s $100 million buyout by Nuance were among the biggest acquisitions in … Next Page »

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Yesterday, we ran the first half of the Seattle life sciences year in review, which focused on biopharmaceutical companies and global health organizations. Today’s rundown will cover the medical device, diagnostic, and health IT side of the local life sciences cluster.

Medical devices may not fare so well in a glamour contest, but this year the Seattle device community had more success stories, more acquisitions, upheaval, and even a couple of controversies. SonoSite was the biggest acquisition of the year, and although terms weren’t disclosed, it was almost surely followed by Pacific Bioscience Laboratories (the maker of the Clarisonic skin brush you see prominently displayed at Nordstrom). Calistoga Pharmaceuticals, you had a great year, but your deal is probably the third-biggest of the year in Seattle biotech. Sorry.

For the highlights from Seattle med-tech, diagnostics, and various Bio-IT operations, read on:

Sonosite (NASDAQ: SONO): The maker of portable ultrasound machines has been relatively stable, and modestly profitable as an independent company for some time, so I was surprised to see it get acquired for $995 million earlier this month by Japan-based Fujifilm. Shareholders can’t complain, given the price represents a 50 percent premium over SonoSite’s prior closing stock price. This is the biggest deal of the year in local life science, by a long shot.

NanoString Technologies. This was a big year for NanoString. The company, a spinoff from the Institute for Systems Biology, developed a second-generation version of its digital nCounter instrument, which measures the extent to which multiple genes are turned on or off in a biological sample. This was part of a bold plan to turn this scientific instrument into a diagnostic tool. By the end of the year, NanoString had raised another $20 million from GE, former Genzyme CEO Henri Termeer, and others, and it presented some important data that suggests it could compete with Redwood City, CA-based Genomic Health (NASDAQ: GHDX) in the breast cancer diagnostic market.

Clarisonic. Terms weren’t disclosed, but this could be the second-biggest acquisition of the year in Seattle’s life sciences community (although this company is hard to really categorize). Pacific Bioscience Labs, the maker of the Clarisonic skin brush, was acquired by cosmetics giant L’Oreal last month. The Clarisonic surpassed the $100 million sales mark in 2010, was highly profitable, and growing by leaps and bounds. My best guess is that Clarisonic sold for about $500 million. It’s the second home run for the same entrepreneurial team who developed the Sonicare toothbrush.

Geospiza. The Seattle-based developer of software … Next Page »

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Google’s new site director in Seattle is Doug Orr, a senior engineer at the tech giant who was working most recently on cloud computing projects, two sources tell Xconomy.

Orr takes over for Brian Bershad, a former University of Washington professor who is now working for Google in Russia, one of our sources confirms. Word of Bershad’s new job was first reported in October by John Cook at GeekWire. Our source reports that Bershad’s job will be focused on determining Google’s strategy for gaining market share in Russia, one of the globe’s critical emerging economies.

Scott Silver remains the director at the company’s Kirkland, WA office, one of our sources says. Both sources spoke on condition of anonymity for this story.

Google’s presence in the Seattle area dates to 2004. More recently, it has seen other Silicon Valley companies come to the Puget Sound region in search of prime engineering talent, from the University of Washington and companies like Microsoft and Amazon. The trend has accelerated this year, with well-financed startups joining the parade as the Bay Area talent crunch gets worse.

Orr has been at Google for about five years, according to his LinkedIn page. Before joining Google he worked at Arbor Networks, a network security company. In a recent presentation at the University of Michigan—his alma mater—Orr described his work at Google this way:

“I’ve got two jobs. I’m actually in charge of the systems software for our network infrastructure, which means the load distribution and the management and monitoring of our production network. And I’m responsible for what we’re calling the cloud platform, which is the thing that we’re doing, sort of incrementally, to allow people to use our infrastructure for their cloud computing.”

As of this summer, Google said it had about 850 people between its Seattle and Kirkland offices, including engineers and product managers along with some sales staff. As GeekWire also first reported, Google recently staked out a new office in Bothell that could have enough room to nearly double that headcount.

At the beginning of this year, Google said 2011 would be the biggest hiring year in its history, surpassing the roughly 6,000 people hired in 2007. At a meeting of computer science educators this summer, Bershad put Google’s hunger for top-drawer talent this way: “We are not limited in the number of positions that we have. We are limited in the number of people we can find who are very good.”

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It’s one of the most nagging questions for Seattle-area technology entrepreneurs: How do you get more of the region’s tech wealth invested in local startups? Business veteran John Sechrest sees a possible answer in Oregon, where investors have created a series of events that help get newbie angels into the game.

He’s hoping to replicate that model with an event called the Seattle Angel Conference.

The project is still in the very early stages—when I talked to Sechrest over coffee this week, he was heading to the first organizing meeting of 10 or so people interested in working on the project. But he’s no rookie with the idea, having already organized the Willamette Angel Conference when he worked in Corvallis, OR.

“If you listen closely to Seattle, Seattle has the opportunity to pop like the Bay Area popped. It really feels like something’s happening here,” says Sechrest, currently serving as an advisor and organizer for Startup Weekend. “Just a little more push on it, and maybe we can make it go.”

John Sechrest

The Puget Sound region does already have established groups for angel investors, such as the Alliance of Angels, the Keiretsu Forum, and Zino Society.

Sechrest, whose resume includes an early stint at Hewlett-Packard and the spin-out of an Internet service provider from Oregon State University, says those groups do a great job. His pitch is that adding a new initiative—particularly if it’s focused on recruiting new angels—can only help make the community more robust.

“If we’re going to double the number of successful exits in Seattle, what has to happen? Somebody has to put more money into the puzzle,” he says.

The Angel Conference model from Oregon is fairly straightforward: A group of investors each contribute a small stake—about $5,000. That serves as the “prize” pool for entrepreneurs, who enter the conference’s multi-month winnowing process for a chance to pitch as finalists. In the end, a winner gets the collective investment.

Like other competitions of this kind, the Angel Conference model runs competing startups through their paces with weeks of due diligence and preparation, to ensure the finalists are worth getting a chance at the investment.

Sechrest says the combination of a low dollar amount and weeks of engagement with entrepreneurs and other investors helps foster fledgling angels who might not know a whole lot about the system of selecting and backing early stage companies.

“In Corvallis, we were able to get a significant number of H-P middle managers to invest, and they did fine and now are active angel investors,” Sechrest says. There are similar Angel Conferences in several other cities in Oregon, where they’ve been running for several years.

The lack of early stage investors involved in the Seattle tech scene is a longstanding gripe in the region, especially given the amount of tech-based wealth. Economist Dick Conway once estimated that the number of “Microsoft millionaires” created in the region by 2000 might be around 10,000. But experienced investors and entrepreneurs say you wouldn’t necessarily know it by their impact on startups.

Chris DeVore of Founder’s Co-op recently wrote that if he could “wave a magic wand and change one thing about our local community, it would be to turn every Microsoft and Amazon alum who walked away with at least $5 million in personal net worth into an angel investor.”

“Paradoxically, because the vast entrepreneurial wealth Seattleites enjoy today was created by just a few massively successful companies, too little of that wealth is being recycled in the next generation of local entrepreneurs,” DeVore wrote. “And with fewer dollars flowing into the local innovation economy, the odds of the next Microsoft or Amazon emerging in the region are that much lower.”

After the recent TechStars Demo Day in Seattle, entrepreneur, investor, and former Microsoft executive Charlie Kindel wrote that “I personally can think of 30 or 40 people who I worked with at Microsoft who should have been there, but probably didn’t even know about it. They probably can’t even spell angel.”

“Early stage startups looking for seed money (e.g. $100-200k) are having to seek out angels in other cities,” Kindel wrote. “This makes no sense to me given Seattle’s economic base. I believe the population of people in the Seattle area who could be involved is much, much larger than those currently engaged.”

Kindel is among the Seattle investors who are interested in making a Seattle Angel Conference happen. Sechrest says if there’s enough interest to get a solid group of investors together in January, the goal is to have the pitch competition at the end of May.

“I’m now into the next phase to find out whether or not I can get to a reasonable number of investors,” he says. “I’ll run this if I have 20, but I’d like to have 40 because I’d like to have the prize be $200,000.”

If Sechrest is right about the Oregon approach enticing more wannabe angels off the sidelines, you’ll probably be reading about the newest Seattle-area pitch competition a few months from now. If not, one of Seattle’s biggest gripes about itself might get a little louder.

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Even for natives of busy cities, it is not always easy to know the fastest way to get around town on foot or by public transit. It would be nice to find out about planned changes to subway lines and bus routes, for example, before rushing to stops that might not be in service. That was the impetus for six-year-old HopStop, the New York-based company that offers its users door-to-door directions for biking, taking taxis, walking, and other forms of transit.

HopStop collects data from transit agencies and other verified sources to provide information on navigating the cities the company covers. The information and directions are tailored for pedestrians and transit riders, which sets HopStop apart from the many websites and apps that offer driving directions, such as Google and MapQuest. As his rivals race to catch up, HopStop CEO Joe Meyer says his company is developing new revenue streams by seeking business-to-business clients.

Users can access HopStop via the Web or mobile devices to plan their routes or look for new ways to reach their destinations. The company provides detailed, hyperlocal information that Meyer says rival services such as Google Transit have yet to match.

“We have a proprietary, patented routing engine that gets smarter over time,” says Meyer.

Though HopStop has raised $2.2 million in total funding since its founding, for the past three years the company has been growing on ad revenues, which Meyer says is in the $2 million-to-$5 million range annually. “People use us because we are helping them in their daily lives,” he says. “We don’t have to incentivize our users.”

HopStop was founded in 2005 by Chinedu Echeruo, who remains chairman of the company. Meyer says Echeruo got the idea for HopStop out of frustration with … Next Page »

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The United States seems stuck with a two-party political system. We don’t always have the same two parties—the Whigs were replaced by the Republicans in the 1850s, for example—but there doesn’t seem to be space in the American psyche for a third major player to take root.

Could something similar be true of the Web browser market? For a long time, the two main competitors were Netscape and Microsoft’s Internet Explorer. Then it was Internet Explorer and Mozilla’s Firefox. Now Google’s Chrome browser is rapidly displacing Internet Explorer—and while we’re technically in a three-browser market at the moment, IE’s user numbers are declining so steadily that it seems only a matter of time before we’re back to a two-browser world, probably defined by Firefox and Chrome.

And yet…

And yet there have always been second-tier browsers, beloved by small factions of users. There’s Apple’s Safari, of course, and Opera. For years, my favorite browser was Flock, which was acquired and discontinued by Zynga in early 2011. And about a year ago, another new player came onto the scene, with ambitious plans to be the new “social browser.”

It’s called RockMelt, and it’s loaded with features that let users tap directly into their social networks, especially Facebook, and communicate with friends. The Mountain View, CA-based startup behind the new browser has direct ties to people who laid the Web’s foundations: it has raised $40 million in venture capital from Andreessen Horowitz, the venture firm of Netscape founder Marc Andreessen, as well as Accel Partners and Khosla Ventures.

So far, about 1.4 million people have downloaded RockMelt, and several hundred thousand are active users, according to CEO Eric Vishria, who stopped by Xconomy San Francisco yesterday (see video below). Those numbers are small even compared to Safari and Opera, let alone Chrome, Firefox, and IE. But Vishria says the company’s aim is to give Web surfers so many unique and useful features that RockMelt will eventually displace one of today’s Big Three browsers. “While there have been, historically, two and right now three players that have massive market share, the players have changed a lot,” he notes. “Every few years someone new comes along: IE, Firefox, Chrome, and now us.”

To leapfrog Safari and Opera and displace IE or Firefox or Chrome, RockMelt needs to do two things, Vishria says. One is to create “a massively differentiated product” that “looks different than anything else.” It’s already well on the way to doing that: RockMelt’s distinguishing features are its “Friend Edge,” which shows which of your Facebook friends are online and instantly reachable, and its “App Edge,” where users can quickly access favorite outside websites and services. It’s also unusual in that it sports big buttons that let users compose Tweets or Facebook status updates, or share the pages they’re viewing with followers or friends.

The other mission is to turn RockMelt users into evangelists. Already, two-thirds of users have recommended the app to at least one friend, but Vishria says the company is planning features that will make it easier for users to tell more friends about the browser.

I’ve been using RockMelt as my default browser since November 2010, when it was first released in a private beta test. The company opened the beta to the public in March, and tomorrow it’s rolling out a new “Beta5″ release containing a bunch of new features. Most software updates these days don’t mean much—in the cloud era, almost every piece of consumer-facing code undergoes constant revision. But taken together, the elements in tomorrow’s release show how RockMelt intends to compete in the coming year.

In the video below, Vishria gives a quick tour of the new features in RockMelt Beta5. Story continues after video.

In Vishria’s world view, the giants of today’s Web are Google and Facebook, and RockMelt is “an ambitious mouse dancing between these elephants.” Over the next 12 months, he believes, Google and Facebook will square off in three main areas: identity, information consumption, and communications. “For us, it’s really exciting to see this happening, because on all three of those we were first,” he says. “We were the first to have a … Next Page »

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