Yahoo Opens Wide

At the Web 2.0 Expo in San Francisco yesterday, Yahoo announced that it is completely redesigning the underlying structure of its services, including Flickr and Yahoo Mail. At the same time, it plans to reveal the technical aspects of this redesign so that programmers can build features on top of them and combine them in novel ways.

"We're in the process of rewiring Yahoo from the inside out and will open up all the assets of Yahoo to developers across the Web in a way we've never done before," said Ari Balogh, Yahoo's CTO, in a keynote.

One of the goals, said Balogh, is to make use of the social-network data that resides on the company's servers. "We're going to make the consumer experience at Yahoo social throughout," he said. For instance, instant-message capabilities could be incorporated with Flickr.

If any Web company has untapped stores of social data, it's Yahoo. Consider that the company has one of the most popular Web mail services. (We wrote about Yahoo's vision for a more powerful, social inbox here.) Nearly 100 million people use Yahoo Messenger. Flickr is one of the top photo-sharing sites on the Web. And Yahoo Answers, a question-and-answer service in which people pose questions that others answer, has been a huge recent hit. But until now, Yahoo has only flirted with the idea of unifying these services, the data, and the inherent social connections that exist within them.

Yahoo's new openness is surely exciting to many people who value open software. Indeed, open platforms invariably lead to innovations that are impossible for companies, often mired in bureaucracy, to produce on their own. To be sure, Yahoo has a history of embracing this sort of openness. According to Balogh, Yahoo claims 200,000 developers that already work on some of its services, some of which have been open for years. And Flickr is the second most popular Web service in the world to tinker around with (as measured by the number of times its application programming interface, or API, has been downloaded).

But I'm skeptical that Yahoo will be able to pull off a project of this scale. The company's massive layoffs and the buyout offer from Microsoft show that it's struggling. Yahoo may have great technologies, but it also has a habit of sitting on projects that are never released to the public. When contrasted with Google's constant flood of new software and services, Yahoo's sluggishness is shameful. At this point, it's unclear if the company will be able to manage a project with the complexity of connecting and opening all its Web services.

Another concern: a platform needs to be compelling for programmers, who are, as much as anyone, swayed by intangibles such as buzz. When Facebook opened its platform, programmers leaped at the chance to build applications, with hopes of riding on the coattails of the social-networking site's rising popularity. Yahoo will need to fight its image as an also-ran in order to court programmers who can make compelling new software. And it must also make its platform seamless and easy to use. Otherwise, Yahoo's act of opening up its services will look less like a bold business move and more like just another good intention.

Oil Is Still Cheap

High oil prices are supposed to get people to use less, yet oil consumption continues to rise in many places. That could be because oil really isn't as expensive as it's been in the past, according to some ways of looking at it. A recent article in the Economist says that because Western consumers' incomes have risen considerably over the past few decades, oil prices would need to top $134 a barrel to have the same impact as prices in 1981. The price of oil was a mere $119 a barrel yesterday.

U.S. Biofuel Startup Turns to Brazil

High corn prices are driving next-generation biofuel startups out of the country, and that could be a good thing. Today, Amyris, a company that's genetically engineering microorganisms to convert sugar into hydrocarbons such as diesel, announced partnerships that will pave the way for it to use sugar that's derived from sugarcane grown in Brazil rather than sugar derived from corn. Recently, corn prices have skyrocketed, reaching record levels of over $6 a bushel. That's made it very difficult for ethanol producers to make money. Sugarcane provides a cheaper alternative to corn, and that's one of the reasons that Amyris is turning to Brazil, says Jeryl Hilleman, the company's chief financial officer.

The move to Brazil could be a good thing for the environment, because sugarcane requires less energy to process than corn, resulting in less carbon dioxide emissions. But ultimately, neither sugarcane nor corn is an ideal feedstock. What's needed are nonfood cellulosic sources, such as grass and wood chips, especially given the abrupt rise in food prices worldwide that have recently prompted riots in Haiti and elsewhere. (See "Battling Ethanol-Propelled Food Prices.") But so far, processes for turning such sources into sugar have been too expensive.

Why Carbon Credits Don't Work

Carbon markets set up under climate-change agreements are supposed to reduce emissions of carbon dioxide. Credits are issued that correspond in some way to the desired carbon emissions (details vary). Companies that produce a lot of greenhouse emissions can then purchase credits from companies that produce fewer. Supposedly, this will fund new clean companies and projects that lead to a decrease in carbon emissions.

Here's the problem. Some of those new companies and projects would have been undertaken anyway, without the credits. In that case, the credits won't actually lead to less emission. An article in today's Wall Street Journal describes one such case.

For a carbon-credit system to work, it seems that you've got to have a competent regulatory body that can give credits only to companies and projects that need the credits to succeed. But this requires a detailed understanding of industries and economies all over the world, as well as new technologies. According to the Journal article, it's taken years for a UN regulatory body to figure out that it was issuing credits to projects that didn't need them. Overall, this sounds like an inefficient system.

A carbon dioxide tax, which assigns a cost directly to the thing that's supposed to be regulated, would work better. Make carbon dioxide emissions expensive, and then let the market work out the best way to deal with those costs.

Twitter to Get Ads?

One of the defining characteristics of a number of young, Web 2.0 companies is a lack of business plan. Twitter, a microblogging service in which people subscribe to short updates from friends, is a perfect example. The goal of its founders and funders has been to build a strong base of users, postponing the pesky task of making money.

A recent post from TechCrunch, however, hints that Twitter may be toying with the idea of inserting ads into users' tweet stream.

Twitter was down tonight, nothing really unusual for the San Francisco based startup (to be fair though downtime has improved since they dumped Joyent), but what was different is some reports of users spotting ads in their Twitter stream during the service difficulties. There were no ads evident when I visited Twitter, which may indicate testing only in preparation for a broad-scale rollout.

It wouldn't be surprising if Twitter took this approach, or if it offered a subscription-based version without ads. It's a service that has real value for a subset of its users, many of whom use it for crowdsourcing: ask a question on Twitter, and those who follow you respond with an answer.

I recently had a conversation with Loic Le Meur, Twitterer and founder of Seesmic, a video analogue to Twitter, regarding the subject of microblogging business models. Le Meur believes that a service must have a large number of users and dominate the market before it can reasonably start to make money. "When it is the default application, and it has mass adoption, then you can start monetizing it," Le Meur says. He adds that he personally finds enough value in Twitter to pay for it.

But people have had more than two years to grow accustomed to a free and uncluttered Twitter. And there is always the possibility that they might leave the service for any number of competitors, such as Pownce and Jaiku. Indeed, there's some anecdotal evidence that this could happen. Twitterific, desktop software that allows a person to receive updates and publish tweets, was one of the most popular Twitter downloads, but it's losing traction among competitors. Recently, Twitterific began to insert ads into people's tweet stream, which, says Le Meur, could be playing a part in the rising popularity of his recently acquired, ad-free software, called Twhirl.

Clinical Trials of Stem Cells: Proceed with Caution

With three biotech companies gearing up to begin clinical trials of their embryonic stem cell therapies, the FDA convened a panel yesterday to debate the safety of these therapies, the biggest concern being that these novel cell therapies carry a risk of cancer.

According to a stem cell blog called The Niche:

Three companies, Geron, Advanced Cell Technology, and Novocell, described their work bringing embryonic-derived cells in (respectively) acute spinal cord injury, visual impairment, and diabetes. One expert who wasn't on the committee said that the discussions had been impressively grounded in science, even getting into specifics about what assays might be considered. Attendees were surprised that no opponents of embryonic stem cell research showed up, but the FDA's announcement said explicitly that it was only the cells' safety that was under consideration.

The dark shadow of gene therapy looms over the regulators--the field suffered a major setback in 1999 when a patient died of cancer linked to the therapy. Scientists know that undifferentiated stem cells can form into a benign mass known as a teratoma when injected into animals, and they fear that a safety incident in the first round of clinical trials could devastate the already-troubled field. The cell therapies under development use differentiated cells, but the possibility remains that some undifferentiated cells may be left in the mix.

According to The Niche, major questions need to be answered to assess that risk:

How do we know what cells we have? How do we know what the cells will do in the body? Where do you put cells? Where do they go? What do they do? How many cells might be dangerous? How many can be useful? What can animals tell us? If the cells "go rogue" in a human participant, will we be able to stop them or even to track them? What's the best way to balance risk and benefit?

The committee declined to speculate when it would release its guidance statement. But Geron has said it plans to begin trials of its cell therapy for spinal cord injury this summer.