Hulu is a problem. So argues a paper by University of Minnesota Professor Dr. Andrew Odlyzko, who says that video isn’t actually clogging the Net right now, but that streaming video content is such an inefficient way of getting video from one place to another that sites should find better options, such as faster-than-real-time streaming and buffering. The goal of the paper is to counter carrier assurances that they will protect video even without any mandated Network Neutrality. Odlyzko argues that such assurances might lead to special video pathways, but that’s not the Internet the market wants and needs.

Aside from Odlyzko’s attack on streaming, which he says comprises 9.6 percent of total web traffic during evening hours and has grown 169 percent year over year, the largest part of the paper is devoted to data that supports his conclusions that content, such as Internet radio and video, is worth less than connectivity such as voice or Twitter. People don’t pay for content, they pay for connectivity, says Odlyzko.

For all the hoopla about Hollywood, all the movie theater ticket sales and all the DVD
sales in the U.S. for a full year do not come amount [sic] to even one month of the revenuesof the telecom industry. And those telecom revenues are still over 70% based on voice,
definitely a connectivity service. In wireless, there is very rapid growth in data service
revenues, but most of those revenues are from texting, another connectivity service (and
one that the industry did not design, but stumbled into).

The report makes for good reading for those thinking about the value of broadband connections (from a revenue perspective a text message generates $1,000 per MB for a carrier while a wireless voice call generates $1 per MB and broadband Internet generates 1 cent per MB) and next-generation services. But if people will pay for connectivity, why can’t Twitter find a business model?

I know I know… by now the world doesn’t need yet another Google Browser blog post, with yet another news item or a hands on review. How about something different, even though it was buried deep inside the Google Chrome announcement?

As part of the Chrome release, Google open sourced a big portion of Android’s graphic engine code. This code comes from the Skia Graphics Engine that was developed by Skia Inc., a company Google acquired in 2005. It was based in Chapel Hill, North Carolina and was started by Michael Reed.

This vector graphics rendering software makes highend visual effects possible on feature phones. It is tiny in size and is capable of delivering very high quality. Skia’s engine is the graphics core of both Google Android and Google Chrome.

This is yet another proof point to my theory that Google Chrome is more about the mobiles and less about the desktops. By adding Skia engine to Chrome, Google can ensure good graphics performance on devices that don’t have graphics processing unit.

Just like that, the summer of 2008 has come to an end here in the U.S. (though gratefully, San Francisco is only going to get warmer over the next 60 days.) Summer is the one time when the business community, that of Silicon Valley in particular, pauses a bit to refresh and recharge.

No such break for us – we have been toiling away, working hard to put together Mobilize, our next-generation mobile conference. (Get your tickets here.) One person that’s been in the trenches throughout is Paul Walborsky, who joined the company a little over a year ago as chief operating officer.

Today it gives me great pleasure to announce that Paul has been promoted to chief executive officer. As CEO, he will lead us through our next phase, in which we will go from being a small network of niche blogs to being a new media company with much bigger horizons.

Bringing on board Paul — a veteran of Wall Street, a founder of (two) startups and most importantly, a trusted friend — was perhaps the single most important decision I’ve ever made in terms of shaping the future of our company.

While the first two years have been devoted to laying the groundwork befitting our future, the next few years are going to be about executing our game plan. And Paul over the past 12 months has proved that he can execute.

Since he signed on, we have doubled our revenues, more than doubled the number of monthly visitors to our network and hosted two sold-out conferences (NewTeeVee Live and Structure 08). And we acquired jkOnTheRun, our first, but not our last, acquisition.

We are looking to grow even more, not only organically, but also through acquisitions and content partnerships. Given the scope of my ambitions, we are only going to get bigger.

Paul has all the right skills to lead us into the future. His ability to focus, motivate and inspire — all while paying close attention to the bottom line — make him an exemplary leader, while his easy smile and ability to stay positive in times of adversity make him a great co-worker. And like me, Paul uses pop culture references to make his points. Like this little video from Any Given Sunday:

As for me, I’m not going anywhere –- my title is simply changing to that of Founder/Chairman. I am going to focus on the areas where my skills add the most value to our company, such as content and the strategic use of technology to build better a editorial experience. I will outline those plans in a separate post later this week, but today is all about Paul. Please join me in congratulating him!

Photo by Photo Matt.

After layoffs last month and an Associated Press article today pointed out that NebuAd has little or no future based on its business model of using deep packet inspection technology to insert advertising into a consumer’s web site based on their surfing habits, the company lost CEO Bob Dykes.

Dykes joined VeriFone as its chief financial officer. It’s a shame Dykes left because unlike the CEO of Phorm, a U.K firm touting a similar business model, Dykes actually struck me as a legitimate businessman. I was never sold on the privacy implications of the NebuAd endeavor, but Dykes, with his background as the CFO of Juniper Networks, added some credibility to the operation. Current NebuAd president Kira Makagon is assuming the title of CEO, and Dykes will remain as chairman of the board.

NebuAd in an emailed statement said, “NebuAd is also broadening its market via more conventional media channels and means. Accordingly, NebuAd’s current President, Kira Makagon who has been responsible for NebuAd’s advertising systems and media revenue, will assume the role of CEO to drive adoption of the platform across more traditional channels.”

Perhaps those “traditional channels” include those not under Congressional investigation for violating user’s privacy–although since a large portion of web providers and large portals seem to be facing such scrutiny NebuAd’s future seems limited at best.

Over on OStatic, Sam Dean has put Google’s open-source Chrome browser (available for Windows users), through the paces. Deeming it “clean and complete for a beta version,” Dean dishes up an in-depth review:

• As promised, Chrome is focused on web applications and is tricked out to handle them nicely. While it may not be ready to act as a complete OS just yet, it lets you create shortcuts for your favorite web apps and run them — even if Chrome is closed.
• Like lots of Google products, Chrome is watching — and it tallies and collects the web sites you visit most often in the Most Visited page (tab). So far, its a useful tool, but it could also host some Google self-promotion.
• Google is making a big deal of Chrome’s “one box for everything” approach. Google search box, address bar, toolbar — Chrome offers it all as one-stop shopping, without menus or multiple places to enter text.
• For the tabbed browsing maniac or the cloud-computing convert, Chrome lets you work with many open tabs at once without crashing or causing rendering problems.
• Chrome isn’t clearly a Firefox friend or foe, just yet. Google acknowledges that it’s borrowed heavily from Firefox’s code, and Chrome readily imports bookmarks and settings. That relationship could also mean extensions designed for Firefox can quickly migrate to the new browser.
• Extensions could be a critical weakness. Google doesn’t have a great track record for bringing out the community to participate in its projects, and without the extensive plug-in catalog that Firefox has collected, Chrome won’t displace it.

Read more at Ostatic. Get a second opinion at Web Worker Daily.

OStatic has put Google’s new open-source browser, Chrome, through its paces. While it found Chrome to have a clean interface — and to deliver on its promise of working efficiently with numerous tabs open — OStatic notes the power Firefox still gets from the large collection of useful extensions with which it works. Chrome is built to be extensible in interesting ways, but it will need to play catch-up with Mozilla.

It was nearly a decade ago when a then-young Marc Andreessen, the wunderboy founder of Netscape Communications, first talked about the concept of the browser pushing the operating system into the background. With the release of Google’s experimental browser, Chrome, we have come full circle.

A lot has changed in the past 10 years. For one thing, the cost of hardware and network infrastructure has declined sharply. Such a decline has led to what’s known as cloud computing, whereby companies like Amazon offer infrastructure on demand. That has, in turn, allowed innovators to roll out their applications without making major outlays up front.

In the meantime, always-on broadband connections at home, work, and while on the move have become commonplace. This has served as a catalyst for innovators, who have developed web services that are now screaming for browsers that allow your data to live on the web but be accessible offline, a trend I first wrote about out in a column for the now-defunct Business 2.0 magazine back in March of 2006.

As I noted back then…

“Things will get more exciting for entrepreneurs when we all start walking around with new Internet-ready portable devices…these pocket-size monsters with keyboards, luscious displays, and brisk 3G connections will soon replace laptops…all they need are browsers that can access Web-based software as easily as your desktop can.”

For web applications, the bigger and more real opportunity is with an emerging category of Internet-enabled devices optimized for on-the-go computing. They are skimpy on resources, but they all have browsers. And given app developers’ focus on designing apps that can be made available to millions simultaneously, the browser has taken a much more prominent role in our digital life compared to the operating system.

Alistair Croll put it best when he wrote:

“Browsers have made computers interchangeable; most of us can work on whatever machine we have at hand, be it a PC, Mac or an XO laptop. As a result, the browser is the new desktop. Today’s browser competition is less about who renders HTML properly, and more about what the incumbent browser is and how well it accommodates whatever new applications the Internet throws its way.”

But in order for web applications to match the desktop applications they seek to replace, these browsers need to start offering OS-like functionality. While this year has brought some changes in that direction, Google’s Chrome browser embodies such an approach as it is specifically built for these web applications.

“We realized that the web had evolved from mainly simple text pages to rich, interactive applications and that we needed to completely rethink the browser. What we really needed was not just a browser, but also a modern platform for web pages and applications, and that’s what we set out to build,” Sundar Pichai, VP of product management, and Linus Upson, engineering director, write on the Google blog.

One of the biggest improvements on this browser is the V8 JavaScript Virtual Machine, which allows multithreading and is said to be more stable than the current implementations of JavaScript. It enables the easy use of multiple web applications without slowing down the browser.

Google Chrome has faster JavaScript VM, better memory management, better Windows UI rendering, faster text layout and rendering,  and intelligent page navigation in comparison to other more widely adopted browsers. When combined with Google Gears technology, this is as close as you can get to replicating the desktop experience with web applications. “While we wanted to make more choices for users, we wanted to make less headaches for developers,” Pichai said in a demo of Chrome at the Google HQ on Tuesday. Chrome could act as the operating layer for cloud computers — and could turn out to be the netbook browser of choice.

“No, I would not call Chrome the operating system of web apps,” said Google co-founder Sergey Brin at the Tuesday demo. “I think it is a very fast engine to run web apps.

“With Chrome we will be able to bridge the divide; we will be able do more and more online,” he said. “You will be able to access your work from an Internet cafe and get all those benefits.”

Microsoft with its IE 8, Mozilla Firefox with its new technology efforts such as Prism and TraceMonkey, and Apple’s Safari are also moving to make their browsers work better with web-based services and applications.

No matter how you look at it, we’ve gone back to the future. And while the browser is not quite the OS yet, its relevance in our digital lives has become paramount.

With additional reporting from Liz Gannes

Today the Wall Street Journal drills into another aspect of the maturing broadband market: price wars. But instead of being good for consumers, in the end these may actually end up hurting them — by enticing them into capped services from cable providers or tying them to plans with early termination fees.

With fewer new customers signing up with DSL or cable providers, we’ve tracked the side effects of maturity such as negative advertising and the boosts in speed offered to prospective customers. To illustrate the expected price wars, the WSJ cites price cuts from Verizon and pricing guarantees from AT&T, the nation’s two largest DSL providers, and assumes cable companies will respond. The cable guys had pretty much won the war when it came to attracting new broadband subscribers, partly because they can advertise faster speeds, and because the newer high-speed services from the phone companies are cannibalizing DSL sales.

This is a price war that will be played out among the average user of “garden variety broadband services,” as the WSJ calls it. My guess is these are the folks using what Comcast cites as the average 2 GB or 3 GB per month, rather than those of you taking the 250 GB challenge in response to the caps some cable companies are implementing on their user base. In Time Warner’s case, the caps will likely benefit from price wars as a way to sign up customers under the new capped plans for lower prices. I noticed Verizon’s offer also contains an early termination fee. Both of which mean that in this price war, some consumers will lose.

image courtesy of Verizon

Updated Analysis: Google, in a blog post on its web site has acknowledged the existence of Google Chrome, a browser that the company will be releasing tomorrow. Kara Swisher has confirmed the existence of Google Chrome, a browser developed by the Mountain View, Calif.-based search company. The rumors of the browser were reported earlier on Google Blogoscoped, which received a comic book that outlined the key features of the browser.

• It is based on Webkit and will include Google Gears.
• It has a browser extensions framework that will allow it to make Adobe AIR-type hybrid apps.
• It includes Javascript Virtual Machine called V8 that was developed by a team in Denmark. It accelerates the Javascript performance and is multi-threaded.
• It has tabs, auto-completion, and a dashboard-type start page that can help you get going to the web services you need. Opera has such a dashboard.
• It has a privacy mode that allows you to use the machine without logging anything on the local machine. It might be similar to a feature called Incognito in the latest version of Microsoft IE.
• Malware and phishing protection would be built into the browser.

The company released:

So why are we launching Google Chrome? Because we believe we can add value for users and, at the same time, help drive innovation on the web. All of us at Google spend much of our time working inside a browser. We search, chat, email and collaborate in a browser. And in our spare time, we shop, bank, read news and keep in touch with friends — all using a browser. Because we spend so much time online, we began seriously thinking about what kind of browser could exist if we started from scratch and built on the best elements out there.

We realized that the web had evolved from mainly simple text pages to rich, interactive applications and that we needed to completely rethink the browser. What we really needed was not just a browser, but also a modern platform for web pages and applications, and that’s what we set out to build. On the surface, we designed a browser window that is streamlined and simple. To most people, it isn’t the browser that matters. It’s only a tool to run the important stuff — the pages, sites and applications that make up the web. Like the classic Google homepage, Google Chrome is clean and fast. It gets out of your way and gets you where you want to go.

Google says the browser is going to be in open source.

We owe a great debt to many open source projects, and we’re committed to continuing on their path. We’ve used components from Apple’s WebKit and Mozilla’s Firefox, among others — and in that spirit, we are making all of our code open source as well. We hope to collaborate with the entire community to help drive the web forward.

The new browser is going to be released in beta for Windows first, and there will be Mac and Linux versions at a later stage. A source tells me this initiative prompted Apple to release Safari For Windows as a beta last year.

The question is: Why a browser? What does Google get from releasing a browser? There are going to be many theories around the Google Browser — that it is a direct challenge to Microsoft’s IE Browser, for example — but I think it might be more than just the desktop. Why? Because even today, despite strong competition from Mozilla’s Firefox, Microsoft controls about 75 percent of the desktop browser market. In other words, given Microsoft’s control of the desktop, it is hard to dislodge it on the desktop.

However, it is vulnerable on mobiles, where IE Mobile has a non-existent market share. Like Mozilla, Microsoft is playing catch-up with Webkit, the core rendering engine for Nokia S60 phones, Apple’s iPhone Safari and Google Android devices. Even a Windows Mobile version is in the works. (Read my Webkit report.) By developing a browser that offers a seamless experience on both mobile and desktop devices, Google can carve out a nice chunk of the browser market for itself. The big opportunity could be especially the emerging class of mobile devices like the Netbooks.

Most of the features mentioned in the comic book and Google’s blog post indicate that features such as faster JavaScript VM, better memory management, better Windows UI rendering, faster text layout and rendering and intelligent page navigation are all features that make absolute sense in a mobile browser. I wouldn’t be surprised that that many of these features end up back in the Android browser.

In recent months, there have been rumors that Android is going to work on more than just mobile phones. Given the light-weight footprint of these devices and Google Chrome’s focus on “web applications” it would make perfect sense for Google to chase this opportunity.

Mathew Ingram points out, “Google clearly sees the browser as a form of operating system — just as I think the Mozilla group.” I agree, and also I agree with John Furrier’s contention that browser-as-OS war is only beginning. What are your thoughts about this development?

If this story interests you, check out our upcoming conference:
Mobilize — The Next Generation Mobile Conference

In response to today’s news that Google is releasing its own browser, code-named Chrome, I decide to call John Lilly, CEO of Mozilla Corp., the folks behind the fast-growing Firefox browser. My intention was to find out what Lilly thought about this development, especially since Mozilla has been viewed as close personal partner of Google’s.

The open-source browser maker depends heavily on a lucrative financial deal it has signed with the search company. The pair recently renewed the deal to last through 2011. Was Lilly worried about yet another browser in the market?

After all, the emergence of Linux has had an equally deflationary impact on the UNIX market. Can a Google browser, promoted on Google homepage and pushed through Google’s mobile OS, become a sticky wicket for Mozilla Firefox?

“We collaborate with them on a bunch of things and we have a financial relationship,” Lilly says. “So there is another browser and that makes for a more competitive world. Of course we would have to compete.”

Given that Microsoft still controls about 72 percent of the browser market, Google can’t afford to leave that business to chance. Web is its business, and the browser is a necessary weapon for the company. “It is not surprising that they are doing a browser. Google does many things (servers, energy) that touch their business,” he said. “They feel that they can make a better browser by starting from scratch…advances in browsers are good.”

Lilly pointed out that most of the other browser vendors — Microsoft, Apple and now Google — have other businesses and thus another agenda. For Mozilla, Firefox was the only agenda. “Our only agenda is to make web better — it is our single mission,” Lilly says. With over 200 million users worldwide and a development team made up mostly of volunteers, Lilly says he isn’t worried about Chrome just yet. “I really don’t know how it will impact us,” he says.

He is right to take a wait-and-see attitude. For one, browser market share doesn’t change overnight. Google, despite its awesome reach, has a history of launching products that tend to lose steam. It has yet to hit home runs that rival its search and contextual advertising businesses.

Not having seen Chrome, I will withhold any final judgement myself, but I would look at the privacy implications of Chrome very, very carefully. I have long since stopped buying into the “do no evil” drivel the company keeps espousing.

This tussle between Mozilla and Google is going to get more gripping in coming years. Mozilla has a services strategy — Project Weave – that could eventually compete with Google’s suite of services. Whatever it is, it seems like Mozilla is ready for the challenge. And just when we thought the world of browsers was getting boring.

You can download Google Chrome from here when it becomes available.

Related Posts:

* GigaOM Interview with John Lilly, CEO, Mozilla Corp.
* Browser wars again.
* John Lilly on The GigaOM Show.

Photo of John Lilly by Joi via Flickr.