This morning I checked my e-mail, powered by Google, and then used Google Maps to find my way to the Google Kirkland open house. It reminded me a little bit of the scene in “Being John Malkovich” when Malkovich, the actor, finds a portal into his own brain and sees that everyone looks like him and says nothing but, “Malkovich, Malkovich.” OK, I guess the analogy would fit better if I also worked for Google and uttered “Google, Google” all day—but that might even happen sometime, if Google’s pace of hiring keeps up. (Just kidding.)

Engineering and site director Scott Silver, who’s been on the job since June (succeeding Peter Wilson, who left the company), introduced the new Kirkland facility, which has been officially open since August 31 and employs more than 350 people in a unified campus setting. He gave a little history of Google’s Kirkland operation—the first office was at Carillon Point in 2004, Google’s first major presence in the Northwest—and how it has grown and contributed to the company’s products. Google Talk, which does Internet telephony and instant messaging, was born and raised in Kirkland, for instance.

Other areas of focus for the Kirkland office include:

—Search: Webmaster tools, and instant indexing for real-time news.

—Advertising: AdPlanner (see below), AdWords Opportunities (helping advertisers optimize search ads), Google Analytics, and Campaign Insights (a new service released last week that’s around making brand ads more effective).

—Applications: Google Talk, Google Talk Video (within Gmail), Google Maps (including a new application for directions on mobile phones), the Chrome Web browser, YouTube video clips, and Google Sync (for synchronizing your mobile phone).

—Infrastructure: system and corporate billing software for supporting applications at huge scales.

Silver, a former Amazon and Netscape veteran, said he’s “quite proud of what we’ve done here, and immensely happy to come to this day,” and to be able to say Google is here to “create great products and find great engineers.”

I followed up with Silver afterwards, and he confirmed Google Kirkland is actively hiring software engineers, but he didn’t say how many positions are open at the moment. He said his team is doing hundreds of interviews per month, “and we’d love to do more.” I asked him about the 800-pound gorilla down the road, Microsoft, and whether Google is recruiting much talent from …Next Page »

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Seattle-based Amazon (NASDAQ: AMZN) announced today a new “Kindle for PC” application that will let people read Kindle electronic books on Windows personal computers. Microsoft (NASDAQ: MSFT) demoed the free app at its Windows 7 release event in New York. It will be available worldwide next month.

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Social media monitoring and business networking software just got a little hotter. Jive Software, the Portland, OR-based maker of social business software, announced last night it has raised a $12 million Series B round from Sequoia Capital. Sequoia previously invested $15 million in Jive in 2007. Jive says the money will be used to expand its product development, as well as enlist new partners and hire more sales and customer support people.

It’s a huge vote of confidence in Jive, and it speaks to the increasing importance of software that helps companies collaborate, network, and build communities around their brands and products. Last month, Jive released a new tool for monitoring social media and helping businesses engage with online communities—a trend that several other Northwest companies are pursuing, such as Seattle-based Appature, Marchex, and Visible Technologies.

Back in March, Jive rolled out an updated version of its flagship product, a platform that combines software to help employees collaborate more effectively with tools for building online communities. It was an important part of Jive’s strategy to sign up more big companies as customers, and it seems to be working—in addition to giants like Intel, Nike, Electronic Arts, SAP, and VMware, Jive has added Cricket Wireless, Experian, InterContinental Hotels Group, Lufthansa, McAfee, and others this year. The company says its revenues in the third quarter of 2009 were double those from the same period last year, and it has maintained profitability.

On his company blog, Jive CEO Dave Hersh wrote, “Jive is in the midst of the greatest period of product innovation in the company’s history. We have recently and will soon deliver new products that will push the envelope on what people think Social Business Software can do.”

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[Updated 12:25pm, 10/20/09. See correction below] Seattle-based Azaleos is announcing today it is releasing new software and services to help companies manage Microsoft Office Communications Server, which is a software platform for instant messaging, Internet telephony, and video conferencing over the Web. It’s a strong move for Azaleos that expands its product line beyond management services for e-mail and collaborative software, and into managing “unified communications”—all forms of company communication run by a single system.

Azaleos is best known for the services it provides to help companies manage their Microsoft Exchange e-mail servers and Microsoft SharePoint collaborative networks.

Last spring, Azaleos established itself in the realm of SharePoint server management. The company also merged with North Carolina-based M3 Technology Group, doubling its size and solidifying its position in e-mail and other communications management. Azaleos now has about 125 employees, and is backed by Ignition Partners, Frontier Capital, and Second Avenue Partners.

“Anybody who follows the IT industry sees the promise of the concept of unified communications, integrating real-time and non real-time,” says Scott Gode, vice president of product management and marketing for Azaleos. “It’s important for Azaleos to get in early.”

These days, companies typically implement instant messaging first, Gode says, and then follow up with conferencing and Internet telephony for their employees. [An earlier version of this article mixed up the order of these services. We regret the error---Eds.] Azaleos provides extensive consulting to help companies deal with the complexities of running and monitoring these features using Microsoft’s Office Communications Server. (Microsoft is a leader in the space, though it competes with Cisco and others.) Azaleos breaks even on its consulting service and looks to make its profits on the management service, Gode says. This is different from big companies like Accenture or IBM, which tend to make more on consulting fees.

So who’s the target customer for Azaleos? “The sweet spot in general for our business is a 500 to 5,000-seat company,” Gode says. “They’ll assume a little more risk [in moving from telephony to IP telephony].” He adds that companies typically can save 30 to 50 percent of the cost of running communication systems by using Azaleos.

Gode says the company has also been “pushing aggressively into Europe.” In late August, Azaleos opened a new office in London that employs five people. He says the company is now selling to more companies based in Europe, such as Mediq, a Dutch pharmaceutical firm.

Lastly, I asked Gode where Azaleos is in terms of its cash flow. From his response, it sounds like the company is still in a growth and expansion mode, rather than hunkering down and getting profitable. “We’re flirting with profitability, and I mean that in a good way,” he says. “Business is good.”

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I can’t do justice to a comprehensive review of yesterday’s FiReGlobal (West Coast) conference at the Four Seasons Hotel in Seattle. Instead, I’ll just give a few of my key takeaways. The all-day event, organized by Strategic News Service, focused on how to solve some of the most pressing problems in technology, business, and society—in areas as diverse as broadband access, entrepreneurship, education, sustainability and the environment, political discourse, human health, and mobile devices.

The sweeping conference had the tagline, “Global technology driving local solutions.” Interesting, as that’s sort of the reverse of Xconomy’s mantra, which is reporting about local stories with global impact. But I think they’re two sides of the same innovation coin.

So, in “ESPN plays of the day” style, here’s my top 10 list from the conference (if only I had the video to go with it):

10. Setting up entrepreneurial zones. A panel led by Ty Carlson of Microsoft proposed denoting special “R&D zones” from Oregon to British Columbia geared toward supporting startups in fields like renewable energy, sustainable farming, and biotech. The idea would be to offer tax credits and other incentives to create a more entrepreneurial culture in the Northwest, especially in rural areas.

9. What government should and shouldn’t do. Investor and entrepreneur Martin Tobias of Seattle-based Kashless said, “Startups and investors can’t make a 10-year bet when you have a two-year tax credit.” Those conditions freeze out small companies, especially in costly ventures like energy. So government should create open markets and set minimum market sizes for new technologies, Tobias said. But it shouldn’t pick the technology winners themselves.

8. Northwest tech startups do the Olympics. Tom Guthrie, CEO of Seattle-based Twisted Pair Solutions, said his company has helped numerous agencies on the Olympic Peninsula inter-operate their radios—a key problem in disaster response and other scenarios. Twisted Pair, which is backed by Ignition Partners and other investors, is also working on a laser system to deliver broadband signals. Meanwhile, Paul Manson, CEO of Vancouver, BC-based Sea Breeze, talked about his company’s project to build a high-voltage, direct-current undersea cable between Victoria, BC, and Port Angeles, WA. This would be a fast, controllable power transmission component of a smart grid; it should be under construction by mid-2010, he said.

7. The world according to Dell. In a chat with Mark Anderson of Strategic News Service, Michael Dell said he is excited about China and the rest of Asia as fast-growing economies. He anticipates a U.S. recovery from the recession, but says, “I don’t think you’ll see an immediate snap-back.” And he likes South America as an emerging market (Dell does sales of more than $1 billion in Brazil alone). But Europe, not so much—he sees a lot of uncertainty in the workforce there.

6. Get ready for Dell smartphones. “Mobility is absolutely the theme,” Dell said. He was talking about the relative importance of desktop computers, laptops, netbooks, and mobile devices to …Next Page »

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Online reputation management is hot these days. Today, Seattle-based Marchex, the online advertising and search company, is announcing a new thrust in its strategy for connecting local consumers with restaurants, florists, and other businesses. The firm is releasing software that helps small, local businesses monitor and understand what people are saying about them and their competitors—and make sure information about the businesses online is accurate.

Marchex (NASDAQ: MCHX) says the product is the first of its kind, but the news fits into a broader trend of Seattle-area companies offering reputation management and “Web sentiment” software. The idea is to sell software tools that automatically collect what people are saying about brands and products in blogs, articles, and social media like Twitter, and then summarize the positive and negative feedback so businesses can quickly respond to customers. Visible Technologies, Appature, and Evri are some of the other Seattle companies working in the space.

“This is a really important product if you think of the next generation of performance advertising,” says Peter Christothoulou, the chief operating officer and a founding executive of Marchex. “It’s about not just acquiring new partners, but communicating with them.” Christothoulou adds that the new effort acts like the “front of the funnel” in Marchex’s strategy for helping businesses find new customers and maintain relationships with them.

While other offerings provide insights into how a company name or brand is represented online, Marchex is focusing specifically on the local aspect of small businesses, says Matthew Berk, the company’s executive vice president of product engineering. In addition to monitoring the sentiment of local customers, that means making sure a restaurant’s phone number and address are listed correctly in various places online, and that the special features of a Petco store in one neighborhood, say, are differentiated from those of other Petco stores at different locations.

But connecting these local stores with feedback from social media and other sources is the main advance here. “Businesses know things are being said about them online,” adds Ryan Fritzky, a senior product manager at Marchex. “It’s an important first step to provide them with a service where intelligence is brought to them in one place.”

Marchex isn’t selling the product directly to small businesses. Rather, it is going through its big partners like AT&T, Comcast, the Cobalt Group, and Yellowbook.com, who will in turn resell the software to local businesses for a monthly fee.

Strategically, it sounds like reputation management could be an important new revenue stream for Marchex, which reported a 44 percent drop in revenues in the second quarter of this year ($21.1 million) compared to the same period in 2008 ($37.4 million). “This is the first of many forward-looking products we’re delivering to the [small and medium-size business] channel. It can be significant for us over time,” Christothoulou says.

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Seattle-based Marketfish has launched a new version of its list marketing software platform. The platform, called Great White, lets marketers rent third party opt-in lists using a Web interface similar to Google AdWords. The latest version lets customers complete live transactions and includes new features like expanded payment options and more transparency on prices. Marketfish rolled out its beta software a month ago, and now has 50 users, including ZAAZ, Wunderman, DDB, and Cole & Weber.

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Ray Ozzie, Microsoft’s chief software architect, announced today the company is forming a new laboratory called Future Social Experience Labs, or FUSE Labs, which will focus on aspects of “social computing” beyond just communication and collaboration. The move is part of a wider restructuring of Microsoft’s labs: FUSE Labs is a merger between the Creative Systems Group at Microsoft Research in Redmond, WA; Rich Media Labs; and Startup Labs in Cambridge, MA. As part of the announcement, Ozzie said Reed Sturtevant, the founding managing director of Startup Labs for the past two years, is leaving the company to pursue other interests.

FUSE Labs will be led by Lili Cheng, a 14-year Microsoft veteran who most recently headed the Creative Systems Group and previously managed the user experience teams for Windows Vista. Before joining Microsoft, Cheng worked at Apple Computer in the human interface-advanced technology group, where she worked on QuickTime VR and QuickTime Conferencing products. Cheng is now general manager of FUSE Labs (in Redmond) and will report directly to Ozzie. “I’ve known Lili for many years, and have long been impressed by her vision and ability to create; to engage yet to also inspire; to lead; to make tough choices; to deliver,” Ozzie said in a memo to Microsoft staff.

Ozzie said he has “refined the missions” of Microsoft’s labs, in part because of “changing business conditions.” From his memo, it sounds like the goal of the new lab is to apply research in social computing (things like user interfaces, social networks, and human behavior) to help develop new products in the areas of entertainment, productivity, and teamwork—as well as to explore how Microsoft can extend the ways people use computer operating systems.

“The three groups being combined have concrete skills and code in areas where ‘social’ meets sharing; where ‘social’ meets real-time; where ‘social’ meets media; where ‘social’ meets search; where ‘social’ meets the cloud plus three screens and a world of devices,” he said. (See more on Ozzie’s three-screen vision here.)

It also sounds like the reorganization is meant to focus the impact of social computing research more immediately on the company’s product pipeline. “FUSE Labs will bring more coherence and capability to those advanced development projects where they’re already actively collaborating with product groups to help them succeed with ‘leapfrog’ efforts,” Ozzie said in his memo. “Working closely with [Microsoft Research] and across our divisions, the lab will prioritize efforts where its capabilities can be applied to areas where the company’s extant missions, structures, tempo or risk might otherwise cause us to miss a material threat or opportunity.”

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It’s been just over a year since we first catalogued the iPhone apps originating from our fair city (and environs). Back then, mobile applications like Urbanspoon, Whrrl (from Pelago), and Jott were relatively new and just starting to take off, letting iPhone users do things like discover restaurants and events and dictate e-mails and text messages—can you believe it’s only been a year?

Now it’s almost impossible to keep up with the volume of iPhone apps coming out of the Seattle area, just on a weekly basis. Here are five that have caught my eye as of late, in no particular order—it’s not a comprehensive list, so if you know of any good ones I missed recently, please drop me a line at gthuang@xconomy.com or post a comment at the bottom of this story. Just from what I’ve gathered lately, it looks like a good mix of indie developers and corporations are creating new products:

iGlasses ($0.99)
A digital magnifying glass that helps you read fine print on things like restaurant menus and medication bottles. The app was developed by Brian Ward of Windward Partners (a real estate broker and attorney) and Jack Breese of the Washington Advisory Group (formerly a director of Microsoft Research).

Best Camera ($2.99)
A smash-hit photography app that lets you edit pictures (applying digital filters and effects) taken on an iPhone, and upload them to a communal online gallery or social site, as Wade reported last Friday. Developed by Seattle photographer Chase Jarvis, it’s going a long way towards making the iPhone the only camera most people will ever need.

DateCheck (free, though the services aren’t)
A background-check app that lets you gather information about your date, or any person—things like criminal records and data from social networks. Bellevue, WA-based Intelius rolled out this app at the DEMO conference in San Diego last week.

Learn That Name ($1, soon to be $2)
A quiz-style game to help you associate names and faces in your LinkedIn contacts. It was developed by a 14-person team assembled at last month’s Startup Weekend in Redmond, WA, and was introduced for sale early last week.

myStarbucks and Starbucks Card Mobile (both free, though lattes still cost an arm and a leg)
A store locator and mobile payment card, respectively. The Seattle Times and many other outlets reported on these, the first iPhone apps from the coffee giant, last week. The payment app is currently being tested at Starbucks stores around Seattle and Silicon Valley.

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Seattle-based Appature announced late yesterday that it now provides “sentiment analysis” that lets healthcare marketers understand people’s feelings (positive or negative) about their brand, or other topics in their industry, from blogs and social media. Together with the rest of Appature’s marketing software, companies can do things like search against information in their Appature database about customers and prospects. Back in June, Appature released a Twitter search engine called Chatterfly. The company was founded in 2007 and is currently bootstrapped and profitable.

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The DEMOfall 09 conference, billed as “the launchpad for emerging technology,” kicks off today in San Diego, with company presentations and new product launches officially starting tomorrow morning. The Seattle and Portland, OR, metro areas are well-represented in the mix, with three Seattle-area startups and one Portland company scheduled to present their stuff. That’s all according to VentureBeat, which co-produces the conference.

It’s a big deal in the tech industry, and a great opportunity for a select group of startups. Here’s a little bit about each Northwest company that will take the stage:

—Intelius, based in Bellevue, WA, provides background checks and identity theft protection for consumers and businesses. Back in May, we reported that the company acquired Spock, the Silicon Valley-based people search engine, for an undisclosed amount. Intelius was founded in 2003 and is led by CEO Naveen Jain, the founder of InfoSpace.

—Point of Wealth Systems, based in Portland, OR, has developed a method that allows employees who make their money in cash and tips (waitstaff at restaurants, for example) to deposit their earnings into a secure register for savings, retirement, or investment purposes. Point of Wealth was formed in March 2008 to bring financial services to this new market.

—Symform, based in Seattle, has been honing its cloud data-storage product in beta trials (and a pre-launch version) since the spring. We first profiled the company back in February, and in April, Symform announced it had raised a $1.5 million Series A round from OVP Venture Partners. Its basic idea is to offer cheap, efficient, and secure data storage and backup services to small and medium-sized businesses.

—Enroute, based in Bellevue, WA, is giving a sneak preview of its product—a unified system to help businesses find the most efficient way of shipping packages from A to B. Enroute is one of the finalists from the Zino Society investment forum, which took place last Thursday in Seattle. It is in the running for a $50,000 Zino investment prize, to be announced within the next few weeks.

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Every time I look at Gist, it’s a little different. Given it’s a scrappy startup trying to navigate the worlds of e-mail, social networking, business software, and Web search—each a huge market opportunity, each hugely competitive—this is probably a good thing.

The Seattle company, backed by Paul Allen’s Vulcan Capital and Colorado-based Foundry Group, is announcing today that its software, which has been in private beta trials for the past year, is now available to the general public. Gist bills itself as an online service that helps people manage their personal and professional relationships more efficiently.

The basic idea is to provide a Web dashboard that finds your contacts from your e-mail inbox and social networks (Outlook, Gmail, Twitter, Salesforce.com), and keeps you up to date about these contacts—even ranking their importance—through online information from blogs, articles, tweets, and updates on Facebook and LinkedIn. So, before your next business meeting, instead of having to Google around or search on Twitter to get up to speed on notable developments, Gist will surface any recent activity involving your contact, says Gist founder and CEO T.A. McCann.

It’s an ambitious product. Since the company’s $6.75 million Series A funding round from Vulcan and Foundry Group was announced in May, Gist has buckled down and focused on listening to customers (about 10,000 and counting) and improving its software and interface. It also moved into new office space near Qwest Field.

Among the new wrinkles in the software: Gist can filter information based on which people you’re meeting with this week, or which people you’ve exchanged new e-mail with; the software can also hook into customer relationship management through your Salesforce.com contacts; you can invite other people to try Gist, so there’s a viral component to the product distribution.

“There are probably a whole bunch of users who can get a lot out of Gist,” McCann says. “We think Gist is something people will want to talk about and share with other professionals.”

For now, the software is free, and will remain so for the rest of the year. But come early next …Next Page »

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Microsoft announced today the beta release of a new image-based interface for its Bing search engine. Called “visual search,” the feature lets you browse pictures of search results—like celebrities, cars, and other products—instead of text links. It requires Microsoft’s Silverlight Web software, and so far works only for predetermined categories, but will be in full release by the end of September. Microsoft senior vice president Yusuf Mehdi unveiled the interface at TechCrunch 50 in San Francisco.

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Marcelo Calbucci, the founder of Sampa and Seattle 2.0, announced today his team has launched TweepML, a service and format for Twitter users to share lists of other users quickly and efficiently. The service makes it easier to follow multiple Twitter users at once (at a given company, say), instead of having to find them individually. A number of startups have agreed to support the TweepML format, including Gist, OneRiot, and Gnip.

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Last month, we broke the story of Marketfish, the Seattle-based online marketing startup that has raised an undisclosed sum of money from prominent local investors, including the Alliance of Angels. Today, Marketfish launched a beta version of its new online platform, which helps marketing agencies and businesses find and rent direct mail and e-mail lists of potential customers.

Here’s how the platform works. Marketfish helps media buyers at agencies and marketing departments shop for marketing lists from list owners, using a secure Web interface. The plan is to allow marketers to track the performance of their campaigns as well. Meanwhile, marketing list owners can use Marketfish to put their lists in front of more businesses and marketing agencies, and boost their own profits.

What Marketfish is doing is worth a closer look. For that, I spoke with Clark Kokich, the chairman and former CEO of Seattle-based Razorfish, the online advertising firm bought by Publicis for $530 million last month. Razorfish was formerly part of Microsoft and, before that, aQuantive (which Microsoft acquired for some $6 billion in 2007).

Kokich says he met Marketfish founder Dave Scott about four months ago and signed on as an advisor to the startup soon after. “I have a lot of respect for David. He’s been in the business a long time, and he knows what the challenges are,” Kokich says. “The more time I spent with him, the more I became convinced it was a significant opportunity. So I invested and joined the board.”

I asked Kokich for more details on what makes Marketfish special compared to what’s available now. “The thing that’s appealing to me is this looks a lot like the business we established at aQuantive,” Kokich says. “It’s an opportunity to use sophisticated technology to dramatically improve the ability to source and [rent] direct mail and e-mail lists. It appealed to me because I’ve been a purchaser, and I know it’s not working for customers.”

In the case of aQuantive—or more specifically, Avenue A/Razorfish, which Kokich joined back in 1999—the key innovation was an online ad-serving system that connected advertisers to actual sales on their websites, so they could accurately calculate return on investment and optimize their media campaigns, Kokich says. That kind of tool did not really exist before.

Similarly, Marketfish is about “creating an efficient market where one doesn’t exist,” Kokich says. “Right now, if you want to buy a list, there’s no place to go where you can search, source, and execute a campaign. It’s a lot of time and hassle, a lot of expense. This is making a marketplace for the list.”

We’ll be watching to see how much of a splash Marketfish makes, and whether the marketplace it is creating takes off with marketing agencies and list owners. As for Kokich, I asked whether he’s staying with Razorfish through the integration with Publicis. “I plan to stay on, absolutely,” he says. “Strategically, it’s a great thing for Razorfish. It will accelerate our international expansion, and allow us to provide greater integration between online and offline.”

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Amazon Web Services announced it has launched Amazon Virtual Private Cloud, a Web service that helps big companies extend their IT infrastructure into the Internet cloud while addressing isolation and security concerns. Companies can use existing firewalls and security to create an isolated network, and then access the Amazon cloud within that network.

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When we last checked in with Verdiem back in June, the Seattle energy-IT firm was reporting encouraging results from its product trials in Seattle, Chicago, and Honolulu. Today, Verdiem is announcing that its personal computer power-management software has reached a new milestone, having been installed on more than one million desktops. What’s more, the company says its business customer base has doubled in the past 12 months.

Verdiem’s software helps big companies and organizations control and manage energy usage by PCs on their network. The product includes simple features like automatically turning off computers when they’re not in use, and turning them back on when they need to install software updates, as well as dashboards for managing energy use. The company says more than 300 corporations, government agencies, and universities have deployed the software, and have typically reduced their PC energy costs by 30 to 60 percent. The latest announced customer is Atlanta, GA-based Cox Communications, which has outfitted 15,000 of its networked PCs with Verdiem’s energy-saving software.

“Business and IT leaders are searching for solutions to tangibly reduce costs and protect the environment,” said Brett Goodwin, Verdiem’s vice president of marketing, in a statement. Companies see PC power management as “low hanging fruit” in the growing effort to make everyday computing greener, he said.

Verdiem was founded in 2001 and is backed by Kleiner Perkins Caufield & Byers and NCD Investors, among others. Since December, the company has been led by chief executive Jeremy Jaech, the co-founder of Aldus, Visio, and Trumba.

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Smith & Tinker, a Bellevue, WA-based game company launched a new, hybrid game combining online and offline play today, according to a press release by the company. Called Nanovor, the game has an online aspect where players can collect, modify, and train small Pokemon-esque monsters called nanovors. Later this year, the company will start selling handheld devices called Nanoscopes, which players can download their creatures onto and use to battle other creatures on another device offline. This is the first game released by Smith & Tinker, which is run by serial entrepreneur Jordan Weisman.

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After just a couple of weeks, Ryan Morel was hooked on Bumper Stars, a free game on Facebook. He and his co-workers were but a few of the tens of thousands of people playing the game, a mixture of ping-pong, pool, and shufflepuck, every month. Morel only wished someone would make a mobile version of the game so he could play it even more. Then he remembered that, as vice president of business development at PressOK Entertainment, based in Seattle, he could make that happen. After a few months of negotiation and six months of development, PressOK and Large Animal Games, the game’s original developer, rolled out Bumper Stars Mobile for the iPhone last week.

Translating games from one format to another is not new, but in the rapidly changing world of smartphone applications, it is an emerging trend. PressOK is one of the first mobile gaming companies to import a game in this manner, although it is rapidly becoming popular among game developers. “Developing a new game is much more difficult than translating a game,” Morel explained.

PressOK was born last September in a merger between mobile game makers Mobliss and Reaxion. Reaxion still exists as a development company based mainly in Russia and Belarus. PressOK is a publishing unit, with the combined game catalog and intellectual property of both companies before the merger, Morel said. Bumper Stars was created by New York-based Large Animal in 2007.

Bumper Stars, which is available for $2.99 in the Apple app store, “is the first real PressOK release,” Morel said. Mobliss had focused on games distributed by AT&T and Verizon to traditional cellphones. The new focus of PressOK is on games for smartphones like the iPhone and the Android, which will be getting its own version of Bumper Stars Mobile soon. Some of the games will be original, and some will be new versions of games in the PressOK catalog. About 80 percent of PressOK’s focus will be on smartphone games from now on, Morel said, including ports, original games, and translations of games in other formats. Morel said there is a revenue-sharing plan with Large Animal, although he could not provide any details.

Morel isn’t concerned that people might hesitate to buy a game that can be played for free online. The company plans on doing advertising and marketing for the next few months, at least, to boost the popularity and sales of the game even as they start working on the next one.

PressOK is one of many companies that sees new opportunities in smartphone games, where possibilities are not available to more old-fashioned mobile games. “In traditional mobile games, there’s a little bit of a sink or swim mentality,” Morel said. If a game does not succeed immediately, it tends to disappear from easily accessible options for games to play on the phone. In contrast, he said, there’s a lot that can be done to boost the profile and sales of iPhone and other smartphone games.

Success would be to get Bumper Stars into the top 25 of paid apps, but it doesn’t have to happen overnight. “The good news is that your success can be built over time,” Morel said. “Once it’s developed, it costs us really nothing to keep it in the app stores.” An existing Facebook version of the game helps, as there are only a few phone games with online versions. “It already has a substantial user base. We can tap into the existing group of people who enjoy the game,” Morel said.

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A wise man once told me, “Engineers don’t lie.” So when I wanted to find out the real story behind Bing, Microsoft’s new search engine, I went to Harry Shum. Shum is Microsoft’s vice president of search product development. He runs the engineering team responsible for Bing, among other duties. He was formerly the managing director of Microsoft Research Asia in Beijing, and he’s a Microsoft distinguished engineer. A few weeks ago, he granted a rare in-depth interview about all things Bing. He also spoke publicly about the search effort at this week’s Microsoft Research Faculty Summit in Redmond, WA.

What’s most striking about Bing is how well it has been received so far—especially compared to other recent high-profile Microsoft products (Windows Vista comes to mind). Bing, which was launched in full last month along with a serious marketing effort, has received mostly positive reviews, and has spurred a modest but significant increase in Microsoft’s market share in Web search—8.4 percent in June, up from 8 percent in May, according to comScore.

So a lot has already been written about it, of course. But I wanted to hear from Bing’s head of engineering about the deeper process of building the software, the technology behind it, and the culture of the search group within Microsoft—and, crucially, how its approach is different from other product groups in the company, in terms of the mindset of its engineers. There may be some important lessons in product innovation here.

Shum began with some historical context. Microsoft has been working on its search product for about six years, he said, while Google has been on the case for more than twice as long. Back in the 1990s, top Microsoft researchers like Eric Horvitz and Nathan Myhrvold talked about building a search engine and crawling the whole Web (only tens of millions of pages back then) with just a few dozen machines. But in terms of product development, Microsoft freely admits it came to search late and remains a heavy underdog in the battle for market share. “The competition is here, and we recognize and respect that,” says Shum, who took over the search team in the fall of 2007.

Indeed, Bing is a new opportunity in a long line of Microsoft search engines—MSN Search, Windows Live Search, and Live Search. “We really believe Bing represents a dramatic improvement in search,” Shum says. “It goes beyond a search engine. We claim Bing is a decision engine. It’s a tool to help users make everyday decisions.”

Whether you’re trying to buy a pair of shoes for a particular occasion, or looking up the local weather to decide how to dress, or tracking a package online, Bing tries to figure out your …Next Page »

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