Author: Liz Gannes

After All Facebook reported this morning that Facebook is testing a new “Questions” feature, someone turned to Quora, the well-funded Q&A site created by former Facebook execs, to ask “Why is Facebook creating a Q&A product to compete against Quora?” (Quora is still in private beta so you may not be able to view that page.)

Guess who should turn up but Facebook director of product Blake Ross, saying “I’ll answer this since I’m involved in the questions prototype at Facebook.” He explains that Questions is an evolution of Facebook’s former Polls product, with the idea of delivering instantaneous results to questions about logistics and recommendations. According to the screenshot on All Facebook, Questions pops up in the ad sidebar on the site — presumably to reach would-be answerers in a questioners’ network in the moment.

Ross opines that tech pundits perceive unnecessary and untrue competitive dynamics with our eagerness to declare that things are killers of other things. He says Facebook’s motivations are anything but anti-Quora.

Facebook’s experimentation in this “space” is actually a direct result of internal circumstances at the company rather than all this recent outside activity. For the last few years, we didn’t have enough engineers to make significant, sustained investments in our applications (e.g. photos and events). Earlier this year, we finally got comfortable enough with our recruiting numbers to reorganize the product engineering group into dedicated application teams of 4-5 people each. That’s why you’re suddenly seeing improvements to applications that haven’t evolved in years, such as our recent launch of higher res photos. One of our app teams is charged with experimentation and we decided to pursue this vision of real-time Q&A now that the resources were finally in place.

Ross also says that he thinks the Q&A category is misunderstood, since Quora and Aardvark have different focuses, the former a knowledge base and the latter “really fast results for more day-to-day queries.” So it sounds like what he’s saying, if I may, is that Facebook Questions is an Aardvark killer.

Please see the disclosure about Facebook in my bio.

Twitter and Facebook will hold their developer conferences this Wednesday (April 13) and next Wednesday (April 21) in San Francisco. It’s a juxtaposition that begs for comparison, so here you have it. We’ll also have coverage from both events throughout the next week.

Timing:

Twitter’s first Chirp comes at a time of tension with its developer community. The company is clearly under pressure from its investors’ and its own lofty expectations to become more of a money-generating product and less of an open platform. In the last week Twitter has made clear its intent to compete with Twitter-based startups by buying a select few and building competing branded products. Developers are still getting themselves organized, but they’re meeting today at a Pre-Chirp event and there’s also some momentum to move off Twitter to an open federated standard.

Facebook’s third f8, by contrast, comes at a more stable time. The company roadmapped many of its planned changes in advance, and others have leaked out. But you never know, Facebook isn’t immune to community and developer revolts; the site could always make another privacy preferences change or prune back developer access further.

News:

Twitter is of course launching its Sponsored Tweets product, which it started talking about openly last night. It will also presumably be clarifying and responding to criticism of its relationship with developers.

Among the features Facebook is expected to launch are: location functionality, a firehose feed, “a ‘Like’ Button For the Whole Darn Internet,” and the further opening up of its platform.

Attendance:

Both events are sold out, but will be available through live video streams. Twitter is using Justin.tv and the stream will be available here. Facebook is using Livestream and the stream will be linked to and/or embedded here.

Agenda:

Chirp is notably Twitter-heavy, with a full day of content coming mainly from four of its top execs (CEO Ev Williams and COO Dick Costolo are each speaking twice). It will have just two panels including outsiders, with VCs and people in government and crisis management represented.

Facebook has one name on its agenda so far: Mark Zuckerberg — though its scheduled afternoon tracks on new tools, best practices, industry strategies and its open source projects will presumably include a range of other speakers.

Twitter is hosting a 24-hour Hack Day that starts after the main Chirp agenda and goes into the next day. It will include a variety of office hours by Twitter employees and talks on more specific topics like Cassandra, the mobile web, and Twitter and the media. Apps developed at the event will be showcased at the end. Tickets are still available and they’re cheaper than the full pass.

Facebook, by contrast, is hosting an “intimate” day-after hackathon that you have to apply to.

Logistics:

The Chirp pass base price was $469 with Hack Day-only passes at $140. f8 tickets were $425 or cheaper with an early discount. Chirp is at the majestic Palace of Fine Arts (which is really a theater setting) with the Hack Day at Fort Mason. Facebook is at the The Concourse at San Francisco Design Center on the south side of the city.

(Then, if you want to see how a massive public web company does a developer conference, stick around till next month’s Google I/O, which is at the big-daddy conference location Moscone.)

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Please see the disclosure related to Facebook in my bio.

The faceoff photo comes from Flickr user eflon.

If you don’t care about Twitter news, you may as well rejoin us next week. Over next few days Twitter is going to dominate the airwaves. And it starts tonight. In advance of his keynote at the Ad Age conference on Tuesday (not to mention Twitter’s own Chirp conference on Wednesday), COO Dick Costolo shared details of the company’s highly anticipated new ad platform, Promoted Tweets, with a couple of news outlets.

In the most basic implementation, advertisers will be able to bid on keywords to have their tweets featured in search results. But Twitter says also may eventually include the paid tweets in users’ regular tweet streams too, something that will surely be more controversial. Costolo said the company expects to decide whether to take that step before the end of the year. Here are some of the promoted tweets implementation details, per stories in Ad Age and the New York Times

• Promoted tweets show up based on how large a CPM an advertiser pays.
• Twitter is developing a “resonance” metric (which is apparently not done yet which makes you wonder what have they been doing these last few months!) that would also take into account how well a tweet fosters engagement and click-throughs.
• Twitter is limiting advertising to only one sponsored tweet per page.
• After the promoted tweets launch on its site Twitter plans to start syndicating them to Twitter clients.
• Launch advertisers include previously tweeting companies Best Buy, Virgin America, Starbucks and Bravo.
• The actual promoted tweets will disclose that they are ads, and will turn yellow when moused over. But they won’t be separated out on the margins from the other tweets.
• Twitter is considering using targeting factors like subject matter, followers’ interests, and geographic locations to target ads in users’ streams, if they do launch.

 Costolo told Ad Age that search volume on Twitter is “huge” but wouldn’t give actual numbers. Promoted Tweets is quite similar to TweetUp, the tweet marketplace launched by Bill Gross on Monday. It is going to be hard for TweetUp to spin this development into a good thing. It also follows other recent moves by Twitter to compete with developers using its platform, for instance buying the maker of Tweetie last week.

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Google today is hosting a cloud computing conference for CIOs — dubbed Atmosphere — at its Mountain View, Calif. headquarters, where we’ll be reporting from throughout the day. First up on the agenda is the unveiling of a rewritten Google Docs, tweaked to present information in real time as well as to enable better syncing across browsers. The goal here it to persuade CIOs that instead of upgrading to Microsoft Office 2010 they should switch to Google Docs.

Though this isn’t a big new product, the Docs rewrite should be a significant improvement. Part of what was holding Docs back from going feature-for-feature with Office was the fact that different browsers displayed the layouts of Docs differently. “We hit a bit of a wall in capabilities of browsers and HTML,” said Anil Sabharwal, enterprise product manager for Google Docs, in a pre-briefing. “For true document layout flexibility we built a document object model layout that runs through our own JavaScript layout engine. Then we convert it into appropriate HTML for each browser.”

The result is “every person sees exactly what the other person sees,” said Sabharwal. So now Docs has actual character-by-character, real-time editing by multiple users; in-document presence and IM; and advanced formatting such as floating images, rulers and data stops.

Sabharwal said the Docs real-time collaboration technology is not Google Wave, nor does it include any of Google’s recent productivity acquisitions, such as AppJet.

The new features for document and spreadsheet editors are available as an opt-in preview today for both consumers and enterprise users, with a revamped drawing editor available to all users today. Users will be able to edit spreadsheets through mobile browsers on Android, BlackBerry and iPhone, but they can only view docs and presentations on their phones. The launch disables offline accessibility, a feature Sabharwal said that very few users partake in, though his team is working to bring it back using HTML 5.

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Of all the times to launch into the Twitter ecosystem — with developers quaking from last week’s revelation that Twitter would compete with them head-on, and Twitter expected to launch a monetization platform at its own conference this week — the legendary entrepreneur Bill Gross is tonight announcing his new company TweetUp.

TweetUp aims to identify relevant tweets and tweeters based on popularity, engagement, interest and also paid bidding on keywords. Though Gross has created many companies over the years through his incubator Idealab, and most recently has been focused on solar energy, TweetUp most closely resembles his great insight of the late ’90s: GoTo.com — which became Overture, aka search advertising, aka Google’s core business. TweetUp is similarly a contextual advertising system for the new web-technology-seeking-a-business model on the block, Twitter. The difference is, Gross wants to monetize the content itself, by getting publishers to pay to reach a relevant audience.

The best thing about Gross’ idea is it comes with built-in distribution and monetization. I’ve seen a bunch of really cool innovations on real-time search lately, but these startups tend to focus on the algorithm rather than the way they will matter to users. Sure, nobody’s using the TweetUp marketplace yet, but at least it has a business model.

In order to identify top tweets, TweetUp uses signals such as a Twitter user’s ratio of retweets to followers and how much they’ve previously tweeted about similar topics, but it also adds in the ability to promote your tweet or your profile by paying something like $0.05 to $1.00 to bid on a term. Then it builds tweets into an ad unit that other publishers can run, giving them real-time, relevant content in a widget in their sidebar, as well as 50 percent of the revenue. Publishers can also opt-in to a keyword rollover feature similar to Kontera’s that pops up a window with a few relevant Tweets when you mouse over a link in the text of an article.

Gross sees it as a way to give relevant tweets more staying power, and to help interesting Twitter users find more followers who are interested in their areas of expertise. He built the company after being frustrated that his own personal tweets from events like Davos and the TED Conference were drowned out. Gross, for all his stature and access to elite events, has fewer than 1,500 followers.

The hard part for Tweetup will be building an ecosystem of participation. And Gross knows this — GoTo was a tough sell too. “This is not going to be an overnight business,” he told us. “It’s going to be an evangelism sell.” To kick it off, he’s offering the equivalent of $100 in TweetUp money to the first 1,000 users. Once the system is populated, TweetUp ad units will go live sometime in the next month. Participating clients and publishers include Seesmic, Twidroid, TwitterFeed, Klout, Business Insider, Answers.com and PopURLS.

I do think Gross has a point: your content doesn’t matter unless people read it, and in the modern media age, where everyone’s a publisher, audiences are harder to come by. You’ve got to work. But as a writer, it feels awfully weird to fork over money to get people to read my tweets and hopefully click through to my stories. Gross’ reply: “If you can pay a lower CPM than you can get [on your web page] yourself to drive traffic, then you will pay.”

TweetUp is not without competition; for instance, OneRiot just began offering a self-service system that publishers can use to promote their recent content on its real-time search engine and on Twitter clients. And of course, Twitter has a few ideas up its own sleeve as well.

Gross is serving as TweetUp’s CEO, and the Pasadena, Calif.-based company already has 10 employees. It has raised funding from Index Ventures, Betaworks, Steve Case’s Revolution, First Round Capital, Jason Calacanis and Jeff Jarvis.

Gross, by the way, will be speaking about his other passion, alternative energy, at GigaOM’s Green:Net conference later this month, put on by our sister site Earth2Tech. Gross was until recently the CEO of eSolar, which is using software to lower the cost of solar and produce it at a utility scale. You can buy tickets to Green:Net here.

Facebook’s U.S. search queries grew 48 percent in March, bringing the company to 4.2 percent market share, according to comScore data that’s due out this afternoon but has already been distributed by Citi Investment Research. At 4.2 percent of searches, Facebook now has a greater share than the search engine Ask, at 3.8 percent, and the long-time portal AOL, at 2.5 percent. And this is coming off of a February when Facebook redesigned its home page to more prominently feature search and saw an immediate 10 percent jump in search queries.

Microsoft’s Bing, which powers Facebook’s web search, is also on the rise, with 11.7 percent market share a couple tenths above February. Yahoo grew for the first time since Bing was introduced — to 16.9 percent market share — but is still on a overall downward slope for the year. Meanwhile, Google had 65.1 percent market share in March, down just a few tenths from March.

Expect this trend to continue. As we wrote last month:

Understanding information through a social lens can be incredibly useful. Not to mention, half of Facebook’s 400 million users log in every day, so they will likely become accustomed to searching through the site where they live on the web.

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Please see the disclosure about Facebook in my bio.

Post and thumbnail photos courtesy Flickr user boxchain.

Swoopo, the crazy “entertainment shopping” site where users buy bids to compete against one another and lengthen the time until an auction closes — and often get absurdly low prices on consumer electronics goods — has spread to seven countries, facilitated more than 200,000 transactions, and inspired tens of behavioral economics academic papers over the last four and a half years. But in the face of increasing competition and slipshod copycats, the company named its third CEO, Frank Han, in February. Han, who came to Swoopo after founding eToys and running the Home Shopping Network’s online division, visited GigaOM this week to chat about where Swoopo is going next.

Han first shared with us the following facts:

• Swoopo hosts 250-300 auctions per day, split between global and local.
• The average final price of an auction is 71 percent off retail (of course Swoopo also makes money from the cost of bids).
• In one third of auctions, the final price is more than 90 percent off retail.
• The company loses money on 65 percent of auctions. “Our margins are nothing like Google’s, but better than Overstock,” said Han.
• The U.S. is the company’s largest market by far after launching a year and a half ago (the company started in Germany and was previously called Telebid).
• Swoopo has raised two rounds of funding, one led by Wellington Partners and one by August Capital. It has nearly 100 employees.

That the Swoopo model is so kooky has two bad side effects, said Han. First, that people assume it’s a scam. Second, that so many wannabes try to copy it. “Swipebids, Swoopee, Swoopuu, you name it,” said Han. And as a byproduct, potential customers sometimes expect the bad practices of some of those companies — such as “shill bidding,” when employees or robots compete against users to push up the price of and even win auctions. Other fly-by-night operations simply don’t mail out the products they get people to pay for. Han said he thinks the copycats and their alleged bad practices are significantly holding back his business. As a response, Swoopo this week launched a campaign called “Swoopo Naked” to try to educate its members and convince them it’s not ripping them off.

Meanwhile, Swoopo fits nicely into the current trends around impulse buying and commerce driven by gaming dynamics — Woot, Gilt Groupe, Groupon and the rest. Han indicated that the company may introduce products similar to those other sites. He said he expects Swoopo to split off into multiple brands and aggressively pursue partnership and distribution deals to extend its reach. The company, which has mainly focused on global expansion until now, also lacks all the extensions of the modern web service — mobile versions, widgets, applications on social networks — so you can expect those are coming, too.

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Daily deal sites are like catnip for web entrepreneurs hunting for good ideas. In most cases, they all look and work the same. But one new Groupon competitor, San Francisco-based HomeRun, has innovated useful social features that entice people to purchase coupons such as participation rewards, user profiles and sharing, and group bargaining. Though Groupon and other sites do encourage users to share deals on Facebook and Twitter, there’s still a lot of innovation to be done around things like personalization and socialization.

HomeRun, which appears to have started publishing offers last month, is currently available only in San Francisco. It is led by CEO Jared Kopf, a co-founder of Slide and AdRoll. Kopf, who founded HomeRun in November and has hired a team including folks from WeatherBill and the Y Combinator program, said he was too busy to talk in detail about the startup just yet. However, site is open for registrations, so here’s what I’m seeing so far.

• HomeRun encourages users to connect their Facebook accounts and shows which of their friends are also on the site. It has built out profiles that show which members have purchased which deals. Giving the site real-world identity makes users more engaged through things like peer pressure, trusted recommendations, and a stickier browsing experience.

• Some of site’s deals don’t have static prices; there’s a feature called “avalanche” that brings down the price a dollar or so at a time when more people sign up. When the deal closes, everyone pays the last and lowest price.

• HomeRun has a point system and offers cash-back credits. You accrue points for visiting the site, inviting new members, sharing and buying deals, and commenting and voting.

• Like Groupon and some of the larger sites, HomeRun doesn’t limit itself to a single daily deal. It does a good job of capitalizing on different types of users by rewarding them with special types of deals. For instance, one side feature for users with a lot of participation points is a special deal called “The Private Reserve.” Another is “Beginner’s Luck” for users who’ve joined within the last 30 days.

Tweaking the social algorithm to encourage impulse buying and engagement is a great start, but it’s not all you need to challenge a company like Groupon with an established base, $100 million in revenue and profitability. Not to mention folks like LivingSocial, which has raised $35 million to take Groupon on. And these sites have grown to their current stature without HomeRun’s social features.

HomeRun is incredibly young and has changed so many variables — it’s too early to say they’ve got the formula right. But so far, I like their approach, and even all the competition copies HomeRun tomorrow I’d trust these guys to keep being creative.

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Recommending relevant content can be dramatically effective. After The Filter, a white-label content recommendation system, was implemented on the video site Dailymotion in March, the site experienced a 40 percent increase in time spent and a 25 percent increase in video streams per visit.

Now, after successful trials, The Filter has secured its biggest media partner to date, NBC. The company will power recommendations for short-form videos on NBC.com such as clips from shows such as “Saturday Night Live.” At a time when the video experience is fragmented and competitive, getting a user who actually visits your site to stick around for more than a couple minutes is huge. It’s something folks like YouTube think about a ton.

I was on a panel with The Filter CEO David Maher Roberts at SXSW where he talked about the fascinating array of signals for making recommendations. During a prep session he told me, “We remember but we also forget. Tastes change. What you’re listening to right now is much more important than what you listened to in the last few weeks.” The Filter, which is backed by Peter Gabriel with $8.5 million in funding and initially tried to be a destination site, says it has 95 million uniques across its partners.

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We see a lot of crazy funding deals (ahem: Zynga, Foursquare) these days for Internet startups, but here’s one on a more standard path. Box.net, the cloud-based content management platform, has brought in $15 million in Series C funding led by the SaaS-focused firm Scale Venture Partners, and including Draper Fisher Jurvetson and U.S. Venture Partners. It brings the company’s total funding since 2005 to $29.5 million.

Palo Alto, Calif.-based Box uses a combination of freemium product marketing (including a new iPad app) and “the traditional kind that takes more money,” according to CEO Aaron Levie. It has four million customers including new additions the Oprah Winfrey Network, Volvo and Nokia Siemens Networks — and even banks sending around secure transactions in the cloud, Levie said. He added that the company had a record first quarter with enterprise revenue up 300 percent year-on-year, but that the company isn’t on track to be profitable until 2010.

Levie is happy to play into the cloud computing trend. “It’s less that people are becoming looser with their data and more that people can understand the cost, usability and access of the cloud,” he said.

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Before a dramatic split last August with Google CEO Eric Schmidt booted from the Apple board, Apple and Google had been the best of friends. Now that the two titans are broken up, it’s looking increasingly likely that Apple will buddy up with Facebook.

Apple and Google once shared a common enemy — Microsoft — and had different enough products and goals to coexist symbiotically. But with Google creating and selling Android devices as a direct competitor to the iPhone, swooping in to buy companies like AdMob under Apple’s nose and bringing the FCC in over anti-competitive maneuverings in iPhone app rejections, now Apple CEO Steve Jobs rallies his troops by calling bullsh*t on Google.

The situation poses a promising opportunity for other existing and emerging technology powerhouses. Who will be Apple’s new most-favored nation? It probably won’t be Amazon, given that little issue of the iPad and the iTunes store. It could potentially be Microsoft, which is ironically looking for friends as it faces up Google in search and productivity products. But it’s clear that Apple holds grudges. How about Yahoo or AOL for their reach? They may have more baggage than assets. At this point signs and logic are pointing to Apple’s new best friend being Facebook.

TechCrunch reported earlier this week based on uncited sources that Apple will soon add Facebook Connect integration to iTunes. I’ve heard the same thing, and further that Facebook could become the social layer on top of the Apple experience. It would be similar to but broader than the way Google Maps is integrated into location information across iPhone applications — with deep implications for personalization and easy authentication across the user experience and for app developers. Instead of that crappy experience of leaving every app to go to the web to login to Facebook Connect, you could integrate your Apple and Facebook accounts once, directly.

Apple, which has completely missed out on the social web, would get a huge leg up with the web’s premium social service. And the partnership could be just as helpful for Facebook (which, of course, has positioned itself squarely against Google as well), in terms of enabling commerce.

That’s because the real prize here, for both Facebook and Apple, is authenticated payments for digital and real-world goods. Probably the single most important alliance to be brokered today is the connection between users’ online identity and their bank accounts. Spending money online and encouraging your friends to follow your lead is a huge market (here’s the obligatory call-back to the problematic but perhaps just before-its-time Facebook Beacon product). The Facebook social graph plus iTunes’ 125 million credit card accounts would be formidable. With their powers combined it will be much harder for PayPal, Google and Amazon to compete.

Facebook and Apple have long been chummy, with some of the earliest corporate participation on the site being the “Apple Students” group, which dated back to at least 2006 and foreshadowed the current Fan Page product. And funnily enough, just like Apple has lagged on social, Facebook has lagged on music.

Facebook already does have the beginnings of an alliance with PayPal to allow international advertisers to pay without credit cards (Paypal says it has more than 81 million active accounts). But as TechCrunch points out, Apple’s Lala acquisition could help be the connector between the two companies, given the music startup’s previous experience working with Facebook on allowing users to gift songs.

Still, there’s one indicator that Facebook and Apple are definitely not on the same page yet. At launch, there was no Facebook iPad application — an obvious fit for the device — and someone on Apple’s crack app review team let through a paid Facebook rip-off app that fooled and confused customers last weekend until Facebook had it shut down for trademark infringement.

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Please see the disclosure about Facebook in my bio.

While I enjoy listening to podcasts, especially of my favorite radio shows, it’s still too much work to sync and download fresh episodes to listen to them on the go. All too often when I want to go for a jog I have no new content loaded up. Stitcher, a company that creates personalized talk radio streams out of shows from providers such as NPR, PRI and the BBC, is trying to help people like me bring audio content to our mobile devices and cars, and along the way introduce us to new shows. The company, which bills itself as a Pandora for news and talk radio, has just raised a $6 million Series B round led by Benchmark Capital and including New Atlantic Ventures, Ed Scott and Ron Conway.

Stitcher helps you subscribe to some of your favorite radio shows (there are about 1,000 to choose from, though not all the shows’ archives are in the system). Recent episodes of these shows get stitched together into streams (with advertising in between — and there’s also some premium subscription content like Rush Limbaugh on demand). The streams are generally oriented towards fresh and newsy content, and they also mix in some programs that you may not have explicitly chosen but Stitcher thinks you may like.

The way Stitcher puts content together might seem a little strange and anachronistic as compared to just picking a program on-demand when you want to hear it, but it’s perfect for the (hopefully) hands-free driving experience. The company already has an arrangement with Ford to use its Sync API to get inside cars that was announced at CES this year. Stitcher CEO Noah Shanok said in an interview that cars are “the ultimate destination for us,” and that he hopes to sign more such deals soon. (Stitcher is already available as an app on the major mobile platforms.)

Benchmark’s Bob Kagle, who joined the Stitcher board with the investment, said he looks forward to Stitcher parsing audio content even further, in order to put together hybrid shows made up of various segments on a particular topic. (And you can bet he’s happy to be putting money into a streaming audio startup that’s not dependent on the music labels!)

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Though Yelp steadfastly denies allegations — and now lawsuits — that its salespeople pressure local businesses to buy advertising in exchange for removing negative reviews and getting preferential treatment, the company tonight addressed them head-on. Specifically, it’s making two major product changes to become more transparent about its filtering process and give less favorable treatment to advertisers.

• First, Yelp is removing the cloak of invisibility from its review filter. Yelp previously made reviews disappear off business profiles, often when they seem to be gaming the system (for instance, a spate of similar positive reviews of a shop could mean the proprietor is asking people to write them — see the video below explaining the filter). Those reviews remained on the site — visible on the authors’ profile — but weren’t something you could find in the course of browsing businesses. Company owners complained that Yelp was editorially skewing reviews about their businesses. Now, Yelp will allow users to toggle to a page of filtered reviews for any business and read them for themselves.

Yelp CEO Jeremy Stoppelman wrote in a blog post explaining the changes:

[M]ost importantly, you can see that Yelp’s review filter works just the same for advertisers and non-advertisers alike. There is not — nor ever has been — a bias. So will Yelp be easier to game now? No, our engineers remain hard at work to make sure that Yelp is the most useful and helpful online resource for everyone.

• Second, Yelp is discontinuing the paid feature of allowing advertisers to choose and promote a positive review of their establishment on their Yelp profile. This “Favorite Review” feature would highlight a previously submitted user review prominently above the fold, pushing recent reviews down the page. It was misconstrued as a way for businesses to control the content on their page, Stoppelman said. He did not specify how the change would impact advertisers who’d already paid for the feature.

Yelp said it was also creating a Small Business Advisory Council, and it has already incorporated feedback from meetings with business owners, such as including advertiser videos on their profile pages (a feature that also launched today).

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New Digg CEO Kevin Rose is wasting no time in changing the direction of the site. He’s killing the DiggBar and welcoming back previously banned domains. But the big challenge he faces is to restart Digg by making it more social, real, personalized and engaging.

The DiggBar is a controversial tool that framed content with Digg branding when a user clicked through from a link on the Digg site. Though Digg had publicly defended the bar in the past, Rose was none too kind in a blog post.

Framing content with an iFrame is bad for the Internet. It causes confusion when bookmarking, breaks w/iFrame busters, and has no ability to communicate with the lower frame (if you browse away from a story, the old digg count still persists). It’s an inconsistent/wonky user experience, and I’m happy to say we are killing it when we launch the new Digg.

Further, Rose said all previously banned domains would be unbanned, another concession to Digg’s critics. The site had previously drawn fire for capriciously targeting sites for various infractions but now Rose said the only filtering will be done automatically and be targeted at malware, virus and terms of service violations. Both changes will happen at a later, non-specified date when Digg launches its version 4.0 redesign.

But these tweaks are only the start of bringing Digg back to its previous heights of growth and influence. In the last day I’ve been thinking about what Rose can really do to change Digg for the better, but it strikes me that Digg’s big problem is it’s a last-generation social site. I’m not trying to be harsh, but the company is experiencing declining traffic and influence, it missed its chance(s) to get bought, and just swapped CEOs. Digg, founded in 2004, sits somewhat awkwardly between the search era and the social era.

Sure, users have friends and posses and there are popular kids, but the dynamics of the site prevent it from harnessing the kind of active link sharing that Twitter and Facebook have run away with. I’ll admit I’ve never been in the Digg in-crowd, but the closest thing I’ve seen to a community on the site is a mob or a gathering of Diggnation groupies at a live taping.

A place where you use a silly moniker as your user ID just doesn’t feel like true socializing in these days of Facebook, Google, OpenID and (to some extent) Twitter. There’s a value to anonymity, but true social interactions are the kind of powerful things that keep you coming back. Endorsing a piece of content with your own name in the context of your known interests for an established group of friends or readers is quite powerful. Digg has already integrated with Facebook Connect, and Rose could probably do more with social norms to encourage users to be themselves on the site.

Digg actually has a lot in common with YouTube. Both sites are plagued with crude and unproductive semi-anonymous comments (though Digg users were rather nice to departing CEO Jay Adelson yesterday). They are user-generated content sites rather than social networks. That’s not a bad thing, but it’s accentuated on Digg because the user groups have dramatically different goals. Active users control the content. Readers come to get a sampling. Publishers hope they can game the system or at least benefit from it. Neither Digg or YouTube has really been able to cultivate a community of user-generated content consumers. YouTube, however, has the benefit of hosting videos that people actually watch, while Digg users click off site to go experience linked content. Digg had previously tried to grab for departing users with the DiggBar, but now it will have to figure out better ways to keep them around.

And in that respect, I do think Digg’s big long-awaited relaunch is a good idea. It’s supposed to make the site more personalized — so each user would see a customized news feed of stories he or she is likely to be interested in. That could go a long way towards more useful and real interactions and sharing around the site. And that, in turn, would bring back the quality traffic and network effects that a modern social web experience offers. I’m not sure if a social retrofit is even possible, but at least Rose seems motivated to chuck out past efforts and, hopefully, try something new.

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Jay Adelson, CEO of Digg for the last five years, is stepping down in order to pursue his “entrepreneurial calling,” he said today. Kevin Rose, founder and longtime public face of the company, will become chairman and acting CEO.

The move signals a deeper commitment to the company by Rose. Digg has long been Rose’s main gig but he is also an active angel investor in companies like Gowalla and Foursquare and always has multiple side projects going, among them Pownce (acquired by Six Apart) and WeFollow (now part of Digg). Rose, the geek icon and former TechTV host, founded Digg in 2004 and brought in Adelson to run it from the early days.

Digg, which filters the news through user voting, was a groundbreaking site but has lost ground to the likes of Facebook and Twitter, which offer more personal ways of finding news. In order to compete, Digg is preparing for a major redesign that will make it more of a personalized news reader and offer better publisher tools for syndicating news.

Adelson had also been CEO of Digg sister company Revision3 (which produces Diggnation), but stepped down from that role in 2007; it’s now headed up by Jim Louderback. He said he will continue to advise Digg, but no longer in a day-to-day role.

Facebook has acquired the group photo-sharing startup Divvyshot, a three-person team that will shut down its product and work on Facebook Photos as engineers. Divvyshot was an appealingly designed product that only launched to the public in February after participating last year in the Y Combinator program.

According to a landing post on Divvyshot,

Divvyshot will begin winding down operations as of today. Existing users can continue to use Divvyshot; however no new accounts will be issued and our iPhone application will no longer be available for download. We’ve always given users access to their original-resolution photos and we hope that this feature will make the transition off Divvyshot easier.”

Facebook is the world’s largest photo-sharing site with more than 2.5 billion photos uploaded per month. It doesn’t have much in the way of features but just storing and serving photos is a major feat. Earlier this month the company bumped up photo sizes by 20 percent, but personally I’d love to see a better premium photo archive solution, even for a price.

By contrast, Divvyshot had low hundreds of thousands of photos, but it had a nice drag-and-drop interface and brought together repositories of images taken by different people at group events. That’s a great function and one that few photo sites offer today.

Please see the disclosure about Facebook in my bio.

Google recently opened the floodgates for business services to integrate with its Google Apps platform — enabling them to get broader distribution and offer single sign-on integrated services within Google’s corporate hub. One aspect of the announcement flew under the radar: Google’s future plan to allow apps to embed themselves directly into email messages. Google calls this “Gmail Contextual Gadgets,” and promises a limited group of tester developers will get access “soon.” That previews a future where email is rich, dynamic and integrated with services across the web — AKA an app platform. The implications could be pretty huge.

Google has already enabled similar functionality for some of its own services within its free consumer Gmail product. So when someone sends a Gmail user a YouTube URL, they see an embedded video rather than just a link. Imagine if the same thing could be true for other services. The email message itself becomes a mini browser window rather than a static block of text and images.

Instead of getting another annoying reminder to click through to RSVP to an Evite, the email could pop to the top of your inbox, load time-sensitive information dynamically, and allow you to respond directly without opening another page. Instead of getting piles of separate alerts from Facebook alerting you additional comments on some random post, you could load up the site right there in the frame of a message and respond.

That vision of an inbox that actually makes sense of Evite and Facebook isn’t what Google is after — yet. This is less about making email social and more about making corporate email rich and dynamic. Contextual Gadgets will be available for only “business-related” developers and only for users of the Google Apps product, said a Google spokesperson.

This isn’t a new concept. Om titled a post in 2007, “Is Email the Ultimate Social Environment?” after meeting Xoopit and Xobni, which added things like context and better photo viewing to email, respectively. Back in the bubble era, a company called Zaplets that made “email a platform for interactive applications” raised more than $100 million. Xobni later acquired the Zaplets IP. (Xoopit was later bought by Yahoo for about $20 million and now it’s a widget within Yahoo Mail.)

Google going to business users first “is not a mistake,” said Xobni founder Matt Brezina in a phone interview. “Context becomes really important inside the enterprise.” Xobni has been long an Outlook-only product, a little piece of software that runs as a sidebar inside Outlook with a bit of Internet Explorer to bring in contextual information about email contacts and trends from the web. (It recently added support for the BlackBerry.)

Brezina’s justification: “Outlook has 500 to 600 million users who haven’t seen much innovation but have a lot of engagement. Those people’s time is worth a lot of money.” So it makes sense that Google, which is facing off against Microsoft’s business suite, would want to go for that market first.

Startups like Gist, Rapportive and Etacts are taking the same business-centered approach, with their context-for-email products falling into the category of “social CRM.”

One company that’s already been able to play around with Gmail Contextual Gadgets is Appirio, which built a demo that shows how you can manage employees and customers with a solution built on Salesforce’s Force.com cloud platform. Watch the screencast here.

It basically looks like a live attachment appended within the body of an email. (The Google spokesperson said that if developers want to learn more they should come to an instructional session on Contextual Gadgets at Google I/O in May.)

I know, I know…do we really need another app platform? With every last square inch of turf declared to be a platform, the appstorification of technology inspired by Facebook and Apple is almost complete. But email still deserves to join the party.

Still, this isn’t wide open space. Email will be a bit tricky to innovate around, given how dependent and immersed we are in it. For instance, messing with linear, chronologically ordered messages in order to bring relevant ones to the fore might do more harm than good. Making messages contain dynamic information might confuse our dependable search and foldering habits for organizing information. But I’d be happy to have an inbox that understands and integrates the world around it.

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Airlines think the value of a flight changes as its departure date comes closer, its seats fill up and Jupiter aligns with Mars. But variable pricing makes travelers like me insecure and aggravated about paying too much for flights. Yapta, a little Seattle-based startup, helps users track changes in flight prices so they can make better purchasing decisions (and get the refund they’re entitled to if a flight they bought becomes cheaper).

You’d think that would tick off the airlines, and Yapta CEO Tom Romary — who previously ran marketing for Alaska Airlines — said initially it did. But since Yapta has shown in the last three years that it brings in regular paying travelers and pushes them towards actually buying the trips they’re researching, it’s become looked upon more fondly, Romary attested. On the consumer side, Yapta says it finds price drops for 45 percent of the airfares it tracks and refunds for 15 percent of the flights customers continue to track after they purchase them, amounting to an average of $375 in alerted savings per year per Yapta member.

Microsoft bought Farecast — which predicts price fluctuations rather than tracking them — for $115 million in 2008, and the startup helped define the central decision-making metaphor of Bing. Yapta is much smaller — it raised $2 million in Series B funding from Bay Partners, First Round Capital and others in 2009, bringing it to $7.7 million in total capital raised.

We like companies that use real-time data to help customers battle variable pricing, so we brought Romary in for an interview. Here’s the video:

Wolfram Alpha may not call itself a search engine — rather, a “knowledge engine” to process questions that can be answered with objective data and computation — but it faces a similar challenge to wannabe-Googles that want searchers to come to their destinations. Simply put, Wolfram Alpha needs users. And so the wonky company, under the leadership of new managing director Barak Berkowitz, is now moving from polishing its product to getting people to actually use it by changing up its distribution strategy.

The first step on that road map is to redesign the Wolfram Alpha mobile site and reduce the price of its famously expensive iPhone  app. (After all, when else do you need quick and definitive answers but while on the go?) Launching Thursday, m.wolframalpha.com has been rebuilt to strip out the CSS and JavaScript that was making it inaccessible on some phones. And further, the Wolfram Alpha iPhone app — which had previously cost $50 and then $20 — will now go for the much more unremarkable price of $1.99 (the nearly 10,000 people who paid one of the higher prices can request a refund, Berkowitz said).

Anyone who buys the iPhone app will be entitled to a Wolfram Alpha iPad app, too — and that’s where things really get exciting. Berkowitz said his company has a goal of offering a value-added service to publishers and authors of e-books so that they can plug in web references to help readers dive in more deeply. Such a plan would also mean an alternate business model — charging a small amount for every e-book bought that’s Wolfram Alpha-fied.

Berkowitz drew a parallel with how mentions of places and public companies can be automatically and dynamically connected to maps and stock quotes, respectively. Just about any site you go to online, he pointed out, has an embedded Google Map.

Wolfram Alpha wants to do the same thing for data, turning it into a widget that can be plugged into e-books, blogs and web applications. “What we don’t have right now is the ability to get any factual data you need, and that’s huge,” Berkowitz said. “That’s a big part of the information mankind has built over time. Our hope is [that publishers and users will say], ‘If I need some data, I go to Wolfram Alpha.’”

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Photo courtesy of Joi Ito via Flickr.