David Hornik writes about the dilemma faced by early-stage companies which receive buyout offers from the likes of Google and Yahoo:

To my mind, these acquisition offers are just like the new TV game show Deal or No Deal.
...
Entrepreneurs who receive acquisition offers early in the lifetime of their companies are essentially faced with the same conundrum as that posed in Deal or No Deal. Relatively little information has been revealed about the long term value of the company, yet the entrepreneur must decide whether or not to take the offer and, in essence, stop playing the game. As can be seen from the game show itself, in many instances taking the deal early on is a good idea because as each new briefcase is opened, the perceived value of the case being held by the contestant goes down, as do the buyout offers from the Banker. However, in many other instances, as time goes on and risk is removed (all the low numbered briefcases are picked), the buyout offers from the Banker increase to substantial dollar values.

Dean Takahashi writes:

In a bid to capture the huge audience for handheld entertainment gadgets, Microsoft is designing a product that combines video games, music and video in one handheld device, according to sources familiar with the project.

The Microsoft product would compete with Sony, Nintendo and Apple Computer's products,
including the iPod. And Microsoft has some of its most seasoned talent from the division that created its popular Xbox 360 working on it. Game executive J Allard leads the project, and its director is Greg Gibson, who was the system designer on the Xbox 360 video game console. Bryan Lee, the finance chief on the Xbox business, is leading the business side of the project.

By anchoring its entertainment device as a handheld game player, Microsoft is starting from its position of strength in the entertainment business that it hopes Apple cannot match, even with its iPod. The game press has dubbed it an "iPod killer,'' but its functions would likely more closely resemble Sony's PlayStation Portable multimedia gaming device.

Anders Lindh writes: "The challenges in service innovation will all be about relevance and context. Sure, social bookmarking is a great thing on my desktop, but its not a killer mobile service. Google does a great job in finding millions on entries for some particular query, but in a mobile context I’m interested in one often very specific answer. Online maps and real-world-service-location become interesting only when my actual physical location is taken into account, even when moving around at greater speeds. I prefer to write blog entries from my desktop, but reading them while on the move will become more common. This leads to a great dependance on relevance, as the small screen greatly puts a limit on the amount of information that I want to be exposed to."

[via Sadagopan] Matt Miller writes:

The mood among VCs remains hesitant about enterprise software startups. Competing against today's megavendors is tough. The last investment "bubble" funded plenty of strong small and mid-sized vendors who are still waiting to be acquired with many stagnating. Perpetual license models are a slowly dying business model, but the much-hyped Software as a Service (SaaS) model is still more conjecture than reality in the core software sectors.

Yet software companies received $4.7 billion in venture capital investment during 2006. That's more than biotech, alternative energy, or any other sector.
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2006 looks like it will be a solid year for software investment for two reasons. One, we aren't yet seeing a bubble that is funding a lot of unworthy companies. And two, we aren't yet overfunding hot categories.

The Economist writes in the introduction of its survey on China:

There is no other important country whose likely trajectory over the next 20 years is more uncertain than China's. Possibilities include:

An economy that continues to boom as the political system gradually becomes more liberal and China becomes an increasingly positive force in the world;

A fast-growing economy, a surge of vengeful nationalism and an attempt by China to displace American power in Asia, regain Taiwan and challenge Japan;

A country in disarray, engulfed by social and political crises as its economy slumps.

All are plausible. Much will depend on choices made by China itself and by other powers, especially America.

In an interview with Forbes in January 2006, the MySpace founders talked about their marketing strategy:

How do you get 46 million people to find out about your product without buying advertising?

DeWolfe: It was really key to create a set of functions that were compelling to our users and an efficient way to use them. Users socialize to figure out what they’re going to do on the weekend. They use MySpace to discover new music and post events. Musicians upload their music. People use it for entertainment purposes or to sell goods in the classified area. MySpace makes what they do in the offline world a) more efficient or b) more interesting.
…
Anderson: We didn’t do traditional marketing, but we did try to find photographers and creative people because we thought that would make the site more interesting. In the beginning, it was all Los Angeles--actors, photographers and musicians. That made for an interesting community, and brought in a lot of people. A lot of the early growth, however, had to do with the features and what our competitors were not allowing people to do.

Music has become particularly important to MySpace. How did you attract over 660,000 artists and bands to the site?

DeWolfe: Tom has a deep passion and understanding for what emerging musicians go through. He understands the frustration. I understood the macro trends of the music business. Labels were signing fewer acts, giving them less time to prove themselves and spending less money on marketing. We saw a need to develop a community for artists to get their music out to the masses. With MySpace, when they went out on tour, they could actually tour nationally. The band might have 20,000 friends on their list and send out a bulletin saying, “I’m going to be in Austin on Tuesday night. Come see our show.” It has allowed bands to make money on music without having a deal.

MZ: Social networking sites have become a phenomenon, what do you think is the fascination behind these sites? Why are they so popular?

Tom: Well there's something old here and something new. The old is that it's simply socializing. Most everyone loves to socialize, and that's what MySpace and other sites let you do. What's new, of course, is the way you socialize, via the computer. I'm well-suited for MySpace, because I'm the sort of person who grew up socializing online - from the time I was 12 I was using a modem to talk to people via message boards and various forms of chat. For me, it's perfectly naturally, and actually preferable in many ways to make friends online. Even today some of my best friends are people I met as a teenager in my room with my 300 bps modem. It's preferable for a few reasons - I can meet different people then I'd meet in real life, and I can meet people while I'm doing something else. I'm not the sort of person to go a party or a club and mill about looking for new people. But I could be doing my homework, working, or anything on the computer and come across people that I can message and IM when I have a spare moment, and real friendships are formed that way. So these sites are becoming popular, I think, because the mainstream is realizing that socializing online is not just for "computer nerds." It’s mainstream enough that we've got a development deal to do a reality TV show based on MySpace. That's about as mainstream as it gets I suppose.

MZ: One of the fascinating things about social networking sites is that they’ve been able to attract and keep the fickle young (18-35 yr. old) users. Why do you think these people are especially attracted to social networking sites?

Tom: One thing I've noticed is how rapidly attitudes are changing about meeting people online. Before MySpace began, I thought most people under 25 were really not interested in meeting people from the Internet. I think it was going on, but I didn't necessarily see it. Under 25 meetings was going on with computer geeks, smaller subcultures, or ethnic sites. I think that was true to a large degree, because most of the mainstream sites that provide a forum for people to meet were dating sites. That was the only option for a mainstream audience. Why would a 22 year old pay for or even use a dating site? Most won't. But a 22 year old, who grew up with ICQ, AIM & the Internet is also much less concerned about privacy. The Internet is not scary to a younger person. Putting their picture up is not a "dangerous" proposition like it is for a 35 year old. And its not scary to me because I was 'online' when I was 12 years old. So my perspective is a lot closer to people who are 21 and younger--people who've grown up "online." Most of our users are 30 and under. I think 24 is the average age. For these people who grew up online, its not "geeky" to use the Internet to meet other people. There just wasn’t a lot of it going on because there was no place for it in the mainstream.