Yahoo Memo - Good one

Yahoo Memo: The 'Peanut Butter Manifesto'
November 18, 2006

An internal document by Brad Garlinghouse, a Yahoo senior vice president, says Yahoo is spreading its resources too thinly, like peanut butter on a slice of bread. Full text of the document is below.

Three and half years ago, I enthusiastically joined Yahoo! The magnitude of the opportunity was only matched by the magnitude of the assets. And an amazing team has been responsible for rebuilding Yahoo!

It has been a profound experience. I am fortunate to have been a part of dramatic change for the Company. And our successes speak for themselves. More users than ever, more engaging than ever and more profitable than ever!

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I proudly bleed purple and yellow everyday! And like so many people here, I love this company

But all is not well. Last Thursday's NY Times article was a blessing in the disguise of a painful public flogging. While it lacked accurate details, its conclusions rang true, and thus was a much needed wake up call. But also a call to action. A clear statement with which I, and far too many Yahoo's, agreed. And thankfully a reminder. A reminder that the measure of any person is not in how many times he or she falls down - but rather the spirit and resolve used to get back up. The same is now true of our Company.

It's time for us to get back up.

I believe we must embrace our problems and challenges and that we must take decisive action. We have the opportunity - in fact the invitation - to send a strong, clear and powerful message to our shareholders and Wall Street, to our advertisers and our partners, to our employees (both current and future), and to our users. They are all begging for a signal that we recognize and understand our problems, and that we are charting a course for fundamental change. Our current course and speed simply will not get us there. Short-term band-aids will not get us there.

It's time for us to get back up and seize this invitation.

I imagine there's much discussion amongst the Company's senior most leadership around the challenges we face. At the risk of being redundant, I wanted to share my take on our current situation and offer a recommended path forward, an attempt to be part of the solution rather than part of the problem.

Recognizing Our Problems

We lack a focused, cohesive vision for our company. We want to do everything and be everything -- to everyone. We've known this for years, talk about it incessantly, but do nothing to fundamentally address it. We are scared to be left out. We are reactive instead of charting an unwavering course. We are separated into silos that far too frequently don't talk to each other. And when we do talk, it isn't to collaborate on a clearly focused strategy, but rather to argue and fight about ownership, strategies and tactics.

Our inclination and proclivity to repeatedly hire leaders from outside the company results in disparate visions of what winning looks like -- rather than a leadership team rallying around a single cohesive strategy.

I've heard our strategy described as spreading peanut butter across the myriad opportunities that continue to evolve in the online world. The result: a thin layer of investment spread across everything we do and thus we focus on nothing in particular.

I hate peanut butter. We all should.

We lack clarity of ownership and accountability. The most painful manifestation of this is the massive redundancy that exists throughout the organization. We now operate in an organizational structure -- admittedly created with the best of intentions -- that has become overly bureaucratic. For far too many employees, there is another person with dramatically similar and overlapping responsibilities. This slows us down and burdens the company with unnecessary costs.

Equally problematic, at what point in the organization does someone really OWN the success of their product or service or feature? Product, marketing, engineering, corporate strategy, financial operations... there are so many people in charge (or believe that they are in charge) that it's not clear if anyone is in charge. This forces decisions to be pushed up - rather than down. It forces decisions by committee or consensus and discourages the innovators from breaking the mold... thinking outside the box.

There's a reason why a centerfielder and a left fielder have clear areas of ownership. Pursuing the same ball repeatedly results in either collisions or dropped balls. Knowing that someone else is pursuing the ball and hoping to avoid that collision - we have become timid in our pursuit. Again, the ball drops.

We lack decisiveness. Combine a lack of focus with unclear ownership, and the result is that decisions are either not made or are made when it is already too late. Without a clear and focused vision, and without complete clarity of ownership, we lack a macro perspective to guide our decisions and visibility into who should make those decisions. We are repeatedly stymied by challenging and hairy decisions. We are held hostage by our analysis paralysis.

We end up with competing (or redundant) initiatives and synergistic opportunities living in the different silos of our company.

• YME vs. Musicmatch

• Flickr vs. Photos

• YMG video vs. Search video

• Deli.cio.us vs. myweb

• Messenger and plug-ins vs. Sidebar and widgets

• Social media vs. 360 and Groups

• Front page vs. YMG

• Global strategy from BU'vs. Global strategy from Int'l

We have lost our passion to win. Far too many employees are "phoning" it in, lacking the passion and commitment to be a part of the solution. We sit idly by while -- at all levels -- employees are enabled to "hang around". Where is the accountability? Moreover, our compensation systems don't align to our overall success. Weak performers that have been around for years are rewarded. And many of our top performers aren't adequately recognized for their efforts.

As a result, the employees that we really need to stay (leaders, risk-takers, innovators, passionate) become discouraged and leave. Unfortunately many who opt to stay are not the ones who will lead us through the dramatic change that is needed.

Solving our Problems

We have awesome assets. Nearly every media and communications company is painfully jealous of our position. We have the largest audience, they are highly engaged and our brand is synonymous with the Internet.

If we get back up, embrace dramatic change, we will win.

I don't pretend there is only one path forward available to us. However, at a minimum, I want to be part of the solution and thus have outlined a plan here that I believe can work. It is my strong belief that we need to act very quickly or risk going further down a slippery slope, The plan here is not perfect; it is, however, FAR better than no action at all.

There are three pillars to my plan:

1. Focus the vision.

2. Restore accountability and clarity of ownership.

3. Execute a radical reorganization.

1. Focus the vision

a) We need to boldly and definitively declare what we are and what we are not.

b) We need to exit (sell?) non core businesses and eliminate duplicative projects and businesses.

My belief is that the smoothly spread peanut butter needs to turn into a deliberately sculpted strategy -- that is narrowly focused.

We can't simply ask each BU to figure out what they should stop doing. The result will continue to be a non-cohesive strategy. The direction needs to come decisively from the top. We need to place our bets and not second guess. If we believe Media will maximize our ROI -- then let's not be bashful about reducing our investment in other areas. We need to make the tough decisions, articulate them and stick with them -- acknowledging that some people (users / partners / employees) will not like it. Change is hard.

2. Restore accountability and clarity of ownership

a) Existing business owners must be held accountable for where we find ourselves today -- heads must roll,

b) We must thoughtfully create senior roles that have holistic accountability for a particular line of business (a variant of a GM structure that will work with Yahoo!'s new focus)

c) We must redesign our performance and incentive systems.

I believe there are too many BU leaders who have gotten away with unacceptable results and worse -- unacceptable leadership. Too often they (we!) are the worst offenders of the problems outlined here. We must signal to both the employees and to our shareholders that we will hold these leaders (ourselves) accountable and implement change.

By building around a strong and unequivocal GM structure, we will not only empower those leaders, we will eliminate significant overhead throughout our multi-headed matrix. It must be very clear to everyone in the organization who is empowered to make a decision and ownership must be transparent. With that empowerment comes increased accountability -- leaders make decisions, the rest of the company supports those decisions, and the leaders ultimately live/die by the results of those decisions.

My view is that far too often our compensation and rewards are just spreading more peanut butter. We need to be much more aggressive about performance based compensation. This will only help accelerate our ability to weed out our lowest performers and better reward our hungry, motivated and productive employees.

3. Execute a radical reorganization

a) The current business unit structure must go away.

b) We must dramatically decentralize and eliminate as much of the matrix as possible.

c) We must reduce our headcount by 15-20%.

I emphatically believe we simply must eliminate the redundancies we have created and the first step in doing this is by restructuring our organization. We can be more efficient with fewer people and we can get more done, more quickly. We need to return more decision making to a new set of business units and their leadership. But we can't achieve this with baby step changes, We need to fundamentally rethink how we organize to win.

Independent of specific proposals of what this reorganization should look like, two key principles must be represented:

Blow up the matrix. Empower a new generation and model of General Managers to be true general managers. Product, marketing, user experience & design, engineering, business development & operations all report into a small number of focused General Managers. Leave no doubt as to where accountability lies.

Kill the redundancies. Align a set of new BU's so that they are not competing against each other. Search focuses on search. Social media aligns with community and communications. No competing owners for Video, Photos, etc. And Front Page becomes Switzerland. This will be a delicate exercise -- decentralization can create inefficiencies, but I believe we can find the right balance.

I love Yahoo! I'm proud to admit that I bleed purple and yellow. I'm proud to admit that I shaved a Y in the back of my head.

My motivation for this memo is the adamant belief that, as before, we have a tremendous opportunity ahead. I don't pretend that I have the only available answers, but we need to get the discussion going; change is needed and it is needed soon. We can be a stronger and faster company - a company with a clearer vision and clearer ownership and clearer accountability.

We may have fallen down, but the race is a marathon and not a sprint. I don't pretend that this will be easy. It will take courage, conviction, insight and tremendous commitment. I very much look forward to the challenge.

So let's get back up.

Catch the balls.

And stop eating peanut butter.

Open source Free Email Stategy Zimbra

In late 2003, at a coffee shop in Palo Alto, Calif., three friends weary of work at big Silicon Valley companies decided to create an email program. In a weekend they cobbled together a simple prototype. They combed the Web for free software, and in a few months they had assembled more than 40 blocks of free programming into a basic system.

They named it Zimbra, after a Talking Heads song, posted it online and invited strangers to offer suggestions. A Rochester, N.Y., college student picked through the code for bugs, working from a dorm room so stuffed with computer gear that the air conditioning runs in winter. A Denver-area techie helped beef up the program's antispam feature while watching episodes of "Lost" on TV. And a nuclear engineer translated the program into French from his chalet in the Alps. As payment, contributors got T-shirts and hats.

^{ZIMBRA!! COMPETITORS ARE NOR FAR AWAY!!}

In February, the three men launched their product at a cut-rate price and started nibbling at the franchise of market leader Microsoft Corp. Like Microsoft's Exchange, Zimbra lets office workers send, receive, store and search the thousands of email messages that can pass through a business daily. Today about four million people use Zimbra, including an Alabama hospital, the Tombstone, Ariz., school district, and 12,000 branches of the big tax preparer H&R Block.

Zimbra sprouted from a revolution in the software industry that looms as a long-term threat to Microsoft and other giants. At its heart is a virtual army of software hobbyists who collaborate online to create free programs. Like bloggers and YouTube addicts, they hang out on the Web at all hours, largely for no pay.

Now, start-up companies are helping themselves to this software, piecing it together like Lego blocks into new commercial products. Often, they post the products' underlying code on the Web and tap more volunteers to help improve it. Then they sell the software online, saving the cost of a large sales force. Zimbra co-founder Satish Dharmaraj, 39 years old, leads Zimbra Inc. -- the company behind the software -- with just 55 people, from a tiny cubicle with a laptop.

Zimbra is a speck compared with Microsoft, which boasts 140 million users of Exchange. But there are a growing number of other specks. The Web is teeming with Microsoft alternatives, from the Firefox Web browser to sales-support software called SugarCRM. Even Google Inc. is in the game, buying the upstarts, including a spreadsheet and the tiny maker of free word-processing software called Writely.com.

Microsoft Chairman Bill Gates says he has seen Zimbra demonstrated and concedes that "they've done a good job," but says the product "doesn't even come close to the things that Exchange does." The trusted communications hub for thousands of the world's biggest businesses, Exchange lets them combine email with conference calling and instant messaging. The newest version, available next month, has improved features for connecting to those services via cellphones and other mobile devices.

But Exchange, though full of features, is complicated and can cost more than Zimbra, depending on a complex price structure. Developing the newest version of Exchange took years of work by more than 400 Microsoft employees.

The rise of upstarts like Zimbra comes as Microsoft is scrambling to adapt to the broad changes wrought by the Internet. The company gained its lucrative position by dominating the market for software installed on personal computers. But increasingly some of the same basic tasks once handled by Microsoft's software can be done over the Web -- and by phones, handheld computers, and other devices that don't all run Microsoft programs. That's forcing Microsoft to start experimenting with ways to sell software services over the Web, while maintaining its stronghold in computer software.

Microsoft is still showing respectable growth in both revenue and profit, but its Windows operating system and its Office software package, which in the 1990s had revenues soaring at or near 30% a year, will likely never repeat their past performance. Microsoft's share price -- though rising since last summer -- has effectively been flat for six years. In 2003 Microsoft started paying a dividend, a tool often used by slower growth companies to attract new investors.

Zimbra is the brainchild of three programmers led by Mr. Dharmaraj, a hyperkinetic computer scientist who once handcuffed himself to a Coke machine to stop his boss from swapping it for a Pepsi dispenser. He bonded with colleagues Ross Dargahi and Roland Schemers while working at Sun Microsystems Inc. Together they joined a software start-up in 1997 and quit together in 2003.

At their coffee-shop meetings in late 2003, the three decided there was room for a new business email program that could serve business customers more simply and cheaply than Exchange. They thought they could put it together in a hurry by rummaging through the free software on the Web.

Loose communities of programmers had been collaborating online for decades. By the early 1990s, they were coalescing into a grass-roots movement known as "open source." In the most famous example, a software engineer named Linus Torvalds at the University of Helsinki in Finland wrote the core of the Linux operating system. He put it on the Web and allowed anyone to tinker with the coding. Word spread, and gradually computer aficionados around the world were dedicating their free time to making Linux better.

From the University of Illinois sprang free Web server software for running Web sites called Apache. In Sweden, researchers worked on open-source database software, called MySQL.

By the time the Zimbra founders got to work, all those programs had been tested and improved over many years. The three engineers were able to find more than 40 open-source programs, including Apache and MySQL, that they could combine to build the basics of an email system.

With the plumbing in place, Mr. Dharmaraj and his crew focused on getting it to work together. They added whimsical features called "Zimlets," which let users perform tasks within an email, such as search Amazon.com or pull up a Yahoo map by hovering the cursor over a street address.

By the spring of 2004, the trio had raised $4 million in seed money. They spent it sparingly, housing their modest contingent of 10 employees in a rented Silicon Valley office that leaked when it rained. Eventually they raised a total of $30.5 million in venture funding.

In August 2005, in what has become a rite of passage for open-source software, Zimbra posted a prototype of its software on the Web and invited suggestions. They bought sponsored links on Google that would point to Zimbra when people searched for key phrases, such as "open source email." And they set up online forums on the Zimbra for contributors to meet and exchange ideas.

Ben Allen, a 20-year-old computer-science student at the Rochester Institute of Technology, checked out the software in the first month, installing it in his dorm room on a server he bought on eBay for $180. Over the next few months he picked through the code and uncovered some bugs, including one that could let a hacker steal a person's private information. When he later shared his findings with Zimbra technicians, they gratefully fixed the bug earlier this year.

In the mountain hamlet of Annecy, France, Carlos Vidal, a nuclear engineer and consultant to power companies and small businesses, found that emails with attachments were crashing his clients' email systems. In September he saw a mention of Zimbra on a Web site frequented by open-source fans. He downloaded the software and liked the way it handled attachments. He immediately started to translate the program into French.

Through the online forums, Mr. Vidal, 46, teamed up with other Zimbra users to finish the French translation, which expanded the program's potential market. And Zimbra updated the coding to make it easier to translate the program into other languages. Soon other contributors translated it into 13 languages, including Chinese, Japanese, Swedish and German.

Around the same time, 24-year-old John Holder had just landed a new job as a computer administrator at the Tombstone Unified School District in Tombstone, Ariz. Hoping to set up the district with its first email system, he searched on Google for free email and was offered a link to Zimbra's site. He clicked on the link and within an hour had the software running at one of the four schools he oversees.

When he accidentally killed his school email accounts, he started exploring the system's file-backup system, and eventually posted on Zimbra's forum instructions for how to avoid erasing files. Like the other contributors, he got a gray T-shirt emblazoned with the red Zimbra logo.

"I'm not looking for money," says Mr. Holder, whose contributions became part of Zimbra's instruction materials. "The incentive is that five years down the road, I can say I helped those guys."

In a suburb of Denver, Joshua Prismon, a project manager at a data-analytics company, installed Zimbra on a home computer. When he saw a surge of unwanted email after switching to Zimbra, Mr. Prismon, 29, peeked into the computer code to see how Zimbra handled spam blocking.

Thinking he could improve upon it, Mr. Prismon sat at his computer for about eight hours on a Saturday in November 2005, trying to fortify Zimbra with a free antispam program called Dspam. Over the next four nights he finished up the work while watching "Lost" with his wife, a notebook PC perched on his knees, and then posted his findings on Zimbra's online forum. "It really was fairly simple," he says.

By December Zimbra's first batch of 750 T-shirts was dwindling, as more and more people offered suggestions for honing the email program. Messrs. Dharmaraj, Dargahi and Schemers, and their employees, were working on an official version of the software, using ideas they developed themselves as well as input from contributors.

The three bet that businesses would want to pay for an official version that had a full set of features, was free of major bugs and that Zimbra would support. In February 2006, Zimbra's Web site offered a link to buy the "Zimbra Collaboration Suite 3.0." The basic price of $28 a year per user includes support and updates, but the cost can be lower, depending on the order. For Exchange, by comparison, a company with 100 users would pay $39 a user each year for the first three years, after which the price falls to $17 a year per user.

In April, Huntsville Hospital in Huntsville, Ala., put 8,000 employees on Zimbra. Interim HealthCare Inc., a home-health-care provider in Sunrise, Fla., paid Zimbra $15,000, or about $12.50 per user, to set up 1,200 nurses with the official version.

Interim's chief information officer, Satish Movva, says the company will expand that to 2,500 nurses by next summer, a step toward the roughly 55,000 nurses across all of Interim's franchisees. "We got the early adopters right away," he says. "After that it takes a little while."

Among many of its earlier customers Zimbra found were companies that had already rejected Microsoft's Exchange for its cost and complexity and were open to a cheaper product. H&R Block, which uses Exchange at its Kansas City, Mo., headquarters, had been looking for an email system for its branches, which can come and go along with tax season. But Exchange was too expensive for that largely seasonal work force, and Web mail such as Google's Gmail lacked features, says H&R Block's chief information officer, Marc West.

H&R Block tested Zimbra's software in 24 U.S. cities and soon ordered the official version. By the middle of tax season, about 3,500 branches in H&R Block's branch offices were using the software. "Two or three years ago Zimbra wouldn't have made the CIO's desk," says Mr. West. But the growing abundance of email choices makes the software "almost disposable technology," he says.

H&R Block recently expanded Zimbra to 12,000 branches and is now considering using it at its headquarters, Mr. West says. Microsoft has stepped up efforts to persuade the company not to drop Exchange, says Mr. West, and H&R Block is weighing its options. A Microsoft spokesman says the company doesn't comment on individual customers.

Microsoft's pitch to companies such as H&R Block boils down to support and technology. On support, Microsoft executives highlight the benefit of thousands of independent software companies and resellers that Microsoft works with to tailor Exchange to a company's needs and fix problems. A single supplier like Zimbra can never compete with that army of partners, Microsoft executives say. "It's complicated building up a business around it," Microsoft's chief software architect, Ray Ozzie, says of Exchange.

Mr. Dharmaraj acknowledges that with Microsoft as a competitor, his company's nascent winning streak could end as fast as it started. Also, Google and Yahoo are now both tuning their Web email services for businesses.

An even greater fear is that another start-up could come along to beat it at its own game. The same open-source software that gave Zimbra its fast start is still coursing on the Web, ready for someone else to grab.

"The thing we worry the most about," says Mr. Dharmaraj, "is that somebody's going to copycat everything we've done in the last year."

How to Revive a Wet Cellphone

Sooner or later every cell phone goes in the drink. For some it may be the bathtub, for others a glass of scotch. For many, the toilet. (No need to explain.)

Hey, you spent hundreds of dollars on that handset, so it's understandable that you might decide to attempt to rescue it. But how?

The Cell Freak has all the collected wisdom on the topic, including some advice I'd never heard, like soaking the phone in 95% alcohol to dissolve all the water trapped inside. I've personally had good luck with low level heat for wet phones and laptops: A few hours on the lowest setting inside an oven (150 degrees or thereabouts) can dry out a gadget and make it good as new.

Regardless of which method you try, remember to remove the battery from any device you attempt to salvage. If this hasn't been made clear by now, batteries are deeply susceptible to damage from heat and foreign substances. They're also relatively easy to replace, so don't even try to save a battery if it's been compromised. However, batteries are by design well-sealed to prevent water or other materials from getting inside, so a quick wipe with a towel should be all you need to save a power cell.

Remember that these methods are not foolproof, in fact they're far from it. Water and electronics just don't mix. My personal record on saving wet gadgets is about 50-50, but those are pretty good odds in my book, and with this advice, they're even better.

PCs Get Cheaper, For Now

For personal-computer makers, the new year can't come soon enough. Until then, the normally healthy holiday season might look like a going-out-of-business sale.

That unpleasant prospect stems from Microsoft Corp.'s decision earlier this year to delay the broad introduction of its Windows Vista operating system until next January. The news struck a blow to Hewlett-Packard Co., Dell Inc., Gateway Inc. and the rest of the $200 billion U.S. industry, which for decades had enjoyed the tailwind of a new release of Microsoft software -- particularly when it coincided with the holiday selling season.
[Pink Computer]
A Sony notebook and mouse, in pink.

Now PC makers are scrambling to entice consumers to open their wallets and not wait until the end of January, when Vista is expected to be available to consumers. Some of the planned incentives are typical -- larger screens, bigger hard drives and new hardware colors -- but many industry observers say the most powerful sales tool will also be the most painful: rock-bottom prices.

Current Analysis, a research firm that tracks weekly PC sales, estimates that, thanks in part to Vista's delay, 70% of notebook PCs sold this holiday season will be priced at less than $1,000. That compares with just 38% of notebook PCs at less than $1,000 in 2004. "It's going to be a blowout sale," says Samir Bhavnani, research director at Current Analysis

At electronics retailer Circuit City Stores Inc., the price of 17-inch-wide notebooks is falling to less than $1,000 from about $1,300 a year ago, says Elliot Becker, vice president and merchandising manager of technology. In September, Sony Corp. started offering its N-series notebook at less than $1,000 for the first time.

"We expect to see the apex of price degradation to occur this holiday," says Mike Abary, vice president of marketing for Sony's Vaio PC brand.

The price slashing underlines how the PC industry continues to be dependent on new Microsoft software. Vista is the biggest overhaul of Microsoft's operating system in 10 years, when the Redmond, Wash., software maker cemented its PC-software monopoly with the hugely successful Windows 95. Its new operating system includes features such as better ways to search for information on a PC and what Microsoft says is vastly improved security. It will be available to big businesses at the end of this month and more broadly in late January.
[Web Site]
A monitor showing a Web site for Microsoft Vista.

PC makers originally expected Vista in time for this year's holiday selling season, one of the two times a year they can count on consumers to stock up on new PCs and related gear (the other is back-to-school season). And the delay is coming at a particularly bad time for the PC industry. In the U.S., unit shipments of PCs declined by 2% in the third quarter, according to Gartner Inc. Market researcher IDC expects the U.S. growth rate for PCs in the second half of this year to be just 6.3%, versus 9.5% for the second half of 2005.

The rock-bottom prices could pressure the already razor-thin margins in the PC industry -- bad news for companies such as Dell, which has been struggling to turn its U.S. consumer business around amid stiff competition, and H-P, which has been trying to boost the profitability of its PC business under Chief Executive Mark Hurd.

Now the key issue for PC makers is clearing out products that run Microsoft's current operating system, Windows XP, with the expectation that few consumers will want those machines once Vista ships. Most of those PCs will be able to run Vista later, and Microsoft and major PC makers in late October kicked off a campaign -- called the Technology Guarantee program -- that provides any new Windows XP buyer a free or cheap version of Vista once it is available.
[Chart]

Microsoft acknowledges the PC industry's concerns over Vista's timing. "Yes, there's concerns from partners, concerns from us, concerns from everybody that we could be slowing down PC demand for the holiday season," says Microsoft General Manager Brad Brooks. But Mr. Brooks says the Vista upgrade program will help drive sales -- and buoy prices -- for the holidays. Microsoft estimates that 85% of the PCs sold this season will have the processing power and other attributes to run Vista if consumers want to install it later

H-P is delaying the launch of some PCs until Vista's full-scale debut. Bruce Greenwood, director of product marketing for H-P's North America consumer notebooks, says the Palo Alto, Calif., company wanted to develop certain products to show off features of Vista, so it didn't make sense to launch them three months before the system is available. He declined to detail the new products.

Decisions like that are rippling through the PC industry. Last week, Goldman Sachs in a report said that year-end demand for motherboards, a key component in PCs, is "falling off a cliff," a sign that PC makers are holding back new orders until Vista ships. Shares of makers of PCs and motherboards dropped on news of the report.

Some PC makers are trying more colorful pre-Vista marketing campaigns and gee-whiz products to get consumers interested. H-P is hawking pocket-size storage drives for taking downloaded music, movies and personal video on the go. Sony plans to join its Hollywood counterpart, Sony Pictures, in releasing 1,000 limited-edition James Bond-themed Vaio PCs -- with a specially engraved "007" logo and digital camera -- tied to the release of "Casino Royale." Gateway is sending six teams to various U.S. cities to gather footage of PC users for a campaign designed to show Gateway's attention to customers' needs.
[Computer and Case]
Sony's James Bond package. which will feature the 007 logo and be loaded with 'Casino Royale' content.

Many of the vendors are also pushing new colors and designs, including a pink notebook for college-age women from Sony's C-series notebooks to a wave design on H-P's dv2000 notebook. Gateway is giving its desktops and notebooks a new copper-like color, called tungsten.

The new bells and whistles notwithstanding, PC vendors know that nothing talks like a discount. Gateway says its new NX570 series notebook, which launches on Nov. 9, will sell for $699 after a $200 discount for the holiday season. H-P says its dv 2000 entertainment notebook will go for a low $569.99 after a $50 mail-in rebate.

The low prices may already be having an effect on consumers. At a CompUSA Inc. store yesterday in San Francisco, Vidal Reyes, a 38-year-old food-and-beverage worker, said he was looking for a new laptop to replace his desktop. When asked if Microsoft's Vista delay would factor into his decision, he said, "Not really." Price, he says, is more important.

Google Buys JotSpot

Google Inc. said it acquired closely held start-up JotSpot for an undisclosed sum, a move that could strengthen Google's expanding services for users to create and share documents online.

JotSpot, exploiting a technology called wikis, provides free and paid services that allow individuals to jointly work on Web-based information such as spreadsheets, photo albums, calendars and contact lists. Google, Mountain View, Calif., has assembled free online word-processing, spreadsheet, email and calendar services that have some similarities with JotSpot's offerings. Such services could win away some of the consumers Microsoft Corp. is targeting with its Office software.

JotSpot Chief Executive Joe Kraus said his company was happy to join Google because "it's really clear they are focusing on letting people collaborate and share and work together online." Google executives are also trying to streamline the number of products the company has, and Mr. Kraus said JotSpot would focus on how to integrate with Google's existing services.

JotSpot, Palo Alto, Calif., has about 30,000 paying corporate customers at about 2,000 companies. Roughly 300,000 people use JotSpot's free service, which carries some storage and other restrictions. The company, which received funding from the Mayfield Fund and Redpoint Ventures venture-capital firms, has 27 employees.