Today Jersey City, NJ-based e-commerce provider Quidsi—which was bought by Amazon in November for $500 million—is launching Wag.com, an online warehouse that will offer more than 10,000 products for dogs, cats, fish, birds, and just about every other critter that families welcome into their homes. The site will operate independently of Amazon, similar to Quidsi’s other properties, Diapers.com, Soap.com, and BeautyBar.com. Like those sites, Wag.com will offer free shipping on orders above a certain size.

The launch of Wag.com certainly piqued the interest of this reporter, for many reasons. First of all, I am a dog owner who does quite a bit of shopping both online and off for food, treats, and other accoutrements for my terrier mix, Molly (photo above—isn’t she adorable?). But I’m also well familiar with many of the challenges pet sites faced during the first dot-com boom in the early 2000s, when I was a young tech reporter for BusinessWeek. Back then, Amazon owned 30 percent of Pets.com—one of the many pet-related sites that didn’t survive the bust.

So a few days before Wag.com launched, I put two of Quidsi‘s executives on the firing line: David Zhang, Wag’s site leader, and Earl Gordon, its director of marketing. They patiently fielded my many questions about how they planned to compete in a category that’s famous for its low profit margins, as well as its growing crowd of competitors that, oddly enough, includes Amazon itself.

Zhang and Gordon pointed out to me that Quidsi’s Mom-friendly shopping sites have 800,000 loyal users—all of whom would be natural marketing targets for Wag.com. “There’s an interesting parallel between pets and children,” Zhang says. “Pets charm us with their unconditional love. They’re like babies that never grow up. We have one site built on babies, so it was just a matter of time before we added pets.”

Makes sense, but I wondered: How can anyone make a profit if they waive the shipping charge on 40-pound bags of dog food? This was a major issue for Pets.com and its rivals in the early dot-com days, when free shipping was a popular promotional tool. I pulled up one of the first stories I wrote for BusinessWeek (now Bloomberg Businessweek), which we published shortly after Pets.com went public in February 2000—and saw its stock plummet from $11 a share to $6.

BusinessWeek crunched the numbers and figured out that for every dollar Pets.com paid dog food manufacturers and UPS for shipping, it collected just $0.43 from customers. In other words, it was losing … Next Page »

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I’m not really a Frank Gehry fan, but I have to say the Gehry-designed Experience Music Project at Seattle Center was the perfect venue for PopCap’s gala last night. The Seattle-based casual game maker was celebrating its new release in its bestselling “Bejeweled” series—Bejeweled Twist—and it pulled out all the stops. If the quality of the food and entertainment were any indication, PopCap is doing very well indeed.

After partaking in kebabs, salmon, and roasted vegetables, the crowd of roughly a hundred gathered in the Sky Church room for an ironically over-the-top presentation and skit, which included a mad professor and six space-age-uniformed female acrobats doing stunts on suspended rings. PopCap chief executive David Roberts took the stage and first addressed the issue of the economic climate. “We planned this event well before the economy started its recent slide,” he said, adding that casual games are as important as ever. “The need for fun in our lives may never be greater than in the next year.” The gaming business has been resilient so far, Roberts said, and PopCap continues to see “record revenues and buy-ins from partners.”

PopCap has been growing in recent years, and now has more than 200 employees worldwide, including offices in Dublin (working on mobile games) and Shanghai (working on multiplayer games and addressing the Chinese market, where the “try and buy” business model used in the U.S. doesn’t fly). From 2003 to 2008, PopCap’s consumer game sales have shot up from $10 million to $170 million. Bejeweled, a puzzle game that involves lining up gems in a grid (a bit like Tetris, to my grizzled eyes), makes up about 40 percent of that revenue.

Founders Brian Fiete, Jason Kapalka, and John Vechey then said a few words and demoed the new game for the audience. Bejeweled Twist, four years in the making, is a variation on the same theme, with a new type of spinning action (you rotate groups of jewels to line them up properly) and some other cool-looking features. It costs about $20 and runs on computers, consoles, and mobile devices (soon the iPhone).

After the presentation, I chatted with Fiete, PopCap’s chief technical officer. He told the story of how he and Vechey had built a multiplayer online game while they were undergrads at Purdue University circa 1997, and how they dropped out of school to join a division of Sierra Online in the Seattle area. Kapalka was already in the game industry, liked their work, and founded PopCap with them in 2000. As for their goals at this point, Fiete says, “We want to be true to our roots. We’re still gamers at heart.” (His personal favorite is the core shooter game Counter-Strike, developed by Bellevue, WA-based Valve.)

Fiete also talked about democratizing casual games—a common theme in the industry. “We want to broaden it out and expand, to try to put Bejeweled or Bejeweled Twist on other devices,” he says. “The goal is to make everyone a video gamer.”

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It looks like Microsoft is getting with the program. The cloud computing program, that is. Ray Ozzie, Microsoft’s chief software architect, has just announced “Windows Azure,” a cloud-based Web service that is hosted on Microsoft servers and lets developers build and run software applications via the Internet. Ozzie spoke about the new product in his keynote at the Microsoft Professional Developers Conference in Los Angeles.

“We have introduced a game-changing set of technologies that will bring new opportunities to Web developers and business developers alike,” Ozzie said. The Azure Services platform, he said, “promises to transform the way businesses operate and how consumers access their information and experience the Web.”

It’s a big deal for Microsoft, and for cloud computing. Until now, Microsoft had introduced only bits and pieces of its cloud-based technology. The new product is seen as Microsoft’s answer to Amazon Web Services and its Elastic Compute Cloud (EC2) platform, which is still the leader in the space. Microsoft’s Azure Services platform can run applications like Web-based e-mail, search, messaging, photo and video sharing, and other social-networking tools, as well as store and handle large amounts of data from businesses and corporations. All of that runs through data centers around the world; in the past year, Microsoft has opened large data centers in Quincy, WA, and San Antonio, TX, and it’s planning to open additional ones in Chicago, IL, and Dublin, Ireland.

For now, developers are restricted to using Microsoft development tools like Visual Studio and the .NET framework. So Azure might seem like a much less flexible brand of cloud computing than Amazon’s. But Ozzie argued that it’s actually a broader and more powerful use of the cloud, in that it gives users better access to raw computing power. In any case, the cloud computing business just got much more interesting—and competitive.

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Amazon Web Services has announced that Elastic Compute Cloud (EC2), its environment for running Web applications in the Internet cloud, is now available to the general public and is running Microsoft Windows Server and Microsoft SQL Server. The move is seen as an effort to keep Amazon ahead of competitors like Google and Microsoft in the cloud computing space.

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Where are John and Todd? A month after Luke reported that venerable Seattle tech reporters John Cook and Todd Bishop left the Seattle P-I for new roles at the Puget Sound Business Journal, they have officially surfaced today at a new website, called TechFlash. Billed as “Seattle’s technology news source,” TechFlash will offer breaking news and analysis on the Northwest’s tech industry—from startups and investors to big companies—as well as guest columnists and interactive features.

The TechFlash site, which is run by the Business Journal, is now in beta. Senior tech reporter Eric Engleman of the Business Journal will also contribute to the site. Among its inaugural posts are a story about Bill Gates’s new holdings company (with the awful name of bgC3), and a report about a closed-door meeting held at Seattle’s Madrona Venture Group to address the economic crisis. Congratulations on the launch, gentlemen—we’ll see you out there.

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Today marks the opening of what will be North America’s largest solar-cell manufacturing plant. And it’s right here in the Northwest. SolarWorld, based in Bonn, Germany, is launching a new solar facility in Hillsboro, OR. On the docket this morning is a ribbon-cutting ceremony and a tour of the sprawling, 480,000 square-foot facility. Expected to be in attendance are some prominent Oregon officials, including Governor Ted Kulongoski, Congressman David Wu, and Senator Ron Wyden.

It’s a big deal for the local economy, and for solar energy. By 2011, SolarWorld’s Hillsboro plant is expected to employ 1,000 people and produce enough solar-cell material to generate 500 Megawatts of electricity per year—enough to power roughly 80,000 U.S. homes, in theory. SolarWorld acquired the Hillsboro facility from Japan’s Komatsu Group in March 2007 for $40 million. Komatsu had planned to use the site to manufacture silicon wafers, but it didn’t pan out, because of weak demand for chips. Now SolarWorld, which was founded in 1977 and had its IPO in Germany in 1999, says it is investing more than $400 million in the Oregon facility.

Solar power is a big piece of the renewable energy and cleantech puzzle. Annual revenues in the solar industry are predicted to triple in the next three years, from $13 billion to $40 billion, according to the investment banking firm Piper Jaffray. Yet the problem has always been that solar cells are very expensive to produce. If they have large enough scale and efficiency, manufacturing facilities like SolarWorld’s could play an important role in making solar energy more mainstream. “SolarWorld…is helping to bring real alternatives to market through a strategy focused on high-volume manufacturing. The new Hillsboro facility is our most shining example of this strategy in practice,” said SolarWorld CEO Frank Asbeck in a statement.

Why Oregon? SolarWorld is certainly not alone in setting up manufacturing facilities there. Companies like SpectraWatt (spun out of Intel), Solaicx, Peak Sun Silicon, XSunX, PVPowered, Mr. Sun Solar Enterprises, and Wacker, to name just a few, have all set up solar-cell factories in Oregon. The main reasons are probably the state’s business energy tax credit, and its large talent pool of tech workers, especially in the semiconductor industry. Also, there is plenty of cheap hydropower, and being close to California, the nation’s largest solar market, can’t hurt either.

“The Pacific Northwest possesses a hotbed of talent in both silicon manufacturing and clean-technologies. Oregon is the obvious choice for where to undertake this new level of solar cell manufacturing, said Boris Klebensberger, SolarWorld’s chief operating officer, in a statement. Klebensberger is coming off a panel appearance (entitled “The great crystalline silicon debate”) earlier this week at the Solar Power International conference in San Diego, CA.

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