Category: Tech news

Want an alternative to the Amazon Kindle/Barnes & Noble Nook e-reader duopoly? Borders’ Kobo is always a choice, and now there’s word that you can newspapers and magazines on there, “there” being the Kobo Wireless eReader device as well as the iOS Apps.

If you need more proof that seed investing is taking over the world, just look up north to Canada. Three years ago, a group of angels started Montreal Startup, a $5 million seed fund. This week, they are launching their second, $45 million fund under a new name, Real Ventures. It will invest in startups across Canada from Montreal to Vancouver, but mostly within 250 kilometers of Montreal where most of the partners are based.

The partners include serial entrepreneur Austin Hill, John Stokes, and Jean-Sebastien Cournoyer, Daniel Drouet, Alan MacIntosh, and Mark MacLeod. The fund will invest in web, mobile, software, digital media, social and casual gaming startups.

A $45 million fund is small by venture capital standards, but it is actually quite large for a seed fund. New York City’s Founder Collective, for instance, is a $40 million fund. The more seed capital gets spread across different pockets of entrepreneurship, the more chance there will be for new startup hubs to grow or feed into the bigger hubs in California and, increasingly, New York. You can learn more about Real Ventures and its investing philosophy in this blog post.

Given all the apparent excitement surrounding electric vehicles and the billions invested by automakers, financial firms and government incentives, you would assume there was a groundswell of consumer support for hybrid and battery electric cars underlying this momentum.

Unfortunately, according to a J.D. Power and Associates report released this morning, we may be on the electric car bandwagon but once you get us to the dealership, we look the other way.

The firm predicts that in 2020, international sales of hybrid and battery electric cars will total 5.2 million, or 7.3%, of the 70-plus million consumer vehicles expected to be sold. This year, the world is on track to sell 954,500 electric units, 2.2% of all car sales. Thus, in a decade, consumers will only move the needle about 5 percentage points, from 2.2 to 7.3. If the future of the car is electric, it’s not happening in the next decade and— given the sluggish growth curve— not the one after that either.

So why the apprehensiveness among consumers?

According to J.D. Power and Associates, a confluence of factors have discouraged would-be-electric owners. Not surprisingly, the number one reason is money. Although there are government subsidies to encourage green car purchases in the US, it’s still difficult for cash-strapped buyers not to compare the new hybrid models against cheaper, less fuel efficient vehicles (remember, the recession is not over for the 9-plus percent who are still unemployed or the many who are underemployed).

“Many consumers say they are concerned about the environment, but when they find out how much a green vehicle is going to cost, their altruistic inclination declines considerably,” John Humphrey, an SVP at J.D. Power, said in a statement. “For example, among consumers in the U.S. who initially say they are interested in buying a hybrid vehicle, the number declines by some 50 percent when they learn of the extra $5,000, on average, it would cost to acquire the vehicle.”

Beyond sticker shock, the report says other popular reasons included: aesthetics, insecurity in the new technology, unhappiness with how the car performed, and the need to recharge batteries/driving range.

Who is actually buying?

J.D. Power says from their research, a very clear, dominant demographic emerged: “buyers of HEVs and BEVs are generally older, more highly educated (possessing a postgraduate degree), high-income individuals who have a deep interest in technology, or who like to be among the early adopters of any new technology product.”

At least there’s hope for those Tesla dealerships in Silicon Valley.

Intel’s investment arm, Intel Capital, announced three new investments at the World Economic Forum on the Middle East and North Africa today.

The three startups that have received fresh capital from the investment organization are UK/Lebanon based Nymgo (which delivers cheap VoIP telephony services), Jordan-based Jeeran (social networking site) and ShooFeeTV (which operates a Web-based entertainment guide).

The size of the three investments were not disclosed, but I understand the investment comes from Intel’s $50 million Middle East and Turkey Fund.

For Jeeran and ShooFeeTV, this is actually the second financial boost provided by Intel Capital – both were originally funded in May 2009.

The investment in Nymgo, means Intel Capital firm has now expanded its portfolio in the ME region to a total of eight companies.

Nymgo launched in December 2008 and offers low-cost VoIP calling services. With over two million downloads, Nymgo says it serves customers in over 200 countries worldwide. Since its creation, Nymgo claims to have served over 300 million minutes of international calls.

With Intel’s help, Nymgo says it intends to accelerate infrastructure deployment, operations enhancement and global marketing.

Ever wonder what the inspiration was for the Facebook Friends icon, the one with the outline of two people side-by-side? Neither have I. But now that Foursquare founder Dennis Crowley put up this side-by-side comparison of images on his Tumblog, I will never be able to look at the outline of the woman friend’s bob haircut again without thinking of Darth Vader’s helmet.

It’s just a funny photoshopped juxtapostion with the caption, “I’m sure this is where the Facebook ‘Friends’ icon came from.” I don’t want to psychoanalyze Crowley too much on this. He simply reblogged something he found amusing from someone else’s Tumblog. (That is what you do on Tumblr. It’s like retweeting). But you have to wonder if he doesn’t feel a little bit like the Luke Skywalker friend.

Before closing Foursquare’s last $20 million round, he was talking to Facebook (and others) about a possible acquisition instead. The deal never happened, and Facebook went on to launch its own rival geo-location product, Facebook Places. Interestingly, Foursquare was present at that launch., but Crowley definitely has mixed feelings about Facebook. Sort of like Luke did about Darth Vader.

Resilient storage solutions provider Cleversafe this morning announced that it has secured $31.4 million in an extension of its series C funding from new and existing investors including Motorola Ventures, New Enterprise Associates and OCA Ventures.

Earlier this week, the cloud storage company also announced that it had received a strategic investment from and inked a development agreement with In-Q-Tel (IQT), the not-for-profit investment firm that was launched by the CIA back in 1999.

According to an SEC filing, cloud-based phone systems provider RingCentral has raised $10 million in its third institutional financing round (with another $851,240 remaining to be sold).

The filing lists previous investors Khosla Ventures and Sequoia Capital – it’s unclear whether the company’s third backer, DAG Ventures, also participated.

RingCentral markets an advanced replacement for legacy phone systems in the form of a hosted business phone system with voice and fax functionality.

RingCentral capabilities are said to include “auto-receptionist, flexible extension structure, multiple voicemail boxes, smart call routing, business answering rules, extension dialing, call transfers, and elegant integration with Smartphones”.

Like Michael Arrington wrote earlier, RingCentral’s phone systems basically make their clients appear bigger than they are.

We pinged RingCentral to ask what the fresh capital will be used for, and if any new investors participated in the round.

Editor’s note: We’re adding something new to our camera reviews. Along with images of the FZ100 camera, we’re including a series of photos shot by the camera.

From the box to your hand to snapping away with the Lumix FZ100, the latest feature-laden compact superzoom from Panasonic, you get the impression you’re handling a camera that means business.

The FZ100 is packed with some tried and true Lumix functionality, like its Power OIS optical image stabilization, a new Motion Deblur feature, face detection, a 24x optical zoom, an 11 frame-per-second burst rate even in RAW, an articulating LCD and scads more. Lumix’s Intelligent Auto processes and pumps out reliably exposed, nicely saturated, almost always true-to-color images — just so long as they’re shot at ISO400 or below. The industry has been preening its feathers over supposed sensor improvements, more ISO latitude and better image quality, but sadly, in spite of a really smart feature set and functionality, the images out of the FZ100 still suffer when pushed beyond ISO400.

On the motion-picture side, it offers many flavors of video. It’d take a whole paragraph to list them, but the top end is Full 1080i HD at 30 fps in AVCHD, which is fantastic for viewing on the big screen. You can also shoot in Motion JPEG format, less technically wieldy and more appropriate for sharing on the web or making simple edits. The 24x zoom range of the FZ100 adds a lot of versatility, as well. However, the upgraded stereo microphone atop the body picks up the sound of the zoom’s motor.

Panasonic has done a pretty good job of fitting the FZ100 to your hand. The controls at the top of the body are easy to identify and operate and the Mode Dial’s indents are snappy enough to prevent accidental changes. The back of the camera becomes a bit of a challenge for those with medium-sized fingers and beyond. Making room for the hinge and housing of the articulated LCD takes some real estate away from the function buttons. That means they have to be smaller and are a tad tough to operate.

WIRED Mode wheel has very distinct indents so the camera doesn’t accidentally switch modes. Li-Ion battery rather than AAs. Stereo microphone. Nimble RAW shooting.

TIRED Poor image quality above ISO400. Electronic viewfinder is a throwaway afterthought. Expensive.

Photos by Jackson Lynch for Wired.com

Editor’s addendum: The photo and text that were originally posted here were from an earlier article reviewing a Panasonic G10. This text and the accompanying images correctly reviews and reflects the FZ100.

Rhythm games get a lot of guff from naysayers. If you’re a fan, you’ve surely heard the catty complaints: “That’s just a toy. It’s not a real guitar.”

And it’s true. The typical Rock Band or Guitar Hero controller is fun, but it’s a bit of a joke compared to the real thing. It may look guitarlike, but the primary-color buttons up top and the plastic flipper at the bottom don’t exactly impress the ladies. You can be the best guitar “hero” in the world and you’re really still just a loser with a plastic ax.

Well, the time is here to silence the naysayers — if you can handle it. For Rock Band 3, Mad Catz is seriously upping the ante with a whole new approach to guitar gaming. Put simply, the Fender Mustang PRO-Guitar Controller is not really a game controller at all, but a full-on guitar simulator. Seventeen frets split up a total of 102 buttons which correspond to a traditional six-string guitar fingerboard. Below that, you are now tasked with actually strumming the proper string — a real wire string — instead of moving a little plastic nubbin up and down. You can play with a pick or with your thumb and fingers. Callous lotion is not included.

The PRO-Guitar completely changes the Rock Band experience from top to bottom. No longer are you simply relying on muscle memory and blind luck to power through an Expert-level song, now you’re actually learning how to play it for real.

Is this difficult? Yes, it is difficult. If you’ve never picked up a guitar before, the learning curve is extremely steep. This is night and day vs. the standard rhythm game ax, and you’ll need to slave through the Rock Band 3 pro lessons — learning chords, arpeggios, muting strings and more — to have any hope of success. But as with a real guitar, practice and you’ll get there. I (a guitar novice) was at last breezing through Medium songs on day three, though completing tunes on Hard was still out of reach when my deadline arrived and the controller had to be returned to Mad Catz. The controller can also be used to play authentic bass guitar tracks, which are easier, and standard five-lane Rock Band guitar parts, which are surprisingly not.

What’s lacking? Despite the new approach, the Mustang still looks like a toy. It’s the same size as a standard guitar controller and is completely made of plastic. If you do want to eventually switch to a real guitar, you’re going to have to get used to everything being farther apart.

And sadly, this controller’s authenticity will do nothing to head off that other standby quip of the naysayers: “Why don’t you just play a real guitar?” Well, really, why don’t you?

WIRED You’re not playing a game any more, you’re learning how to play guitar. Totally revolutionizes Rock Band gameplay (and makes you the weakest member of the band).

TIRED No whammy bar — but, trust us, your hands will be full. Lacks weight. Big investment.

At last, it is possible to relive the humiliation of childhood piano lessons all over again.

One of Rock Band 3’s key innovations is the addition of a keyboard part to songs. While older versions of the game had the guitar track picking out many of the keyboard notes, now keyboard players gets their due.

Naturally, they also gets their own new instrument: a keyboard.

It’s long been thought that adding keys to rhythm gaming would be a bit of a joke, and when you play non-pro keys, using just five buttons and with no need to strum, it pretty much is. But with Mad Catz’s pro-keyboard controller and a much broader spectrum of buttons to hit, the keyboard part can be just as challenging as the rest of the band.

The Rock Band 3 keyboard is a miniature keyboard that can be played on a tabletop, placed on a stand or worn, keytar-style, around the neck. The controller spans just two octaves (that’s 25 keys total, white and black), and it is technically designed to be played with just one hand — no matter what the song’s difficulty level is. (Your other hand operates a somewhat-silly modulation touchpad and a lone Overdrive button, both on the neck of the device.) But when songs ramp up in difficulty — some use just a few keys, some use the whole set of 25 — going two-handed is the only way to keep up.

And you know what? Keyboards in Rock Band 3 are surprisingly fun. Many songs on the disc were clearly selected with keys in mind, and the pianist gets to shine frequently. I’ve found few moments in Rock Band as satisfying as nailing “Imagine” on pro keys. And remember: You’re playing the honest-to-god notes to the actual song.

The keyboard’s diminutive size and one-handed parts are the only real concerns. But while it would be fun to be smashing out 10 notes at a time with both hands, maybe that’s something best left for Rock Band 4. For now, it’s hard enough just to figure out where your fingers are while you’re playing. The little ridges located on three of the keys aren’t a lot of help, and it’s tough to figure out where your hands are without either taking your eyes off the TV or just experimenting with random hits.

Now get back to your scales, kid! Practice! Practice! Practice!

WIRED More fun than you’d think. Surprisingly sturdy, with decent action on the keys.

TIRED Not the manliest of instruments. No onscreen cues as to where your fingers are before you commit to hit the keys. Best keyboard song ever — “I Ran (So Far Away)” — tragically not included in Rock Band 3.

This weekend, Ryan Block put up an interesting post on gdgt entitled: Will the Mac App Store have enough to sell? He raises a number of good points for why Apple may not be able to replicate their current App Store success with this new desktop store. But I’m left wondering if the store won’t lead to a new class of app: a sort of micro-app for the desktop.

Block makes the following points: a) high-end software like Photoshop won’t be placed in this store because Adobe won’t want to give Apple a 30 percent cut of all sales. b) most paid desktop software is dead or dying due to free replacements on the web. c) Apple’s strict rules will prevent developers from using this new store for test or demo software. I agree with all of those points. And that’s why I’m wondering if this store won’t instead lead to this new type of app environment.

While Apple’s brief demo at their event last week and their website teaser page indicate they intend this Mac App Store to be used to distribute full Mac apps, such as the ones they make like Pages, iPhoto, iMovie, etc, I think it’s possible that popular apps in this new store may be more akin to Mac Dashboard widgets.

Here’s what I’m thinking: one of the most popular apps since the inception of the iPhone App Store has been Pandora. Pandora obviously works through the web browser, but plenty of people would be into a small app that sits somewhere on your desktop running in the background. How do I know? Because Pandora actually already makes such an app — but it runs on AIR and you need a Pandora One premium account to use it. What if Pandora made a free ad-supported Pandora Mac app? Or a paid version (maybe $5 or $10) that gives you premium features? A lot of people would want such an app.

What about a Mac desktop Twitter client? Many of the most popular ones right now also run on AIR (TweetDeck) or Silverlight (Seesmic). Hugely popular native Mac apps exist, such as Tweetie for Mac, but since Twitter bought that client, they haven’t committed to continuing development on it (though it is supposedly being worked on on the side). People would pay a small amount for a great one of these as well.

But a real opportunity may exist in small apps that don’t just fully mimic popular web apps, but instead extend upon them. Imagine a Facebook app, for example, that offered a great photo upload and viewing experience? Again, this is sort of the idea Apple seemed to originally have with their Desktop Widgets, but those never really took off. One reason, undoubtedly, is that distribution was lacking, and developers had no way to make money from them. The Mac App Store solves both of those issues.

And this store may give rise to a whole new crop of small apps that otherwise might get lost in the sea of web apps — or not exist at all. You could certainly make the case that great new services like Instagram would have never existed without the iPhone App Store. Perhaps the Mac App Store will lead to developers creating new experiences and a new crop of apps as well.

And then of course there are games. While traditional game makers may hold off on Mac App Store games since they’d obviously prefer to make 100 percent of their revenue instead of the 70/30 split with Apple, plenty of micro-game makers will pop-up to take advantage of the Mac App Store’s distribution. Angry Birds, Cut The Rope, etc. We’re going to see them all. And they’re going to be huge.

I’d also argue that part of the impetus behind the Mac App Store is also to kill off optical drives, so that Apple can make machines more like their slick new MacBook Air. Every app you buy through the Mac App Store is downloaded and installed directly over the web. And you can install them again on a new machine when you upgrade. No CDs/DVDs needed.

Another point, of course, is to simplify the application buying experience for users. While plenty of software is available to buy and download over the Internet right now, the process is scattered and generally poor. The Mac App Store will change that. A lot of users and developers will welcome this.

Of course, such a unification attempt will have people scared to death that this means Apple will eventually kill off app installation on the Mac outside of this store. But that won’t happen — even Apple isn’t that bold. The shitstorm and backlash they would face from Mac users if they were to do this would be massive. Apple is a lot of things, but they’re not stupid. You’ll still have the option to install your own apps the old way.

Yes, you can’t install apps on the iPhone outside of the App Store, but you never could. Since the dawn of the Mac that hasn’t be the rule. Even if they wanted to, it’s too late for Apple to change that — at least directly.

Instead, computers like the iPhone and iPad that have this new distribution model will eventually far outnumber Macs — based on recent sales, they already might.

Apple has said that they’d like to get the first version of this Mac App Store out there in 90-days. They’ll undoubtedly have a range of third-party developers on board for the launch. But it will be shortly after that when we’ll begin to see exactly how this new distribution model will be used. And I suspect a lot of $5 micro-apps and small games may end up being the apps that drive the store.

Something culturally strange is happening in San Francisco. I’m not talking about the “let your freak flag fly,” live-and-let-live vibe for which the city is famous. I’m talking the growing cultural rift between the city and Silicon Valley, despite the obvious geographic overlap.

If you drew a Venn Diagram between San Francisco hipsters and people who work in and around the Web industry it’d look like a more shoved-together version of the MasterCard logo. While many of the largest technology companies of the last few decades’–like Apple, Cisco, Oracle, eBay, Yahoo, Google–were based on the peninsula, Web 2.0 has unabashedly been centered in San Francisco. Facebook, LinkedIn and YouTube were founded on the peninsula, but that’s about it. TechCrunch recently moved from Palo Alto to the city and Twitter, Zynga, Yelp, Digg and dozens more are within an easy walk from our offices. Just upstairs from us are Yammer, ShopItToMe and OpenDNS.

Implicit in almost every single Web 2.0 startup is the idea of scaling quickly– whether it is raising angel money to focus on getting a product out – revenues-be-damned – or pulling any viral trick in the book to make sure that millions adopt your application or go to your site. The obsession with heady user numbers is only escalating with the reliance on advertising-based business models, since most large ad businesses need 15 million uniques or so to make sense.

Getting big, fast is even more the name of the game now than it was in the late 1990s, with many startups not even building much of a business — just developing the product and hoping a larger company will buy that coveted traffic and user engagement. And the faster all that can all happen, the better.

Go to any hipster, grungy bar in San Francisco. Ask the first five hoodie-wearing people you see what they do, and you can be sure at least two say they work for a startup. And if your next question was “How big are you guys?” no one would flinch… and each of them would try to pad the answer. Big is good in startup land. Getting big, fast is what separates startups from small businesses. Doing that over-and-over again, decade-after-decade is what separates the Valley from nearly anywhere else.

And yet, when it comes to the non-Web, brick-and-mortar retail business in San Francisco an ugly, self-righteous, vitriolic hate is emerging against anything successful enough to have more than one or two locations. Last week there was an ugly blow up around a local, high-brow coffee vendor, Blue Bottle Coffee, who wanted to open a coffee truck in Dolores Park– the center of San Francisco hipsterdom in the Mission district. It’s something many of our readers wouldn’t care about, but it strikes at the heart of what has made Silicon Valley great– despite being geographically in the heart of modern Silicon Valley. In short, locals were so incensed that they didn’t get adequate opportunity to approve or disapprove of this “chain” coffee store opening a non-permanent location in their neighborhood that an army of people threatened to boycott, protest, and — believe it or not– actually spit on employees as they went to work their first day.

A reaction against national chains or big box retailers that hurt local mom-and-pop businesses is one thing. But this is so sad and crazy that it makes tea partiers look rational. For obvious reasons, a local business that has been successful enough to open seven stores isn’t the same as a national chain.

When Starbucks locations were popping up throughout America, you saw similar reactions to a big corporate coffee chain running out small mom-and-pops. But Blue Bottle is a Bay Area company with just seven locations. Somehow the same city– the same cultural mix– that supports a Web startup going from an idea to a global powerhouse in a matter of months rushes to tear down a retailer that’s been successful enough to open a few stores in just a few of the modestly-sized city’s cloistered neighborhoods. It’s as if Silicon Valley’s much-trumpeted meritocracy only holds true for the Web. When it comes to coffee? We don’t want the best-run, most popular local brands that have won in the local market; the same brand that mom-and-pop restaurants in the Mission serve and the same brand that you have to wait in line for 20 minutes to get just a few miles away. No, that should be hobbled and literally spit-upon.

It’s such a staggering juxtaposition of rewarding success on one hand and punishing it on the other. One of the most open, competitive systems of working capitalism, juxtaposed against a system that is downright anti-capitalist and protectionist to a rabid extreme– all in the same tiny geographic area. It’s so staggering that I wonder if the two are connected in a yin-yang relationship, like the sibling who is a clean-cut, straight A’s student and the sibling who is a rebel in reaction.

This isn’t the only example. Also last week, Trader Joe’s pulled out of a development in San Francisco’s Castro neighborhood in part because the city was forcing them to make patrons pay to park. This wasn’t a matter of economic necessity, this was a stated desire to control the type of shopping that could happen at Trader Joes. Because the traffic in the neighborhood is already so bad, the city wanted to discourage anyone who wanted to drive to Trader Joe’s for a quick, pick-up-a-few-things trip. The retailer rightly balked and pulled out. If Trader Joe’s is bringing a popular, low-cost, organic grocery store to the neighborhood, shouldn’t it get to dictate what kind of customer it would like? Now nothing is going in. But you made your point, San Francisco. Well done. Just this weekend, we see San Francisco colliding with Silicon Valley again with the city’s cease-and-desist for the popular UberCab.

A more striking collision of typical-Valley and San Francisco cultures was Supervisor Chris Daly’s uproar over a proposal to upgrade San Francisco’s port so that the city could host the America’s Cup. The price tag was $270 million–that’s nothing for this city– and was estimated to generate potentially $1.4 billion in economic activity, create 9,000 local jobs and help repair the aging Port of San Francisco.

Daly, one of only two dissenters, vowed to bring the entire thing down, personally in a long rant, followed by a press conference where he dropped f-bombs and said ”San Francisco should not be going so out of its way, using the people’s money so that a billionaire can have his yacht race.” Or, I guess, using the people’s money to give several thousand people jobs. Daly even found himself on the extreme of the very progressive San Francisco Bay Guardian on the issue. Ellison has a lot of enemies, but most would probably admit that building the second largest software company in the world in San Francisco’s backyard and angel investing in other large locally-based companies like Salesforce and Netsuite has done more good for the area than harm. And calling the global sailing event “his” yacht race is extreme– even given the colossal ego of Ellison.

Similarly, I know self-made Internet millionaires who’ve bought old properties in transitional neighborhoods in San Francisco, only to give up on restoring them because they met so much neighborhood opposition to anyone “wealthy” coming in and rehabbing a historic property. Never mind, these aren’t trust fund kids. These are people who moved to San Francisco because it was a land of opportunity, started from nothing and took huge risks to build companies that employ hundreds of city residents. That’s called spitting on the hand that’s feeding the city– a city, which has steadily lost its relevance in industries like traditional media, finance and manufacturing.

The startup guys used to be the outcasts; the nerds in high school getting their revenge in the real world. Yet, somehow, in the city that benefits the most from their hard work, those nerds have become viewed as the jocks. Those who can’t or don’t start companies are tearing that meritocratic ethos down in the name of “looking out for the little guy.” But who is better for the little guy: An entrepreneur investing in building a profitable, growing company — whether its Zynga or Blue Bottle– or a self-important politician or neighborhood rabble-rouser? It comes down to whether you believe in a capitalist system. And despite the libertarian leanings of a lot of the Valley establishment, a big part of San Francisco is getting less capitalist in the name of being “progressive” every day.

When I first moved to Silicon Valley back in the 1990s, not only did most of the large tech companies operate outside the city, but most of the richest figures in Silicon Valley tended to live outside the city, either north in Marin, east in Walnut Creek or south in Woodside, Palo Alto or Menlo Park. If the city isn’t careful a similar flight is going to occur with the younger generation of entrepreneurs– just like Blue Bottle left Dolores Park, Trader Joe’s left the Castro, and Larry Ellison could very well pick Spain over San Francisco. Left in the city will be a bunch of bitter grandstanders who are too busy spitting on people–again, I mean that literally–who are trying to earn a decent wage at a coffee kiosk to actually start a company, create jobs or invest in making San Francisco a better place themselves.

Valley types spend a lot of time lecturing other parts of the United States and the world what it takes to create a culture that celebrates risk and reward. Maybe we should take a look at the culture in our own stomping ground.

Like most people in Silicon Valley, I’m very intrigued by this UberCab cease & desist situation. My first reaction was “uh oh”. But that quickly switched to a feeling that this is probably the best thing that could ever happen to the young startup. That may sound crazy. But it’s not. And what’s going on here should mean something to people far beyond the Valley.

First of all, while no one likes the threat of legal action, this cease & desist is a huge validation of what UberCab is trying to do. The city of San Francisco (aka San Francisco Metro Transit Authority & the Public Utilities Commission of California) would simply not care if the company wasn’t on to something. Or worse, they probably wouldn’t even know about it if the service was lame.

But that’s not the case. There’s clearly a demand for a service of this nature, and that’s why the city cares. They view it as a threat. Just read what they’re saying, as summarized by our own Lora Kolodny:

• Ubercab operates much like a cab company but does not have a taxi license.
• Its cars don’t have insurance equivalent to taxis’ insurance.
• Ubercab may threaten taxi dispatchers’ way of earning a living.
• Limos in U.S. cities usually have to prebook an hour in advance, by law, while only licensed taxis can pick someone up right away but Ubercab picks people up right away (again without a taxi license).

It other words: we’re scared shitless of this model.

They’re trying to spin in on the groups that passengers won’t be protected — or something. But that’s ridiculous. I’ve been in an UberCab a few times — each time I’ve felt roughly 100 percent safer than I have in any taxi I’ve ever been in.

Does that give UberCab the right to break laws? Of course not. But the case here seems to be that the laws themselves are broken. This is absolutely a space that needs to be disrupted. And that’s what UberCab is trying to do. They’re not trying to do it by being shady and dick over customers. They’re trying to do it by re-thinking this method of transportation using technology.

The argument that this could threaten taxi dispatchers’ way of earning a living is the best though. Just because you’re an incumbent doesn’t give you the right to rest on your laurels and never be challenged. If the dispatchers feel threatened by UberCab, they should try to compete better, not hide behind some lame legal threat.

The investors in UberCab are already ripping this legal threat apart on Twitter. They’re obviously conflicted here, but that doesn’t mean they’re wrong. Lowercase Capital’s Chris Sacca has some particularly interesting opinions — because he’s been in this situation before. “We invested in @280north after Apple dropped a cease & desist on them and other investors walked away. Sold for 10x our basis,” he writes. Yep. ”My old company Speedera was sued by it’s primary competitor a dozen times before they bought us for $140 million. #gameonuber,” he continues.

The fact is that a lot of these types of suits arise when incumbents feel threatened. They often have the capital to legally run the smaller guys out of business or make them bend to their will. But UberCab seems determined to fight here. As we noted in the original post:

Since the orders arrived on October 20th, Ubercab has remained in service under threat of penalties including up to $5,000 fee per instance of Ubercab’s operation, and potentially 90 days in jail per each day the company remains in operation past the orders.

That’s serious stuff. And it’s also going to serve as a rallying call for the company. The outpouring of support from the community will be huge. And given that this model has potential to shake up the industry is all the major metropolitan areas across the country, there’s going to be a ton of interest in this case from all around. And UberCab will bathe in free publicity.

Current towncar servies are inefficient and too expensive. Taxi services, for the most part, are just plain awful. UberCab could at the very least force both of them to get better, or slowly die. That is, if silly backward-thinking laws don’t get in the way.

Even if they ridiculously have to be known as something like “UberCar” going forward, look for UberCab to continue driving forward.

Update: As a few commenters note, this situation has some similarities to the case of PickupPal. Of course, that was in Canada. Let’s hope we’re not Canada here.

Savvy Internet surfer Chris Crompton has found a flaw in Groupon’s email link encryption where adding the search term “addx” (exact Google search = allinurl: addx site:groupon.com) brings up about 35 or so emails of people who have subscribed to the Groupon newsletter. I am unable to tell whether these emails are from people who actually purchased the deals or just signed up for Groupon’s over 20 million strong email list.

It looks like this is some kind of Google Analytics tracking flaw for a Groupon marketing campaign, and the emails are from people who have referred deals to others through Groupon’s insecure links. It seems as though when someone clicks on a deal link in a Groupon email and posts it anywhere else online, Google has indexed this sensitive information.

Groupon, which launched its service allowing merchants to create their own deals yesterday, might be suffering some data issues along the lines of what happened to purchase sharing startup Blippy when it exposed credit card numbers through Google search results in April.

I have gotten in touch with Google, Groupon and a few of the people with exposed email addresses about the flaw and will update this post when I hear back.

Update: Groupon Director of Engineering Shinji Kuwayama responds to the issue in the comments section of this post.

“We can see that a number of email addresses — less than 80 — have gotten out into Google’s index, due to having been pasted into publicly-crawlable pages around the Web.

Fortunately, only a tiny fraction of our subscribers are affected, and we’re working directly with Google right now to get our subscribers 100% excluded from both Google’s index and Google’s cache.”