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As you may have heard, Apple completely blew through its pre-order launch day iPhone 4s in less than a day (and that was despite major technical issues with the ordering process). It has now blown through the second wave (due in early July) as well. The current shipping estimate if you order right now is July 14. Ugh. But if you absolutely want one at or around launch day, the Internet, as always, provides an option.

Scanning eBay right now, there are roughly 400 iPhone 4s for sale (between the 16 GB and 32 GB models). Sure, the device isn’t out yet, but people are willing to part with the device as soon as they get it on June 24. The question is: how much do you have to pay to get them to part with it? Currently, the cheapest ones are going for $550 — and that’s the $199 16 GB model. The cheapest 32 GB model? $799 — a full $500 over the $299 retail price.

Both of those are bargains compared to what some people are selling them for. Want the iPhone 4 hand delivered to you by June 27? That will cost you $5,000. Yes, $5,000 for one iPhone. At least 50 other people are offering to sell their’s for $1,000 or more.

And this is just two days after the initial pre-sale. As the expected ship date continues to get pushed back, these prices are going to get much more ugly. By the time launch day hits and people have them in their hands, don’t be surprised if many of these new iPhones sell for thousands of dollars.

Since April, Twitter users have grown accustomed to Twitter’s first ad revenue play: Promoted Tweets. Today, the second phase of that strategy is starting to be tested: Promoted Trending Topics. The first such topic? Toy Story 3, promoted by Disney/Pixar.

As you can see in the right hand toolbar of Twitter.com, at the bottom of the Trending Topics area there is now an 11th topic, “Toy Story 3.” Next to it is a big yellow box letting you know that it’s a promoted Trending Topic. Just as with Promoted Tweets, the functionality for these Promoted Trending Topics is the same as the regular Trending Topics — clicking on it takes you to a search results page to see what people are saying about Toy Story 3.

“As we have always said, we plan to test different advertising and promotional models in these early stages of our monetization efforts for both user and brand value. As part of this effort, we are testing trends clearly marked as “promoted” for an undefined period of time,” a Twitter representative tells us.

And along with buying the Trending Topic, Disney/Pixar gets a Promoted Tweet at the top of the stream, Twitter confirms. Twitter also says that just as with Promoted Tweets, the Promoted Trending Topic “has to resonate” or it will disappear.

Two more things of note here. First, it’s interesting that Twitter is putting these at the bottom of Trending Topics rather than at the top. Still, the yellow badge draws your eye naturally to it. Second, the Promoted Trending Topic appears no matter which city or country you set your Trending Topics to. In the future, you can imagine these Promoted Tending Topics being even more highly targeted to just certain regions/cities.

Every few weeks, Google’s Android team updates their Platform Versions page that breaks down how many Android devices are running each version of the OS, based on data from the official Android Market.  Today’s it’s reached a big milestone: exactly 50% of Android phones are running 2.1, the latest officially released version of Android (2.2, or Froyo, went live for a small number of users last month, but has not officially been deployed on a wide scale).

This is a big change since early May, when only 32.4% of phones were running 2.1. Since then, a number of older phones have been upgraded, and the new Sprint Evo and some other newer devices run it as well.

So why does this matter? We’ve written pretty extensively about Android fragmentation, or the fact that there are many phones running older versions of the OS. The Android team contests the use of the word ‘fragmentation’, (one blog post actually calls the term useless because it has been used in so many ways).

But the fact remains that nearly 50% of phones are running older versions of the OS, and if a developer wants to make use of the latest Android features, they’ll leave a big chunk of the Android userbase behind.  Case in point: when the official Twitter application was released in April, it was only available to 27.3% of all Android users.

Still, the tide appears to be turning. OEMs are going to get faster with their updates, and Android upgrades will eventually start coming more slowly, which will hopefully result in fewer phones getting left behind.

The Playstation Move is just what it looks like: a Wii clone. It feels the same, looks the same, and works the same. That’s a good thing, though. Everyone and their grandmother has played Wii bowling and knows how it works. Sony isn’t reinventing motion control with the Move. They are, however, seriously improving it.

When Hot Potato launched at our Realtime Crunchup last November it was already a solid app. Then came a new version in March (just before SXSW), and it was even better. Today brings version 2.0 — and it’s the best yet. And it’s also different.

When it first launched, Hot Potato was basically an iPhone app that let you build a social stream around events happening at any given moment. Right before SXSW, the newer version of the app added killer Foursquare integration, and tied everything together with the service’s website. The update today shifts the focus away from events, and makes it about all kinds of activities. Really, anything in the world you may be doing, you can now “check-in” while you’re doing it on Hot Potato. It’s actually pretty cool.

When you load up the app, you’re taken to a screen with six default prompts for what you may be doing. Those six are: “I’m watching..”, “I’m listening to..”, “I’m attending..”, “I’m reading..”, “I’m thinking about..”, and “I’m playing..” After each, there’s a box to fill in the noun that should follow each of those. When you enter that, Hot Potato searches to see if it’s already in the system. So, for example, if you say, “I’m watching Lost”, Hot Potato finds the other people doing that as well and ties you altogether into one activity.

Within this activity page, people can comment and respond to comments about the activity, just as you previously could in Hot Potato. You can also add pictures to this stream.

There’s also a seventh activity option in which you choose your own verb. Hot Potato gives you a list of new options (such as “I’m eating”, “I’m drinking”, “I’m checking out”) — or you can add your own. This reminds me a bit of the service Plurk, which is a Twitter-like service that allows you to organize your status updates around verbs. But obviously, this is more robust.

Just as before, when you fill out what activity you’re doing, you can send it to Twitter, Facebook, or use it to check-in on Foursquare. The way Hot Potato has set this all up is quite seamless. And there is of course an activity stream front and center in the app to showcase all of your friends’ activities.

There’s also a new element: awards. Yes, just as with some of the other location-based services, you can now get badges for doing certain activities. For example, when you share your first activity, you earn the “You’re a Big Deal” award.

Hot Potato 2.0 also brings a revamped version of the website to match this new activity focus. And for the first time there’s an iPad app as well.

We’re already seeing a ton of Foursquare-like services that let you “check-in” when doing various things. For example, Miso lets you check-in around movie, television, and Internet video content. This new version of Hot Potato aims to let you check-in no matter what you’re doing. And it smartly ties in with Foursquare.

Find the new version of Hot Potato in the App Store here. It’s a free download.

This morning, a number of major advocacy groups, including the ACLU, EFF, and CDT, sent Facebook an open letter detailing some of the outstanding issues with Facebook privacy. The groups’ letter acknowledged that Facebook has made strides recently on this front, especially with its launch of new, simpler privacy controls, but that it hasn’t addressed some major privacy issues, like the fact that the controversial Instant Personalization feature is automatically opt-in.Wasting no time, Facebook has just responded with an open letter of its own.

Along with Instant Personalization, other issues addressed in the advocacy letter include the fact that Facebook is able to track user browsing behavior through its ‘Like’ buttons and other widgets (these widgets are served up by Facebook to third-party sites, so it can see which sites you’re visiting). And the letter says that users should have more control over what information third-party applications should have access to. Finally, the letter asks Facebook to give  more control over what information mandatorily made public, and the ability to export data so that users can easily transition to social networks other than Facebook.

Facebook’s response addresses each issue point by point:

• Regarding the so-called “app gap”, Facebook says that it is implementing a new data permission model that will be rolling out in the next few weeks. There’s also now an option to turn off Platform entirely.
• Facebook’s response to the Instant Personalization is pretty weak — it says that the program has been “widely misunderstood” and that partners can only access users’ public information. I understand the program quite well, as do numerous other critics, and, I’m sure, the likes of the CDT and EFF. And it’s obvious that there are still issues with handing over “public” data, especially when some of that data was switched from private to public during Facebook’s privacy transition in December.
• Regarding Facebook’s ability to track users through its widgets, Facebook says that it does not use that information for targeting and that it is deleted after 90 days.
• Addressing the point about giving users more control over what information they can hide, Facebook effectively says that it’s given users more control than they had, but that it finds that users have a “more meaningful experience” when they share more information. In other words, they’re still going to force some of this information to stay public.
• Facebook says that it is currently testing SSL access to Facebook (a good move).
• Regarding the ability to export data, Facebook says that users can already do this via its APIs. It then takes some shots at the advocacy organizations saying that it is “surprised that these groups would advocate for a tool that would enable one person to strip all privacy protections for any information that has been shared with them”. I’m pretty sure nobody is asking for that.

Here’s the full letter from the advocacy groups:

And Facebook’s response:

At the risk of pissing off our new office neighbors, I have a confession to make: I loathed the Yammer iPhone app. Don’t get me wrong, I love Yammer, and find it absolutely vital to our work. But the app was easily the least stable of the dozens of apps I have  on my iPhone. It was so bad, in fact, that I’ve been accessing Yammer through mobile Safari in recent weeks. But that’s why I’m happy to announce that today, with the launch of the latest version of the app, 3.0, my nightmare is over.

As they note in the App Store description, Yammer 3.0 for iPhone is a complete re-write of the app. It promises to fix “many crashes,” load “much faster,” and even work on the upcoming iPhone 4. A quick run through confirms all of those things. The app’s UI has also been overhauled and is much more pleasing to look at now (and is actually simplified). This looks to be an all-around win.

It also brings several smaller features such as: autocomplete for @replies in the app, full landscape support, and the ability to mail and call contacts right from within the app. This thing just made my job much easier. Nice job Yammer, you’ve earned your way back on to my main screen of apps.

You can find the new Yammer app here. It’s a free download.

Update: Fine, I’ll change the title to “fewer”.

This morning, news broke of a spiffy, and very powerful new feature on YouTube: a built-in video editor. It’s a feature that I’ve personally been longing for for years, and it’s going to be a huge deal for anyone who uploads to YouTube on a semi-regular basis. This morning I spoke with Rushabh Doshi and Josh Siegel, the lead engineer and product manager for YouTube’s video editor, respectively, about how the feature came to fruition and what users can look forward to in the future.

The JavaScript-based YouTube editor isn’t loaded with bells and whistles, but it can handle the basics just fine: it’s easy to trim and splice together the video clips that you’ve uploaded, and you can replace your video’s audio with any of YouTube’s library of 40,000 approved songs (you can’t upload your own audio yet, but YouTube is working on deals to make that happen).

Siegel says that the core idea behind the video editor is to give users the basic features they need in the cloud. YouTube isn’t out to recreate existing video editors like Final Cut in the browser — he notes that many people aren’t even familiar with them. Instead, it’s taking the core features that have broad appeal and putting them in a lightweight package that’s accessible from nearly any browser.  YouTube has also learned from its experiment with with YouTube Remixer, a mashup feature launched in 2007 that didn’t have a particularly good user experience.

Doshi added that one of the main goals with the project is to keep the interface very lightweight for the user, leaving all the intense processing to Google’s massive infrastructure. He contrasts that with current video editing solutions — even if they’re easy to use, low and medium end computers can struggle at quickly editing content that’s shot in HD. That isn’t a problem when you’re doing your editing in the cloud.

Siegel and Doshi were hesitant to talk too much about what we can expect from the video editor in the future, explaining that it will depend on what users are asking for. That said, they did hint at a few features. First, they said that they’re “really excited” about the opportunities provided by the iPad and other mobile devices, so we can probably count on that coming fairly soon.

They also mentioned some features that are being considered, including video transitions, effects, titles, and audio layers (again, these will be implemented pending user demand). Finally, they said that they’re looking into a way to deal with mashup videos that combine both high and low resolution content (right now if one video in a mashup is low quality, it downgrades all of them).

One other thing to note: YouTube says that the feature is slated to launch later this evening, but there’s a chance that it might slip til tomorrow. When it does go live, you’ll be able to access it at YouTube.com/testtube.

What makes TechCrunch a property that attracts some 10 million unique users a month is diversity. We cover tech single-mindedly but from a lot of different perspectives. So it’s from that stance that I’m writing this post.

I have a confession to make: With all due respect to my colleague Mr. Siegler—who I should say writes more posts, drives more page views and hence creates way more value for this site than I do—I am not a fanboy.

I have no problem championing a business – even an unsexy or unpopular one. When I was at BusinessWeek I was one of the first people to write about a lot of Silicon Valley companies like Facebook, Yelp, and Digg, and over the last two years I’ve written here about even more unknown companies from around the world that I think have a shot at building something big and making the world a better place. That’s what I love about my job, and why I’ve done it for more than ten years.

But that’s not being a fanboy. I just can’t get excited about a stunning product if it doesn’t solve a core problem or make some sort of business sense. Product for sheer product sake is writing about technology in a vacuum.

That’s why I’ve been one of the only reporters to consistently question Spotify’s promises of near-term US launches and profitability. (Yep, still haven’t launched here, if you’re keeping track. We’re almost a year after the first “guaranteed” date, FWIW.) And it’s why– despite whiling away most of my time on my recent 20-hour international flights playing on the iPad– as a business reporter I’ve never thought the device would be an immediate mass market hit for one simple reason: As of now, it is a beautiful solution to an unarticulated problem. The first person I knew who had one gasped and said, “This is a product everyone wants they just don’t know it yet.” Exactly.

Contrast that to other hits from the Steve Jobs, part two era: The original iMac. It didn’t start a new category but solved a core pain point of allowing people to easily connect to the Internet but plugging in just one wire. The iPod. There were dozens of MP3 players, but Apples hardware and the iTunes solution produced the first device where you could stylishly, easily and affordably carry around all your music with you, wherever you went. The iPhone. Again, plenty of smart phones on the market, but Apple fundamentally reworked the Web experience so that it was a new thing optimized to being a handheld device, not a shrunken computer.

The iPad is a beautiful toy and as a user, I’m glad I spent the money on it. But until developers do more than upload widescreen versions of iPhone apps and give this thing a reason people who don’t just love Apple have to buy it, it’s just a beautiful toy. It doesn’t solve world peace or even a basic problem like the earlier Apple devices did. I’d argue the closest to a killer app is Netflix, but I spend about half my time out of the US where it doesn’t work. Next to that the most killer app is the battery life. I appreciate the stance on HTML5 but the bottom line is, that means I can’t view a lot of sites right now, especially media sites. That’s frustrating for a Web-centric device.

Finally, some numbers actually back up this oh-so-controversial view that the iPad is merely a great product. A report was released yesterday from market research firm YouGov that showed that a whopping 98% of iPad buyers own another Apple device and 57% own two or more Apple devices. What’s more—79% of non-iPad owners the firm surveyed said they definitely or probably would not buy one and another 14% said they were unsure. From the release: “Most say they just don’t know what they would do with the device that they do not already do on another computer or mobile device.”

Unlike the other hits of the Jobs era—this is so far not a device that reaches across the aisle. Why didn’t I write about this yesterday when the report came out? Well, usually TechCrunch and every other blog over-cover anything Apple so I try to cover other stuff. But curiously, almost no one wrote about this. (Kudos to Eric Savitz of Barrons who is always willing to jump in front of fanboy fire, although he thinks numbers aside, YouGov underestimates the device’s appeal.)

Whether you think the conclusions from the research are right or wrong this is important from a technology business point of view because Apple is now the most highly valued tech company in the United States. It is priced at absolute perfection– from a business, not product point of view. There are huge ripple affects for developers who make their living coding for Apple products, not to mention people buying the stock at this price. It deserves at least discussion.

Being a fan of products is great. I totally agree that in today’s media world knowing how an author feels about a product is relevant. But when these things kill our ability as reporters even to consider independent research, we’re not doing anyone—readers, developers, investors, and even the companies we cover—any good whether we love the product as individuals or not. Embracing the fanboy mantle? Too much of a slippery slope for me.

Women’s network Sugar Inc. raised a whopping new $30 million round of financing from Sequoia Capital on June 9, says Goldman Sachs in their quarterly Internet/Digital Media report. That report is based on data they obtained from Dow Jones VentureSource. That has caused a flurry of attention around the fast growing company.

But there’s just one problem – it didn’t happen says an anonymous source close to the company. Sugar has raised a total of $31 million to date, but their last funding round was a year ago. The company is profitable and has no plans to raise more money, says our source.

“This is bizarre” says CFO Sean Macnew. “I wish everyone would stop calling us.”

So where did Dow Jones and Goldman Sachs get their original data? And why didn’t they just check CrunchBase, which has the most up to date information on startups on the planet?

Up next – confirmation that TechCrunch has not been acquired by Yahoo.

Mobile search could grow from 9 percent of all queries this year to 20 percent by 2012, estimates RBC analyst Ross Sandler in a new report issued today. There is still a huge gap between mobile’s share of overall search queries and its share of search advertising. Sandler estimates that mobile will still represent less than 2 percent of search ad budgets this year, compared to the 9 percent overall share. But he thinks that gap can narrow and that mobile search advertising can be a $2 billion to $3 billion market in 2012.

His assumptions seem a bit aggressive on the ad revenue side. There might always be a gap between mobile search share and mobile search ad spending because of the relative effectiveness of search ads on PCs versus on mobile phones. But Sandler does a deep dive into mobile search advertising and comes up with some compelling reasons why that gap should at the very least begin to narrow just as mobile search starts to take off thanks to the growth of large touchscreen devices such as the iPhone, iPad, Android, and Blackberry.

One big advantage the new generation of smartphones have over PCs in terms of search advertising is that the screen real estate devoted to search ads is much bigger. A single search ad on a PC takes up about 4 percent of the screen real estate, whereas a single search ad on a smartphone takes up about 20 percent of the screen. The relatively larger size of the ads results in higher click-through rates on mobile (as much as 3 to 5 times as much).  On the iPhone, one search ad takes up 22 percent of the screen, and if two search ads are served up it takes up nearly half (48 percent).  For Android, those numbers are 18 percent and 38 percent for one and two search ads, respectively.

Sandler tested the same keywords across different devices (an iPhone, Android Nexus One, Blackberry, and aPC), and found that the average, for both the iPhone and the Nexus One, was 1.1 paid search results per query, compared to 9.2 search ads per query on a PC.  Searches on Blackberries showed hardly any paid results.

Another key driver for mobile search revenues should be the growth of local ads.  Sandler found that the ratio of localized or geo-targeted ads to non-local ads is still low and expects that to grow as advertisers learn how to geo-target their search ads.  Geo-targeted ads should also perform better, leading to higher mobile search ad revenues.

So how many people actually conduct searches on their smartphones? According to comScore, half of all smartphone owners conduct at least one search per month, 20 percent search once a week, and 11 percent search almost daily (which is about the same as the percentage of people who search on feature phones every month).

This year, Sandler estimates there will be 374 million people with smartphones, increasing to 766 million in 2012.  Consequently, the number of smartphone searches will grow from 157 billion to 586 billion (up from 35 billion two years ago).  The comparable number of searches on PCs this year will be 1.3 trillion, growing to 1.6 trillion in 2012.  Any way you look at it, mobile searches will become a significant portion of total searches within two years.  But how much will those searches be worth?  That is still a guessing game at this point.

If there’s one area that Yahoo has been strong in over the past several years, it’s partnerships in mobile around the world. The company’s deals with OEMs (like the most recent one with Nokia), ensure the company has had a foothold in the quickly growing mobile space despite not having an actual phone like rival Google. Holger Luedorf was the Senior Director in charge of those types of deals. Now he’s left the company, and is joining Foursquare — a company which Yahoo just unsuccessfully tried to buy.

Luedorf is joining the Foursquare business development team as Vice President, Mobile and Partnerships, we’ve confirmed with the company. His focus will be on “creating awesome partnerships with mobile carriers and OEMs that get Foursquare apps distribution on handsets around the world,” Foursquare General Manager (Foursquare’s cute title for COO) Evan Cohen tells us. He’s already left his job and Yahoo and will start at Foursquare next week, we’re told.

This is a very smart hire for the location-based startup. While they’ve had success in the U.S. thanks to the rise of app stores by Apple and Google, OEM deals remain extremely important in the rest of the world for getting your service on mobile devices. Basically, it sounds like Luedorf’s job will be similar to the one Kevin Thau holds at Twitter. Thau has been vital in the company’s international growth, signing deals left and right to ensure Twitter is available through large portions of the world through SMS.

I also asked Foursquare how their funding is coming along — they avoided that question. But you can bet it’s coming along quite well (Andreessen Horowitz is the winner there, according to our sources) if they’re able to hire Luedorf, and the dozen or so other employees they’ve hired recently.

[photo via Luedorf’s Twitter]

Social email startup Xobni is channeling Microsoft today. The company is now selling the premium version of its product, called Xobni Plus, which the company rolled out last year, in a number of stores. The boxed software, which will be featured in stores right next to the newly released Microsoft Office 2010 software, will be sold at Office Max, Fry’s and a few other brick and mortar establishments, putting Xobni in 3,500 stores in total. Xobni Plus will also be sold on Amazon.

Xobni is hoping to capitalize on some of the foot traffic that Microsoft will be bringing to stores for the new version of Office. Office is carried in 35,000 brick and mortar stores, and Xobni says that its software is currently in 10% of those stores, and will be adding its offering to more stores soon. The price for the boxed set will be the same as it is online: a one time fee of $29.95.

So why is Xobni going old school with software in brick and mortar stores? The company claims that retail boxes improve conversion online (60% of customers that Xobni surveyed say they are more likely to buy software online if they saw the software in a retail store) And 80% of people surveyed (over 2000 respondents) said they were likely or very likely to buy software in a retail store in the next year. Xobni also says that retail boxed software has a higher perceived value/price point.

Xobni’s social email plugin essentially makes your e-mail smarter (Xobni is inbox spelled backwards) and integrates LinkedIn, Twitter Yahoo Mail, Facebook, Skype, Hoovers and more into your Outlook inbox. The Plus product improves search in this plugin, and includes an autosuggest feature, which can use linked Facebook and LinkedIn accounts to pair Email address with full names, as well as the ability to search within your Xobni ‘feeds’ in the sidebar.

Xobni, which just raised $16.2 million in new funding, has been looking for ways to make money over the past year. Plus is one of these revenue streams, and Xobni also offers a paid syncing service between devices and desktop clients called Xobni One.

Of course, the offering of Plus in retail stores is more than just a revenue opportunity for Xobni. It’s also a branding opportunity to associate its product with Microsoft to consumers. While this move doesn’t represent an established partnership with Microsoft, Xobni is clearly hoping to ride on Office 2010′s coattails.

The Electronic Entertainment Expo is the gaming industry’s equivalent of the Consumer Electronic Show and the North American International Auto Show. It’s a massive show filled with game demos, over-the-top booths, and scantly-claded booth babes. It’s heaven. Click through for a large photo gallery that will give you a taste of what you’re missing.

AOL is close to selling Bebo to an investor group, we’ve confirmed from a source close to the company. The price? $10 million or less. Rumors of the acquisition first surfaced this morning, and the buyer may be Criterion Capital Partners.

That’s just a bit less than the $850 million AOL paid for the social network in 2008. And as decimated as Bebo is, it’s almost certainly worth more than $10 million.

But the deal will also give AOL the ability to write off the full purchase price of Bebo for tax purposes, which we wrote about in March:

Despite that value, Aol’s best financial option for Bebo will likely be to abandon it rather than sell it, say corporate tax experts we’ve spoken with.

Here’s why – complicated corporate tax rules will let Aol write off the full purchase price of Bebo if they declare it worthless and abandon the asset. With Aol’s effective tax rate of around 45%, that’s $380 million and change in their pocket in taxes that they’d be able to avoid.

A sale of Bebo would almost certainly be less attractive. If someone were to pay them $100 million for the service, which is optimistic, Aol could still offset the remaining $750 million as a tax loss. But it could only apply against long term capital gains, and Aol doesn’t have any to offset against. They’d have to carry that loss forward and hope for future gains to offset it against.

One corporate tax attorney we spoke with wouldn’t discuss Aol specifically, but did confirm the logic of the approach. Bryan Smith, a partner at Perkins Coie, says “Without getting into any specific facts or companies, it will often be more attractive for a U.S. corporation to simply shut down a subsidiary and claim a deduction for the worthlessness of the stock against ordinary income instead of selling the stock at a distressed price and taking a capital loss, which may only offset capital gains.”

In April AOL confirmed that they were going to sell or abandon Bebo. This sale, we’re hearing, still allows AOL to write off the purchase against ordinary income, meaning they may save hundreds of millions of dollars in corporate taxes.

We’ll update with more information as we get it.