December 2, 2009

Twitter was just the beginning. After dreaming up the innovative communication medium, Jack Dorsey is looking to revolutionize another core aspect of society — money.

On Tuesday, Dorsey announced his new start-up, Square, which will let anyone with a cellphone or iPod become a merchant and accept credit card payments.

Square is a small plastic device that plugs into a gadget’s headphone jack. Buyers swipe their credit cards through the machine, which then transmits the payment data to an application running on a connected iPhone or iPod Touch. (Android and Blackberry apps are in development, and computer software will be available later.)

You don’t have to have the Square gadget or app to pay. You just need a credit card and an e-mail address to receive a receipt.

A select few cafes and small vendors are among Square’s first beta testers. Intelligentsia Coffee & Tea in Venice will be one of the first in Southern California, starting as early as next week.

Beginning sometime early next year, Dorsey wants everyone to use Square.

“I think we’re going to give the Squares away for free,” Dorsey said on the phone from San Francisco on Tuesday, “because they’re pretty cheap for us to make.”

Once the company begins ramping up hardware production, you’ll be able to sign up for an account, enter a shipping address onto the site and receive a device in the mail. Like PayPal, profiles are tied to a bank account.

Dorsey envisions the service replacing virtually every cash transaction. Let’s say a friend owes you $30 for dinner last week, but there’s no ATM in sight. Grab the Square device from your keychain, plug it into your phone and tell him to pay up.

Then there’s the untapped market on Craigslist. The free and ubiquitous classified ad site “is doing more transactions than eBay today and has no inherent payment mechanism,” Dorsey said. “It’s a huge market for us.”

The payment system is secure, Dorsey said. Transactional data is safely encrypted, and the credit card info is never stored on the device, only passed along, he said. Signatures are drawn with a finger on the touch screen.

Buyers with a Square profile can set their photos to display on the vendor’s screen to thwart identity thieves or daughters with a penchant for “borrowing” plastic. (It won’t stop your twin sibling from charging things to your card, though.)

Even the e-mail address and phone number a customer is asked to put in during the sale is invisible to the seller. It’s only used to transmit the digital receipt, which can include a logo and links to the retailer’s website or Twitter page.

A cool, high-tech toy for free. What’s the catch? Well, Dorsey has a hidden agenda, albeit one shared by many — he’s sick of cash.

“I, for one, hate getting change,” Dorsey said. “I just can’t stand it.”

The current credit card system isn’t without its faults, either. “I get so annoyed when people give me a paper receipt for something that was like $5,” he said. “There’s nothing that I would do with that receipt.”

His solution is Silicon Valley’s hippest new start-up: Square. Its e-mail receipts save trees; its charitable donations save the poor; and, gasp, it even has a business model. “We may charge $1 for the app,” Dorsey said in an e-mail.

– Mark Milian
twitter.com/markmilian

http://latimesblogs.latimes.com/technology/2009/12/square.html

By Prince McLean

Following a press release from ComScore indicating that Microsoft has approached 10% market share with Bing, more comprehensive search statistics indicate that Bing’s growth and share of web search is being wildly overstated.

ComScore’s October “US Core Search” rankings made headlines in suggesting that Microsoft’s Bing, combined with the company’s other search properties, have incrementally amassed a significant share of US search, now at 9.9%.

However, ComScore’s press release points out in small type that “searches for mapping, local directory, and user-generated video sites that are not on the core domain of the five search engines are not included in the core search numbers.”

Microsoft doesn’t have a big share of the mapping, local directory, and user generated search market. By removing this from its “core” rankings, ComScore greatly inflates Bing’s importance, because the vast majority search related to maps, local search, and “user generated video” (why not just say “YouTube”) are all owned by Google. Microsoft’s own “Soapbox” effort to match Google’s YouTube failed and was shut down in August after a three run.

When looking at more neutral statistics that don’t gerrymander figures to arrive at a desired conclusion, the facts are very different.

Net Application’s search engine market share figures have been tracking the industry since at least 2000. For October 2009, the latest full month recorded, it gave Microsoft Bing just a 3.49% share of all search globally, along with 0.08% share for MSN Search and 0.01% share for Microsoft Live Search. Yahoo Search took second place with 6.68%, leaving the lion’s share for Google at 84.53%.

This establishes the trend AppleInsider reported this summer that despite glowing press releases for Bing, Google keeps eating away more and more of the web search market globally, while Microsoft and Yahoo continue to remain stagnant.

As the chart below shows, in the four years between 2004 and 2008, Google incrementally shifted from having almost 60% share to having a dominating +75% share, while Yahoo fell from 18.5% to 12.7% and Microsoft fell from 14% to 6.3%.

Over the last two years since, Google has continued to gain share while Yahoo’s dropped to the current figure of 6.7% and Microsoft’s Bing, MSN and Live Search combined amounted to just 3.5% of the global web search market.

Posted by Larry Dignan @ 11:12 am

Google on Thursday revealed a bevy of noteworthy developments for its Chrome OS. The company released the Chrome OS to the open source community, laid out its security vision and promised to deliver a simple operating system. However, the success or failure of the Chrome OS will ride on whether users will give up desktop applications.

Sundar Pichai, Vice President of Product Management, outlined the Chrome OS, noted that “there’s a paradigm shift in computing” presumably to netbooks and noted:

“Every application is a Web application. There are no conventional desktop applications.”

And there’s the rub. The Chrome browser on Chrome OS will be “blazingly fast” with a demo boot time of 3 seconds or so. The security picture is solid. And since the Chrome OS is connected to the Web, silly things like updating and installation will go away.

Simply put, Google’s vision rides in the cloud. The devices that run the Chrome OS will have all data in the cloud and depend on wireless cards and Wi-Fi. Google said it would specify what wireless cards it will support. Google’s mission is to give the Web applications access to all of the hardware available to today’s operating systems.

So here’s the question: Are you ready to give up your desktop applications?

You have about a year to answer the question and there will probably be a big debate between now and the Google OS launch with hardware partners. Google executives walked a line between pitching Chrome OS devices as a secondary computing machine, but one where you may spend the majority of your time on it.

Pichai noted that if you’re a lawyer doing contracts all day Google’s Chrome OS powered netbooks “won’t be the machine for you.”

Nevertheless, Google’s moves today with the Chrome OS are notable and the company clearly thinks that its approach will be a hit. And it’s hard to argue for the simplicity of a browser-based operating system, quick boot times and the move to cut out a lot of startup processes. If successful, Google can push more folks to the cloud.

My hunch is it may a while to get consumers to believe that “every application is a Web application.”

There are a ton of moving parts here. Among the notable background links and ZDNet coverage:

Larry Dignan is Editor in Chief of ZDNet and Editorial Director of ZDNet sister site TechRepublic. See his full profile and disclosure of his industry affiliations.

For daily updates, follow Larry on Twitter.

Email Larry Dignan

By SCOTT MORRISON

Google Inc. said Thursday the Internet search company is “a year away” from making its anticipated Chrome computer operating system available to users.

Vice President Sundar Pichai, speaking to reporters at a briefing on the company’s Mountain View, Calif., campus, said rumors that Google was close to launching its new operating system were not true.

In July, the company said it was working to develop a new operating system that it hopes will drive Internet users to its Web services and applications.

The new operating system, which Google said would be available to consumers in the second-half of 2010, is a direct assault on software maker Microsoft Corp., which has long dominated the computer software market and is now trying to muscle in on Google’s core business: Internet search advertising.

The new OS also comes as Google looks for ways to diversify its business. Internet search advertising constitutes 97% of the company’s $22 billion in revenue and efforts to cash in on its software applications and video-sharing site YouTube have generated limited results.

Analysts said Google’s operating system push was an ambitious long-term strategic move to broaden the company’s reach and increase use of its search engine and other revenue-generating services. But any impact on the company’s financial performance would be years away.

Write to Scott Morrison at scott.morrison@dowjones.com