IBM announced this morning that it will be rolling out cloud computing services for corporations in the Spring of 2008. More than just a beautiful turn of phrase, cloud computing is a paradigm that leverages a distributed architecture to carry out massive processing tasks online, instead of on a single computer. The program, called Blue Cloud, is set to compete at least indirectly with Amazon's Elastic Compute Cloud, or EC2.

In theory, cloud computing will usher in an era wherein innovation based on massive data processing becomes affordable for almost any company, no matter how small. The possibilities are exciting; I think of the huge benefits we've seen from the network effect of users aggregating their activities online and the thought of leveraging a related paradigm for processing power seems fantastic. I hope we'll get to see the direct application of such an approach, but cloud computing could remain an activity of big, stuffy organizations only. Any semantic web companies interested in both heavy processing and avoiding investment from In-Q-Tel, the CIA's investment arm that's ubiquitous in the semantic web sector, might appreciate improved cloud computing options. IBM's hardly got a perfect record historically, either, but nobody's perfect.

IBM announced last month a collaboration with Google to promote cloud computing in academic institutions. Though from the consumer perspective working with Google sounds promising, Google has seen very limited success with large organizations. Similarly, RedMonk analyst James Governor argues that the real story behind Blue Cloud is that "IBM is miles behind the real players in this space and needed to win some breathing room." "I see no evidence IBM gets Cloud Computing, " Monk said. "IBM is addicted to its own scale, so it doesn't fully understand web effects. What's Blue Coud? Enterprise EC2/S3 but without customers and developers at this point."

Amazon's showcase customers for EC2 are mostly tiny, random startups, so it's hard to know the extent of adoption, but the potential is big. The market for time on single Super Computers is substantial, so in theory cloud computing should see a lot of demand as well.

Is cloud computing set to become commoditized? That probably goes without saying. What direction will it move in then? I can't help but think that IBM is uniquely prepared to add a layer of business services on top of their cloud. It's mornings like this that I wish I was more engaged in the enterprise space - this sounds like a whole lot of fun.

Larry Dignan at ZDNet, a writer far more informed on enterprise matters than I, says that "It’s still early to ponder the enterprise cloud possibilities, but it can’t hurt to mull over the issues. The cloud will be hovering over your corporation shortly." There's also some informed discussion over at DataCenterKnowledge.

Interested in other large scale, futuristic work at IBM? Check out this post here on Read/WriteWeb earlier this year from guest authors Martin Wattenberg and Fernanda B. Viégas, two researchers behind IBM's Many Eyes program.

Radiohead’s name-your-own-price sale of its new In Rainbows album has generated lots of commentary, especially since comscore released data claiming that 62% of customers set their price at zero, with the remaining 38% setting an average price of $6, which comes to an average price of $2.28 per customer. (There are reasons to question these numbers, but let’s take them as roughly accurate for the sake of argument.)

Bill Rosenblatt bemoaned the low price, calling it a race to the bottom. Tim Lee responded by pointing out that Rosenblatt’s “race to the bottom” is just another name for price competition, which is hardly a sign of an unhealthy market. The music market is more competitive than before, and production costs are lower, so naturally prices will go down.

But there’s another basic economic point missing in this debate: Lower average price does not imply lower profit. Radiohead may well be making more money because the price is lower.

To see why this might be true, imagine that there are 10 customers willing to pay $10 for your album, 100 customers willing to pay only $2, and 1000 customers who will only listen if the price is zero. (For simplicity assume the cost of producing an extra copy is zero.) If you price the album at $10, you get ten buyers and make $100. If you price it at $2, you get 110 buyers and make $220. Lowering the price makes you more money.

Or you can ask each customer to name their own price, with a minimum of $2. If all customers pay their own valuation, then you get $10 from 10 customers and $2 from 100 customers, for a total of $300. You get perfect price discrimination — each customer pays his own valuation — which extracts the maximum possible revenue from these 110 customers.

Of course, in real life some customers who value the album at $10 will name a price of $2, so your revenue won’t reach the full $300. But if even one customer pays more than $2, you’re still better off than you’d be with any fixed price. Your price discrimination is imperfect, but it’s still better than not discriminating at all.

Now imagine that you can extract some nonzero amount of revenue from the customers who aren’t willing to pay at all, perhaps because because listening will make them more likely to buy your next album or recommend it to their friends. If you keep the name-your-own-price deal, and remove the $2 minimum, then you’ll capture this value because customers can name a price of zero. Some of the $10-value or $2-value people might also name a price of zero, but if not too many do so you might be better off removing the minimum and capturing some value from every customer.

If customers are honest about their valuation, this last scenario is the most profitable — you make $300 immediately plus the indirect benefit from the zero-price listeners. Some pundits will be shocked and saddened that your revenue is only 27 cents per customer, and 90% of your customers paid nothing at all. But you won’t care — you’ll be too busy counting your money.

Finally, note that none of this analysis depends on any assumptions about customers’ infringement options. Even if it were physically impossible to make infringing copies of the album, the analysis would still hold because it depends only on how badly customers want to hear your music and how likely they are to name a price close to their true valuation. Indeed, factoring in the possibility of infringement only strengthens the argument for lowering the average price.

By all accounts, Radiohead’s album is a musical and financial success. Sure, it’s a gimmick, but it could very well be a smart pricing strategy.

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LaunchBox Digital is a new early-stage investment firm that opened its doors yesterday in Washington, D.C. Founded by Julius Genachowski, former Chief of Business Operations at IAC, Sean Greene, founder of the Away Travel Network, and John McKinley, former CTO and President of Digital Services at AOL, the company will make small, seed investments in the style popularized by Y Combinator and TechStars. LaunchBox Digital will invest between $15,000 and $30,000 in fledgling Internet companies in exchange for a 4-8% stake.

Like the investment firms it is modeled after, LaunchBox Digital will offer startups more than just cash. Startups chosen for investment during their initial investment cycle, will be required to spend 12 weeks in Washington, D.C. and will have access to business advisors and the chance to trot their businesses out in front of angels and venture capitalists who can invest in the companies further. Unlike Y Combinator, startups participating in the LaunchBox Digital program will be required to find their own accommodations while in D.C.

As cost of entry for Internet businesses goes down, small, early-stage investments are getting more and more attractive to investors. Instead of betting the bank on a handful of large investments, investors can scatter their money over a larger number of startups and increase their chances that something will stick. "There's a capital gap emerging as venture funds get larger and put more money to work per deal, but as cost to start companies go down, it gets harder for early stage companies to figure out where to go to get early stage funding," Julius Genachowski told Reuters.

LaunchBox Digital has an impressive list of advisors lined up, including Dick Costolo from Feedburner, Scott Ferber from Advertising.com, Tom and David Gardner from The Motley Fool, former FCC Chairman Reed Hundt, Jon Miller, ex-CEO of AOL, and Ross Levinsohn, former President of Fox Interactive. During the 12-week program, the firm will set up a weekly series of Advisor Programs in which people on their list will speak with participants.

The firm is currently accepting applications for their first program, LaunchBox08, which will begin in May, 2008. Applications are due at the end of February. Those interested in seed funding, but not the mentoring program, can also submit proposals to LaunchBox Digital.

With sectors looking to Congress for the regulation of p2p file-sharing sites, as well as the recent trouble with Internet traffic throttling, it’s the p2p file sharing and content download sites that are caught in the middle.

Vuze, the IPTV network, is taking measures into its own hands by petitioning the FCC to adopt regulations that would prevent arbitrary interference by broadband network oprators for p2p services. Basically, Vuze wants the Internet traffic throttling to stop. Comcast has all but admitted to this act of anti-net neutrality, as has Bell Sympatico, a Canadian ISP.

That’s not making a lot of people happy, and things got even uglier from a legal perspective when Jon Hart took a stance of his own, suing Comcast for misleading advertising in regards to its fast connection speeds. So here stands Vuze, torch in hand, hoping to lead the entire industry wo a land of complete net neutrality.

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First John Edwards. Then Barak Obama. Now it’s John McCain’s turn to shine on MySpace for the Presidential Dialouge series. It’s going down on Monday, December 3, at 7 pm ET. The location has not been determined, but it will be somewhere on New Hampshire’s college campus.

As all the others, McCain’s dialogue will be simultaneously broadcast on MTV, MySpace, and MTV Mobile. MTV News correspondents Gideon Yago and John Norris will be moderating alongside WashingtonPost.com reporter Chris Cillizza. You get a piece of the action by submitting questions on MySpace, and participating in Flektor-powered online polls.

So has anyone watched these dialogues yet? There’s only so many candidates that can appeal to a teen and college-age demographic (is McCain one of them?), and I’ve yet to see any marketable stunts like saxaphone-playing. What’s that all about? Maybe McCain will fall off the stage again. Nevertheless, it seems like candidates are working harder than they’ve ever worked, to gain attention and get the vote. From Obama offering additional attention to the technology world and debates going down on YouTube, I’m tired just keeping up with them.

[image credit: Joe Cavaretta/AP]

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Remember the Milk, the integrated task management system, has relaunched its service with a ton of new features. The task list interface has been improved, especially for mobile users with larger screens. New icons are part of this new interface, as are keyboard shortcuts. More importantly, however, there’s now the ability to connect your tasks to your task details while you edit. This is especially helpful for when you have multiple tasks selected, or are using the multi-edit mode.

Tag management for tasks and lists (tasks tags will now show in lists) is another upgrade that avid users will find helpful, and there’s even the option of multi-editing in order to add tags to multiple tasks at once. This should really help you organize your tasks better, and improve their searchability as well.

Sometimes I think people underestimate the power of tags, but RTM has not only improved its tagging features, but has made them even easier to manage. Google has made similar moves with the improvement of its tag system for Notebook. This ties into RTM’s improved search functions, which include the ability to use smart lists in searches, and advanced search options.

The last important upgrade I’ll mention is the ability to subscribe to private addresses for Atom, RSS and iCal feeds. This is an important distinction that needs to be more widespread for the use of feed readers, especially those found on start pages, or with the upcoming surge in social networking platforms. So now, if you have a feed that requires a username and password, you can now add it to RTM without having to remove the authentication, which would otherwise make the feed public.

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YouTube has announced that they will soon be supporting high definition for videos uploaded to their site. Meanwhile, startup Vimeo hopes to make high def a differentiator that will make user’s switch to their service. While HD is fantastic on the big screen for sports and movies, does it really matter for online video? Are the longer load times worth it? That’s what we’re trying to get to the bottom of with today’s poll:

Do you care about high definition for online video?
• Yea, I would choose a service based on it
• Somewhat, I'd prefer my online video in HD
• Not at all, I just care about the content
View Results

Be on the lookout for The Daily Poll in the afternoon every day Monday thru Friday. If you’d like to sponsor “The Daily Poll” or any future contests, please contact Adam Hirsch.

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Joost is finally rolling out some advertising alternatives that have been expected for some time now, especially with the advent of its API offerings and inclusion of Meebo chat. The Coca-Cola’s European Division has created the first commercial widget for use on Joost. It’s called Coke Bubbles, and it’s more interactive than most, when it comes to Joost users. You can choose the clip you’d like to share from Joost, and send it to other Joost users. Add a “bubble” note, and away it goes.

So what makes this better than other advertising widgets we’ve seen?

The customization for users. It’s more of a way to promote the sharing of media you like, instead of promoting its own content. So it will be interesting to see if this is more appealing to users. It certainly lends itself to viral sharing more so than just a widget advertising an upcoming film. And in what looks to be a way to get in good with developers in hopes of creating more useful ad methods for online use, Coca-Cola has also partnered with Joost for Developer Days, an event that takes place in London, Amsterdam and New York.

[via webware]

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CBS is acting like the Google of Manhattan. It has announced its upcoming CBS Mobile Zone, which is a free Wi-Fi network for laptops and other wireless devices, granting Internet access. From Times Square to Central Park South, and 6th Ave. to 8th Ave., the free wireless zone is an experiment between CBS and the MTA.

No word on how many devices the system will be able to support. So what’s the catch? It’s an advertising ploy for CBS Outdoor, the company’s out-of-home advertising sector (things like billboards, bus stop ads, etc.). So when you access this free network, you’ll get a CBS-branded home page that’s riddled with local and national news, local search with community reviews, and even a social network. I can’t imagine how extensive this social network will be, and if it will be incorporated into a larger CBS network, or specific to the new Mobile Zone. But with the upcoming holidays that do nothing less than take over Manhattan, it’s good timing for CBS to push such an advertising campaign.

Citi and Salesgenie have already signed on to be early sponsors for the CBS Mobile Zone, and surely there will be more to come. Is this a sign of the Internet truly replacing the television, from an attention-based perspective in addition to the dispersement of information? I always felt that television would just keep merging with computers and the Internet. Maybe CBS will be promoting its television content through the Mobile Zone as well.

As more ad-supported methods are applied to more devices and businesses (mobile phones and mp3s), we’ll surely be seeing more of these free zones popping up across the nation, in some senses taking the burden off the local and national government to match other countries’ free wireless offerings.

[via centernetworks]

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Apple today released Final Cut Express 4, a significant upgrade to its powerful video editing software based on Apple’s award-winning Final Cut Pro 6, with a new low price of $199. Final Cut Express 4 adds support for the latest AVCHD cameras, allows mixing of standard and high definition content on a single timeline, includes the ability to import iMovie ‘08 projects, and gives users access to hundreds of sophisticated FxPlug cinematic effects and filters. “Almost a million digital filmmakers have made Final Cut their editing application of choice,” said Rob Schoeben, Apple’s vice president of Applications Product Marketing. “With the introduction of Final Cut Express 4, Apple makes it easy for anyone to join the rapidly growing community of Final Cut editors worldwide.”