My brother reminded me today that while Steve was roaming in the wilderness known as Next Computer, he visited Wolfram. He was so impressed that he decided to ship a free copy of Mathmatica with every NeXT machine sold in the academic program (which already was selling machines for half the list price). That program changed how my brother viewed math forever. He went back to school (to Harvard) and got an advanced degree in Math, and has been a teacher of Math ever since – touching the lives of untold students through the years.

That was Steve Jobs – changing the world directly and indirectly in so many ways.

The change engine that is Apple will continue operating on momentum for a while. The team that Steve build is strong and they have been taught well. We will see if they can have the impact on another industry like those that Steve has created or recreated.

Personal Computing – the Apple ][ and the Mac

Music – the iPod, iTunes, digital music sales

Telephony – the iPhone

Animated films – Pixar

Personal Computing – the iPad

We had considered Steve to be an immortal. Now we know that he was merely a giant. Those of us that follow him now must dedicate ourselves to apply what we have learned by watching him work and live.

Today we lost a giant.

Steve Jobs  1955 – 2011

I encourage all to read the pieces linked above and to listen to the podcast, but I’ll also cut to the chase.  Dediu’s conclusion is that Google’s acquisition of Motorola Mobility makes no sense.  Not as an expansion of Google’s business, not as a strategic decision to begin making telephone handsets and tablets, not even as an expensive way to buy lots of patents that deal with various aspects of mobile computing and communications.

One thing that we do know is that Google does not employ dumb people.  They must have something in mind to support their decision to spend $12.5 billion – a lot of money even if you have Google’s bank account.

So then, why might Google be buying Motorola Mobility.  I think it might be to provide an escape hatch from the money pit that is called Android.  From the beginning, Android was supposed to make money for Google by providing access to mobile search.

Google acquired a mobile OS and built a large team to develop it into what is now Android – a team that recently was quoted as being over 200 people strong.  That is an expensive team, and getting more so.  In a startling move, Nokia decided several months ago to base future phones on the mobile OS from Microsoft instead of on the free Android OS from Google.

Further, the companies that Google has convinced to use Android in phones and tablets (by offering the OS to them for free) cannot be happy.  Now, those companies appear to have a target painted on them.  They have been getting sued because Android “borrows” patented technologies.  Recent published reports have said that Microsoft gets more revenue from license fees from Android phones than it gets by selling Windows 7 phones.  Apple has obtained injunctions against HTC and Samsung prohibiting sale of products that allegedly infringe Apple IP.

So, unless mobile search is making huge amounts of money for Google (which is certainly not reflected in their recent financial results), it is reasonable to think that Google executives just might be wondering if the whole Android business might be a mess that they should have avoided and one form which they need to extract Google.  But no one would want to admit a mistake, and shutting down Android at this point would be admitting a big mistake.

But shutting down Android would be very attractive.  By creating Android, Google has antagonized Apple, Microsoft, Nokia, and any other maker of a mobile OS.  This has limited potential market in which Google can make money via ads and mobile search to those devices that run Android – giving it more costs and smaller revenues.  After all, if Google had simply worked with each handset maker regardless of the OS that company chose to use, it would be able to sell ads on 100% of mobile devices rather than the subset that runs Android.

With that background, the acquisition of Motorola Mobility takes on a whole different possible meaning.  It provides a way that Google can get out of the phone business without ever having to admit that Android was a mistake.

Watch and see if within the next year or two Google has a reorganization in which Motorola Mobility and Android are combined into a semi-autonomous mobile devices division.  This could be done for lots of sound business reasons.  Then, that mobile devices division can be spun out as an independent publicly traded company – with the marketing messages that this is good for both Google and for the new company because each will focus on their own separate businesses.

If the new company were to flourish, Google is a winner because it would own lots of the stock of the new company.  If the new company were to fail, it would simply be one more Silicon Valley tech company that had a moment of brightness and then failed.  Like Netscape, like Palm, like 3Com, … the list is essentially endless.  Google is again a winner because the failure is not a Google failure and the losses are not Google losses.

Like I said, Google has really smart people.  They generally don’t do things without thinking them through.  And this could be one of those times that they have thought things through more than most of the rest of us.

I disagree – what “patent trolls” actually do is accelerate the inventing process. They allow the true innovators – the ones that invented something new and got patents – to get immediate value for the patent rights because they pay cash to the innovators when they purchase the right to sue infringers of the patents. Innovators then can invest that cash to developing now inventions. This speeds the cycle for an inventor to get to the next invention.

The people or companies that have to allocate resources to defending against patent suits are the infringers – those that do not really innovate but rather copy the inventions of others. These are free riders – the do not invest in creating new technologies but rather quickly rush a copy of new technology to the market in hopes of grabbing sales from the actual inventor. They actually reduce the incentives to innovate because the inventor makes lower profits when she has to compete against these copiers. This is the whole reason why the field of patent law exists – to protect inventors from these copiers.

By filing lawsuits against the infringers, “patent trolls” reduce this copying by non-inventors, which means that the true innovators will sell more products and make higher profits. Again, this rewards innovators and will lead to more, not less, innovation.

We should be celebrating “patent trolls” – not vilifying them.

First – what did Apple announce?  iCloud is a system of providing information anywhere – regardless of what device we are using or where we are physically located.  It is integrated into Mac OS X Lion (available in July) and into iOS 5 (available in the fall).  One small slice of iCloud is available immediately – a piece of the iCloud offering that extends our music collections.

Up until now, a computer (Mac or PC) controlled the music collection with Apple’s iTunes software.  Music could be copied onto iDevices by syncing them with the computer.  It worked pretty well as long as we were very careful to keep one computer as the master media server and if we both synced regularly and backed up the collection regularly.

With iCloud, the need to regularly back up the collection goes away.  At last, Apple will allow us to do something that we should have been able to do all along – download again songs that we purchased in the past.  That means that we can download our purchased collection of music onto a second computer, a third computer, etc (up to ten devices) directly from Apple’s servers.  That is a nice service, and I am sure that my daughters, especially, will be happy to be able to have a copy of the family music library (or a subset of it) on their computers.

This “multiple download” service is also a way to get music onto an iDevice without connecting it to the computer acting as a media server and syncing.  Just go to the iTunes app on the iDevice, navigate to purchased music, and directly download the album or track onto the device.  I played with it last night.  It is nice, and it works as described.

Two caveats popped into my mind, however.  First – I don’t know of any way that songs can be deleted directly on an iDevice (if you do, please share in the comments section and I will update this post).  That means that an iDevice will become full over time unless it connects to a computer at some point to sync and remove some portion of the tracks.  So, the cord is not really cut, after all.

Second, if I am out and about and suddenly want to hear a track of music, I want to hear it NOW – not after it downloads.  That means streaming, and Apple did NOT include streaming in the iCloud music offering.  Amazon has it, and Google has it, but not Apple.  This is a huge hole in the iCloud and it may have me shifting my music collection over to Amazon’s locker.

The drawback of both Amazon and Google is that it can take weeks to upload an entire music collection into their cloud services, while Apple has the very slick ability to see what we own and match it to the same track that they already have on their servers.  So the only tracks that need to be uploaded are the rare tracks that Apple does not already have.  This is a great advantage for Apple over the other services, but it is only an advantage once – when deciding what service to use.

Allowing streaming rather than only downloads is an advantege of the non-Apple services every time you want to listen to a track of music.  I hope that the lack of streaming is not an obligation imposed by the music companies and that Apple corrects the hole in iCloud soon.

I am a General Partner in a venture capital investment fund. Yesterday morning, I received a telephone call from a man in Norway, saying that he had purchased stock from a law firm calling itself the name of my venture fund. He had send payment to them via wire transfer, but had not received any shares of stock. He was trying to track down the status of his purchase. He gave me the url for the web site of this supposed law firm, which included addresses in Hong Kong and in California – and the California address that they listed was the original address of my venture fund (an address that we moved out of over 8 years ago).

Since this organization impersonating my venture fund was claiming to be a law firm, I first called the California Bar Association. They said that they only had jurisdiction over real lawyers, not fake lawyers. They suggested that I contact the local district attorney. I called the local district attorney, who told me that stock fraud was under the jurisdiction of the SEC and referred me to SEC Enforcement.

This was getting frustrating!

I sent SEC Enforcement a detailed memo with all of the facts that I had in the middle of the day yesterday. By the time I arrived in the office this morning, I had a voicemail from an SEC Enforcement Officer. I just got off the phone with him. He had already had a long conversation with the defrauded investor in Norway, had already tracked the wire transfer from Norway to its destination in Asia, and had already talked with the appropriate regulators in that jurisdiction to track the recipients. All of this had been done, and fewer than 24 hours had elapsed since my initial contact to the SEC!

Unfortunately, this type of financial scam is all too common, The SEC even has a link on the front page of their web site to known scams, and the entity impersonating my fund will be added to that page with a notation that they are not in any way affiliated with my fund.

The SEC Enforcement officer suggested that I contact the Registrar of the fake web site and demand that it be taken down, and said that if they had any questions about whether or not that site was fraudulent then I should have them call him. He also said that if any other people contact us, we should refer them to the SEC, giving me a special email address and telephone number to give them.

I was very impressed with the speed and professionalism that SEC Enforcement took in dealing with this situation. I hate that anyone needs to deal with things like this, but thank goodness that there are public servants who know about this type of scam and react to quickly and so well. In my opinion, this is our tax dollars working well.

Dr. Baran invented the concept of packetizing digital information for transport through a network, with the packets being reassembled at their destination. This concept is one of the fundamental technologies of the Internet.

Dr. Baran was a giant.  All of us who use the Internet today stand on his shoulders.

That is why I am so bothered by the direction that the company seems to have recently taken, and that track seems to be personally directed by the CEO, Eric Schmidt.

I’d provide an item-by-item list of disturbing recent statements by Google executives and actions by the company, but Silicon Alley Insider has already done so much more eloquently than I would be able to. I highly recommend their article, reprinted below in its entirety.  See the article at the Silicon Alley Insider site here.

I know–aren’t we great!? I have to pinch myself sometimes.

Google’s CEO went to Abu Dhabi this week and preached. He sermonized about Google’s exceptional virtue — its indifference to profit and supreme trustworthiness. His speech should have been shocking. Except that delusional self-righteousness is now routine at Google.

Eric Schmidt‘s comments at the Abu Dhabi “media summit” certainly sound especially cocky even considering the Google CEO’s past haughty pronouncements. Schmidt,Fortune reports, implied Google is more trustworthy than any government on the planet after he was was asked asked about the company’s worrisome stash of private data on its users, Schmidt :

“All this information that you have about us… Does that scare everyone in this room?” The questioner asked… “Would you prefer someone else?” Schmidt shot back… “Is there a government that you would prefer to be in charge of this?”

Schmidt also said Google has been known to curb its own creepy impulses:

“There are many, many things that Google could do, that we chose not to do… One day we had a conversation where we figured we could just try to predict the stock market. And then we decided it was illegal. So we stopped doing that.”

Fortune wonders if Schmidt’s comments are a sign of “a dangerous culture of self-righteousness.” They are.

But the CEO’s remarks are just the latest in a series of prominent self-righteous statements from Googlers. There have been plenty of similar cases just in the past couple of months alone. It’s worth cataloging them, given Google’s deep relationship with its millions of users, and given that the Mountain View internet company doesn’t seem to be getting any more humble.

Delusion 1: It’s not about the money

In Abu Dhabi, speaking to a diverse international audience, Schmidt said Google “sees itself really differently from other companies” because “we see ourselves as a company with a mission about information and not a mission about revenue or profits.”

Here’s what Schmidt said to a different crowd, of Wall Street analysts, in an October conference call: “We love cash.” That’s the full sentence he uttered. He had nothing to say on the call about Google’s noble information “mission.

Come on, St. Eric: Google did not make $15 billion in profits over the past year on accident. The company exists to make money for its investors and executives. Period. And that’s not something you’d have to apologize for if you’d drop the old saw about how Google is too virtuous to chase money and how it really just wants to make us all smarter.

Delusion 2: Google’s wealth means Google “gets it”

Above is an extraordinary clip of Matt Cutts, a search engineer and defacto spokesman for Google. Asked on the podcast This Week in Google to address the disturbing privacy lapses in Google Buzz, whichexposed one user’s location to her abusive ex, and to address Schmidt’s ham-fisted response, Cutts says he believes in Schmidt’s handling of Buzz and “a lot of stuff” because Google’s stock price is no longer “very very low” and thus the CEO “absolutely does get it.”

It’s a truly bizarre moment, in which Cutts defends some horrendous management decisions based on Wall Street trades. If the last two years have taught this country anything, it’s that the connection between stock performance and executive competence is pitifully weak.

Yet Cutts is hardly alone in revering Google’s financials. Schmidt looked at Google’s unexpectedly strong third-quarter profits and said they made him “very optimistic now about the future,” gave him “the confidence to be optimistic about our future” and made him “very, very happy with Q3.” After a blowout fourth quarter Schmidt said “we are back in business full blast.”

But at Google financial gains have not been correlated with innovation. The company still gleans nearly all its profits from its core, longstanding contextual advertising business; its many many side projects and acquisitions add little to the bottom line. So Google shouldn’t get too excited to see its stock is up 77 percent the past year versus 59 percent for the S&P 500, or to be accelerating its hiring while national unemployment is stuck at 10 percent.

Profits do not mean you’re connecting with users’ most pressing needs. If that were the case then Microsoft, flush with revenue from its old-line Office and Windows businesses to this day, would have clobbered Google in Web search years ago.

Delusion 3: Google must sacrifice user privacy to grow

Google wanted a big debut for Google Buzz, its attempt to copy the likes of Twitter and FriendFeed. So it bypassed an established “beta” testing system and launched Buzz with no external trials. It also built Buzz into GMail to get more users. This ended up screwing users over on privacy; Buzz was automatically sharing their lists of most-emailed friends with the world.

And yet Google’s contrition has been limited. The company response boils down to, “well that’s unfortunate but it’s also the way the world works now.”

Original Google Buzz product manager Jyri Engstrom repeated this view in the above This Week in Googleclip, in which he states it was “brave” of Google to risk users’ trust for the benefit of Buzz, since it needs that trust so badly. See the clip above. He added:

What we’re going to have to come to terms with is this stuff happening more. I honestly don’t think it’s a bad thing for people to be exposed to the issues this way.

So terrible privacy violations like sharing your location and work address with an abusive ex-husband and other unauthorized parties are the necessary costs of progress and not “a bad thing,” according to one of the key engineers behind Google Buzz. In fact, they are learning experiences.

Engstrom said this, by the way, on the same podcast where the abusive ex-husband was discussed, so it’s not like he didn’t grasp the full implications of what had happened.

But he was hardly alone in framing privacy abuse as inevitable and necessary. In a later podcast, Cutts said that while Buzz perhaps needed more testing, rapid deployment allowed Google to get rapid feedback on Buzz and “iterate” quickly and “try out a lot of different things” (see latter half of clip above).

Translation: It’s very effective for Google to use the actual relationships of actual humans to test unproven social networking code. And conveniently, Google doesn’t have to endure the sometimes painful cost of this testing!

Of course, there’s a more ethical alternative: Use consenting beta testers like the “Trusted Testers” Google has already organized to test innovative social products, rather than rushing into something to get big fast.

Delusion 4: Users are hungry for Google synergy

When Google launched Buzz, it thought people would by dying to see the product pop up all over the place: in Google GMail, Google Maps even Google search. Google VP Vic Gundotra openly talked about using those properties to promote Buzz in an interview with Silicon Valley blogger and startup advisor Louis Gray. See the short clip above.

But this sort of integration proved to be Buzz’s biggest weakness: The combination of Buzz and Gmail cluttered up people’s inboxes and, quite controversially, made it possible for Buzz to compromise users’ privacy by combing their email logs. Google should have known such deep integration would be a bad idea because, as we noted the day Buzz launched, the company experienced a very similar controversy when it hooked Google Reader up to GMail two years ago.

It seemed unfair and sleazy, not convenient, when Microsoft started using its operating system to promote its online services, streaming media technologies and Web browser. Google isn’t quite as suspect as Microsoft but, in the eyes of the public, it’s increasingly getting close. Especially when it comes to search. And the public will be increasingly hostile to Google product bundles that are more about promotion than functionality.

Delusion 5: Google is a worker’s utopia

Google brags about finding, and keeping, “the world’s best engineers;” it even avoids offering jobs to some top coders to avoid an over-concentration of awesome. It takes pride in its notoriously lengthy and rigorousinterview process, and in coddling workers once they clear it. The company certainly gets tons of free press for the free food and massages.

But the system seems increasingly broken.

Management has flip-flopped on the perks for example; Google honchos originally said posh benefits “save employees considerable time and improve their health and productivity… Expect us to add benefits rather than pare them down.” Also, “these things [benefits] cost nothing.” But come the next recession, Google was cutting way back and battling what executives described as presumptuous worker entitlement. “The culture was misinterpreted,” Sergey Brin told a reporter. “That grew up into everybody’s expectation… We decided to… significantly cut down all the snacks.”

The hiring system, it turns out, was nearly rejecting Google’s best employees and riddled with bizarre or terrible questions. And as for retention, some of Google’s most ambitious employees saw their work buried; some complain until they quit.

Delusion 6: The outraged users are confused

Whenever Google’s actions spark criticism, the first response of the self-regarding Google priesthood seems to be to insist the critics are simply bewildered at the company’s complicated brilliance.

For example, in December Schmidt made a rather chilling statement on CNBC about secrets (which we were the first to highlight): “If you have something that you don’t want anyone to know, maybe you shouldn’t be doing it in the first place.” The quote set off a firestorm of controversy.

Google rather absurdly argued that Schmidt had been misunderstood and taken out of context; in astatement circulated at the time its flacks claimed Schmidt was “talking about the US Patriot Act.” Sure he was — after he gave his little lecture about the villainy behind secrets. There’s plenty of context in the video clip we ran, reproduced above.

Schmidt also absurdly claimed to be misunderstood over Google Buzz. Speaking at the Mobile World Congress in Barcelona a couple of weeks ago, Schmidt went so far as to falsely deny any privacy breach occurred with Buzz, saying in effect that users were hysterical:

“People thought that somehow we were publishing their email addresses and private information, which was not true [it was]… It was our fault that we did not communicate that fact very well, but the important thing is that no really bad stuff happens in the sense that nobody’s personal information was disclosed [it was].”

Schmidt said this after a civil liberties group had already issued a warning about Buzz’s “serious problems” with “private information” and after Google’s own Todd Jackson had said Google was “very very sorry” for getting millions of users “rightfully upset.”

Schmidt was right that there’s a lot of confusion around Google. Unfortunately for him, much of that confusion seems to originate in the company itself. Hopefully the Todd Jacksons of the company will have a chance to educate their peers on the realities of life outside the Googleplex. Eric Schmidt included.

(Matt Cutts picture by Andy Beal; Jyri Engström picture by Esther Dyson; Gina Trapani picture by Jared Goralnick)

The process got me thinking about how much less I know about every player in baseball today then I did when I was a kid.  Back then, I was aware of the daily fluctuations in batting average of every player and ERA of every pitcher for the teams I followed the most closely, and knew within a few points those numbers for everyone in the major leagues.  This was when the information sources were the daily game on the radio, the daily paper, and The Baseball Weekly.

So why is it that now, with the internet putting every possible statistic and news story at my fingertips, do I have less access to immediate hard data?

One possible answer, and one that I have to face directly (if a bit sorrowfully), is that my brain is older.  Perhaps I simply cannot keep information in my head now even though doing so in the past was effortless.  Possible, but let’s just act as we of the baby boomer generation typically do and simply ignore the passage of years.

Another possible answer, and one that I think has ramifications far beyond my love of the national pastime, is that I now know that I can get reams of information on every player at any time.  If I can pull up the exact percentage that any given player is able to perform in any given situation, why go to the trouble of pouring over the box scores every morning?

Looking back, I think I stopped memorizing the daily box scores when The USA Today began printing their expanded box scores.  It was not because the expanded box scores were too complex to memorize or that they were not interesting.  It was that I started taking those pages from the paper every morning and carrying them with me.  They were so easy to pull out of my pocket at any time that I never memorized the information any more.  Later, the trend continued when box scores and extended line scores began appearing on the internet and I stopped carrying the pages from The USA Today in my pocket – and later stopped subscribing to that paper at all.

So I wonder – is there a 15-year-old kid out there pouring over the daily online stats and memorizing the games now the way that I did 35 years ago?  Or is today’s generation focused on a higher level, assuming (as I do) that when facts are easily accessible then the brain is better utilized drawing conclusions than memorizing and ordering facts?

In any event, we find ourselves just weeks away from opening day.  The sun is shining, everyone’s record is a pristine 0-0.  Everyone has a legitimate shot at winning it all.

Ain’t life grand?

The budget for NASA shows some shocking decisions.  The overall plan that NASA had been following, to retire the Space Shuttle and develop the next-generation Constellation spacecraft, comprised of the Ares I and Ares V launchers and the Orion crew capsule, is being tossed into the dustbin.

Yes, the Space Shuttle will still be retired.  There are only five flights left on the schedule – including a launch of Endeavour coming up this Sunday, February 7.  But Constellation is dead – and something new and better is supposed to be invented instead.

The new plan is to find and use private sector creativity.  Brilliant!   And it is also exactly what Red Planet Capital was created to do.

Great coverage over at SpaceRef.com and also at NASAwatch.com.  The budget overview is available here, and the details are here.  You can also get a copy of Administrator Charlie Bolden’s statement on the budget here.