Facebook last week announced its Initial Public Offering — exactly the event I said wouldn’t happen in one of my controversial predictions for 2012. But I’m sticking with my call on this one since we’re 2-3 months from the actual event and a lot can happen to screw things up between now and then. I’m pretty sure Facebook shares will be trading sometime this year, I just don’t think the company will have a traditional IPO.

Companies go public for three reasons: 1) to raise capital for various corporate purposes like acquisitions and paying down debt; 2) to secure the wealth of founders, giving their kids something to fight over, and; 3) because they have over 500 investors, secondary trading of shares is picking up and if they don’t go public under a process they control the SEC will force them to go public in a less-profitable event.  Facebook in its prospectus says reason one — the most cited reason by far for companies going public — does not apply to them. They don’t really need the money and plan to park it in T-bills, which if you think about it can only drag Facebook earnings down given current low interest rates.

Give us your money and we’ll do nothing with it.  Not only that, we’ll also use your money to hurt the value of your shares.

To be fair, sometimes companies go public just because they can. Remember the dot-com bubble?  In that period of irrational exuberance companies went public and their shares soared for awhile without regard to profitability or even having a real business model. So sometimes you take the money because it is obviously stupid money and if you don’t take it now you may never get another chance (yes, I’m talking about you, Webvan).

But that’s certainly not the case with Facebook, which is profitable and growing, has no debt, and has $3.5 billion already earning next to nothing in the bank.

Reason two for having an IPO — to secure the wealth of founders and early investors — is the reason Facebook gave for going public and that makes sense. After eight years of hard work everyone involved would like a liquidity event so they can buy a new house and car. There’s nothing wrong with this motivation except, given the lack of actual need for capital, it shows a misalignment of interests between Facebook management and new Facebook investors.  We are actually investing in their Ferraris.

Now maybe Facebook is the IPO of the century and none of this matters, but as a narrative for big institutional investors it’s a little shaky, especially when you see that after the IPO Facebook CEO Mark Zuckerberg, who is younger than the IBM PC, will still control 57 percent of Facebook’s voting shares, in effect placing total voting and managerial control of a major public company in a single executive.  This is unprecedented for a company at this scale; even Bill Gates only owns 20-odd percent of Microsoft and had to answer to investors when he was CEO.

So this isn’t just the Facebook IPO, it is the Zuckerberg IPO.

Something similar to this happened back in 1988 when Dell Computer went public. Michael Dell was the Mark Zuckerberg of his era. At 24, Dell was even younger than Zuckerberg is today. Dell was smart and he was full of himself — but not so full that he thought he could carry the company offering on his shoulders alone.  With the encouragement of his investors and board, Dell hired some seasoned managers to help him take the company public, then later fired them all and went back to running the company as he saw fit.

Mark Zuckerberg wants to do the same thing that Michael Dell did, just minus the pro forma hiring and firing of suits.

It’s going to be a slog for Zuckerberg. For the next 2-3 months he’ll have to be everywhere, kissing ass while not appearing to be kissing ass, answering tons of boneheaded questions from people he doesn’t respect — people who will be primarily questioning his vision and fitness to lead.

Zuckerberg is going to hate this process and might explode as a result. He’s going to be under a journalistic microscope, too, and some bad information about him may come forth (I don’t have any, by the way, but powerful people often have powerful enemies). Throw in some bad business news for Facebook or some good news for Google and a $100 billion IPO starts to look pretty iffy.  There are lots of ways this process could fall apart.

What’s a geek to do?

Well just as there are three reasons for companies to go public there are also three ways to do it. The normal way is to follow the traditional path Facebook and Zuckerberg have embarked on now — hire investment bankers, do a road show, pay $500 million in fees, go public. That’s how Dell did it in 1988, though that company raised only $30 million, not $5 billion, so the fees were significantly lower.

The second way to go public is to do nothing at all yet have more than 500 investors and a brisk secondary trading market in private company shares.  In that case the SEC will do the IPO for you for free (well, they’ll fine you too, but not much) which sounds good in a way but must be bad because nobody ever does it.  Name a company that went public in this manner?  I can’t.

The third way to go public is by buying or merging with a company that is already public. This is viewed on Wall Street as the chickenshit method because it generates nowhere near as much in fees to investment bankers who, after all, are the cowboys driving this herd. To be fair, most of the time when companies back into going public it is because of weakness.  Certainly the public company they are buying is weak, often valueless.  The decision to use this method is often based on being unable to find an underwriter to go public by the usual route and not having the capital to wait for better times. Again, it’s hard to find a really big company that has done it this way, though little companies do this all the time.

But that’s exactly why I feel Facebook will abandon its present IPO course and instead buy a public company.

No road show for one thing.  Zuckerberg’s agony ends. The idea that acquiring a weak public company would drag down Facebook shares is ridiculous because Facebook is so big and available public shells are so small that the dilution effect would be vastly less than that $500 million in banker fees.

Here’s an idea: Facebook might actually find a public company it wants to buy.  Yeah, that’s the ticket.

And while buying a public company would limit the amount of money Facebook would be able to raise initially, the point isn’t to even raise money, remember?  The negative effect of all those T-bills would be avoided.

That’s why I think Facebook will change course and back into being a public company. It’s cheaper, easier, and accomplishes the same result.  Five years from now nobody will even remember how they did it any more than they can explain Google’s Dutch Auction IPO in 2004.

multidimensional, get it?

I was watching this Bloomberg video the other day featuring Shawn Carolan, the venture capitalist who backed the Siri electronic personal assistant startup then sold it to Apple. His was the closest I’d heard to a technical explanation of how Siri works and it surprised me because it sounded a lot like technology I remembered from years ago at Excite, the long-defunct search engine.  Please look at the video and then meet me in the next paragraph.  The part that excited me (no pun intended) is about four minutes in.

Okay, he said they used linguistic techniques to map blocks of words against 10 possible domains of expertise to figure out what the heck you are asking Siri to do, with the real breakthrough being treating the entire user question or order as a single linguistic unit.

Now let’s jump back to 1994.  Eighteen years ago the search engine technology standard was set by Alta Vista, which spun out of Digital Equipment Corporation. Alta Vista pioneered web indexing with spiders dragging back web pages and it pioneered keyword searches. But if a keyword wasn’t present, Alta Vista would never return the web page you really needed because Alta Vista wasn’t smart enough.

Today the search engine standard is of course Google which uses PageRank to measure relevance by putting higher in the search results those pages that are linked to by more other pages.  Adding to this (yes, I know I’m over-simplifying — feel free to correct me) Google knows a lot about synonyms and how word meaning changes in different contexts — basic linguistic tools that were probably out of Alta Vista’s reach simply because of the processing power required.

And then there was Excite, which was completely different. When I first visited the company in 1994 it was called ArchiText and was six Stanford students operating from their Los Altos garage. I helped them find their first customer and their first venture capitalist, Steve Coit of Charles River Ventures. Vinod came along later.

Most of the ArchiText boys were semantic systems majors and they took a very different technical approach to search than did Alta Vista or that other up-and-coming search engine, Yahoo, which in those days did the task the old fashioned way — by hand.

ArchiText used spiders, too, and built its own web index, but from the start the company was dedicated to finding useful search results even if they didn’t include any search terms from the original user query — seemingly an enormous job.  Google does some of that through its elaborate algorithm, mentioned above, but Google’s technique is for the most part hard coded and brute force while ArchiText’s was very different and, well, elegant.

Here’s how the ArchiText (later Excite) search engine worked. Every query was stripped to its significant words — subjects, objects, verbs and adjectives — then each query became a vector in a multidimensional space with each unique word being a dimension.  “How do space rockets stay in orbit when they are flying through space?” would become a vector string one unit long for each of those words but two units long for the word “space.”  This bit of semantic DNA was then mapped against an index of millions of web pages that had all been similarly converted to multidimensional vectors.

Finding the most relevant results then became a simple matter of grabbing the N vectors (web pages) nearest to the query vector in that multidimensional space.  It was quick, scalable, concentrated the processing load on the indexing where it didn’t bog down retrieval, and could reliably return pages like “Why satellites fall from the sky” that might answer the question even though none of the same words were used.

Compare that to the description of Siri from the Bloomberg video.  Siri takes the entire query as a single block and maps it against a corpus composed of 10 domains of expertise looking for a fit, or perhaps for the best fit.

Technically it sounds darned similar to me, but then I’m forever condemned to remember old crap like this.

In the long run PageRank was more useful to the real world, Excite got sucked into @Home and the whole mess blew up with the dot-com meltdown, but not before all this technology was patented — patents owned today by Excite@Home’s creditors, which surprised me given that the original inventor, Graham Spencer, now works at Google.

Those old Excite patents, while nearing the end of their lives, could turn out to be very valuable to, say, a Google trying to compete with Siri on Android or even to an Apple trying to defend Siri from competitors.

I expect we’ll see those patents change hands sometime soon.

Steve Ballmer has always been nice to me. I can’t say we have much of a relationship, but the half dozen times I have interviewed him have always gone well and he tries to please, which I appreciate. But (there’s always a but, isn’t there?) Ballmer has failed at Microsoft and I believe 2012 will see him replaced as Redmond’s CEO.

During Ballmer’s term Microsoft’s stock has gone nowhere and it lost to Apple its position as America’s most valuable technology company.  While the company is wildly profitable and will remain so for years to come, those profits still come, for the most part, from two stalwart products from the 1990s — Windows and Office — both of which will fade as the mobile conversion proceeds.

Very little else has worked for Microsoft.  I know, I know there are 50 million xBox game systems out there and hundreds of millions of games have been sold, but how much money did Microsoft actually make on all that hardware?  The company would be in a better position today, frankly, had it simply shut down everything but Windows and Office.

Ballmer tried and failed and it is long past being time for him to go. Unfortunately most of the internal candidates who might logically have succeeded him are no longer with the company.  And it is my belief that once you leave Microsoft you don’t come back.

Besides, Ballmer probably doesn’t want to give up the job.

But it’s time, Steve.  You know it’s time.

Now we’ve reached the part of the show where I tell you who I believe will be the new Microsoft CEO.  I could have put it in the headline above but I wanted you to keep an open mind at least this far. Because there’s a cynical cadre of readers who apparently come here mainly to get angry and feel superior and those readers are about to accuse me for the second or third time this week of having jumped the shark.

I think the next CEO of Microsoft will be Eric Schmidt, who happens at the moment to be chairman of Google.

For something this crazy to happen it has to work for both parties and I think this does, so please read to the end.

Schmidt is, at this point, a billionaire drone at Google. Larry Page is back firmly in control and there is little for Schmidt to do but go around the world hinting at new products. Not only that, Page is pointedly dismantling the organization Schmidt built, seeing it as inefficient.

It is no longer Eric Schmidt’s Google.

I’ll get back to Schmidt’s motivations in a moment, but now let’s look at why Microsoft might do this. It’s a tactical move for one thing and Microsoft thrills to tactical moves. Google has been identified as Microsoft’s top enemy and Schmidt certainly knows Google.  Apple is a big enemy, too, and Schmidt knows that company from his several years on the Apple board.

If Microsoft wants to send Wall Street and the technology market a clear signal that something has changed, hiring Eric Schmidt would be that signal.

And for his part I think Schmidt would do pretty well at Microsoft. It’s a very techie company that presently lacks technical leadership and is adrift as a result.  It lacks the cultural problems Schmidt faced at Novell and the cult-of-personality problems at Google, where Schmidt had too much of a free hand with the result being the dysfunctional culture Larry Page is currently dismantling.

More than anything else, though, sometimes just firing the manager can turn a team around. In this instance I am referring to Ballmer.

Now back to why Schmidt would want to even do it.  For one thing he can prove Larry Page was wrong.  For another — and this is vitally important — this is about the only way Schmidt can sell his Google stock, which may be not far from a historic high.  As CEO of Microsoft there’s no onus against selling that stock or putting it in a foundation which then sells it, or maybe even selling it to Microsoft.

Call me crazy but that’s how I see it.  Who would you choose?

I was speaking recently at a software company very interested in mobile apps. One of their concerns had to do with which operating systems to support.  Should they do them all?  Just a couple? My advice was that three’s a crowd.

Technical markets tend to divide like bettors at the racetrack where five percent win, 10 percent break even while 85 percent lose. Turning these numbers on their head and applying them to mobile OS revenue, IOS (iPhone, iPad, iGizmo to be named later) will generate 85 percent, Android 10 percent (because it is Open Source and free) leaving only five percent max for mobile OS number three, which could be Blackberry or Windows Phone 7 but can’t be both.

Notice this is all about revenue.  I’m not saying Android won’t have more phones in use than Apple, just that Apple will make a lot more money from its phones.

Since Microsoft feels it can’t afford to miss the mobile transition, they’ll do anything to hold at least the third spot, which is why I expect Redmond to eventually acquire RIM. That would actually be a better than usual deal for Microsoft. RIM has (residual and fading) market share as well as incredible talent at its Waterloo, Ontario HQ, not to mention a bootload of cash. What they don’t have is a clue, which is why they need Microsoft, which is clueless, too, but will at least provide desperate new leadership, mass, and marketing clout.

Hey, I think that was my first prediction for 2012!

Another option for Microsoft would be to embrace Android and reposition Windows Phone as a shell, making Android apps look and function like Windows apps. This is not as stupid as it sounds. Thanks to its aggressive legal department, Microsoft already makes more money from Android than does Google, so Android’s success can be seen as Microsoft’s success if you squint a little. Microsoft could specialize in Android services where Google might be letting users down a bit and the Microsoft/Android Application Store could sell apps for both OS variants, undercutting Google.

That’s prediction #2: If Microsoft doesn’t buy RIM they’ll license Android.

If they are really on their game Microsoft will do both (buy RIM and license Android) which would be a true game changer.

This potentially leaves a little room for other candidates for mobile OS position #3, but I’m at a loss for a good business case for even trying. Consider, for example, Intel’s new mobile OS project called Tizen, which replaces the failed Meego.

Tizen looks to me like a bad bet. Intel even championing a mobile OS against IOS and Android is spitting in the wind. The best that Intel can hope is to grab third place, which would still take a miracle.

Is a potential five percent market share worth Intel’s time?  I don’t think so.

Prediction #3: Tizen will fail in 2012.

This week I’m at NASA’s Green Flight Challenge in our new home town of Santa Rosa, California. It’s a contest for efficient flight using alternative energy that I’ll be writing more about later in the week. Much of the $1.65 million in prize money comes from Google, the subject of this column. I’ve been giving a lot of thought to Google’s strategic path under once-and-future CEO Larry Page and think I’ve got a couple things figured out. Google is right now in the process of changing, well, its process. Page is rebuilding the company but not doing a very good job of explaining himself, so I’ll just have to handle that here.

The image we all have of Google is that of a money machine based on PageRank and AdWords with a huge number of other products and projects thrown-in, hardly any of which make the company any money.  Some of these projects, like Android and GMail, have enormous followings and significant market shares, but they still do little better than break-even. Many of the eternal beta projects seem to be more experiments or simply larks. Google under Page’s predecessor CEO Eric Schmidt seemed to be a hodge-podge company lacking a sure hand at the tiller.

This was, I think, by design. Schmidt (and Page and Google co-founder Sergey Brin) were smart enough to know in those early hyper growth days that the next big thing for Google could just as likely be something they didn’t see coming, so they supported rampant experimentation. Well companies mature and the second coming of Larry Page represents a change in that policy.

The old idea was to let a thousand flowers bloom then throw big money behind the most promising of those flowers. And that worked for awhile, yielding products like GMail, but the maturing of Google as a company and the Internet as an industry is forcing the company into a new business model. This is not to say that engineers won’t still be allowed to spend time on their own projects, but that the company realizes now that it can no longer rely on serendipity to provide its next hits.

If you have no constraints, no limits, then all ideas are welcome and can be equally promoted, at least for awhile. But that’s not the situation faced by Larry Page earlier this year when he again became Google’s CEO. What Larry saw was Facebook’s dramatic success in a market segment where Google had been notably unsuccessful. That’s why Page led with making all Google bonuses partially dependent on the company’s success with social networking products. Larry led with the carrot, then slowly added some sticks.

What we’ve seen is a huge conceptual change in Google with the demise of formerly high-flying divisions like Google Labs and even closing down profitable acquisitions like Slide. The end of Slide, which appeared to happen precipitously a couple weeks ago was actually five months in the making.

Google is cutting all the projects that look like they’d at best peak with $20-50 million in annual profit and concentrating on those that are either bet-the-farm strategic priorities like combating Facebook or promise to yield billions in profits. Gone are the five-man teams operating in separate digs, replaced by thousand-man teams dedicated to specific and well articulated goals.

Think about it. A lot of the criticism of Google here and elsewhere has been about lack of focus, lack of standardized interfaces, oddly positioned products that sometimes conflict with or oppose each other. Google was run as an insurgency. And now Larry Page is determined to turn Google into an army. Each conflict to come will be approached with a Manhattan Project development effort.

Social is the first battle to be fought this war but I am sure Larry has others planned. He’s promoting a new class of generals (vice presidents, I guess) and giving them the power and resources to get their jobs done with thousands of developers and billions of dollars each. Instead of doing a hundred things and making money from two of them, Google will soon be doing a dozen things and making money from 10 of them, or at least that’s the plan. And it’s a good one, because even geeks grow up sometime.

But they are keeping the free food, right?

I seem to be writing a lot of these What the heck was that? columns explaining recent news events. This time it is the firing of Carol Bartz as CEO of Yahoo. I’m not here to defend Bartz, whom I would have fired long ago (or more probably not hired in the first place), but I want to make the point that for all her failings, Bartz was mainly fired for being a hardass.  It’s not what she did or didn’t do as much as her style while doing it.

Carol Bartz is, like beer, an acquired taste.  I like her, but she has a long history of bothering sensitive geeks. The old-timers at Autodesk (a very geeky company where she was CEO) absolutely hated Bartz for her brusque style.

Some of this was casting. Remember Bartz was hired specifically to be not Jerry Yang, the Yahoo co-founder who preceded her as CEO.  Jerry has a brusqueness of his own, but his brusqueness is on behalf of the geeks, since he comes from their ranks. To be different from Jerry yet also turn the company around pretty much required that Bartz piss-off nearly everyone, which she gleefully did. If the company was doing better business-wise, she’d still be getting away with it. But over the long haul Bartz came to be seen inside as a pain-in-the-ass who also wasn’t delivering.

Some people will ask whether Bartz would have been fired with the same style and performance had she been a man?  I think that had she been a man she wouldn’t have been hired in the first place, so the broader question is moot.

So what happens now for Yahoo?  While it will be pitched differently than this, I expect the second coming of Jerry Yang. Jerry can’t be CEO again (or shouldn’t — he’s smarter than to try that) but the real power still lies with he and his cronies. They’ll choose somebody to take the CEO job but I think the company will be run more by consensus.  Jerry’s a smart guy and he learns from his mistakes.  But will it be enough to satisfy Wall Street?  I don’t know.

For all Yahoo’s problems, this is the part of the show where I point out that Wall Street is really, really stupid about how tech companies should be managed. Analysts tend to take a structural approach, looking at inputs and outputs and cash flows like Yahoo or any of its competitors are manufacturing those electrons on assembly lines.  It doesn’t work that way.

I’ve written about this many times over the years. These are companies built purely on intellect — companies where there are a few individuals who are capable of doing things that are unique in their enterprise.  Imagine a General Motors where there was only one worker who could make really fine exhaust systems. That wouldn’t work in Detroit but it does work in Silicon Valley because the output of that one person can be amplified a thousand or a million times.

Look at Google and its acquisitions, for example.  Google notoriously buys companies only to discard their products. This is clearly because Google is acquiring the people for their potential. Yet analysts wring their hands over the lost products as though that was what really mattered and the acquisitions had somehow failed. The truth is the products were inconsequential all along.

Are some individual contributors worth $100 million?  Yes, though Wall Street gets that backward, too, thinking CEOs are worth that kind of money, which they aren’t.

Back to Yahoo, a distracted, demoralized, and not very efficient company.  But at this point bringing-in a manager with the goal of increasing efficiency would I think be a mistake.  People don’t get this.  What Yahoo needs to do is dig deep in the human resources it already has and pull out something new that will change the game.  And to do that the first thing the company needs to do is heal.

Next time around whoever runs Yahoo will have to be much more sensitive to cultural issues. They will want someone who can unite the company and create a more aspirational firm that looks to innovate and be forward thinking, yet also not trapped by the Jerry Yang syndrome of risk avoidance. Yahoo needs a bit of risk-taking at this point, but it would be a mistake to hire someone who comes in with the idea of making the company a more efficient machine.

Driving Miss Sadie

Last week I announced that I’m planning my own Android phone and the next thing you know Google does the same thing!  Coincidence? I think not.  Our motivations are somewhat different, however, and their budget, at $12.5 billion, is marginally higher. I’ve had plenty of time to think about this as I drive the dogs across country to our next home in California and there’s quite a bit more to this Motorola deal than other pundits have been saying.

Yes, it has a lot to do with patents and that might well explain Google’s goofy bidding behavior during the recent Nortel patent auction. Maybe Google already knew it was going for Moto at that point. Certainly with these 17,000 patents plus the $1 billion worth of patents acquired from IBM, Google can go toe-to-toe with Apple or anyone else in an IP battle. Cross-licenses of certain mobile technologies would certainly appear to be in the future for many of these companies.

And cross-licenses represent another important aspect of MotoGoogle that generally hasn’t been noticed — Motorola’s Java license. Oracle, the new owner of Java and all the rest of Sun Microsystem’s old IP, has been beating-up on Google in court, claiming the search giant has stolen Java technology. Not anymore. If this Motorola Mobility deal goes through (and I think it will) then Oracle loses grounds for its lawsuit, which is part of why Google is even doing the deal.

Okay, so Google is going into the phone business. Of course they are going to run the company as a separate business since that’s about the only way to spin the inevitable negative impact the deal will have on Google’s gross margins. Only Apple makes big margins on hardware and while MotoGoogle would like to be Apple, it isn’t.

What does this mean for Google Voice? I haven’t heard this question asked yet. If Google wants to sell phones they’ll mainly do so through the mobile carriers and every one of those carriers is threatened by Google Voice’s potential to disintermediate them and steal their revenue. I’m sure the carriers will ask for Google Voice to go away as a condition for handling MotoGoogle phones. It wouldn’t surprise me, either, if this turn of events for Google Voice surprises Google, which is a very smart company with occasional blind spots.

I think the deal is going to shake up the mobile voice and data businesses generally. And this might not be the end of it, either. What if, for example, Google mounted a bid for T-Mobile? Why not? Yes, it would be expensive but such a move would level the playing field in even more ways, giving Google a 4G network they could really use, shaking-up the incumbent carriers in the process.

What if, what if, what if… Google TV is so far a failure, but this deal could shake that up, too, with MotoGoogle perhaps entering the set-top box business. Certainly Motorola has technology to contribute and what will be interesting to see is how the business shakes out as a result.

This is a bold move on Google’s part. Not a bet the company move, but the move of a confident Larry Page who knows that bold action is required. He has guts, that boy.  And I think it is going to be fun to see how this plays out.

A reader came to me this week with a problem. He was being sued in federal court by a company claiming he had defamed them online.  That will be $75,000, please.  I’m not getting into who the reader is, which company is suing, even what jurisdiction, because none of that matters here.  But the case is real and I feel for the reader. So let’s come up with a way to make sure this doesn’t have to happen again.

America is a very litigious society. We love to get all riled up and sue each other, whether our claims are valid or not.  In this reader’s case he is accused of making improper comments in an online forum. Seventy-five other people are also accused in the suit, but they are John Does — unknown individuals. Now we begin to see where that $75,000 claim came from. “All of you defamed me but only one used his real name so he can pay for everyone.”

In this case investors were discussing a public company the shares of which they did or didn’t own, liked or didn’t like, and the company seems to feel the criticism was both unwarranted and hurtful. So they sued, much to the surprise of my reader, who thought he had a right to his opinions.

Of course we have a right to our opinions. It’s expressing those opinions that sometimes gets us in trouble.  I say a lot of strong stuff right here but I also try to do it carefully. It helps if you are telling the truth, of course, but I find it useful even then to clearly identify strong statements as my opinions: “It is my opinion that he is a crook.”

After all, I could be wrong.

Many lawsuits are warranted but some look to me like bullying or even legal extortion. Sometimes it is cheaper to pay an undeserved settlement than to pay even more to win and get nothing. Big companies play this game. But everything is relative: my HVAC contractor sued me for not paying him for the work he didn’t do, following what I believed (note, this is my opinion) to be a similar legal strategy, figuring that I would pay to make the nuisance go away. Only I didn’t pay.  That’s not my style.

But a lot of people do pay and I would guess (again, my opinion) this can have a chilling effect on public discourse even to the point of affecting the public’s right to know.

So let’s fix the system.  Here’s my idea. If I were Facebook or Google+ or LinkedIn  — web sites that like to serve as centers of discourse — I’d offer my members a legal plan. No annual subscriptions or pre-payments necessary, but there would be a $500 deductible. Remember this is for legal services, not for paying settlements, so if you lose you pay the damages, though not the associated legal bills.

Let’s imagine Google gives this a try, because they’ll try just about anything that can be reduced to an algorithm as this can be.

Hire a top law firm; charge a $500 deductible for $1 million in legal services; show a profit by scaring the crap out of people with cleverly written form letters actually sent by androids; rinse, repeat one million times.

And it would work. People would think twice before writing words they might later regret.  But if those words were truly heartfelt and the cause important enough they might be worth $500. And those being talked about might still pursue lawsuits, but it won’t work well for them because Google will always have more money than they do. Game over.

This could be the idea that puts Google+ over the top.

So if you happen to work for Google and agree this is a fabulous idea, I’ll be happy to license it for a very modest sum.  But if you just take the idea and run with it, remember one thing.

I’ll sue you.

Who will buy Hulu, the IPTV streaming service and why should we care? I’m not sure I do care, now that Lie to Me has been canceled, but in case you are an American who feels the future of series television is important, here’s what I think is going on.

The Wall $treet Journal says Apple is thinking of making a bid for Hulu and Seattlepi.com says Microsoft’s is no longer interested, which leaves Amazon, Apple, Google, Yahoo, and any unnamed parties. I can’t think of any unnamed parties, by the way, so I’m guessing one of these will walk with Hulu, which went into play a couple weeks ago following an unsolicited (and still unidentified) bid.

Of course the three big network owners of Hulu will guarantee five years of continued program access with the first two years exclusive. That’s because they have no money in Hulu and each stands to walk with $600+ million from the sale, but only if there is a sale. Without such an exclusivity period there will be no sale and no $600+ million. None of these networks can buy out the others for antitrust reasons so the “networks might balk” story is just to sell newspapers (or electrons). Hulu will be sold.

It will be interesting to see how much Hulu will cost the winner, though. The company appears to be managing the press brilliantly to generate buzz. Any of the interested parties could do the deal all in cash, no problem. But who will end up with it? Here’s my score sheet.

Apple will buy Hulu if the price is right, but how much higher than $2 Billion they will go? I suspect Apple may actually be just meddling here, trying to make it more expensive for the eventual winner.

Microsoft has already telegraphed that $2 billion is too high, but since they probably can’t afford to not be in this business that suggests they will put some smaller amount (still $1+ billion) into content deals.

For that matter, all the losers will be looking for content, so I’d say $4+ billion is up for grabs in Hollywood beyond Hulu. New cars all around!

Amazon just did a content deal with CBS (so did Netflix — remember them?) so buying Hulu would round out their content for Amazon Prime, likely bringing-in millions more customer accounts. But there, too, it depends on what is Amazon CEO Jeff Bezos’ price target. He and Jobs are very similar in that they will have a maximum in mind and probably won’t go higher.

My gut suggests that the auction will finally come down to Google and Yahoo, if Google can get this past the feds despite its dominant position with YouTube. Yahoo CEO Carol Bartz probably sees this as her best chance to avoid being fired so I think she’ll bid high. I suspect, too, that Yahoo’s unsolicited interest was what started Hulu in play in the first place, though that’s just a guess on my part.

Buying Hulu could also be Bartz’ undoing, though, because she could blow half her cash or more (I suspect Google will go to $3 billion and Yahoo will beat that) and then find herself in a position where she can’t make a profit on her purchase, especially since she’ll have to do her own CBS deal at that point and CBS CEO Les Moonves won’t make that cheap. Amazon reportedly paid $100+ million to CBS, but Moonves will try to hold out for closer to the $600+ million he would have received had CBS been a Hulu owner, seeing anything less as charity.

The fascinating scenario here, of course, is that Yahoo way overpays, damaging itself fatally in the process and ends up being acquired by one of the others, probably Microsoft.

No wonder Ballmer pulled out of the bidding, he’s playing the long game.

Roger with his axe

Roger McNamee is a smart guy and a very successful investor as a co-founder of Elevation Partners. He made a breakfast presentation last month at the Paley Center for Media in Los Angeles that is well worth watching. I could probably get half a dozen columns out of this one speech, but the part I want to concentrate on here is McNamee’s claim that when it comes to social media, Facebook (in which he was an early investor) has already won. I’m not here to say Roger is wrong, just that I am not exactly sure what Facebook is winning.

The core of McNamee’s speech didn’t have to do so much with Facebook as with Microsoft, Apple, Google, and HTML5. His point was that Microsoft is going down and that is freeing-up money from a decaying enterprise software business that can go to support new businesses based on HTML5. Google won’t be the beneficiary of Microsoft’s fall, according to Roger, because they’ve lost, too: the mobile transition effectively eliminates Google’s tollbooth on the Internet because smart phone users hardly search at all. So Apple wins by providing all the devices and Facebook wins, I guess, by providing the most popular destination.

Again, I’m not saying he’s wrong, but what I took away from this speech was first an image of Microsoft as the Roman Colosseum being mined for marble after the barbarian invasion, and second a sense that while Facebook is certainly a huge social, cultural, and business phenomenon, I just don’t see it being around for very long.

Facebook is a huge success. You can’t argue with 750 million users and growing. And I don’t see Google+ making a big dent in that. What I see instead is more properly the fading of the entire social media category, the victim of an ever-shortening event horizon.

Each era of computing seems to run for about a decade of total dominance by a given platform. Mainframes (1960-1970), minicomputers (1970-1980), character-based PCs (1980-1990), graphical PCs (1990-2000), notebooks (2000-2010), smart phones and tablets (2010-2020?). We could look at this in different ways like how these devices are connected but I don’t think it would make a huge difference.

Now look at the dominant players in each succession – IBM (1960-1985), DEC (1965-1980), Microsoft (1987-2003), Google (2000-2010), Facebook (2007-?). That’s 25 years, 15 years, 15 years, 10 years, and how long will Facebook reign supreme? Not 15 years and I don’t think even 10. I give Facebook seven years or until 2014 to peak.

Does this feel wrong to you?  Listen to your gut and I think you’ll agree with me even if we don’t exactly know why.

Roger may not care since he will have already made his Facebook fortune and then some. But I think this foreshortening is important because it makes Facebook the winner, yes, but the winner of what? Super-IPO of the decade? Yes. Dow-30 company of 2025? No.

My interest is in what follows Facebook, which I think must be its disintermediation by all of us reclaiming our personal data, possibly through our embracing the very HTML5 that Roger loves so much. The trend is clear from “the computer is the computer” through “the network is the computer” to what’s next, which I believe is “the data is the computer.”

You’ll notice I didn’t mention Apple. Black swan.