Brett Winterford's CES blog

Little over a month since Facebook's Beacon advertising service came under fire over privacy concerns, the company's chief revenue officer has said that the "social ad" will remain a key focus for the social-networking site.

Owen Van Natta, chief revenue officer at Facebook, told an audience at the Consumer Electronics Show that most Facebook users are comfortable with sharing information about the products and services they consume.

Facebook's Beacon is an advertising service which posts messages on users' Facebook profiles about any purchases they make on Facebook-affiliated e-commerce sites. These social ads expose to other users such information as what movies their friend has watched, what music they have consumed, or what brand of clothes they prefer.

The premise of Beacon is that friends and other people who are intimately connected to a user are more likely to influence a purchasing decision than any other form of advertising.

The service came under fire late last year when it was discovered that users had little control over the release of information pertaining to their purchasing decisions. After a period of intense media scrutiny, Facebook founder Mark Zuckerberg responded with an apology and offered an option which allows Facebook users to opt out of the Beacon service altogether.

But Van Natta says it was the press and other privacy advocates, and not users, which forced the apology upon the company.

"One of the reasons it took us so long (for us) to respond was because it wasn't really a user thing as much as it was the press and the folks who are trying to highlight it and make it important to people," he said.

Van Natta said that only a "small single digit percentage" of Facebook users have since taken the remedial step of a total opt-out from Beacon. And not a single advertiser pulled out of the project when the privacy concerns were exposed.

In fact, the company plans to "open up" the Beacon service beyond the first 60 companies it began with, and will eventually make it "self-service."

Facebook users, he said, are predominantly young people who have grown up in an age where they are used to their information being shared on the Internet.

"We built Beacon because when you look at people's profiles, they are already doing things to share this kind of information; there is just the friction of having to enter it all in manually," he said.

As more and more content floods the Web, Van Natta believes that a greater emphasis will be placed on the "credibility of identity and content."

"Amazon.com reviews have become far more useful since posters have had to provide their name and since users have been able to vote on whether the review is useful," he said.

"Every day I hear radio ads for restaurants, but they rarely convince me to go eat at that restaurant. A friend, on the other hand, a person who actually knows me and knows my taste, can cause me to take action. The lens through which (the recommendation) is provided is the big difference," he said.

"We think people will want to expand what they are doing with Facebook," he said. "We just have to get the product right so that there's a comfort level and people don't think their privacy is being invaded. If you don't give people that comfort they won't share that information and usage won't happen."

Even the most dedicated long-time IBM veterans say that IBM "really failed" in the consumer business in the nineties before it abandoned it in 1999. Upon acquiring IBM's PC division, says David Nichol, director of Lenovo's small business and consumer line for Australia and New Zealand, Lenovo's first priority was to get its commercial business in order before considering retail.

With its commercial range winning market share and a successful launch of a consumer range in India under its belt, the company says it is now ready to tackle the consumer market on a global basis - a market which makes up some 40 per cent of global laptop sales.

Lenovo's new K-Series ThinkCentre desktop

(Credit: Lenovo)

Lenovo's new 15-inch IdeaPad

(Credit: Lenovo)

Lenovo says it has Sony, HP and Apple in its sights and wants to position its new consumer PC's as premium products.

"We pitted ourselves against those kinds of products and only went to market once we had products that exceeded them," Nichol said. "We want to be understood as a premium brand, something that competes with HP, and something that will not be misunderstood as a low-end brand. It is very difficult to climb out of that hole if you get positioned as a low-end brand. You get discounted against the opposition."

While not being a price aggressor, he did say the new range of Lenovo consumer PC's will be priced under HP in terms of value-for-configuration. "That is a function of establishing the brand," he said. "Companies with well known brands can generally charge more of a premium. You will see us between the Acer and HP price in terms of configuration."

The PCs will be sold with one year on-site warranties for the desktop models and one year return-to-depot warranties for notebooks, aiming to turn them around within the depot in two days.

Nichol says Lenovo has no plans to sell the PC's direct and will target those mass retailers that will help the vendor position the products as a premium brand.

But for all the talk about being a 'premium' play, on first glance the new products look unlikely to unseat the likes of Sony and Apple, whose products (specs aside) are thinner, sexier and carry a better known, classic look-and-feel brand.

But Nichol says there is no reason why Lenovo can't quickly ramp up market share.

"The PC space still tends to be something of a meritocracy," he said. "If your product or the customer experience of the product is the best, its easily found out. There is a pretty mature set of reviewers that make it known what the best products are. If you have something that is really good, you can get a rapid advocacy happening in the market."

Only time, and the reviewers, will tell.

Today's Internet, he said, is a "go-to" Internet.

"The Internet reacts to our requests rather than anticipating them," he told the conference at the Venetian Hotel and Casino.

In the future, he predicts Internet services will be more proactive, predictive and context aware.

"The Internet is going to come to us," he said, "bringing us the information we need at any given time."

He expects this to have a radical affect on the wider technology industry.

When computing came to the desktop in the eighties and nineties, "computing became personal," he said, and "innovation, collaboration and standards drove growth beyond what anyone could imagine."

"I believe that the Internet is following the same path today."

Intel CEO Paul Otellini addresses CES

(Credit: Brett Winterford)

Otellini said he expects the mobile Internet device, armed with mobile broadband and location-aware technologies such as GPS, to be the one that makes best use of this "personal" Internet.

Demonstrating a number of future applications on a mobile internet device, Otellini opened a window into a future where location-based services can aid users real-time in an intuitive way. In one demonstration, the device's camera could recognise objects on a street or translate a restaurant menu, serving up an "augmented reality". While the demos were staged at CES (replicated back-stage on a more powerful computer than the mobile device in his hand), Otellini says the continual shrinking of transistors could see such services come to the mobile device in the not too distant future.

There are four major obstacles to delivering such an experience today, he said. The first is silicon. The mobile internet device, the "next big thing" in computing, he said, will need a more compute-powerful, more power-efficient processor. The second obstacle is the lack of a ubiquitous wireless broadband infrastructure to deliver these services in a wider range of locations. Third, Internet services lack context, he said, that ability to know what we need at a given point in time. And finally, he expects that computing will need to come up with more natural, human interfaces to engage with.

In terms of silicon, Otellini believes Intel to be well on the way to making the dream a reality. The company continues to find ways to shrink transistors. To illustrate, Otellini showed how a 1971 Intel chip (the Intel 4004) featured 2250 transistors and was 10 microns in size. Today's chips, Otellini said, contain a whopping 820 million transistors. That many transistors in 1971 would have required a wafer nine feet by six feet, which would consume the energy of 200 U.S. households. "Instead its the size of a thumbnail," he said.

Otellini said Intel went close to missing its mark on Moore's Law in recent years as it struggled to find new ways to shrink transistors without leaking current. But Intel's engineers saved the day, discovering "a new recipe" with which to produce the next generation of processes - a High K Metal Gate process based on the element Hafnium.

This breakthrough, Otellini said, means that the next generation of Intel chips can deliver 38 per cent more performance on the same power usage, or cut power in half with the same performance as the current generation of chips. The mobile Internet device, he said, while slightly chunky today, will "shrink half and half again" in size in the next 12 months as a result.

From a wireless perspective, Otellini predicted that the WiMAX standard, technology in which Intel Capital has invested in significantly, will win out over other competing standards to deliver the necessary ubiquitous access to the Internet for mobile devices. WiMAX is particularly strong in delivering online video, he said.

"In the next five to ten years , we at Intel believe WiMAX will bring about the change necessary," he said.

The third obstacle is context. Otellini said we need to move from searching for information on a network towards a network that finds you the information you need proactively. These services will require that users give the network an indication of their location, their preferences, and other information of a private nature.

"The impetus is on us as an industry to provide security and privacy users need," he said.

The final hurdle is interfaces. Otellini used the example of the motion and gesture sensing technology of Nintendo Wii, which has revolutionised gaming by offering more human ways of interacting with the computer, as an example of what's to come.

"Its popularity lies with the interface and not the graphics," he said. "You expect to engage and interact with the Wii. In gaming, we have moved from the keyboard to mouse to joystick to wands - with each step, a more natural engagement."

But that was precisely the atmosphere in Las Vegas tonight as he both opened this year's CES conference and closed a final chapter of his career.

Thousands of journalists and technologists queued for some four hours in snake-like lines that wound around several floors of the Venetian Hotel and Casino to hear him give his tenth and final CES keynote.

In just under six months, Gates will retire from full-time work with the software company to devote his time and energy to his philanthropic project The Bill and Melinda Gates Foundation, which aims for global equity in healthcare and education. As several Microsoft devotees said during the long wait to see the show, Gates' last CES keynote is a significant event. This was the man that revolutionised desktop computing and in the process influenced the career opportunities for millions of IT support workers around the globe. And for the very dedicated few among the 140,000 people in Las Vegas for this year's CES, it is likely to be the last time they will see him talk.

Gates isn't a dazzling stage-performer by any stretch. His squeak of a voice has nothing of the immediacy or intensity of some of his peers (Cisco's Chambers comes to mind), and he hardly appears the rock n' roll type with his daggy blue sweater and slacks.

Microsoft Chairman Bill Gates adrresses CES 2008

(Credit: CES)

Thankfully there were plenty of stars at hand to liven up the event.

Early in the address, Gates was treated to a pre-recorded tongue-in-cheek send-off that included appearances by presidential candidates Hillary Clinton and Barack Obama, former vice president Al Gore, U2's Bono, Hollywood director Steven Spielberg and actor George Clooney, all joking at Gates' expense as to what he might get up to upon retirement.

Among the frivolity, there was the business. Gates discussed the next "digital decade" as being one in which high definition content will be pushed to all manner of devices. He then touted the further development of the natural/human user interface - making an example of Microsoft's touch-based 'Surface' Table Computer, but not mentioning the Nintendo Wii or the Apple iPhone, both pioneers in the field.

Gates predicted that PCs will again grow this year at double digit growth rates, and announced that Microsoft's latest Vista operating system now has some 100 million users. He also announced that broadcaster NBC will be offering some 3,000 hours of footage from the Beijing Olympic Games online using Microsoft's Silverlight and Live software technologies.

In gaming, Gates' colleagues announced that the company has shipped some 17.7 million X-Box games consoles, claiming that more cash is spent on XBox games than games for both Nintendo Wii and Sony Playstation put together.

The company also showcased new innovations in the digital home and for the portable music player Zune and demonstrated ways in which Microsoft technology can be used to improve the communications and entertainment experience while driving in a car.

There would be no major product announcements, nor any emotional farewell.

Instead his keynote closed, as perhaps the long wait to see Gates speak deserved, with some real rock n' roll royalty - a live Guitar Hero jam-off with Guns N Roses guitarist Slash.

Microsoft Chairman Bill Gates summons Slash for a Guitar Hero duel

(Credit: CES)

Then Gates, unassumingly, walked off the CES stage for the last time.