It wasn’t so much the predictions as the discussion that was most interesting at last night’s annual predictions dinner, organized by the Washington Technology Industry Association. Will Twitter be acquired in 2010, and why? Who will have the dominant cloud computing platform in the next couple of years? What kind of startup are you looking to build or finance, and which areas are you staying away from?

A panel of Seattle-area tech entrepreneurs and investors gamely took the bait and had some lively exchanges over the course of an hour. OK, these guys all know each other, and we’ll take what they say with a grain of salt since it’s a public forum—but here were some of the most interesting points they made. (You can read more comprehensive recaps of the panel on Brier Dudley’s blog at the Seattle Times, and soon on TechFlash by moderator John Cook.)

The panel was split 3 to 2, with the narrow majority guessing Twitter will get bought next year. Andy Sack of seed-stage fund Founder’s Co-op predicted Twitter will make more money than Facebook in 2010 (surprising, given the current disparity in the other direction). Glenn Kelman, the CEO of Redfin, an online real estate firm, said Twitter should charge for search (as it has begun to do in partnerships with Google and Bing). Kelly Smith from Curious Office and the startup Pressplane argued that Twitter could be “absorbed by a big company,” but “it’s going to go nowhere.” By the end of the evening, Sack was predicting that Microsoft would buy Twitter next year.

There was a consensus that 2010 could be a big year for acquisitions. Bill Bryant of Draper Fisher Jurvetson boldly predicted that Amazon will buy Netflix, Blockbuster, and Hulu, while opening brick and mortar “Amazon media stores.” Greg Gottesman from Madrona Venture Group said Cisco might buy EMC (for VMware) and Seattle-based F5 Networks, while Microsoft might buy Research In Motion, the maker of the BlackBerry smartphone. Sack predicted Adobe would pick up Seattle photo-editing startup Picnik. Rupert Murdoch (News Corp.) would buy Seattle’s Cheezburger Network, and someone would buy Redfin.

Looking back on 2009 for a minute, the big deals that were questioned by the panel included Adobe’s acquisition of Omniture (Gottesman said it just didn’t make sense strategically) and …Next Page »

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Here are my 2009 technology predictions. It was getting harder and harder since my post is starting to look a lot like everyone else’s posts. I look forward to a better year for the world in 2009. Drum roll please…

10. Video finally takes off
Overall consumption of video increases significantly on Web. I have been saying this since my days at AtomFilms but it really does happen in 2009. Video advertising is finally going to get some traction. Higher quality will bring more eyeballs. There are some even better video predictions from my friend Alex Castro of Delve Networks (in full disclosure, I am an advisor to his company). His are spot on. I do disagree with his prediction that YouTube will lose market share. I think they’ll grow from their current market share of videos watched from 37 percent to 45 percent.

9. More ad networks versus less
Contrary to a number of predictions, there will be more ad networks versus less. With 80 percent of the ad supply being sold through indirect channels, there will be more (rather than less) ad networks. There will be better control over supply by publishers, and everyone on this Comscore list will be there by the end of 2009. Anyone who is building unique IP will have a chance at an acquisition. Yield technology in advertising is going to be a big theme in 2009 since all other forms of targeting are basically commodities.

8. Everything is simpler and smaller
We don’t have the IT budgets that we once did. Smaller and simpler devices will take off. For example, industry sources say more than 11 million netbooks worldwide were sold in 2008, up from just around a million in 2007. Netbook sales will easily double in the new year. Also, the majority of all phones next year will be smart phones (over 50 percent).

7. The giant sucking sound
There are going to be tons and tons of consolidations in the technology space. Big guys will buy big guys. Small guys will merge with small guys. Small guys will get bought by big guys. There will be a lot of great deals out there for companies with capital.

6. It’s cooler to start a business than a rock band
There are massive layoffs and the economy is bad. Per the above, when consolidation happens, unemployment increases. People are only an hour away from registering online for …Next Page »

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Everyone loves a good prediction. Well, last night there were many of them. I attended the Washington Technology Industry Association’s “Predictions for 2009″ dinner event at the Westin Hotel in Seattle. Before I get to the panel discussion, just a couple of tidbits overheard around the room:

—Ben Elowitz, co-founder and CEO of Wetpaint, told me about “Superwoman Teriyaki.” This is a little restaurant in Seattle’s Pioneer Square (its real name is Asia Ginger Teriyaki) that is legendary among local entrepreneurs because of the woman behind the counter who takes orders, makes the food, delivers the food, manages the tables, and everything else—all at a blindingly fast pace. “CEOs want to hire her,” Elowitz said. Imagine her doing search engine optimization, he added.

—At dinner, I sat next to Big Fish Games founder and chairman Paul Thelen. (The fact that I was wearing a nametag from a PopCap Games event probably didn’t go over too well, but he humored me.) I asked for his thoughts on the casual games industry in 2009. He pointed out that some companies are cutting back because of the recession, but added, “We’re growing faster than ever.” The $83.3 million that Big Fish raised in September probably doesn’t hurt. Not too surprisingly, Thelen’s an avid gameplayer on his iPhone.

—Ken Myer, CEO of the WTIA (and an Xconomist), said he had a very successful trip to China last month, meeting with companies and potential partners together with a host of Seattle-area mobile tech companies. More on this soon.

Now for the main event. The “predictions” panelists were Mark Anderson, CEO of Strategic News Service; Ben Elowitz of Wetpaint; Matt McIlwain, managing director at Madrona Venture Group; and Kelly Smith, founding partner of Curious Office and founder of Pressplane. The panel was moderated by John Cook from TechFlash, who took audience questions via text messages on his iPhone. I’ll leave the more comprehensive roundup of the panel to John, and just give my top five take-aways here:

—Microsoft is stronger than ever. Three of the four panelists listed the Redmond giant as the big company best positioned to thrive in the economic downturn. Why? “An ungodly amount of cash,” as Elowitz put it. Smith pointed out the wealth of opportunities Microsoft has because of the number of interesting companies that could be for sale on the cheap, such as Adobe. (McIlwain chose Amazon’s position instead, because it knows how to operate cost-effectively as the “Wal-Mart of online,” he said.)

—Yahoo will be bought, though it probably shouldn’t be. But by whom? Anderson called the failed Microsoft acquisition “the dumbest deal that ever didn’t happen.” Smith and Elowitz thought it would be a good enough bargain for Steve Ballmer now. McIlwain said Disney would be “the most logical choice,” because it understands how to monetize content.

—Flat is the new up. We’ve certainly heard this before, but the reality of the economy is that holding steady is about all you can ask for in 2009, whether it’s online advertising, VC investments, or startup revenues. Elowitz noted that Wetpaint hasn’t touched the $25 million it raised in May yet. McIlwain warned that we could be headed for a Depression if there are big tax increases, trade policy changes, and more national bailouts in the coming months.

—The biggest issue in technology is far from unanimous. Anderson voted for broadband access and energy, while Elowitz cited the broader economic and financial climate, and McIlwain and Smith touted “education and talent” to foster innovation and the information economy.

—The trends predicted for 2009 are not sexy. McIlwain joked that the biggest trend would be “tax shelters,” but then said it would be “helping extend what I have further.” Elowitz concurred, saying it would “not be a sexy year,” but rather would be all about focusing on return on investment. Smith cited cloud computing and virtualization as the tech trends to watch, while Anderson pointed to the confluence of biology, chips, and software. All in all, that sounds pretty conservative, gentlemen.

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