Now that it’s got a very Apple-like system in place—tablet computer paired with digital media—Amazon.com appears to be cranking up the volume on its online music service as well.

The San Francisco office of Amazon’s a2z research and development subsidiary is chock full of job ads for people to work on the Amazon MP3 store and Cloud Player, the e-commerce giant’s challenger to Apple’s long-dominant iTunes music platform. The company says it’s looking to “rapidly grow this team,” and the 21 job ads listed paint a picture of that growth.

Amazon’s looking for a lot of different skills. The company’s got ads for developers and engineers to tackle both the front-end software and mid-level networking systems. It wants designers to help polish the user interface, engineers to specifically take on overseas products, and program managers to oversee things. And, of course, mobile developers with experience in both Android and Apple’s iOS—a system that doesn’t currently have a native Amazon music player application.

Amazon’s MP3 store has been lurking around for several years, but has really picked up steam with the broad adoption of Android-based smartphones, which often have the Amazon store pre-installed. Its Cloud Player, which debuted last year, is bundled with the Amazon MP3 service.

(Trying to become a default music player for Android is another clever way that Amazon is yanking parts of that mobile operating system away from its sugar daddies at Google, which was late to the game with a serious digital music competitor last year. The more prominent example of Amazon’s bigfooting is now the Kindle Fire itself, which runs on an extremely customized version of Android.)

I’m not sure how much people will use the new Kindle Fire to listen to music, but that would fit into CEO Jeff Bezos’ concept of the Fire as “a fully integrated media service.”

That’s a key distinction. While Apple got into the digital music business to drive sales of its hardware devices, Amazon is plainly coming at the tablet and mobile-app markets as ways to just sell more stuff, whether that’s music or e-books or streaming movies or groceries (still in Seattle only!) or tube socks, for that matter. The longer you stay in Amazon’s digital storefront, the more they know about you, and the likelier it is that you’ll buy something from them next time.

iTunes could certainly stand to face a strong competitor here—from a user’s perspective, the software can be very difficult to navigate and sometimes feels like it’s barely been updated in years (just ask one of the whiners on this “I Hate iTunes” Facebook page.) But even with an integrated MP3 store and attached Cloud Player that makes listening easier, Amazon still has a ton of work to do if it hopes to make a dent in Apple’s huge music-selling lead—especially now that Google also is also on the case.

At the moment, Amazon and other runners-up in digital music are still fighting over scraps. Market research firm NPD Group has estimated that Amazon accounts for about 14 percent of the digital song download market, with Apple claiming about 70 percent. From the look of these hiring plans, Amazon is hoping to get serious about changing that balance.

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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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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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What is the future of electronic books and digital publishing in Boston? We might be getting a glimpse of it today.

The news is that Safari Books Online, a joint venture between O’Reilly Media and Pearson Education, is acquiring Threepress, a Boston-area software and consulting shop specializing in tools for digital publishing. Terms of the deal haven’t been announced, but it’s probably fairly modest in size.

What makes it interesting is that it’s a story of homegrown, bootstrapped talent in a burgeoning field—e-book reading and publishing—that has finally come of age.

Safari (not to be confused with the Apple browser) provides an on-demand digital library of thousands of books and videos on software, IT, professional development, and other techie and business topics. The 10-year-old company, which has just under 100 employees, is headquartered in Sebastopol, CA. But it started in Boston, and some of its leadership team, including CEO Andrew Savikas, is based here.

As part of the Threepress acquisition, Safari is planning to move into a new office space in Boston that will have about 10 employees. “We are looking at space with room to grow,” says Savikas, an O’Reilly Media veteran. “I expect we’ll be hiring in Boston, especially on the technology side.”

Threepress is a profitable, four-person tech shop founded by Web developer Liza Daly in 2008. Daly previously worked at Digitas and iFactory, and she originally started Threepress to do consulting and build tools for academic publishers and websites. As is often the case for startups, she found an unexpected niche. [Disclosure: Daly is married to Dan Schmidt, my longtime Honest Bob bandmate.]

Daly entered the e-book world by writing Bookworm, an open-source, browser-based reading system for e-books using the EPUB format. At first, she saw books as just part of the content of academic websites. But her work got the attention of Savikas at O’Reilly Media, which decided to host Bookworm on its site in 2009. That year Savikas also recruited Daly to speak at a big … 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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Boston has a pretty well-known cluster of tech companies—young and old—that are focused on aspects of travel like booking flights and hotels. Kayak, TripAdvisor, and ITA Software (now part of Google), just to name a few, fit that mold. But there’s another area player that’s helping customers to experience a city once they get there, via an interesting marketing proposition.

That would be Boston-based Smart Destinations, which is looking to provide a Disney World-esque experience to hitting tourist and historical sites in 12 cities such as Boston, Chicago, Seattle, Las Vegas, and Los Angeles. It’s not a new idea, as you’ll see, but it has a modern twist.

For Boston, adult travelers can buy a three-day “Go Card” from Smart Destinations for $109, and gain admission to more than 70 attractions, like the New England Aquarium, Salem Witch Museum, the Museum of Fine Arts, and even Cape Cod activities like whale watching. That price can be adjusted in wintertime (when people don’t want to be out on a boat), and, naturally, a kids’ Go Card costs less. The card also enables users to skip lines at tourist attractions, says CEO and founder Kevin McLaughlin. That, and the one-stop-shopping aspect give it the amusement park pass feel.

“It makes it really easy for families to go to big cities,” he says.

McLaughlin recognizes that not every customer may be looking for a 72-hour-straight, nonstop tourist-attraction-hopping vacation, though. Smart Destinations also offers a Go Select pass, with which consumers can pick certain spots they’d like to see. For each attraction they add to the pass, the amount of the discount at each individual spot grows.

McLaughlin started the company with travel industry veteran Cecilia Dahl in 2003. The inspiration came from a Paris tourist service, which sells a card giving visitors access to all of the city’s museums. This is McLaughlin’s sixth tech startup. His past ventures include Delphi Internet (acquired by News Corporation), Netspoke (acquired by Premiere Conferencing), and exchange.com (acquired by Amazon). Smart Destinations is now up to around 32 employees, and has raised three rounds of funding from investors such as North Hill Ventures.

Smart Destinations is now making a bigger push into the mobile sphere, says McLaughlin.The company started by selling physical cards with a smart chip through its website. Consumers can get still get that card via snail mail or participating kiosks in their destination cities, or they can access it via their mobile phones. Starting first quarter of this year, consumers can also create, purchase, and customize the Go Select pass right from their phones, adding tourist destinations and racking up discounts as they make their way through a city. A small … Next Page »

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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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AT&T shook up a potentially drowsy holiday week with the news that it was abandoning its $39 billion bid for Bellevue, WA-based T-Mobile. Ma Bell and T-Mo’s parent, Deutsche Telekom, telegraphed the end of their deal a week earlier when they got a federal antitrust lawsuit suspended. It seemed for a while like maybe there was some hope of an alternate deal, but apparently the Obama administration wasn’t having it.

We got some insights on what the future might hold for the fourth-place carrier from entrepreneur Giri Sreenivas, VC Tom Huseby, and state Rep. Reuven Carlyle. For now, it seems, T-Mobile and Deutsche Telekom might take the significant spectrum it got from AT&T for the breakup and get back to work on the core business—while keeping an eye out for new suitors. I guess that makes this holiday season one of slightly less anxiety for T-Mobilers in the region.

Here’s the rest of this week’s tech headlines from Xconomy Seattle:

—I found out that Google had appointed senior cloud engineer Doug Orr as the new director of its Seattle offices, replacing Brian Bershad. Bershad is still with Google, but is focusing on a new job in Russia, where his broad task is finding ways to increase Google’s market share in that country’s burgeoning economy. Orr has been with Google for about five years, and was most recently working on internal and external cloud-computing software projects. Scott Silver remains director of Google’s nearby Kirkland offices.

—We saw reports that Amazon.com is hunting for an office in the Boston area, with at least four research scientist jobs posted on its internal board. The move isn’t a huge surprise, since tech companies of all kinds are racing to acquire talent wherever they can find it. One interesting angle is that the Amazon subsidiary apparently involved here, a software development shop called A2Z, is primarily based in California—where the market for engineering talent is the hottest around.

—Seattle’s Voyager Capital, a technology VC firm that also has offices in Portland, OR and Silicon Valley, filed paperwork with the SEC for a new fund that could be worth up to $125 million. Voyager wouldn’t comment on its new fund, which is the firm’s fourth, and its first new fund since 2007. It will be interesting to see what kind of appetite there is out there for new VC activity, since we’ve seen reports of a tougher market for high-risk investments in the current climate.

—On the smaller end of the investing spectrum, I also reported on a fledgling project to draft new angel investors in the region. The idea, called the Seattle Angel Conference, is being spearheaded by tech-business and economic development veteran John Sechrest. The idea is taken from a series of events in Oregon, which get angels to chip in a small amount of money for a prize pool, which goes to a startup that makes it through several weeks of due diligence.

—We stopped by the offices of Seattle’s Stratos Product Development, an engineering and design shop that other companies turn to when they need help turning out a novel new product. Stratos president Sean MacLeod and former WTIA president Ken Myer gave us a run-through of some of the common elements, and even more common mistakes, that you see when companies try to build an innovative culture.

—I’ve seen some pretty humble startup offices—mine included—but Redmond’s Digital Lifeboat may take the cake for locations at its spot “between the cemetery and the trailer park.” The company, founded by two veterans of iShip.com, is an online consumer PC backup service. But instead of owning lots of big iron, Digital Lifeboat relies on a distributed network that uses its customers as storage nodes. We’ve seen this before in town from Symform, a cloud startup that is taking a similar approach to IT customers.

—And finally, our friends in Boston reported on the formal split of TripAdvisor from Bellevue-based Expedia, which leaves TripAdvisor as its own public company. This spinoff was announced back in the spring. TripAdvisor has more than 1,000 employees and is on pace to top the $486 million in revenue it made in 2010.

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Our partnership with the folks at WGBH continues as we join forces again this week to bring you the Xconomy Report. In this week’s innovation news, TripAdvisor goes public and independent, breaking ties with Expedia. Seattle-based Amazon.com makes plans for a Boston-area office, which will open in Cambridge early next year. And much more, including news from Akamai, Nuance, and Metamark Genetics.

In case you missed it this morning, have a listen below. The Xconomy Report airs every Friday at 7:49am on 89.7FM.

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Much has been written on the battle between Apple and Amazon. Certainly Steve Jobs’ passing has made us all reflect, and perhaps on a much deeper level than before, on the man and the empire he created.

In many ways, the companies are more alike than they are different. What makes them both remarkable players is their ability to take the long view. Their business strategies focus on what customers will want a decade from now, not just next holiday season. Because they look at the future this way, both companies are comfortable breaking big rules along the way. And to date, they’ve both delivered, in ways that have exceeded even what their biggest supporters expected. Which is perhaps what makes this next round of battle most interesting.

No doubt both Apple and Amazon each have amassed an increasing share of the consumer wallet over the last few years.

Apple’s strategy has been to focus on a specific type of consumer: one who is comfortable with a higher price point, is keen on sleek design, and is drawn to an integrated software/hardware solution that’s easy even for your mother to use. Not to mention that along the way Apple built a brand cachet that started with its Think Different campaign and remains unmatched today. All of this means that Apple might be losing the bottom 30 percent of the market. But do they care? Recent figures confirm that Apple is capturing more than 50 percent of the profits with just 5 percent of the computer market. Next quarter’s projections have them snapping up even more with 60 percent. And that’s without even trying to account for the value of Apple’s extended ecosystem.

Amazon’s strategy, on the other hand, is to redefine entire markets, like books. In its software and its irresistible services, it takes a steady, go big or go home approach. They’ve created the world’s biggest electronic marketplace and are counting on the investment its consumers have made in the Amazon ecosystem: their Kindles, their Amazon MP3s, their Prime subscriptions, and their streaming movies.

Enter the Kindle Fire, the first real competitor to the iPad.

How will the Kindle Fire launch affect Apple’s 80 percent share in the tablet market—and could it in the end only help to spur interest in the iPad? In the short term Amazon will face big losses—as much as $20 per tablet—but the move will spur sales and help win over the low-end segment of market. It’s a gamble, but one Amazon is smart to make if it wants to compete with the iPad—and start-ups like Spotify—on music and movie downloads.

But is the tablet the important thing, or is it the services to which the device connects you? In the end I believe the digital economy is about … Next Page »

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Billionaires in space! This week started out with a big announcement from Microsoft co-founder Paul Allen, who is bankrolling a new company that aims to make private spaceflight more routine by launching rockets from the belly of an airplane—the biggest one ever built.

Allen said it’ll probably cost him 10 times the nearly $30 million he spent on a previous space project, the SpaceShipOne craft. He’s enlisted some big names for the company—known as Stratolaunch—including aerospace guru Burt Rutan and PayPal founder Elon Musk, who happens to own a rocket company. A former NASA administrator, Mike Griffin, is a Stratolaunch board member.

Also at the announcement (just to watch) was Allen pal and former Microsoft software chief Charles Simonyi, the only private citizen to fly to space twice (he paid his own way with the Russians). Simonyi said he thought Allen’s project was audacious and doable, and said he’d return to the great beyond a third time aboard a Stratolaunch craft—provided his wife approves, and the price is right.

Also making headlines this week around the Seattle area:

—AT&T, Deutsche Telekom, and the U.S. Justice Department postponed the antitrust lawsuit over AT&T’s desire to buy Bellevue, WA-based T-Mobile USA. This followed AT&T and Deutsche Telekom (the parent company of T-Mobile) pulling their merger application from the FCC, and signals the possibility of a different deal in an effort to please regulators.

—Clearwire netted about $715 million in a stock sale, money that was sorely needed for the Bellevue-based wireless supplier to upgrade its fourth-generation network to the faster long-term evolution, or LTE, technology that is becoming the industry standard. Majority shareholder Sprint (NYSE: S) ponied up about a little less than half the money.

—I took a look behind the scenes of Zillow‘s new app for the Kindle Fire, Amazon’s bargain-priced tablet. Zillow (NASDAQ: Z) made a big deal out of being the only real estate app with maps on the Kindle Fire, and for good reason: There’s a bit of a workaround involved because … Next Page »

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As company “announcements” go, this one barely qualifies. Bango, a UK-based provider of mobile billing services, says it has “signed an agreement to provide services to Amazon.” And that’s that. But it actually says a whole lot.

It’s pretty easy to guess what Bango’s providing here—most likely, it’s in-app payments for the Kindle Fire, Amazon’s new color touchscreen tablet device. The Fire was unveiled in late September and started shipping in mid-November. But it’s still not a complete device, at least from a developer’s perspective.

Of course, there are hardware limitations—the Kindle Fire doesn’t have GPS, a camera, Bluetooth capability, and several more features you’d expect to find on most tablets. But perhaps more significant is the fact that the Kindle Fire’s version of Google’s Android operating system doesn’t allow access to Google Mobile Services—a suite that includes Google’s in-app payment service.

Without that capability, app developers lose a big means of making additional money on their app downloads, such as selling premium content for a game.

Amazon’s Q&A site for developers has said for months that the company is “working on a solution that will let you sell digital content in your apps using Amazon’s merchandising and payments technology. Our solution is currently in beta and available by invitation only.”

Amazon clearly needs its own in-app payment structure—why hand that over to Google when your bottom-line business is retail? But it seems a little shocking that a company already processes an ungodly amount of payments online couldn’t figure out a mobile app payment system before its new product hit the streets.

Which brings us back to Bango. The company is publicly traded on the London exchange, and a big player in mobile payments—name-brand clients include Research in Motion and EA Mobile gaming.

And while Bango’s statement on the Amazon deal was only three sentences long, Bango’s website is a font of information about its current offerings, which include payment systems that work with a user’s phone bill, a credit card, or PayPal.

Some others writing about this deal have fixed on the idea that a deal with Bango means Amazon could be heading toward billing app store purchases through a user’s monthly phone bill.

I guess that’s possible. But it seems kind of odd to think that Amazon move into the device market itself just to hand off the payments to the wireless carriers. The Kindle Fire’s wifi-only, after all. And remember, for Amazon’s purposes, it’s not a tablet so much as a portable storefront.

Bango has been expanding its footprint as well. In its recent midyear report, Bango touted its “continued product development to broaden the types of transactions passing through the Bango Payments platform, including optimization for the Android platform, development of a cloud based offering and the launch of HTML5 based products.”

I’d say it’s more likely that Amazon is using partnerships like this to build its own in-app payments system that links directly to an Amazon user account. If Amazon really wanted to fork over all that payment data to someone else, then why wouldn’t it have a Kindle Fire payments system when the product was introduced?

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A campaign to win the contract to bring a technology incubator to Harlem went into high gear on Monday with the launch of a new website. IncubateNYC, a group of entrepreneurs and investors co-founded by Marcus Mayo and Brian Shields, believes it has the answer to the New York City Economic Development Corporation’s request for proposals to establish a home near 125th Street to nurture fledgling tech companies.

Though New York has technology incubators scattered across neighborhoods such as SoHo and Brooklyn’s DUMBO (Down Under the Manhattan Bridge Overpass), Harlem has not seen similar activity.

“Right now people are leaving Harlem to go to the West Coast,” Mayo says, “or they are going to other places in the country because they don’t see the opportunity here.” He says entrepreneurs are looking for places they can scale up their businesses, and he believes a technology incubator in Harlem could be an attractive prospect for startups. “There is talent in Harlem and around the country that is looking to relocate where there is more access for building out their businesses and providing resources,” Mayo says.

According to its request for proposals, Mayor Michael Bloomberg’s administration wants a business incubator in place in the vicinity of 125th Street, with an emphasis on technology, new media, and services, and it may include co-working space. Mayo says IncubateNYC has signed up not-for-profit Abyssinian Development Corp. as a community partner for its proposal. Mayo must work fast to finalize … Next Page »

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In the long-running debate over online sales tax laws, one of the most laughable ideas has been that calculating sales tax rates all over the country is somehow a difficult job for big e-commerce companies like Amazon.com.

You know, the same company that adds enough servers every single weekday to run a circa-2000 version of itself. The same company that knows every item I’ve ever perused, and can tell me what fellow shoppers bundle and buy. The same company that gives away streaming movies and takes a loss on full-color touchscreen tablets just to get people in the buying mood.

But that’s been the basic argument against various cash-starved states’ attempts to pass “Amazon laws” deputizing online retailers as new tax collectors. A longstanding U.S. Supreme Court decision, enacted before the Web was a force in retail, held that figuring out sales tax rates for thousands of jurisdictions nationwide would put a burden on interstate commerce. And that is something only Congress is allowed to do.

That could be happening sometime soon. As we’ve discussed, Amazon is putting its weight pretty heavily behind a new online sales tax system being debated in Congress. The latest evidence of the Seattle company’s dedication was on display today, as VP Paul Misener testified at a U.S. House committee hearing on the issue.

In his prepared remarks, Misener acknowledges the obvious fact that software has solved the problems with national sales tax collection: “With today’s computing and communications technology, widespread collection no longer would be an unconstitutional burden on interstate commerce, and Congress feasibly can authorize the states to require all but the very smallest volume sellers to collect.”

He also shouts out Avalara, the Bainbridge Island, WA-based company that has been a leader in supplying online sales tax software to retailers, particularly small and medium-sized sellers. As CEO Scott McFarlane recently told me, all the talk of sales tax collection being some kind of unfathomable dark art is frustrating for the entrepreneurs trying to solve the problem.

“What chafes me is when people say that there’s not a solution out there, it’s too hard. The reality is, it isn’t. It’s a statutory requirement. We have the technology,” McFarlane said.

It’s encouraging to see so much progress being made on an issue that’s lingered, probably needlessly, for so long. Amazon’s sometime foe at the National Retail Federation, which represents a lot of the big brick-and-mortar retailers, also is behind the recent push to enact a national online sales tax system.

The fight for now seems to be over which businesses to exempt from such a system. The bill Amazon’s supporting gives a pass to sellers making less than $500,000 a year in revenue, and Misener’s testimony calls out $150,000 as an even better figure. eBay, in its own testimony today, wants a much bigger small business exemption—eBay’s Tod Cohen threw out several suggested thresholds, from $5 million up to $30 million.

There is the matter of a little election about a year from now, which could see big changes in who’s in charge over in the other Washington. It’s not clear whether this issue will be resolved before the political climate gets hot and heavy—if you were running for re-election, would you want some opponent running ads about how you voted for an Internet sales tax?

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After a year of epic battles with politicians and brick-and-mortar competitors, Amazon.com has made sales-tax policy a relatively sexy topic in the business world. But another Seattle-area technology company has been working for years to navigate complex sales tax systems—and it’s growing like a weed.

That company is Avalara. Started by an accountant/developer and based on Bainbridge Island, WA, the company provides web-based software that helps businesses automatically calculate and pay sales taxes with precision, no matter where the sale takes place.

How big a problem is that? There are about 11,000 different taxing districts in the U.S. alone, with overlapping boundaries, shifting rates, and long lists of exemptions. Selling the same item to two homes in the same neighborhood could actually mean charging two different amounts for sales tax, if they’re on opposite sides of a tax boundary. And retailers are deputized as the tax collectors, taking in all the revenue up front and sending the government its cut.

It’s the kind of complex, constantly shifting set of data that has been practically begging for a software solution for years. But even businesses that were already using accounting software to keep their books traditionally had to punch in the nitty-gritty details of sales tax data manually.

Avalara makes it automatic by tracking the sales tax zones nationwide, tying them to a sale’s location, and plugging in the information exactly where it’s needed in accounting or e-commerce software. And since the Internet has expanded the sales footprint of virtually any business, making it possible for even a small retailer to find customers nationwide, making those calculations has become increasingly necessary.

It’s also downright fun, if you ask the Avalara guys. Even though their particular island is of the more frigid San Juan variety, the company embraces a pretty lighthearted culture that counters the potentially dry subject of sales tax policy. The executive team donned tropical shirts for their official headshots, and when we met recently at the company’s Seattle office, CEO Scott McFarlane’s shirt stripes, watch face, and laptop skin were all being employed to display Avalara’s signature bright-orange color scheme.

“Some people want to put a computer on everybody’s desktop. I just want to calculate everybody’s transactions,” McFarlane says with a powerful laugh.

Avalara got its start in 2004, and now has about 250 employees worldwide. The company, which has raised $21 million in financing this year, is led by three co-founders: CEO McFarlane, technical chief and board chairman Jared Vogt, and tax chief Rory Rawlings, the accountant-developer who has also been instrumental in helping to develop national sales tax policy through the Streamlined Sales Tax initiative.

Avalara’s rise has been quick enough to land it on the Inc. 500 list of fast-growing companies in 2010. It made the larger Inc. 5,000 list this year (No. 682), with last year’s revenues pegged at $16.7 million. This year, the business will grow again by 50 to 75 percent, McFarlane says, putting Avalara’s sales in the neighborhood of $25-$30 million. … Next Page »

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This week’s wrapup of Xconomy Seattle tech headlines features two great entrepreneur/investors who will be featured at Mobile Madness Northwest, our action-packed half-day forum Dec. 6 at F5 Networks. We’re pairing up two people whose experiences span big-company products and proto-company startups: Wesley Chan of Google Ventures, and Charlie Kindel, formerly with Windows Phone (and a bunch of other products over 21 years at Microsoft).

As we found out in this profile, Chan led the projects that became Google Analytics and Google Voice—the latter of which prompted his move up to Seattle, where he’s still based today. But instead of working on big projects inside of Google, Chan is now a partner at Google Ventures, where his investments run all the way from consumer apps to life sciences.

Kindel left Microsoft earlier this year to devote more time to angel investing, mentoring and advising startups, and creating a new company of his own. The details of what he’s working on are still under wraps, but Kindel’s experience gives him an interesting and extremely informed perspective on the future of innovation in mobile.

Moderating the discussion with these two smart guys will be Chetan Sharma, the well-known mobile industry consultant and adviser. Get your tickets here—the clock is ticking on the special Saver Rate, our last discounted pricing promotion before the event on Dec. 6.

Other things catching our attention in the past week:

—Windows Phone has a lot of catching up to do if it wants to take the strong third-place competitor’s spot in the mobile platform battles. And critical to that task is getting developers to create a strong ecosystem of digital products and services. Brandon Watson, the developer team lead for Windows Phone, took a look back at the first year of WP7 on the market and reveals some of the specific steps his crew is employing to woo developers to Redmond’s side.

—The Clarisonic skin-cleansing device has been quietly piling up sales (and celebrity customers) by putting the sonic-wave technology behind Sonicare toothbrushes into a cosmetic application. And it’s paid off, now that cosmetics giant L’Oreal has acquired parent company Pacific Bioscience Laboratories for an undisclosed sum.

—Hackathons are growing up. Seattle-based Startup Weekend had quite a year in 2011, even if you don’t count the growing international footprint for its signature events. The entrepreneur education nonprofit’s potential has now been recognized by Google, which inked a new two-year global sponsorship deal. That will give Startup Weekend some cash, but it also allows Google to tap into the organization’s worldwide community of entrepreneurs, hackers, designers, and investors.

—Amazon has been getting a lot of attention in the public policy sphere for its resistance to state-by-state efforts to collect sales taxes online. The e-commerce pioneer has been staunchly, sometimes belligerently opposed to those efforts, and it may be paying off: A bipartisan group of U.S. senators is backing a new national law that would set a nationwide standard for sales tax collections online—something Amazon has long supported. Amazon and its sometime-foes at the National Retail Federation are both supporting this new bill.

—PopCap Games, the casual game maker recently acquired by Electronic Arts, sponsored a new survey that shows an increasing willingness by gamers on social networks to use digital currency and buy virtual goods. The survey shows a pretty significant change since last year, the kind of pace PopCap and others are looking for as they stake out new ways to make money in the free-to-play arena.

—Stockbox Grocers isn’t a tech startup, right? The company, a project of two entrepreneurs from the Bainbridge Graduate Institute, turns surplus shipping containers into mini corner stores stocked with cupboard staples and fresh produce. But in a profile, we showed how even something as low-tech as retail can be heavily influenced by cheap, powerful technology and “lean startup” methods.

—Meanwhile, down in Portland, the team at Urban Airship continues to make news. This week, we saw the mobile app infrastructure provider featured as one of the inaugural investments from Intel Capital‘s new $100 million app-focused fund. The deal also comes with a partnership that will make Urban Airship’s services available to developers working on apps for Windows-based notebooks powered by Intel’s processors.

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Did you know that an Immunex employee once ended up swimming with the otters at the Seattle Aquarium during a company holiday party? Or that Immunex executives once mocked an uptight Big Pharma partner from Wayne, NJ by producing a video spoof on “Wayne’s World,” the comedy sketch from Saturday Night Live?

Yes, these are the same goofballs who created a $7 billion-a-year drug for autoimmune diseases and established Seattle as one of the top handful of biotech hubs in the world.

I’ve been digging up a lot of fun stories from Immunoids to prepare for the next big Xconomy Seattle event, “The Immunex Impact” on Dec. 1. We have more than 150 people registered from all over the biotech community—both Immunex alumni and non-alumni—for what will be a truly special event.

As we get ready for the big event, I thought it would be fun to put together a little trivia quiz. If you’d like to participate, just send your answers to ltimmerman@xconomy.com with “Immunex Trivia Quiz” in the subject line, and your answers in the body of the email. I’ll plan to announce the winner in person at “The Immunex Impact” and will hand over a surprise piece of Immunex memorabilia as the prize.

Have fun!

1. What was Immunex’s all-time high stock price, adjusted for splits? Hint: It came in March 2000.

A. $83.60

B. $77.32

C. $111.81

D. $167.47

2. What year did Immunex win FDA approval for Enbrel?

A. 1996

B. 1998

C. 1999

D. 2000

3. Who were the so-called “Three Amigos” on the early Immunex executive team?

A. Steve Gillis, Chris Henney, Steve Duzan

B. Ed Fritzky, Peggy Phillips, Doug Williams

C. Steve Gillis, Michael Kranda, Alan Frazier

4. How much did Enbrel sell in its first full year on the U.S. market?

A. $150 million

B. $258 million

C. $632 million

D. $367 million

5. In 1995, American Home Products made a hostile takeover bid for Immunex when the stock price was at $12 a share. What did AHP (later called Wyeth) offer?

A. $14

B. $16.50

C. $19

D. $17

6. What did Ed Fritzky famously do with his Porsche while getting an update about how the Enbrel team performed at an FDA advisory committee?

A. Got into a fender-bender

B. Drove off with a gas station nozzle stuck in his tank

C. Blared the horn loud enough to alert nearby police

D. Got a speeding ticket

7. True or False: Immunex researchers once collected urine in company bathrooms for scientific purposes

A. True

B. False

8. Which of the following nicknames were occasionally used to refer to Immunex?

A. Immunex University

B. The Lazy I

C. Cytokines R’Us

D. All of the above

9. How many employees did Immunex have in Washington state at the time of the Amgen acquisition agreement in December 2001?

A. 1,200 … Next Page »

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Looks like Amazon’s pugnacious bet on national sales tax reform is paying off.

The Seattle company (NASDAQ: AMZN) says it is strongly supporting a proposed national law that would force online retailers to collect local taxes on more of their sales, ending a longtime loophole originally meant to help catalog businesses. The National Retail Federation, which has battled with Amazon on the sales tax issue, also is on board with the bipartisan Senate proposal announced today (the federation represents lots of brick-and-mortar retailers).

So how’s that a win? Amazon has gone to some pretty extreme lengths to avoid being deputized as a tax collector for state and local governments, insisting that its shipping centers are different companies and even shutting down entire networks of third-party sellers when state lawmakers pass “Amazon tax” bills.

That behavior has caused a lot of turmoil for the ecosystem of smaller businesses that rely on Amazon. One example is the story of Shopobot, a comparison-shopping startup that relocated from the San Francisco Bay Area to Seattle earlier this year specifically because Amazon axed its affiliate program in California.

But Amazon has said for a long time that it favors a national solution, rather than a hodgepodge of different state rules. Specifically, the company has supported something called the Streamlined Sales Tax project, in which states agree to a common set of sales tax definition and practices.

The common standards are important because each state taxes things differently—sometimes wildly so.

Cue up today’s bipartisan Senate bill, which uses the Streamlined Sales Tax program as a centerpiece of any national tax system for online sales.

So, while any retailer would certainly enjoy the fact that it didn’t have to act as a big tax collector, and could price its products a little better to boot, Amazon clearly knew the days of tax-free Internet sales weren’t going to last forever. It placed its bet on a national system, and made some pretty belligerent moves to reinforce that preference.

And it looks like that strategy is paying off.

There’s no guarantee that this bill will actually become law, of course—the federal lawmaking process is both arcane and volatile, and any tax vote will be a tough one in this economic climate. But it’s got a lot of the hallmarks of something that could pass.

An interesting side note: Shoppers in Washington state already pay sales taxes on Amazon purchases, because the company’s headquarters are here. But the state also says it’s only collecting taxes on about half of the online and mail-order purchases by people living here, and that adds up to some big numbers.

If the new Senate proposal becomes law, Washington officials estimate that state and local government treasuries could raise about $242 million annually. That comes at a time when the state has been cutting billions from spending on education, health care, and other expensive government programs.

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Best Buy is looking to a local IT services firm to spruce up its business, announcing today that it is acquiring Waltham, MA-based MindShift Technologies for $167 million. The deal gives Best Buy (NYSE: BBY) more power behind its services offering as the company faces competition in its retail operation from online sources like Amazon.

MindShift, founded in 1999, is the leading managed service provider for small and mid sized businesses in the U.S. (an estimated $40 billion market, according to Best Buy). It offers cloud, data center, and other IT services to businesses for a monthly fee and has more than 5,400 business customers.

The acquisition by Best Buy resembles the retailer’s 2002 acquisition of Geek Squad, the provider of computer repair and maintenance services. MindShift will keep its company name, management team, and 500 employees spread across Massachusetts, New York, Minneapolis, North Carolina, Philadelphia, and Washington, D.C., according to today’s release.

“There’s no question that acquiring the skills, capabilities and clients of mindSHIFT has the potential to help expand Best Buy’s global services capabilities in the vast small and mid-sized business market,” said George Sherman, senior vice president of Best Buy Services, said in the announcement.  “As important, the mindSHIFT team will bring added experience, talent and resources to the remote support capability we have been building within our multi-channel tech service unit Geek Squad.”

MindShift most recently raised $18 million in venture funding and has the backing of investors such as TD Fund, Volition Capital, and Columbia Capital. The acquisition is expected to close around the end of the calendar year, subject to customary closing conditions.

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