Big Fish buys Grubby Games

Big Fish Games is gobbling up Grubby Games, a Vancouver, B.C.-based game studio known for titles such as "My Tribe," "FizzBall," and "Incredibots." Three of Grubby's employees are joining Big Fish, which opened a Vancouver game studio last year.

That new office -- which now has 10 people -- followed an $83.3 million venture round for Big Fish. Given Big Fish's strong financial position, CEO Jeremy Lewis said they may "selectively" buy other gaming studios that are a "cultural fit."

Grubby Games co-founder and CEO Ryan Clark said he's happy to join Big Fish.

“Big Fish Games has a remarkable culture and a unique, multi-platform development ecosystem that aligns with our vision for creating differentiated content.” Clark said in a statement.

The acquisition is the latest sign of growth for Big Fish, which earlier this month announced plans to open a European headquarters in Ireland. That facility could employ as many as 100 workers over the next three years.

Big Fish, with more than 350 workers, recorded revenue of $85 million last year. It distributes more than 1.5 million games every day.

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Microsoft confident, cautious as near-final Windows 7 is released

Microsoft's servers have been overwhelmed this morning as subscribers to its MSDN and TechNet services scramble to download the newly issued Windows 7 Release Candidate. The continued demand is another good sign for the next version of Microsoft's flagship product, following generally positive reviews for early builds.

But the Windows team is being careful not to declare victory yet.

"We feel very confident about the quality of the product, the path we're on, and being able to meet our goals," said Jeff Price, senior director of Windows product management. At the same time, he made it clear that the team is doing its best to keep that confidence in check. "We're trying to be cautiously optimistic," he said.

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Expedia shares jump, Amazon Payments, VCs on IPOs, & more

Online travel site Expedia's shares jumped after the company beat revenue estimates for the first quarter. Bellevue-based Expedia reported revenue of $635.7 million, down 8 percent a year ago. Net income was $39.7 million, down from $49.8 million the same quarter a year ago.

Amazon.com says its Amazon Payments service is gaining traction. The Seattle online retail giant said more than 25 shopping cart and ecommerce platform providers -- including CardinalCommerce,Miva Merchant, Magento, ShopVisible, Mercantec, and Zoovy -- have included Amazon Payments in their offerings.

The National Venture Capital Association is calling on the Securities and Exchange Commission to help spur the slumping IPO market by easing corporate governance laws for startups and providing tax relief to IPO investors.

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Bill Gates on Jeff Bezos

Bill Gates writes about his fellow Seattle billionaire, Jeff Bezos, in a piece for Time magazine's annual list of the 100 most influential people in the world. It is a short, but fascinating essay. Gates calls the Amazon.com founder "one of those insatiable pioneers of business and technology."

He finishes the piece by comparing Bezos to Johannes Gutenberg, writing that the Kindle may change how people read books.

Here's a short excerpt:

"Pioneers are also survivors. You have to have a lot of respect for how Jeff's vision and determination carried his young company through the dotcom bust early in the decade. While other e-businesses flamed out in spectacular fashion, Amazon held steady and eventually broadened its inventories and lines of business far beyond what even the largest retailers can boast of offering."

Gates and Bezos are both geeks at heart, and that's part of what makes the piece compelling. What's also interesting is -- in all of my years of covering technology -- I can't recall a moment when there's been any sort of public interaction between the two technology titans.

You can read the full essay here. Others on the list this year include Edward Kennedy (Arnold Schwarzenneger essay); 4Chan.org creator Moot (Rick Astley essay); Twitter founders Biz Stone, Jack Dorsey and Evan Williams (Ashton Kutcher essay).

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Report: Windows 7 in October

Tech site Pocket-lint quotes a representative of PC maker Acer saying that Microsoft's new operating system, Windows 7, will be available Oct. 23. If it's accurate, it would be the first time the release date has been nailed down.

Microsoft isn't commenting on the report yet. The company, which issued the first Windows 7 Release Candidate today, has so far declined to give a specific release date or even to confirm that the new operating system will be available this calendar year. Even so, the widespread assumption is that the company is aiming for a release in time for holiday shopping, so the news wouldn't be that surprising.

According to the site, Acer's Bobby Watkins also provided information about upgrade promotions, similar to those offered to people who bought Windows XP machines in advance of Windows Vista's release. However, it's not clear if he was referring to an Acer arrangement or something that would apply more broadly across the industry.

"23rd October is the date the Windows 7 will be available," the site quotes Watkins as saying. "There is a 30 day upgrade time so that customers don't wait to buy a new computer so if you buy during that 30 day period, you'll get a free upgrade to Windows 7."

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How to market an iPhone app: Enlist a pre-schooler

Perhaps inspired by the Microsoft TV commercials featuring a 4-year-old, Zillow.com COO Spencer Rascoff films his 4-year-old daughter Sophia looking up homes via the company's new iPhone app.

It used to be that pets and animals were key to marketing new products. Maybe the new trend is pre-schoolers. Anyway, I've got to say that Sophia is pretty cute in her pink pants and boots doing the "Zillow iPhone dance."

Hat tip to Aubrey Cohen who found the video through Rain City Guide.

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Entrepreneurial Activity Climbed As Economy Worsened in 2008

Last year’s deepening recession churned out more entrepreneurs, but not necessarily ones who will produce high levels of income, according to a new report.

The Kauffman Foundation today released its annual “Index of Entrepreneurial Activity,” a comprehensive report that tracks U.S. entrepreneurship rates and trends. It shows entrepreneurship rates rose to .32% in 2008 – meaning that an average of 32 of every 100,000 Americans started new ventures each month. That’s a slight increase over 2007’s 0.3% rate–and the highest rate since Kauffman started tracking new business formation rates in 1996.

An interesting revelation in the new data is that the percentage of new entrepreneurs starting businesses deemed as having “high income potential”—such as accounting, real estate or high-tech firms –decreased slightly last year, while those with low- or medium-income-producing potential rose. That suggests that more people are turning to entrepreneurship out of necessity in today’s bad economy, meaning they have limited job opportunities and start businesses to generate income rather than to chase a hot opportunity. In recessions, the numbers of “necessity entrepreneurs” tend to rise given lagging job markets.

“The total business creation rate increased over the past year, but this masks diverging underlying trends,” said the report’s author, Robert Fairlie, a University of California - Santa Cruz economics professor. “Entrepreneurship rates increased only for low-income types of businesses and not for high-income types, which may be early signs of how the recession is impacting firm formation. The continuing effects of the recession on business creation are important because entrepreneurs contribute to economic growth, innovation and job creation in the United States.”

The construction industry, which was among those that shed the most jobs last year given the sector’s woes, saw the highest level of entrepreneurial activity, the report said. The services industry saw the second highest number of new entrepreneurs.

The report also explores the educational achievement and demographics of new entrepreneurs and finds that immigrants continue to form new businesses at significantly higher rates than the U.S.-born. Latinos showed the biggest increase in entrepreneurship rates of any racial group, a trend that started in 2005. By contrast, African Americans’ business creation rate fell slightly in 2008.

Entrepreneurship among both men and women continued to increase, though women’s entrepreneurship levels returned to their 2005 levels of 0.24% after declining the past few years. Men continue to have a much higher entrepreneurial rate – 0.42% — than women.

Older adults surveyed, ages 55 to 64, saw the biggest increase in new entrepreneurship rates in 2008, climbing to 0.36% from 0.31% in 2007.

Another interesting finding: Americans who never graduated from high school were far more likely to start new businesses in 2008, compared with those with a college degree. Business formation rates for those without high-school diplomas rose to 0.48% from 0.42%, while they dropped to 0.30% from 0.31% for college graduates.

Overall, Kauffman’s data suggests the recession is helping spur entrepreneurship, but not necessarily for the best reasons. Necessity entrepreneurs often face an uphill battle, since they don’t always have the financial resources and risk tolerance or innate entrepreneurial drive of self-selected “opportunity” entrepreneurs. Still, some of the best ideas can be bred out of necessity.

Given that the economy only really started to nosedive in late 2008, next year’s Kauffman index should be even more interesting.



Readers, ever started a business out of necessity? Do you expect entrepreneurship rates will continue to climb this year?

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Stop making excuses and get started

Most business projects can be launched on a budget if your life's dream depends on it, and even now there is equity backing out there, writes Luke Johnson, more 

Small-Business Loan Program Hit Unexpected Hurdle: Not Enough Applicants

Small businesses around the country have been complaining about the lack of funds out there. But the lackluster performance of one microloan program shows that money won’t solve all the problems.

In Washington D.C., a recently formed microloan program faces an unexpected problem: not enough applicants. Only 15 companies have applied for the funding, according to this story in the Washington Business Journal. Through the program, small businesses can apply for low-interest loans of up to $25,000, depending where they’re located.

Some small businesses are too troubled to think about applying for loans. “You get people so drilled and focused on, ‘Oh my god how am I going to survive,’ that they are ostriches for a while,” says Donna Grigsby, the executive director of the nonprofit that operates the program.

The Washington program is a pilot, set to expire next year. It could be expanded, though, if it’s successful.

The challenges at the program are a sign of the multi-layered problems small businesses face. Because of depressed revenues and cash flow, some business owners are so convinced they’re no longer creditworthy that they’re not bothering to apply for funding. Small-business owners have long complained that loosening lending standards isn’t enough to pull them out of the recession – particularly when the loan programs require certain levels of cash flow that eliminate many start-ups.

Critics also charge that the program wasn’t well-publicized and many business owners may not have known about it. That’s something to keep in mind as more government-funded programs get rolled out across the country.

Readers, do you think loan programs like this one can help struggling small businesses? What do you think is keeping more small businesses from applying?

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ZymoGenetics to cut third of staff

ZymoGenetics today announced plans to cut 32 percent of its workforce, yet another blow for Seattle's struggling biotechnology industry. As part of the restructuring, the company is cutting 161 jobs. It is also discontinuing research efforts in oncology. 

“We’re taking steps to reduce our costs, align our spending with our highest corporate priorities and conserve our financial resources,” said Douglas Williams, chief executive officer of ZymoGenetics in a statement. “While it is very difficult taking these actions, they are necessary given challenging market conditions and the changing focus of our business plan. Going forward, we believe that ZymoGenetics will be a stronger, more sustainable company with substantially reduced dependence on the capital markets for funding."

The money-losing biotech company -- which will record a charge of $8.5 million as part of the restructuring -- said that the cuts will occur in research, manufacturing and other development-related functions. The layoffs will reduce operating expenses by as much about $30 million.

ZymoGenetics reported a net loss of $116 million last year. It finished last year with $90 million in cash, though a partnership with Bristol-Myers Squibb was to bolster its cash position.

The Zymo layoffs are the latest bit of bad news in the biotech community. Last fall, Merck announced plans to shut down its Rosetta research facility, which like Zymo operates in Seattle's South Lake Union neighborhood.

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Does experience at Microsoft make for a good politician?

State Rep. Ross Hunter, a former Microsoft general manager, announced today that he's running for King County Executive, competing against four other candidates for the position. He's one of many former Microsofties now in the political arena -- and he's pointing to his experience at the Redmond company as a major selling point 

"I think I bring something that those other guys don't have a lot of, which is private-sector management experience," Hunter said during a radio interview with KUOW-FM's Ross Reynolds today.

"I was a general manager at Microsoft. I was there 20 years -- 17 years. We changed the world there. Learned how to do management there. Microsoft brings something to the table that our region is short of, I think, which is impatience. I've had to temper my personality in order to be effective in the Legislature, but I have a level of impatience for solving problems that I think is not as evident in the other candidates."

Other former Microsoft managers in politics include Suzan DelBene, the former Windows Mobile executive now challenging Rep. Dave Reichert -- who previously fought off two challenges from another former Microsoftie, Darcy Burner.

At any rate, it will be interesting to hear what people -- particularly Microsoft employees -- think of Hunter's comments. Does management experience at Microsoft really help someone become a good political or government leader?

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Scenes from TechFlash Live

We had a great time Wednesday night at the second TechFlash Live, and we're glad so many of you could join us. Lots of great people, conversations, food and drinks. Thanks to Ben Huh of I Can Has Cheezburger for sharing insights into one of Seattle's more unusual startups. And thanks to event sponsors SolutionsIQ, Seattle University and Microsoft BizSpark.

Stay tuned for details on the next TechFlash Live, scheduled for this summer. In the meantime, here are a series of photos from tonight's event, taken by photographer Matt Hagen.

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Facebook executive considers California Attorney General campaign

SACRAMENTO — An executive with the company that operates the social networking Web site Facebook announced today that he's considering running for attorney general of California., more 

Google's PR Campaign

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AOL Has Bad Quarter

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Oracle: Clinging to the Past?

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AT&T's iPhone Dilemma

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Social Gaming Scores in the Recession

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On Engineering and Design: An Open Letter

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IAC acquires Urbanspoon

Internet giant IAC has acquired Seattle's Urbanspoon, the online restaurant guide known for its slot-machine style iPhone app. The deal closed last month but was kept under wraps until being announced by IAC this morning in conjunction with its quarterly earnings.

The purchase price wasn't disclosed. It was "a compelling offer in a pretty crummy economy," said Urbanspoon co-founder Ethan Lowry this morning. More than that, he said, it made sense from a business and competitive perspective. He cited IAC's "tremendous reach."

"Being a part of IAC gives us a chance to keep growing," he said. "It is a good thing."

Urbanspoon will continue to operate as an independent brand, and it will remain in Seattle, an IAC spokeswoman said this morning. No layoffs are planned. Even though the purchase price wasn't disclosed, IAC has promised to limit itself to deals of $100 million or less. Staci Kramer of PaidContent.org estimates the price to be "in the low double-digit millions."

Lowry declined to comment on the terms of the deal, though he said the three founders were happy with the financial outcome.

"It is a strong deal and a good deal, and financially it makes sense," said the 35-year-old co-founder.

Lowry, Adam Doppelt and Patrick O'Donnell, all former Jobster employees, founded Urbanspoon in 2006 and funded the company themselves. Using an ad-based business model, Urbanspoon was already profitable before Apple started promoting the company's iPhone app in commercials, but it became even more so after that, Lowry said.

IAC said in the news release that the acquisition will enhance its collection of local Internet brands, which include Citysearch, ServiceMagic and InsiderPages. IAC also has investments in OpenTable and MerchantCircle. Urbanspoon's aggregated restaurant reviews will be integrated into IAC properties including including Citysearch and InsiderPages, the company said.

"With millions of downloads of their iPhone app, Urbanspoon has demonstrated that they can successfully distill mash-up web content and deliver it through mobile for foodies and local restaurant seekers alike," saidDinesh Moorjani , IAC senior vice president for mobile, in the news release announcing the acquisition.

Urbanspoon has attracted a large following, with more than three million visitors going to its Web site each month and more than one million "shakes" of its iPhone app every day. Asked whether IAC was more interested in the iPhone app or the Web site business, Lowry said it was a "50-50 proposition." However, he did say that the immense popularity of the iPhone app "kind of catalyzed it."

Urbanspoon had entertained other offers over the years, but he said IAC made the most sense in part because of its ownership of Citysearch. The online local city guide has been serving local restaurant ads on behalf of Urbanspoon for the past year.

Another benefit of the deal is that IAC has given the 3-person company a lot of autonomy.

"It is kind of funny because it feels like very little has changed except now we get benefits and salaries and we can file expense reports," said Lowry. "Other than that, it feels identical."

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Likewise Software attracts $10 million from existing investors

Likewise Software has scored a $10 million venture round, with existing investors Ignition Partners, Trinity Ventures and Intel Capital bankrolling the Bellevue startup. It follows a $6 million round last summer and a $11.5 million round in 2006.

The company -- formerly known as Centeris -- says it is doing well despite the rough economy.  More than 20,000 organizations are using its open source software, with revenue growing more than 500 percent year over year. Likewise's software is designed to makes sure that Windows, Unix, Linux and Mac computers operate securely within a company’s IT infrastructure.

"Because of our strong financial growth and careful expense management, we were able to raise capital in a challenging market," said CEO Barry Crist in a statement. "On top of a great year in 2008, our first quarter in 2009 is the best in the company’s history."

Competitors include BMC Software and Centrify.

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Microsoft's Tellme on Windows Mobile: Is voice the new touch?

Voice-recognition technology from Microsoft's Tellme subsidiary will provide an alternative way of controlling and interacting with Windows Mobile 6.5 phones when they come out later this year, the company announced today.

Microsoft is touting voice as a competitive advantage for Windows Mobile. The company took the unusual step of singling out the iPhone in its news release today, saying it "requires four touches and more than 20 keystrokes to find a business with the Apple iPhone, while it only takes one button push and one verbal command to find the same business with Tellme."

Here's a video showing the technology in action.

Microsoft says the Tellme feature will be available for free through the Windows Marketplace for Mobile when Windows Mobile 6.5 debuts in the fall. It's also making the technology available for free to mobile operators and carriers to offer pre-installed on mobile phones.

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Wetpaint partners with MSN

Wetpaint plans to create more than two dozen "fansites" in conjunction with MSN Entertainment as part of a deal announced today. Seattle-based Wetpaint, which operates a wiki-based Web site publishing platform, offers social media tools that allow readers to contribute photos, stories and other content.

The companies didn't mention what types of entertainment sites they plan to create, though Wetpaint does have some experiencing building these offerings on its own platform. (Here's a look at the Wetpaint fan sites for TV shows such as Merlin, Rome and The Mentalist.)

While Facebook and MySpace have their fair share of entertainment fan sites, Wetpaint CEO Ben Elowitz tells TechCrunch that his company's sites attract more user engagement in terms of contributions and comments.

"With their SuperFan initiative, MSN recognizes the power of the voices of fans and the ability of this motivated audience to drive buzz and traffic above and beyond static fan pages and message forums," Elowtiz said in a statement. The release did not say whether MSN and Wetpaint plan to share advertising revenue from the new offering.

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RealDVD case; Vista; Geospiza; Amazon in education; and more

RealNetworks CEO Rob Glaser acknowledged in a preliminary court hearing that the company's RealDVD technology could let consumers copy rental DVDs, but he said the company wants to "steer people away from that," reports CNet News.com.

RealNetworks is fighting with movie studios over whether consumers can legally copy DVDs to their computer hard drives. Wired reports computer scientist Robert Schumann testified that RealDVD software circumvents encryption technology designed to prevent copying.

Microsoft last night released Windows Vista Service Pack 2, a big bundle of fixes and updates for the PC operating system. Details in this official Windows blog post.

Amazon Web Services today announced a new program called AWS in Education, extending its cloud-computing offering to teachers, researchers and others in education.

On a related note, Carlsbad, Calif.-based Applied Biosystems and Seattle-based Geospiza announced what they are calling the life-science industry's frst "genomic analysis cloud-computing solution." It uses Amazon Web Services.

PathGuide Technologies, a Seattle maker of warehouse management software, is celebrating its 20th year in business this week.

Cozi's family scheduling and calendar service is embedded on the Dell Studio One 19 PC, a touch-enabled computer.

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Minecode's Verma given $2,500 fine, one year of probation

Minecode project manager Sandeep Verma was ordered to pay a $2,500 fine and sentenced to one year of probation today for his role in disabling the Web site for online wine shop Vinado in late 2006.

While U.S. Magistrate Judge Mary Alice Theiler said that Verma had led an "exemplary life" with no prior offenses and great support from his family, she noted that the 35-year-old software programmer's action did have severe repercussions on Vinado.

"I know that you will return to being a very constructive member of society," Theiler said in her ruling from the bench. Tomorrow, Minecode CEO Pradyumna Samal is set to be sentenced for the more serious issue of deleting Vinado's Web site after the online wine retailer allegedly failed to pay its bills to Minecode.

In brief remarks at the federal courthouse in downtown Seattle today, Verma said he was very sorry for the incident. He declined to comment after the hearing.

Verma, who remains employed at Minecode, had asked the court for a $750 fine and no probation. Attorney Amanda Lee said that Verma did not understand at the time that what he was doing was wrong, and he lied to FBI agents out of loyalty to his boss.

"He is not someone whose moral compass is misaligned," she said.

Because he is not a U.S. citizen, his attorneys expressed concern about how the sentencing would be interpreted by immigration officials. Government representatives said they took those factors into consideration when drafting their sentencing recommendations, which included at least one year of probation and a fine of $5,000.

The situation arose in late 2006 when Verma -- allegedly acting on orders from Samal -- disabled the Web site of Vinado. The following month, Samal deleted Vinado's Web site, which wiped out customer databases, graphics and other information, said federal prosecutor Jim Lord.

While Samal's involvement was much more serious, Lord said that Verma lied to the FBI and stuck to the company's "party line."

As part of the plea agreement, Minecode is set to pay at least $122,000 in restitution for the damage it caused to Vinado.

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Double-header for Seattle geeks

This couldn't have come together better if we had planned it. We're looking forward to seeing many of you at tonight's sold-out TechFlash Live event, starting at 5:30 p.m. at the Palace Ballroom in Seattle, at 2100 Fifth Ave. And afterward, the revival of the free Ignite Seattle event is taking place at the King Cat Theater, a short walk away at 2130 Sixth Ave.

We're expecting a great crowd at TechFlash Live, with Tom Douglas food, drinks and networking. Our featured guest is Ben Huh of I Can Has Cheezburger, who will answer questions about building a booming business out of LOLcats and awkward moments. If you have anything you'd like us to bring up, feel free to post a comment below.

TechFlash Live is at capacity, as evidenced by this Craigslist post. But if you missed out on this one, we'll be having one of these each quarter, so we hope to see you next time.

Afterward, many of us will also be heading over to the King Cat, where the first set of fast-paced Ignite talks starts at 8:30 p.m., preceded by a paper-tower contest at 7:30 p.m. It's great to see Brady Forrest and crew reviving the Ignite phenomenon in the city where it started.

Hope to see you tonight at one or both of these events. 

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Small-Business Groups Give Obama’s First 100 Days Mixed Review

Many small-business owners and the groups that represent them were initially leery about Barack Obama’s presidency and how he would help them. How do they feel 100 days into it? Did he dash, meet or exceed expectations when it comes to helping small-business owners in this bleak economy?

Since taking office, President Obama introduced several initiatives or proposals with direct or indirect effects on small businesses, ranging from funneling stimulus money into Small Business Administration loan programs, pushing health-care reform, funding alternative energy and job creation projects and prodding banks to unfreeze credit. Of course, businesses may also benefit from the massive stimulus package by winning government contracts and the expected business it will spur.

A new Wall Street Journal/NBC News poll shows the new president is broadly popular among the American populace, and has so far produced an upswing in national confidence.

Still, many business advocacy groups – which tend to lean Republican – aren’t nearly as impressed. They feel the new president has burdened them with extra regulations, such as requiring they extend COBRA benefits, without providing financial relief such as tax breaks. “Unfortunately, small business owners largely believe that Washington just keeps cranking out more ways to abscond their limited time, capital and resources,” says Karen Kerrigan, executive director of the Small Business and Entrepreneurship Council, a lobby group, in a news release. “We hope that in the next 100 days and beyond, President Obama will turn to entrepreneurs for ideas that will reduce their government-imposed costs and burdens, solutions that will help them maintain and grow their workforce, and options for providing affordable health coverage.”

Other groups with more focused agendas also don’t feel he’s done enough to help small firms. Lloyd Chapman, The American Small Business League, a group that follows small-business contracting, says President Obama reneged on his campaign-trail promise to ensure small businesses win their share of government contracts.”You have come out with numerous small business rescue plans and stimulus plans, and yet today small businesses in all 50 states are still having to compete with “corporate giants” for even the most minuscule government small business contracts for goods and services,” Mr. Chapman wrote to Mr. Obama on ExceptionMag.com.

Yet, others are more tempered in their reviews, even complimentary. Todd McCracken, president of the National Small Business Association said in a phone interview this morning that he’s happy President Obama has put unionization “card-check” reform on the backburner and pushed credit-card reform and reviving SBA lending to the forefront. Mr. McCracken would have liked to have seen the SBA administrator elevated to a cabinet post, which hasn’t happened. The big test in his mind, however, is yet to come: Whether President Obama can push through health-care reform that’s agreeable to business owners. NSBA wants reform that mandates that individuals buy health coverage but that doesn’t mandate that employers buy it. “I think all in all he has shown that he’s willing to be pragmatic,” Mr. McCracken says. “He sees that small business is really good for the economy… I think we’ve actually seen a growing realization of this over the last 100 days.”

Readers, what do you think of Obama’s first 100 days? Has he helped small businesses better weather the economic storm?

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Swine-Flu Fears Worry Restaurants, Hog Farmers

The flu that’s sweeping Mexico and across some states in the U.S. is causing some consternation from a group of small-business owners: those in the $15 billion domestic pork industry. They believe it’s just bad publicity.

“It’s killing our markets,” said Francis Gilmore, 72, who runs a 600-hog operation in Perry, Iowa, to the Associated Press. “Where they got the name, I just don’t know.”

The swine flu strain doesn’t exactly come from pigs, but a hybrid of sorts from humans, swine and bird influenza. Still, the name has caused plenty of damage: Consumers aren’t buying pork products and diners aren’t sure about eating bacon, ham or pork chops either. (Public-health officials say the swine flu virus isn’t food borne, but spreads through human contact.)

Hog prices nationwide have dropped to an average of about $59 per 100 pounds of carcass on Tuesday morning from $62 last Thursday, when first reports of the virus came out, according to the U.S. Department of Agriculture. What’s more, prices haven’t been able to get the usual bump they get during spring – usually more than $70 in late April and May. In addition, China, Russia and Ukraine are banning imports of pork and pork products from parts of the U.S., as well as Mexico. Other countries are increasing pork-import screenings.

“We’re discussing, is there a better way to describe this that would not lead to inappropriate actions on people’s part?” said Dr. Richard Besser, acting director of the Centers for Disease Control and Prevention, to the AP. “In the public, we’ve been seeing a fair amount of misconception … and that’s not helpful.”

Still, small-business owners are fighting back. Having survived peanut and pistachio scares, many in the food and restaurant industry know that reassuring consumers is paramount.

Richard Averitte, marketing director for a North Carolina chain called Smithfield’s Chicken ‘N Bar-B-Q, informed consumers via its Web site, Facebook account and Twitter feed, as well as in local TV and radio interviews, that it’s still OK to consume its large BBQ platter with cole slaw, potato salad and hushpuppies.

“I didn’t really want to put a sign on the window because that would give people the wrong idea,” Mr. Averitte told QSR magazine, a trade publication. “We just want to keep our customers informed. I wanted to nip it in the bud right now. I wanted to make it crystal clear, get out all the confusion and questions, and state the facts.”

For their part, hog producers are aggressively showing that their operations are clean. Farmers are increasing their handwashing, restricting visitors and outside contact at their farms, preventing birds from interacting with pigs and separating hogs that come from multiple hog farms.



Are the steps these small-business owners doing enough? What would you do in this situation?

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Browsing the neighborhood on Zillow's new iPhone app

Home buyers, real estate agents and nosy neighbors now can get the power of Zillow.com in the palm of their hands. The Seattle online real estate upstart today is unveiling a free iPhone application that allows users to browse property information on more than 88 million homes in the U.S.

Utilizing the iPhone's GPS functionality, the new Zillow app pinpoints a user's location and shows nearby homes on interactive aerial maps. Much like the company's Web site, the new app also shows estimated home values, historical property records, for-sale listings and photos.

Zillow has been working on the application for the past four months, with Chief Operating Officer Spencer Rascoff saying that "it took a little while to get it right." Other real estate companies already offer iPhone applications, including Zillow's San Francisco rival Trulia.

But Rascoff said that Zillow's application goes much further than the competition, leveraging the phone's GPS functionality as well as its touch interface to allow users to move around the map with the swipe of a finger..

Zillow's app also offers data on 95 percent of the homes in the country -- which means iPhone touting users can look up the value of a home or peruse interior photos of their neighbors' pad as they walk, drive or boat around the neighborhood.

"Honestly, it has changed the way I walk around the neighborhood," said Rascoff. "It is totally different. You are learning about every home in your neighborhood. It is fascinating and it is fun and entertaining. It is sport."

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Minecode employees look to avoid jail time as hearings near

Minecode CEO Pradyumna Samal and project manager Sandeep Verma, who pleaded guilty to computer intrusion earlier this year, are expected to be sentenced in federal court in Seattle this week. The charges arose after the employees at the Bellevue Web development shop intentionally disabled the Web site of Vinado, an online wine shop that had allegedly failed to pay its bills.

Both Samal and Verma are expected to to avoid jail time, according to pre-sentencing court documents filed over the past week. Samal is asking the court to impose a sentence of probation, while attorneys for Verma are suggesting no probation and a $750 fine.

Samal -- who orchestrated the misdemeanor crime and then lied to FBI agents about it -- could face a maximum sentence of one year in prison. But the U.S. Attorney's Office is recommending [PDF, 10 pages] 90 days of home detention, 288 hours of community service and three years of probation. The feds also are suggesting that Samal pay a $30,000 fine and participate in "moral reconation therapy."

"Samal’ s illegal response to a contract dispute, his subsequent lies to FBI agents, and his instructions to Verma to lie on his behalf, are indicative of someone who lacks a strong moral foundation and not of someone who would likely promote a culture of
compliance and ethics within his company," the government wrote.

For Verma, the government is recommending two years of probation, 40 hours of community service and a $5,000 fine.

"Defendant (Verma) has no prior criminal history and he played a lesser role in the computer intrusion offense than codefendant Pradyumna Kumar Samal, who directed Defendant to enter the commands that disabled Vinado’s website," the government wrote.

In pre-sentencing documents, Samal's attorney paints the picture of an enterprising immigrant entrepreneur who was unfamiliar with U.S. law.

"The act which brings him before the Court was impetuous. It was and borne of frustration with a customer that insulted his companyand employees, took their work product, used it commercially and refused to pay for it. A more experienced businessman would have reacted differently. But good men do make bad judgments at times. Mr. Samal enforced a right in a way that broke the law, although he was unaware of the law at the time he acted."

Samal's attorney, Irwin Schwartz, said that the CEO has accepted responsibility for his actions and has apologized to employees and customers. He also noted that the financial impact has been significant on Minecode.

"Our community needs this man. His employees need him, and of course his family needs him. There is no need to worry about
him offending again," Schwartz wrote.

Verma is set to be sentenced on Wednesday morning, while Samal is slated for sentencing on Thursday. Minecode has agreed to pay restitution of $120,000 to Vinado, though the company is asking for more.

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'Sweet 16' finalists named in UW Business plan competition

The University of Washington held the initial round of its annual business plan competition Tuesday. Judges from the local business community decided on a "Sweet 16" who will now compete for the top prizes on May 21. Ninety entries were submitted this year from colleges from across the state, with 33 teams chosen to give presentations. Here are the 16 teams that are moving on to the next round. (Descriptions provided by the UW.)

3 Phase Energy Systems, UW - Green technology that harnesses wasted exhaust energy and feeds it back into the grid. (Pete Agtuca, Ian Courtnage, Bo Hight, and Ben Reiber)
 
AuraViz, UW - Safe and affordable 3D dental imaging. (Stephanie Barnes, David Beck, Brady Bernard, and Jeremy Horst)
 
Big Canvas, UW - We take mobile/always-connected communication to the next level, beyond texting and Twitter, by offering richer media expressed through photos and creative arts to our users. (Adam Goldblatt and Satoshi Nakajima)
 
ecowell, WSU - Will design, deploy and manage a network of litter-free, beverage dispensing kiosks that allow users to customize their drink. (Brian Boler, Reid Schilperoort, Donald Tilton, and Andy Whitaker)
 
Energizing Solutions, UW - Washington corporation with patent pending technology to facilitate efficient motor operation and reduce unplanned downtime in industrial facilities, cutting customers’ operating costs by up to 5 percent. (Brian Pepin, Marc Ramme, and Anthony Simon)
 
Green Windows, UW - We will engage in the development and licensing of “Smart Windows” technology to architectural glass manufacturers. The technology will offer windows that change color with a flip of a switch. (Greg Humphreys, Jeff Litton, and Jianlei Shi)
 
HydroSense, UW - Novel, practical, low-cost, sensing solution for tracking water usage in the home. (Jon Froehlich, Conor Haggerty, Zach Okun, Vandan Parikh, and Debbie Tran)
 
MicroDose, Seattle U - Software which enables autonomous communication and insulin dosing decisions between a Continuous Glucose Monitor and Insulin Pump. This effectively creates an artificial pancreas to be used in the treatment of diabetes. (Bob Kircher, Don Matheson, Jensen Mauseth, and Richard Mauseth)
 
Myyeyou, UW - Online virtual community to provide professionals with services for social networking and career development service. (John Jin, Amir Kabbara, Winnie Lin, and Patrick Tsao)
 
Nanocel, Seattle U, UW - Provides high performance liquid cooling solutions to the electronics thermal management market. (Todd Fishman, Dustin Miller, Mehar Pratap Singh, and Daniel Rossi)
 
Nanofacture, Seattle U, UW - Fully automated biosensor system for PCR-free immunoassay from fluid sample that enhances the sensitivity of detecting cells (or DNA). (Jae-Hyun Chung, Stephen Hawley, Kyong-Hoon Lee, Simon Lee, Bonnie Lehenbauer, and Kieseok Oh)
 
Nova Theranostics, UW - Contrast agent (patent filed) for magnetic resonance imaging (MRI) applications. (Micah Adler, Guillaume C.-Bouffard, Amanda Mathes, and Jeffrey Stevens)
 
Olive Only, SPU - Product line that uses olive oil as its foundational ingredient. (Loren Downs, Kevin McFarland, Joshua Russell, Sarah Schooley, Joel VanderHoek, and Jason Williams)
 
Shockmetrics, UW - Technology that is able to detect shock in patients before it becomes terminal. (Ryan Bergsman, Wayne Ciesielski, Deborah Kessler, Erik Roby, Anthony Rodriguez, and Kenneth Schenkman)
 
Sisalwood, UW - A sustainable alternative to hardwood for interior design and furniture. (Jason Hahn, Payan ole-MoiYoi, and Lindsey Sheets)
 
Soluxra, UW - Will revolutionize global renewable energy production with application of its ultra-low cost, next-generation organic photovoltaic (OPV) solar cell technology in residential solar panels, electricity-generating windows, and building facades. (Lawrence Chiu, Steven Hau, Alex Jen, and Angus Yip)

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Troubled MOD Systems cuts workers amid fraud allegations

MOD Systems continues to undergo tumultuous internal changes following fraud and embezzlement allegations brought against the company's top brass.

Sources tell TechFlash that as many as four workers were recently relieved of their duties at the heavily-funded Seattle company, including director of marketing Adrienne Lenhart and director of operations Douglas Lower. That follows our report earlier this month that Chief Executive Mark Phillips and Chief Operating Officer Kenneth Gordon had been placed on leave.

It was unclear whether Phillips and Gordon would ever be reinstated, and our sources didn't know the official status of the two executives. One source described it as an "indefinite leave." 

Reached on his cell phone, acting CEO Anthony Bay declined to comment. Lenhart, who had previously served as spokeswoman for the company, could not be reached.

In February, Seattle angel investor Bob Arnold sued Phillips, Bay and Gordon for breaching their fiduciary duties at the company. Filed in King County Superior Court, Arnold's suit alleged that Phillips "deliberately engaged in a massive fraud" against the company that included inappropriate travel and consulting agreements.

Lower and Lenhart are not named as defendants in the lawsuit.

Last September, the company landed one of the largest venture deals in the state when it attracted $35 million from Toshiba and NCR. MOD is the maker of a digital media kiosk technology that allows retailers to distribute music, movies, games and other entertainment products directly to consumers. 

Since the allegations were reported by TechFlash, MOD has kept a relatively low profile with few comments in the press.

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Dendreon's Prostate Vaccine Validated with Drama

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Symbian: Not Just for Smartphones Anymore

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Juniper: App Stores to Generate $25 Billion in Sales

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