Today Intel agreed to pay rival chipmaker AMD $1.25 billion to settle a raft of ongoing litigation going back decades. AMD accused Intel of anti-competitive practices, which sparked an antitrust investigation. By settling now with AMD, Intel could avoids paying out billions more down the line and being branded a monopolist by the government for abusing its 80 percent PC-chip market share.

The size of the settlement is as close to an admission of guilt we’ll ever hear from Intel. It still maintains its innocence, as any prudent corporation would, but you don’t pay out $1.25 billion just to avoid the hassle of a trial. And while $1.25 billion is an enormous sum which will help shore up AMD’s balance sheet, it amounts to only 10 percent of Intel’s $12.9 billion in cash and short term investments.

Just to put the size of the settlement in context, last year Intel’s revenues were $38 billion. Last quarter alone, it was making roughly $104 million a day. At that rate, Intel brings in $1.25 billion every 12 days. It can absorb the settlement pretty easily.

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• Intel and Nokia have formed a long-term strategic partnership to create an open standard for a new mobile computing platform built upon Linux-based operating systems.
• Intel will acquire a Nokia HSPA/3G modem IP license for use in future products -- will complement Intel's Wi-Fi and WiMax offerings.

The acquisition is expected to close this summer, subject to certain regulatory approvals and other conditions specified in the definitive agreement, and will result in Wind River to become a full subsidiary of Intel under its Software and Services Group umbrella. Wind River has more than 1,600 employees and operations in more than 15 countries, and last reported annual revenues of $359.7 million.

Full release can be found here.

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That’s one hell of a fine, considering the previous record for similar abuses in the EU was ‘only’ €497 million (Microsoft, back in 2004).

The European Commission has ordered Intel to stop the exclusion practices immediately, and said it would closely and actively monitor Intel’s compliance with its decision. E.U. regulators first began investigating Intel in 2001, after AMD filed a complaint in Brussels the year before.

The commission estimates the world market in the specific chip set in question (x86 CPUs) to be worth about €22 billion a year, with Europe accounting for approximately 30% of that (€6.6 billion). Intel currently maintains a share of about 80 percent of the European market.

Intel has not commented yet, but the general expectation is that the company will appeal both the fine and orders to change its business practices to the European Court of First Instance.

Update: Paul Otellini, Intel Corporation president and CEO just issued the following statement:

“Intel takes strong exception to this decision. We believe the decision is wrong and ignores the reality of a highly competitive microprocessor marketplace – characterized by constant innovation, improved product performance and lower prices. There has been absolutely zero harm to consumers. Intel will appeal.”

“We do not believe our practices violated European law. The natural result of a competitive market with only two major suppliers is that when one company wins sales, the other does not. The Directorate General for Competition of the Commission ignored or refused to obtain significant evidence that contradicts the assertions in this decision. We believe this evidence shows that when companies perform well the market rewards them, when they don’t perform the market acts accordingly.”

“Intel never sells products below cost. We have however, consistently invested in innovation, in manufacturing and in developing leadership technology. The result is that we can discount our products to compete in a highly competitive marketplace, passing along to consumers everywhere the efficiencies of being the world’s leading volume manufacturer of microprocessors.”

“Despite our strongly held views, as we go through the appeals process we plan to work with the Commission to ensure we’re in compliance with their decision. Finally, there should be no doubt whatsoever that Intel will continue to invest in the products and technologies that provide Europe and the rest of the world the industry’s best performing processors at lower prices.”

(Image via BusinessWeek)

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In fact, the whole Netbook market may be making them nervous. Despite the fact that they power most of these devices with their new Atom chip that handles some PC chores well and uses a lot less power (so batteries are smaller and last longer). Intel sees Netbooks as devices for people who can’t afford normal laptops, or as second devices. But it’s clear that a lot of people are buying them instead of normal dual core machines, despite their very serious limitations.

That means that for the most part, every Netbook sold is one less Dual Core that Intel can sell at a higher price and higher margin. Which explains exactly why the company has been publicly criticizing the performance of the machines. “If you’ve ever used a Netbook and used a 10-inch screen size–it’s fine for an hour. It’s not something you’re going to use day in and day out,” said Intel VP Stu Pann at an event last year.

Intel also wants to keep Netbooks at 10 inches or less. Some PC companies we’ve spoken with say that Intel doesn’t want Atom chips in devices bigger than 10 inches, and puts incredible pressure on them to keep Netbooks at 10 inches or less. Dell’s Inspiron uses an Atom chip anyway, but Samsung is using Via’s competitive (and less expensive) chip, the Nano.

We asked Intel if they forbid manufacturers to build Netbooks with larger than 10 inch screens, which is what those manufacturers are telling us (Dell notwithstanding). Their answer: “Intel defines a netbook as a 10″ or smaller screen size. We recommend that OEMs and netbook manufacturers use that guideline as well in order to get the best user experience.”

That’s a nice statement but it’s complete rubbish. There is no performance loss with a 12 inch screen v. a smaller screen (other than power usage). A 12 inch Netbook is just as fast or as slow as a 10 inch one. The only difference is that the user is even less likely to buy a low end laptop with a dual core.

Netbooks are clearly here to stay, and the new models with larger screens and larger keyboards solve two of the three problems I have with them (the last issue is Vista and XP, which runs poorly on these devices, but people are fixing that problem, too).

We’ll soon see 13 inch and larger Netbooks, despite the pressure Intel is putting on manufacturers to keep them at 10 inches. Intel may not agree to have their chips in these devices, but Via, with their excellent Nano competitor, seems more than willing to fill the void.

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Lots of people think Netbooks are the next big volume market because they allow people who previously couldn’t afford computers to own one. People got so bullish on the devices that sales projections reached 50 million units by 2012.

I’ve had a chance to test many of the units, though, and I can say that the promise is much bigger than the payoff. Perhaps that’s why Intel is rethinking whether the devices are as great as everyone’s expectations.

A typical Netbook has a 7 inch screen, an Intel Atom or Via Nano processor, a solid state (flash) hard drive and a keyboard that’s 80-85% standard size. Most have Wifi. Some have other bells and whistles like bluetooth, a camera, etc.

I find Netbooks unusable for three reasons: they’re underpowered as PCs, the screen is too small for web surfing, and the keyboard is so small that effective typing is impossible.

The basic problem as I see it: Netbooks are designed to appeal to two very different markets – the price sensitive and the size sensitive. The two are really mutually exclusive.

Too Little Horsepower

Netbooks use Intel Celeron, Intel Atom, or Via Nano CPUs. All are x86 compatible, and they have great power usage. At best the devices have 1 GB of memory, and some make do with as little as 256 MB.

Most of these machines are running Windows XP or Vista. A few have some flavor of Linux. Combining that UI, even the lower end XP and Linux, with normal computing is a heavy chore for these machines. If you have an email application open and a couple of tabs in a browser, there’s a lot of slow down. One Vista machine I’ve been testing tends to crash after a few minutes of use.

This is not the computing experience that most people are familiar with. The Atom just can’t compare to a dual-core laptop when it comes to performance Anyone with an alternative will quickly be unhappy at how sluggish these machines are.

Then There’s The Screen

These machines have screens ranging from 7 inches on up. The worst thing about the screens is vertical resolution, which is generally 600 pixels. Even if you aren’t using a lot of toolbars and plugins on the browser that take up vertical space, they annoyance factor is high. This is, at best, how much of a web page you’ll see on the screen:

You are constantly scrolling down on these devices. You have to scroll down just to see the title of the first article on the NYTimes, for example. And unlike the iPhone, you can’t just swipe your finger. You have to use the keyboard or trackpad to scroll down, and it means taking your eyes off the screen. It’s annoying and, again, if you have a different device, you are going to stop using your Netbook.

Remember that the iPhone has 480 vertical resolution, and you can resize text to fit a lot of it on the screen. The image above shows 8 lines of text in the post (net of title, etc.). The iPhone shows 22 lines of text.

In other words, the iPhone or iPod Touch, with a tiny 3.5 inch screen, has a vastly better browsing experience than any Netbook (it’s faster too).

The Keyboard

Then there’s the keyboard. It’s tiny – most of them are just 80% of regular size. Any normal adult can’t type fast on it without constantly hitting the wrong keys because there is no space between them. It isn’t much better than a Blackberry-type mobile keyboard when it comes to speed and accuracy of input.

Convergence Of Mobile And Laptop

There is a big fat hole in the market between mobile devices like the iPhone and regular laptops. But smaller, underpowered laptops aren’t the answer for the mass market. Most of the Netbooks aren’t much cheaper than very low end laptops (and those laptops have normal keyboard and much bigger screens).

The problem with Netbooks is they are trying to address two markets at once: emerging markets where price is very important, and developed markets where people want a second computer. The emerging markets don’t care about size, they just want it at a low cost – so offer them something that’s bigger and works better at the same price (remember, bigger = cheaper for most computer parts except the screen). Developed markets don’t care about price as much as performance, and Netbooks cut too many corners. Perhaps that’s why Netbook screens are starting to inch up to 10 and 11 inches. Which doesn’t really make them much different from normal laptops (and the prices are about the same).

So what’s the answer? Well, we have our own ideas. When you ditch the operating system and all it’s weight and focus on a device that runs a browser only (a true netbook), you can make do with mobile phone level hardware. Give people a big screen to really experience the Internet. Make it a touch screen or add a normal keyboard. And keep it really inexpensive. That’s a device people will want.

The sub notebooks can get bigger and more useful without sacrificing cost, which is great for emerging markets and students. Tiny notebooks that perform well will be higher cost, and there’s a market for those, too.

Update: There has been a fair amount of criticism of this post. Instead of doing a follow up, I’m copying a comment I left at one blog post that says I didn’t research properly:

I should have been clearer in my post for those people, like you, who really know the space. I’ve tested a ton of these, and I have definitely done my research.. They litter my office. A lot of them are older 7 inch models. I have a Nano device that I guess hasn’t hit the market yet, running vista. not so well. I’ve got one of the Dells. I’ve tested 10 inch, 8.9 inch and 7 inch machines on every OS they offer (XP, Vista, Linux). I’ve even scraped machines and put my own stripped down version of linux with a browser…

and that’s when things start humming. The screen still sucks, and the keyboard still sucks, but the machine works well. as in as well as a desktop, at browsing the internet.

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Me neither. But tell that to Intel’s trademark lawyers, who filed a lawsuit against Intellife on September 18 for trying “to cause confusion that Intel is the source or sponsor of Intellife’s services” and “dilution of the INTEL trademark.” There are serious trademark lawsuits and there are frivolous ones. This appears to be the latter. We are not talking about a situation like with Scrabulous borrowing whole hog from Scrabble. This is about two syllables that overlap. The complaint, which we’ve obtained, is embedded below.

We’ve also obtained the communications between Zhang and Intel’s outside law firm leading up to this complaint. It shows how a seemingly boilerplate inquiry can lead to a full-blown lawsuit, and sheds some light onto the bullying tactics large companies such as Intel routinely employ in the name of protecting their trademarks and other intellectual property. After all, Intellife is a two man-shop that can hardly afford to take on a corporate giant like Intel, which has about $40 billion in annual revenues. But so far, Intellife refuses to budge. It’s name, by the way, stands for “Intelligent International Lifestyle”

About a year before the compliant was filed, in August, 2007, Intellife’s president and owner Faith Zhang received a seemingly routine letter from one of Intel’s outside lawyers, Raffi Zerounian, who wanted to learn more about what products or services the small firm markets under the Intellife name to determine whether Intel’s trademark was being damaged.

The very next day, Zhang promptly replied with his own letter stating:

Intellife Travel, Inc. is a travel agency specializing in airline tickets between the US and Greater China region. We plan to continue to focus on providing the best possible travel booking experience to our customers. To the best of our knowledge, Intel does not have a travel agency business. In fact, prior to receiving your letter, neither we nor any of our customers had correlated our name to Intel Corporation.

I hope that this letter clarifies our company’s activities and plans. You may visit our website at http://www.intellifetravel.com to get more information. Let me emphasize that we absolutely have no intention of, nor can we benefit from, leveraging the Intel brand name. Can you notify us by letter that this matter has been resolved?

Before the end of the month, he received another letter from Intel’s lawyer (the second embedded document below). This one was not so friendly. The lawyer suggested that Zhang change the name of his business to avoid legal action, informing him:

Intel’s use of the INTEL brand spans the fields of computers, communications, networking, and the Internet. Additionally, the INTEL brand is used on such varied products and services as consumer electronics, publications, and financial services, as well as secondary promotional items including clothing, luggage, writing utensils, stationary, plush toys, golf balls, and numerous other novelty items.

Apparently, Intel’s brand covers everything from luggage to golf balls. Who knew? This time Zhang decided to get his own lawyer, who sent a strongly worded defense of Intellife’s right to keep its name (the third embedded document below). Among his arguments were that the two companies don’t offer similar products or services,, their respective logos look nothing alike, there is no evidence any consumer was actually confused, and that marks need to be “viewed in their entirety, and not ‘dissected’ into components.”

That seemed to do the trick. Until a little more than a year later, when Intel decided to file its suit. What took it so long? Who knows. Maybe it had a big backlog of other trademark suits to get through first.

The Complaint:

Intel’s (Earlier) Second Lawyer Letter to Intellife:

Intellife’s Lawyer Letter Back:

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The two companies envision a library of small widgets that will be included alongside standard television content. For example, a user could use an eBay widget to monitor the current prices of their active auctions, or a sports widget to keep track of current scores.

The TV Widgets Channel continues to blur the line between a television and a computer with a big screen – it probably won’t be long before the distinction no longer exists. And while I could see some of the widgets coming in handy, they might also turn off a lot of users. For many people, television is an escape from the constant alerts and messages of today’s society. Interactive TV is a neat idea, but sometimes people just want to kick up their feet and relax.

If the new announcement does pique your interest, you probably won’t be seeing it in action any time soon. The widget platform makes use of the Intel Architecture, which isn’t integrated with current TVs. You’ll need to wait until you can get your hands on a device with the Media Processor CE 3100, which was also announced today. The system-on-chip solution will enable 3D graphics and a “fusion of Internet and TV experiences” on cable boxes and TV’s, along with other consumer devices.

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The product is a distributed computing platform for third party research and application building. My live call notes are below.

Notes, in chronological order:

…waiting for call to begin

Prith Banerjee from HP began the call and introduced Andrew Chien and Prabhakar Raghavan. Summarizing the key news: HP, Intel and Yahoo are partnering with governments and academic institutions to create an open source cloud computing test bed with six distributed centers. Global, distributed, Internet scale platform. The main goal is to remove financial and logistical barriers for people to develop cloud computing application. Partners include the University of Illinois at Urbana-Champaign, and the Karlsruhe Institute of Technology (KIT) in Germany.

HP believes we are entering an era of “everything as a service.” Businesses and users will use the services, which will anticipate your needs based on location, etc. This shift towards everything as a service will require a new approach. HP will conduct research in two areas: intelligent infrastructure and cloud services. They say they’ll experiment with radically new data center structures.

Andrew Chien from Intel: cloud computing is a big challenge. important technology issues around hardware stack to drive performance, energy usage, etc. This isn’t a “test tube” study, it’s a large scale distributed global platform. “Intel has a long history of open collaboration” he says.

Prabhakar Raghavan from Yahoo: Says Yahoo is pleased to be a cofounder of the project. Want to take Internet research “to the next level.” Says the next generation of the web demands collaborative research. Discussing M45 data center they launched with Carnegie Mellon and other projects where they experimented with cloud computing. Says this announcement is in the spirit of the earlier partnerships. Building and contributing to an “intellectual commons.”

Questions:

- how are each company contributing?

Each company is providing people and resources, and each is creating one of the six test beds. Research can be conducted across the stack. Yahoo has contributed open source software, from the OS to Hadoop. Chien reiterates support for open source software. Says some of the pieces of the data centers are up and running now.

- Size of investment by each company?

not disclosing financial terms. each facility will have 1,000- 4,000 processor cores.

- web needs a new architecture…please expand?

They want people to take the cloud for granted, so people can create applications at any scale.

- have they measured how much collective computing power? Why not part of IBM/Google research announced last year?

we’re complimentary to IBM/Google, and also different. they are going to allow people to run low levels of customized software. IBM/Google is focused on application level right now. In terms of scale, they say not to focus on total computational capability, but to focus on scalability.

- idea of timeline? what will finished products look like?

some of this is underway and being used. M45 datacenter has been in operation since 2007, this takes it to a broader level. they are looking to see publication of research by all parties, contribution to an intellectual commons.

- have they received government R&D funds?

says they are partnering with the national science foundation and various academic organization, never really answered the question.

- can others join this group? IP ownership?

Chien says they are taking a leadership step. open to more people contributing. On IP ownership, they are making clear statements about what is open source, commitment to openness.

Note: I was not allowed to ask a question for some reason. Things I would have asked:

1. How do third parties open their own facilities/data centers? What if Stanford wants to open a facility?

2. Pricing: How will resources be allocated to people building on the platform?

3. Where to people go for information on APIs and other tools needed to access the platform?

4. Yahoo kept referring to M45 as a version of this already deployed. Is that their contribution or are they building out a new facility.

Overall this is super squishy, and appears to be more of a hype release than anything. More details are needed. A lot more.

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It’s being described as “a globally distributed, Internet-scale testing environment designed to encourage research on the software, data center management and hardware issues associated with cloud computing at a larger scale than ever before.” Other partners include the Infocomm Development Authority of Singapore (IDA) (which is distinct from the MDA, I believe, which is unfortunate), the University of Illinois at Urbana-Champaign, and the Karlsruhe Institute of Technology (KIT) in Germany:

The test bed will initially consist of six “centers of excellence” at IDA facilities, the University of Illinois at Urbana-Champaign, the Steinbuch Centre for Computing of the Karlsruhe Institute of Technology, HP Labs, Intel Research and Yahoo!. Each location will host a cloud computing infrastructure, largely based on HP hardware and Intel processors, and will have 1,000 to 4,000 processor cores capable of supporting the data-intensive research associated with cloud computing. The test bed locations are expected to be fully operational and made accessible to researchers worldwide through a selection process later this year.

The test bed will leverage Yahoo!’s technical leadership in open source projects by running Apache Hadoop — an open source, distributed computing project of the Apache Software Foundation — and other open source, distributed computing software such as Pig, the parallel programming language developed by Yahoo! Research.

“The HP, Intel and Yahoo! Cloud Computing Test Bed furthers our commitment to the global, collaborative research community that is advancing the new sciences of the Internet,” said Prabhakar Raghavan, head of Yahoo! Research. “With this test bed, not only can researchers test applications at Internet scale, they will also have access to the underlying computing systems to advance understanding of how systems software and hardware function in a cloud environment.”

Researchers at HP Labs, the central research arm of HP, will use the test bed to conduct advanced research in the areas of intelligent infrastructure and dynamic cloud services. HP Labs recently sharpened its focus to help HP and its customers capitalize on the industry’s shift toward cloud computing, a driving force behind HP’s vision of Everything as a Service. With Everything as a Service, devices and services will interact seamlessly through the cloud, and businesses and individuals will use services that anticipate their needs based on location, preferences, calendar and communities.

More on Yahoo, HP and Intel’s websites. This gets Yahoo in the game that Microsoft, Amazon and Google have been playing for some time.

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We just got word that HP, Intel, and Yahoo will be announcing a joint research initiative tomorrow morning. We don’t have any details at the moment, but we’re guessing it will probably have to do with large-scale processing. Leave your own speculation in the comments – the first person with the right guess will get a TechCrunch T-shirt.

Employees from HP, Intel and Yahoo are not eligible to participate.

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Who do you trust more, Google or Toyota? The answer might depend on where you live. In its annual corporate reputation survey of 60,000 people worldwide, the Reputation Institute finds that Google scores highest in the U.S., but is No. 2 worldwide after Toyota. On the global list, Ikea is No. 3, Johnson & Johnson is No. 5, and Walt Disney is No. 12. Apple doesn’t even make it into the top 25 (see below).

Using the same data, Forbes breaks out the top 75 companies in the U.S. In the U.S. alone, Apple is No. 17, HP is No. 18, Intel is No. 19, Dell is No. 25, IBM is No. 35 and Microsoft comes in at No. 43. Bringing up the rear is Motorola at No. 50, Cisco at No. 55, CBS at No. 62, and American Express at No. 75. (See partial list below).

These rankings are based on an opinion poll, but they just don’t seem right to me. How can Dell be No. 25, with all of its customer service issues last year? And why is American Express, which regularly ranks as one of the most admired companies in the world and one of the top brands, dead last?

It is instructive to compare some of these rankings to the top 100 brands, as measured by an estimate of brand value. (See below). Google, again is No.1. Microsoft is No. 3, IBM is No. 6, Apple is No. 7, Toyota is No. 12, HP is No. 16, American Express is No. 20, Intel is No. 27, and Dell is No. 41. About the only company the two rankings agree on is HP. These brand rankings feel like a better measure of reputation to me than the Reputation Institute’s survey.

What do you think? Take our own poll. Vote for the companies you trust or admire the most. Multiple answers are allowed.

Editor’s note: I put in BMW twice by mistake in our poll, so please only vote once for BMW if you vote for it at all. I’m keeping the existing poll up rather than put up a new one and throwing away the votes that have already been cast.

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The more I learn about the $3.2 billion deal announced earlier this week to salvage Clearwire’s and Sprint’s WiMax businesses by merging them together, the more I am convinced that someone got snookered. And that someone was Google CEO Eric Schmidt. Maybe he just can’t say “No” to visionary billionaires like Clearwire chairman Craig McCaw. Or maybe McCaw got Intel CEO Paul Otellini to lean on his buddy Schmidt. Otellini himself pledged $1 billion of Intel’s money towards the venture because he has made a big bet at Intel on selling WiMax chips. He also happens to sit on Google’s board. I don’t know if any of the above happened or not.

What I do know is that Google came reluctantly to the table and that for a long time the deal was being blocked internally at Google for some very good reasons. The main reason is that WiMax as Clearwire is deploying it is not a very good replacement for mobile broadband services. It is, above all, a fixed wireless solution. What it replaces is wired broadband services to homes and offices delivered through cable and DSL. That is how Clearwire is selling it today.

But to get Google (and Comcast and Time Warner Cable) to put up the cash, Clearwire had to promise it would build out a richer mobile broadband service as well. This is why Google invested—to bring the broadband Internet to mobile devices (some of them hopefully running the Android operating system). And it is why Comcast and Time Warner Cable invested. They don’t need a replacement for cable broadband to people’s homes. They need a wireless offering to fend off AT&T’s and Verizon’s incursion into their television market. (It’s all about who has the better bundle). Everyone is enthralled with this idea of WiMax as a disruptive wireless mobile broadband alternative. Even Neal Cavuto couldn’t stop waxing about the wonderful wireless future that this deal represents.

I wish that it were true. But here are a (more) few problems:

1. Clearwire and Sprint have not yet proven that WiMax is a viable business even for fixed wireless. Clearwire lost $727 million last year, nearly five times more than its total revenues. And it is projected to lose increasingly more over the next couple years during the expensive growth phase of its business. Moreover, the uptake of the service in the 50 or so cities where it is available has not been so great. That is because, unless you live in a rural area with no other broadband alternative, it is trying to solve a problem that doesn’t exist. At this point, most people in the U.S. can get broadband at their home just fine through cable or DSL.

2. WiMax hasn’t proven itself elsewhere either. Even in Korea, which has had WiMax for two years and is supposed to be a broadband paradise, consumers are not clamoring for WiMax. There are only about 150,000 WiMax subscribers in Korea, well below initial expectations.

3. Before you can turn Wimax into a mobile broadband service, you need mobile WiMax equipment. Cell phones, laptops, and other devices with WiMax chips in them are a long way away. Intel is ready to sell those chips, but device makers are not going to put them in their gadgets until enough consumers want them. And most consumers are going to wait for a WiMax network to show up that they can access both where they live and when they travel. So there’s a chicken and egg problem there.

4. Clearwire doesn’t know how to act like a mobile company. It doesn’t have a mobile business plan. It has a fixed wireless business plan. In order to make WiMax truly mobile, you need to build out a network dense enough to cover subscribers as they move from one place to another. That is simply not the case today, even in the markets where Clearwire operates.

5. Sprint is conflicted. To deal with roaming and coverage gaps, Clearwire would need to use Sprint’s 3G cellular network as a backup. That would require another chip in each device, which would make them more expensive than competing devices from AT&T or Verizon. Also, it would require Sprint opening up its 3G network to Clearwire and, by extension, Google. That’s not going to happen.

6. WiMax is not a global standard. Here in the U.S., WiMax is built on 2.5 GHz spectrum. Overseas, it is built on 3.5 GHz spectrum. That makes it harder for equipment manufacturers to achieve the scale they need to make money from WiMax devices and network equipment.

7. McCaw may be a visionary, but sometimes he doesn’t see so clearly. Yes, he built what is now AT&T Wireless and sold it for $11.5 billion. But after that he also was responsible for Teledesic and XO Communications—two massive failures that cost investors billions of dollars. Clearwire was about to join those latter two before Schmidt & Co. came to the rescue.

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The deal to combine Sprint Nextel’s and Clearwire’s fledgling WiMax businesses that was rumored last March is finally expected to go through. Comcast and Intel are supposed to put in $1 billion each; Time Warner Cable, $550 million; Google, $500 million; and regional cable provider Bright House Networks, $100 million. The new company, which will be valued at $12 $14.5 billion, will be run by Clearwire and take its name.

As I said before, this is a disaster waiting to happen. Sprint and Clearwire need the deal to try to salvage the billions they’ve already sunk into their money-losing WiMax networks. But putting more cooks into the kitchen with different WiMax aspirations is not going to help. Google wants more wireless broadband alternatives for its planned mobile apps and advertising. Whereas the cable companies want a way to compete against mobile phone operators encroaching on their turf. As I wrote last March:

WiMax is a promising technology and these are early days. But even an extra $3 billion won’t be enough. Building out a nationwide WiMax network could cost as much as $8 billion to $12 billion. And there could be more technical hiccups.

I can see why Google might throw its hat into the ring here—anything to promote more broadband wireless networks. But Comcast and Time Warner Cable should stay away. The logic behind the investment seems to be that the cable companies could use the WiMax network to counter the moves by Verizon and AT&T into their turf (with TV service over phone lines). It is being suggested that the cable companies would be able to launch their own white-label mobile phone and high-speed Internet services over WiMax.

Here’s where that logic breaks down: Verizon and AT&T have a huge head start and customer lock-in when it comes to cell phone service. WiMax mobile phones would take decades to chip away at that even if they do offer faster data speeds. Today, Clearwire is only offering at-home phone service, not mobile. As for broadband Internet and home phone services, Comcast and Time Warner already compete effectively against the phone companies today with their alternative services over cable.

I hope that I’m wrong and that this new consortium will bring cheap WiMax to us all. Because the technology is very promising. Unfortunately, the business is not.

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Intel is releasing into public beta today a new “experimental” product from its labs called Mash Maker. It’s a browser plugin – most functional with Firefox but also available for Internet Explorer – that lets end user create their own mashups on top of existing websites.

The idea of a mashup, while very central to the movement we call Web 2.0, has always struck me as an overly techie concept. And Intel’s Mash Maker doesn’t do much to change that, even though it tries to bring mashups more mainstream.

What’s a mashup? Simply a combination of data from disparate sources into one presentation. Web 2.0 sites mash up data all the time without asking their users to do much. Problems only seem to arise when when users are required to link data together in manual, custom ways.

Intel Mash Maker sits in your browser as a toolbar that can be expanded into a sidebar as well. As you browse the web, you’ll come across sites for which it already has mashups available. For example, if you go to your friends page on Facebook, it will suggest that you activate a mashup that shows all your friends’ avatars on a Google Map. If you agree, it will plop this map right onto the webpage, and you can even decide to pin the map to the page for future visits. This is the easy part of Mash Maker, and it’s kind of nifty.

There are other places on the web where Intel likes to highlight its mashups, such as Expedia where a “leg room” mashup will show you how much estimated leg room you’d have on each search results flight. You can also pull up Yelp reviews when flipping through Craigslist.

But much of the web is like the Wild West and there are no premade mashups yet. That’s where presumably you are expected to come up with your own. And Intel has provided all the options you need to make a mashup from right within the browser extension. But honestly, the vast majority of users are going to have no clue or desire to learn how to make mashups with it. This is where the idea of an end user mashup program falls short, and it’s same the reason you’ll never hear your (normal) friends mention how they stayed up all night playing with Yahoo Pipes.

When it comes down to it, it’s probably not terribly important that Mash Maker will have limited appeal. I still can’t quite figure out why Intel even decided to produce something like this, since they seldom (never?) release pure web products that have nothing to do with hardware. But hey, why not – I’m sure at least a few people will get a kick out of it.

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WiMax is going nowhere fast but that is not stopping a consortium of cable and tech companies from considering a plan to invest $3 billion more into a proposed bailout-through-merger of Sprint Nextel’s WiMax business (known as Xohm) and Craig McCaw’s Clearwire. The consortium that is reportedly being put together would include Comcast ($1 billion), Intel ($1 billion), Time Warner Cable ($500 million), Bright House Networks and Google ($500 million).

This latest plan comes after Sprint Nextel’s disastrous $30 billion write-down last quarter of its Nextel acquisition, and is an attempt to salvage something out of that train wreck. It also comes after Intel recently balked at putting up $2 billion itself. Intel wants to sell WiMax chips and has already sunk $600 million into Clearwire. But even Intel has its limits.

WiMax is a promising technology and these are early days. But even an extra $3 billion won’t be enough. Building out a nationwide WiMax network could cost as much as $8 billion to $12 billion. And there could be more technical hiccups. (An Australian WiMax provider is already giving up).

Clearwire, which is already operating its broadband wireless service in parts of the country, lost $727 million last year, on revenues of $151 million. So far, it has raised at least $2.75 billions dollars through private investors ($900 million in 2006), an IPO ($600 million), and a $1.25 billion line of credit. As for Xohm, it has only soft launched with employees in three cities. Nevertheless, last year it cost Sprint Nextel $577 million in capital expenditures and operating expenses.

I can see why Google might throw its hat into the ring here—anything to promote more broadband wireless networks. But Comcast and Time Warner Cable should stay away. The logic behind the investment seems to be that the cable companies could use the WiMax network to counter the moves by Verizon and AT&T into their turf (with TV service over phone lines). It is being suggested that the cable companies would be able to launch their own white-label mobile phone and high-speed Internet services over WiMax , or use it to distribute their TV content to computers and new digital devices.

Here’s where that logic breaks down:

1. WiMax is more an alternative to fixed broadband Internet access than it is to mobile phone service. Verizon and AT&T have a huge head start and customer lock-in when it comes to cell phone service. WiMax mobile phones would take decades to chip away at that even if they do offer faster data speeds. Today, Clearwire is only offering at-home phone service, not mobile. As for broadband Internet and home phone services, Comcast and Time Warner already compete effectively against the phone companies today with their alternative services over cable.

2. It no longer makes sense to try to own all the pipes because pipes are becoming a commodity. Yet pipes are an expensive commodity. If the idea is to create a new way to stream TV and movies to people, the cable companies no longer have to build out the infrastructure themselves to do that. It would be much cheaper to let the WiMax business prove itself to be viable on its own and cut deals for distribution.

(Photo via Erik Charlton).

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The site is said to focus solely on business ideas, and is designed to tap into the opinions of the wider developer and entrepreneur community.

According to a report at Venture Beat, the site cost around $40,000 to develop and has been tested internally, with Intel soliciting views from its employees about the hottest software companies.

Like any good Digg clone, it appears that it hasn’t taken too long for it to be gamed, with the top result at the time of writing being for the Open Source CMS Joomla. Even if it isn’t gamed for advantage by some, it’s a little strange that Intel wants to use the site to find “the next Google” whilst offering it to the public; after all if the model does identify the next Google, wouldn’t everybody see the result and have an opportunity to jump in before Intel does?

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Havok’s 3D software powers online worlds including Linden Lab’s Second Life, as well as a variety of console games on Xbox, Wii and PlayStation.

According to Intel, the acquisition will enable developers in the digital animation and game communities to take advantage of Intel’s innovation and technology leadership in the creation of digital media.

Well known games using the Havok platform include BioShock,” “Stranglehold,” “Halo 2,” “Half Life 2,” “The Elder Scrolls IV: Oblivion,” “Crackdown,” “Lost Planet: Extreme Condition,” “MotorStorm” and “Harry Potter and the Order of the Phoenix.” The terms of the acquisition were not disclosed.

(via Metaversed)

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As part of the deal Intel will provide JAJAH access to their community of product dealers, OEM customers and developers, as well as access to Intel’s range of VOIP patents.

I spoke to JAJAH CEO Trevor Healy prior to today’s announcement. Although he was unable to shed any light in the particular ways JAJAH would be utilizing Intel’s patents for me, it was evident that it’s a step forward they are pleased with.

Healy did explain some of the other benefits of the new deal, aside from the additional $20 million in the bank. Having access to Intel insiders gives JAJAH the ability to better optimize their product for Intel Chips, both current and those planned for future release.

The deal supports JAJAH’s emphasis on mobile technology. From existing platforms through to ultra mobile devices that merge computers, mobile and wifi technology, JAJAH wants to be a first choice VOIP provider, and the Intel deal should help them achieve that goal.

On Skype the company tries to avoid the apples and apples comparison. As we’ve previously reported, JAJAH’s VOIP service is point to point, bypassing the soft phone of other VOIP providers by connecting calls between the caller and receiver on their respective land lines or cell phones. JAJAH calls itself the 2.0 version of Skype, Voice 2.0.

The call I took with Healy was using JAJAH and call quality between Australia and the United States was significantly better than Skype out. It is a good product, Mike Arrington called it a “killer VOIP product” and I’ll probably end up using it myself if they promise not to call it Voice 2.0 again.

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The suite has been developed and put together by SpikeSource, which will also be supporting and maintaining the new product suite. Intel will distribute SuiteTwo through its channel partners, distributors and through direct sales. SpikeSource have integrated all the products in the suite and have included a portal which will allow users to view all the main information (via feeds) from the different product installs.

The cost of the full suite will be between $150 and $200 per seat per year, which is a premium over the cost of each component individually, but SpikeSource and Intel hope that by integrating the products to make them easy to use together that they have added enough value to make the suite appealing to businesses. In addition to the per-seat license fee, companies will also need to pay licenses for the middleware applications that are needed to run the suit (the web server and the database server). The revenue from the suite will passed on to the four application providers (with a cut to SpikeSource). Intel is not taking any revenue from this product.

Orders for SuiteTwo are being taken now on the website, and will be fullfilled in Q1 2007 when the suite launches. There are also plans to take the suite beyond the four products that are currently included, with a phase two release potentially including podcasting, social networking, VoIP and/or IM. This suite has potential if only because it can make it easier for businesses to adopt enterprise 2.0 products such as blogs and wiki’s, but the downside might be that all this is too much for some businesses and they may opt to adopt each of these products independently.

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This is the logical next step in the world of big vendor movie downloads and AOL looks like they’ll beat Apple’s iTV to the punch. AOL Video already has some of the most extensive deals with movie studios of anyone in the video on demand space. Viiv owners will also be able to download and play music, according to Kanellos.

The Viiv is a combination of various hardware and software including DRM and a network card. Intel has entered into deals with a number of content providers to allow delivery of media through Viiv.