The man who would run Yahoo

He made his mark at Microsoft as head of the company's worldwide sales force at a time when it seemed everyone hated the company - most of all its customers. In 2 1/2 years Kevin Johnson achieved a miracle: He turned Microsoft's customer satisfaction numbers around.

After that, CEO Steve Ballmer gave Johnson a really hard job: Figure out what to do about Google, which now garners more revenue from online advertising than Microsoft does from Windows.

Plan A, which Johnson spearheaded, was to buy Yahoo (YHOO, Fortune 500), a company that for all its problems commands roughly twice as much online-ad revenue as Microsoft (MSFT, Fortune 500). Plan B, it would appear, is to acquire Yahoo's search business and leave the rest. In the middle of all this, while immersed in Yahoo talks "seven days a week," the affable Johnson, 47, known to insiders as KJ, agreed to talk to Fortune twice, once in April and once in late May.

"Online is a very, very significant growth opportunity for us," he says. It's also something of an obsession for his boss. It was the only part of Microsoft's business that Ballmer talked about in his presentation at the company's annual CEO summit in early May. He showed a PowerPoint slide that displayed approximate ad revenue for the largest media companies in the U.S.: GE/NBC (GE, Fortune 500) on top at $15 billion, Google (GOOG, Fortune 500) in the middle at $8 billion, Microsoft down near the bottom, with a measly $2 billion. Ballmer estimates that the $40 billion spent this year on online advertising will double by 2010. If Microsoft is ever going to approach the growth it achieved during the PC boom, it has to grab some of that action before Google takes it all.

That's where Johnson comes in. He holds an unwieldy portfolio at Microsoft. On one hand, he's in charge of the company's core Windows monopoly - for better or worse, it was on his watch that the company released the much criticized yet highly profitable Windows Vista. With his other hand he runs Windows Live Services - a division whose failures he described bluntly in a May 18 memo to his staff: "The fact is we are not where we want to be in [online services] yet, and we've been in this position longer than we'd all like."

There's an important link between these two seemingly unrelated businesses. Ballmer wants Johnson to take Microsoft's so-called platform business - its PC-based Windows software franchise - and migrate it toward what Microsoft calls "software plus services." Just as Windows was the framework on which software ran in the PC era, Windows Live Services could be the framework for Internet computing. It's unlikely that Microsoft will ever create the kind of monopoly on the web that it enjoyed in PCs, but the company is deploying its considerable resources to control as much of it as possible.

During a long conversation, Johnson draws a simple chart on a whiteboard. Four vertical rectangles represent industries that profit from online advertising: search, information and content, communications and social networking, and online productivity services (e.g., word processing on the web rather than on the desktop with Microsoft Word).

Underneath all four is a horizontal box - the revenue-generating ad platform on which the other industries rely. That box is key to Microsoft's online aspirations. "There will be a small number of big-scale players in that underlying platform," Johnson says. Microsoft has been building its platform though acquisitions, but before its $50 billion bid for Yahoo, the most it had ventured was $6 billion last year for aQuantive's system for buying and placing ads.

But for a platform to work properly, Johnson says, it needs scale. "The more ad inventory you can get, the better job you can do to target ads, drive efficiency, and deliver better yield for publishers." Google has scale; Microsoft doesn't. But it does have a lot of money. Thus the Yahoo pursuit.

Jerky might not top everyone's list of hot products for a cold economy. But recently I met an entrepreneur who is prospering in the jerky business against all odds. Her story is instructive for any business owner trying to swim against the economic current - which is most of us nowadays.

Her name is Janie Honeycutt. Along with her husband Ron Hargett, Honeycutt runs House of Jerky. They sell the usual beef varieties, plus exotic jerkies such as ostrich and alligator. Honeycutt and Hargett also sell pre-packaged "Soldier Jerky" that you can send to your favorite troops in Iraq or Afghanistan.

Honeycutt and her husband have seen their share of economic cycles since 1997, when they launched House of Jerky in Temecula, Calif. Last year their wholesale operation, which distributes to a dozen branded stores around the country, grew 15% over 2006.

How did they achieve such torrid growth at a time when sales of so many other "optional" products are hitting a wall of gloomy consumer sentiment?

Enter the Internet.

House of Jerky's online retail sales more than doubled from 2006 to 2007. All told, the couple sold $600,000 of jerky last year, and is on a 2008 run rate to beat that number. If you consider that a typical one-pound order runs $34, that's a lot of jerky going out the shipping and receiving dock.

Honeycutt shared some of the strategies that have helped her rev up her web sales so fast. Most of her business comes from referrals, bringing in new customers who spawn yet more new customers by gobbling up and then gabbing about her unique jerky offerings. Honeycutt says that she regularly hears from customers who "share [the jerky] with everyone they can."

But the big surge in online interest, Honeycutt says, has come from her search engine optimization efforts. Just try typing in "ostrich jerky" into Google. House of Jerky landed in first and second place on the results page. Instead of buying online advertising, she transformed her site into a search engine magnet.

House of Jerky's homepage is packed with keywords associated with jerky. It's light on images, which search engines tend to ignore.

Honeycutt also used social networking to raise her site's profile. After she scattered mentions and links to her site on various social networking sites (including StartupNation.com, where I first learned about House of Jerky), she confirmed that the search engines started ranking her higher. Those online bulletin boards aren't sounding like such a waste of time anymore, are they?

House of Jerky's 15% wholesale growth is a major achievement, especially when you consider that their product is distributed mostly in recession-sensitive resort towns. But the company's online growth has been nothing short of spectacular. Honeycutt's search engine savvy sets her firmly apart from the thousands of small retailers that have been sucking wind of late.

Next week I'll highlight another entrepreneur whose smart strategies generated more than $1 million in revenue in 2007.

The iPhone gets a $100 million iFund

Silicon Valley venture capital giant John Doerr said Thursdsay that his firm will launch a $100 million "iFund" to help finance the development of software applications for Apple's iPhone.

The fund raised by Kleiner Perkins Caufield & Byers is intended to ignite a flurry of new games, productivity tools and so-called widgets using Apple's software development kit unveiled Thursday. Kleiner Perkins will essentially open a bank for startups focused on iPhone applications.

"We're all here today because we love Apple products," Doerr said at an Apple's event at the company's Cupertino, Calif. "And I'm here because I love Apple entrepreneurs."

Apple, which also announced new software to make the iPhone compatible with corporate e-mail systems, plans to open "the App Store" with the next release of iPhone software. The feature will allow people to purchase and download new applications for their phones.

According to the business plan, as explained by Apple, developers will participate in a revenue-sharing arrangement. Apple will keep 30 percent of sales from every app sold. Plus Apple will host and take care of credit card fees. The software developers get to keep 70% of the proceeds, said Jobs.

The move comes four months after Google announced its $10 million Android fund. Unlike Apple's revenue sharing model, Android is structured like a bakeoff where the best mobile applications written for Google's open-source mobile platform will receive as much as $100,000 in prize money.

Both efforts aim to break wireless carriers' near-monopoly on what applications can be downloaded to cell phones.

In typical Silicon Valley hyperbole Doerr summed up the move as the beginning of a new world order. The iPhone, he said, is "bigger than the personal computer. If you want to invent the future, the iFund wants to help you build

Is nanotechnology the key to curing cancer?

In nanotechnology, we think small -- very small. A nanometer is the length of ten hydrogen atoms placed end to end. If you take the nanoparticles that we make, 30 of them, and string them end to end like beads on a pearl necklace they would span the tiniest blood vessel in the human body.

What does working at that scale enable us to do?

Naomi Halas has a vision of a world where cancer is no longer a threat

NH: They're the perfect size to interact in the most effective ways with biological systems because it's a size where one is just a little bit bigger than the fundamental natural building blocks - atoms and molecules. In just the same way that Mother Nature controls atoms and molecules when our bodies make cells or make new types of molecules like proteins or DNA, with nanotechnology we can start to do some of that control ourselves.

Tell us about your nanoparticles.

NH: We invented a particle that we called nanoshells. The structure is basically a coated sphere. The inner core of this particle is made out of glass and the outer shell is made out of g

How do they work?

NH: Nanoshells are essentially nanolenses. They capture and focus light around themselves. By controlling the inner and outer thickness of this metallic shell we can control the wavelength of light that this nanoparticle will absorb. They can be effectively delivered to a specific organ or tumor through the bloodstream.

Once in place, infrared light is shone through the skin and to the tumor. The nanoshells have dramatic heating properties. They absorb the light and convert light to heat with incredible efficiency. This raises the temperature of their local environment by ten to twenty degrees. It turns out, of course, that we are very temperature-stable organisms, so if you raise the temperature of our cells by twenty degrees our cells will die. So this is a way of very gently and very non-invasively inducing cell death. If I take a nanoshell and I attach it or place it directly next to a cell that I want to destroy and shine light on it then it will convert the light to heat and it will very gently destroy the cell.

How do nanoshells compare to conventional cancer treatments?

NH: Compared to current cancer treatments, this will be very safe and non-invasive. Obviously, there might be several adjacent cells [that also get destroyed] but that's microns, very tiny dimensions. If you compare that to traditional types of surgery, the precision is just extraordinary.

The computer that decides if we live or die

A serious injury leaves a loved one in a coma. Relatives may face the hardest decision of their lives: to wait it out or turn off the life-support machine.

The program may help families decide what action to take if a loved one is critically ill

But now, that critical decision may be turned over to a sophisticated computer program. New software should soon be able to predict more accurately than loved ones how comatose patients would choose to be treated, if they were able to make the decision themselves.

Bioethicist David Wendler at the U.S. National Institutes of Health in Washington D.C., and his colleagues, used very elementary past research to build up patterns in patients' choices. "There was very little data available and the approach we used was incredibly simplistic," Wendler concedes. "But even with a little amount of data, we did very well."

The study compared how accurately their computer-based tool predicted a patient's preferred treatments compared with what loved ones said. Results showed both methods got it right around two-thirds to three-quarters of the time.

Wendler hopes to build up a broader data bank of personal profiles, which will include age, gender, religious and ethnic background, to advance the software. He is confident that will enable more accurate patient predictions. "We have very good reason to believe we can get significantly better results," Wendler says. "Maybe ten or fifteen percent more accurate than (next of kin)."

Patients have gained more control over their medical care in recent years but many still fail to sign a directive looking to the future. Few discuss treatment preferences they would elect if they lost the ability to make decisions. Without a self-directed advance medical plan for a patient, relatives are often asked to step in and act on a loved one's behalf.

"We've always gone with the idea that people who know the patient best are also best positioned to make the decision about treatment," Wendler says. "My concerns were that this process puts a burden on families. I wanted to develop an alternate approach."

Wendler is acutely aware of the problems a software program like this might pose for the community at large. "Some people say, 'of course this is good' and others think 'this is crazy'," Wendler says.

The Spirit of Music: The Science of Pop

Since the early days of pop music, the music industry has been searching for the secret formula to writing a successful song -- for that special alchemy that separates a Grammy-winner from a dud. For a period in the 1970s and 80s, the self-styled King of Pop Michael Jackson seemed to have stumbled upon it, but somewhere along the line he, too, seems to have misplaced it.

Hit Song Science claims to be able to predict whether a song will be a pop hit

But now a piece of software claims it can compute whether a song has chart-topping potential, and a number of record companies and musicians are using Hit Song Science (HSS) to gauge whether they have a hit on their hands.

The software, developed by Barcelona-based Music Intelligence Solutions, works by breaking down more than 60 elements of a song, including melody, harmony, tempo, pitch, octave, beat, rhythm, fullness of sound, noise, brilliance and chord progression, and compares it against a database of over 3.5 million past commercial hits.

The program organizes songs into clusters with similar-sounding equivalents and then rates the song on a scale of one to ten, with a score of 7.3 being deemed likely to do well in the music charts.

Curiously, clusters of songs do not necessarily contain songs that sound the same to the human ear, but from a mathematical perspective they share similarities. HSS analyzed music from Norah Jones' first album before she broke through and the program's algorithms placed her in a cluster with Linkin Park, Aerosmith and JayZ.

If you have ever wondered why you sometimes find yourself humming along to some smooth jazz on the radio when you consider yourself a strict thrash metal fan only, then perhaps HSS has discovered the scientific answer.

Besides Norah Jones, the program also predicted success for Mika, while "Turn Your Car Around," a song penned by Ben Novak, a singer-songwriter from New Zealand, was rated as a potential hit by HSS, who recommended it to Sony Music in the UK. It eventually ended up as a vehicle for ex-Blue band member Lee Ryan and scored a respectable UK chart position of 16 in 2005.

Much Ado About Media

Shoot out at a school. Blame it on media. Women victimized by a crowd. Blame it on media. Actor commits suicide. Blame it on media. Sania refuses to play. Blame it on guess who? Looks like, Akon could jolly well re-write his chartbusting lament as "You can put the blame on media". Why is it that every time something goes wrong, media is most conveniently made the scapegoat?

Media surely didn't cook up a Sania controversy out of thin air. It wasn't media that had objections to her playing in short skirts or shooting at a mosque. Media was just being what it is - a medium for people to voice their views.

Now if someone doesn't agree with the views of those who don't approve of Sania's sartorial sensibilities, and criticizes media, it is only a classic case of shooting the messenger!

"It's the orthodox thinking that's to be blamed. Few opinionated people try to hog the limelight. They just wait to get enough fat to fry an egg. None of them realizes that such opinions could disturb a player's constancy of purpose and kill the joy of playing," says veteran cricketer and commentator Navjot Singh Siddhu.

He sympathises with Sania saying, "Tennis is already such a high pressure game, and it can get unnerving for any player to be the target of constant nitpicking. Sania is being pelted with stones, but remember, it's only a tree laden with fruits that's pelted with stones." Point taken Mr Siddhu!

This time the proverbial stone-pelting came from Bhopal based "flag advocate" RK Pandey who filed a PIL against Sania for dishonouring the Indian flag. And mind you, RK Pandey is no newcomer to the limelight zone. He had filed similar PILs against Sachin Tendulkar, Mahendra Singh Dhoni, Mandira Bedi, M.F.Hussain and the list doesn't end there! So this time if he decided to add Sania to his glorious list of disrespectful Indians, why malign the media?

If we do some honest soul searching instead of simply heaping all the blame on media, lot of us as media consumers and curious Indians (not in that order always), would find ourselves responsible too.

One bad performance by Mohammed Kaif and his house in Allahabad was under siege by the locals. One defeat at 1982 Asian Games by Mir Ranjan Negi and his wedding ceremony was jeopardized. Is it media or we, who gave in to such spasmodic, irrational acts of vandalism?

The voyeurs that we are, let's not be hypocrites at least! Don't we ourselves derive vicarious pleasure in prying into others' lives, and react in utmost illogical fashion when our expectations are not met?

"People derive a morbid pleasure in miseries of others" says Atul Wasan, former Indian cricketer and commentator. Regretting such a sadistic scenario, Wasan puts the onus on fans and audiences even as he doesn't completely absolve media and celebrities. "Instead of crying foul, celebrities also need to grow up and act more mature," says Wasan.

Media is not some unknown, undefinable Matrix conrolling our lives and reactions. We are not awaitng a Neo to unplug us, and make us see the reality! When it comes to media, we are the 'One'! So if Sania refuses to play, let's not put the blame on media. For once we (including celebrities) could be honest in saying " You could put the blame on me!"