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Majesco Entertainment is finding itself the target of some unusual criticism about its newest cooking video game “Cooking Mama World Kitchen”: Animal rights activists say the company included too many meat recipes in the game.

PETA wants more games to feature vegetables

Two days ago, People for the Ethical Treatment of Animals (PETA) launched a parody of the game. In the parody, players have to complete tasks like plucking the feathers off of an increasingly bloody turkey or reach inside it to take out its intestines.

Depending on the score, an angry girl appears and tells the player that he or she is “meaner than Mama” or “too nice.” A separate page invites people to email Majesco asking the company to add more vegetarian recipes or make a game with just vegetarian recipes.
“If you take just a minute to think about what happens to the animals who are killed for Mama’s meals, a fun cooking game no longer seems quite so innocent,” says PETA on its Web site. The organization says the parody has been played more than 160,000 times.

Majesco issued a press release Wednesday saying that nearly half of its recipes included in the game for Nintendo Co.’s Wii console are vegetarian friendly. “While Mama is not a vegetarian, she fully supports the humane treatment of animals,” said the statement, written by a clearly amused writer.

Ironically, PETA’s efforts might be doing more to help rather than hurt Majesco. Though early sales figures aren’t yet available, a spokesman said the protest has brought a lot of attention to the game, which was released Tuesday and is the most recent installment of a popular series that has sold 2.5 million copies cumulatively. The Edison, N.J., company says it has received about 900 to 1,000 protest e-mails so far.

-Yukari Iwatani Kane

Source: WSJ.com: Business Technology

The two biggest security-software makers lost a big chunk of their market caps on Wednesday, November 19, 2008–and not just because of the bad day for tech stocks. Microsoft announced late Tuesday that it would offer free antivirus software starting in the second half of 2009.

Microsoft didn’t land a solid punch, but tech-security companies felt it this morning

Symantec (off 9%) and McAfee (off 7%) are out in full force spinning Microsoft’s move as an admission that it never belonged in the security business. (Rowan Trollope, senior vice president of Symantec’s consumer business, called it “a capitulation” in an emailed statement). And they’ve got a point: Microsoft has been selling a suite of security products called OneCare for more than two years; in announcing the new free offering, codenamed “Morro,” Microsoft said it would pull the plug on OneCare, which costs $49.95 a year.

But the stock-market reaction is not surprising. Free anything is disruptive for businesses that are trying to sell similar products. Yes, there’s already free antivirus out there—AVG gives away its software, for example—but free security software from Microsoft is big deal if only because it comes from Microsoft.

Todd Gebhart, McAfee’s executive vice president in charge of consumer products, calls the stock selloff a case of “shoot first and ask questions later,” adding that something similar happened when Microsoft first entered the security market with OneCare. And Microsoft hasn’t stolen much business from the incumbents.

But Microsoft did shake up the market then, says Gartner analyst John Pescatore. Symantec bought Veritas in an effort to diversify its business. And both Symantec and McAfee were forced to drop their prices. So while Pescatore says that replacing OneCare with free antivirus software is a graceful way out of a business that Microsoft probably shouldn’t have entered in the first place, it will also put pressure Symantec and McAfee in terms of pricing.

A Microsoft spokesman says that the goal of the new software is to make sure that every PC is protected, especially ones in the developing world where people may not be able to afford the $50 or so that commercial security software now costs.

-Ben Worthen

Source: WSJ.com: Business Technology

Green Hills Software, which makes an operating system for medical equipment and car brakes, is trying to move into the realm of personal computers.

The secure operating system

The company is positioning its system as a secure layer over which other operating systems, like Microsoft’s Windows, can run. It is targeting organizations like the military, where security is a paramount concern.

Green Hills received a high-level certification Tuesday from the National Information Assurance Partnership—an organization for technology testing run by the National Security Agency—stating that its operating system has withstood a series of attempted break-ins.
The closely held company has been selling a version of its operating system for more than a decade. The reason most people have never heard of it is that the software isn’t for PCs, but for embedded components like anti-lock brakes, medical equipment, and military aircraft.

Green Hills’ operating system serves the same core system-management function as Microsoft’s Windows or Apple’s Mac OS, but systems that use its software have different needs than PCs. Brakes, for example, don’t need to do much other than brake, but they need to do that with 100% accuracy and no risk of hang-ups. (Imagine getting a “system not responding” message when trying to avoid a car that stopped short.)

One reason that Green Hills’ operating system is so reliable is that its core only has 10,000 lines of code, compared to millions in most other operating systems, says Dan O’Dowd, the company’s chief executive. That’s a way of saying that it’s far less complex, and that there are fewer opportunities for things to go wrong.

Unlike firewalls and other security software, the operating system controls the core operations of the computer itself. But Green Hills isn’t positioning its operating system to replace Microsoft Windows. Rather, think of it as a sturdy fence that surrounds Microsoft’s software. This would allow someone who works with sensitive information to keep that information partitioned from the part of a computer that accesses the public Internet. Currently analysts who deal with top secret information need to have two separate computers—one that connects to a secure internal network and one that connects to the Internet.

The question, of course, is: Will companies buy it? There’s a need for such an operating system among most businesses that handle sensitive information, says Neil MacDonald, an analyst with research company Gartner. “I think the challenge for Green Hills will be articulating why people need stronger security than they have today,” he says. “If there isn’t money to be saved it will be a hard sell.”

-Ben Worthen

Source: WSJ.com: Business Technology

Mozilla’s Firefox has made strides in recent years as consumers have drifted away from Internet Explorer to the open-source Web browser. The latest Nielsen Online survey showed Firefox with 15% of U.S. online adults, and the company set a Guinness World Record for downloads in 24 hours when it released Firefox 3 in July.

Now, faced with competition from Google’s Chrome browser, Firefox is cajoling regular-Joe users to use add-ons, a feature at the heart of Firefox.

The Mountain View, Calif. company’s 5,000+ add-ons range from search toolbars to a Calvin-and-Hobbes popup generator. But as many as 70% to 80% of Firefox users don’t install any of them, estimates Mike Shaver, Mozilla’s vice president of engineering.

This is heresy to Firefox devotees who can’t live without Adblock Plus or Greasemonkey, and sort of like using Facebook just to display your favorite TV shows. (Or buying an iPhone just to make phone calls, but it turns out some people do exactly that.)

Now Mozilla has launched Fashion Your Firefox, which bundles popular add-ons based on nine categories. The categories are named after personality types, including “Social Butterfly,” which includes add-ons for Facebook, Twitter and LinkedIn, and “Shopaholic,” with eBay and RetailMeNot options.

The idea is to promote some of the add-ons that appeal to mainstream users and make it easier to install them, says Mary Colvig, a marketing manager at Mozilla. “I definitely think it’s an awareness problem,” she says. “A lot of people are still not aware that they have choice.”

- Andrew LaVallee

Source: WSJ.com: Business Technology

H-P provided a glimpse at how large tech companies will ride out the downturn: cut costs to cover for slumping sales.

H-P is controlling its costs

The computer giant announced preliminary results for its fiscal fourth quarter Tuesday, including revenue of $33.6 billion, and earnings-per-share of $1.03, excluding special charges. Both numbers surpassed analysts’ expectations. But the real tell was the company’s forecast for the current quarter and its 2009 fiscal year. The story there: revenue will be lower than analysts expected; income will be higher.

H-P deferred all comments until Monday, when it was originally scheduled to report earnings; an H-P spokeswoman also declined to comment for this post. But obviously the only way to improve the bottom line while the top line shrinks is to cut costs. And H-P is aggressively doing that. For example it’s laying off more than 24,000 employees as part of its acquisition of technology-services company EDS. It’s also shutting down for two weeks around Christmas, a week longer than normal.

Cutting costs during a downturn isn’t rocket science, obviously. But it helps to have a lot of room to make cuts, like H-P does. That’s another lesson: Making acquisitions just before a major economic downturn is probably a good thing, if only because the same number of sales people now have more products to sell.

Meanwhile, expect other large companies like IBM and Oracle to release forecasts showing a similar emphasis on controlling costs.

-Ben Worthen

Source: WSJ.com: Business Technology

Venture capitalists–who invest in startups with the hopes of profiting later when the companies get sold or go public–have had a tough time of late. With their main means of generating profits through the initial public offering market and mergers and acquisition arena dampened by the financial downturn, there have been few returns to be had.

Startups may have a new source of funding

Now some players are trying to step into the void. On Tuesday, a new company called InsideVenture is launching with the aim of acting as a matchmaker between venture-backed startup companies and institutional investors. Sponsored by Silicon Valley Bank, InsideVenture will create a “direct private market” so that large financial institutions such as mutual-fund companies T. Rowe Price, Fidelity Investments, Wasatch Advisors and others can invest their money into small startups. That also gives venture capital firms an additional source of capital to turn to to fund their young companies.

Mona DeFrawi, CEO of InsideVenture, explains to this blog how the process would work: InsideVenture has created two panels of venture capitalists to screen and select some top-tier healthcare and technology startups. The startups that are picked by the venture capitalists get to present themselves to InsideVenture’s membership list of institutional investors. The institutional investors can then choose whether or not to give funding to some of these startups.

“Stagnation in the IPO market has left institutional fund managers with little opportunity to invest in the next generation of innovative growth companies,” says DeFrawi, noting that InsideVenture hopes to change the situation.

Of course the jury is out on whether InsideVenture will succeed. But its launch is a sign of how the venture capital industry is seeking new solutions to profit from their investments. Expect more such creativity, especially as the financial downturn continues to freeze up the IPO and M&A market.

-Pui-Wing Tam

Image: Tracy O via Flickr

Source: WSJ.com: Business Technology

Adobe unveiled a new version of its Flash video player Monday that makes it possible to watch videos and other content on some mobile phones. Just don’t expect to use it on an iPhone.

Flash is the most common software for watching video on the Internet, including ones from YouTube and countless other sites. It’s also used to view other features on Web sites, such as zooming in on and scrolling over products. Odds are you use it every day, as Flash is installed on 98% of Internet-connected computers, according to Adobe.

Until now, however, only a slimmed down version of the software was available for mobile phones. Adobe has been working with a number of wireless carriers and phone makers to develop a version of Flash that will run on all devices. Notably absent from the project: Apple, which along with BlackBerry-maker Research In Motion, is one of the few smartphone companies that doesn’t allow Flash in its device

The trend continued at Adobe’s annual MAX conference in San Francisco Tuesday. The company’s technology chief, Kevin Lynch, said that Flash would now work on smartphones—those big-screened phones that are increasingly able to do all the things PCs can. He demonstrated the software on a device from Samsung, one that ran Microsoft’s Windows Mobile operating system, and one that ran Google’s new Android OS.

Then he held up an iPhone. The crowd expected a Steve Jobs-like “one more thing” announcement. Instead, Lynch said that Flash still wasn’t available for the iPhone. The company was working on it, he added.

If only it was that easy. Getting Flash to work on the iPhone isn’t a technical challenge but a political one. Apple has taken steps to ensure that only content it approves will run on the iPhone. It’s a way of ensuring that developers will design software specifically for the device, which should in turn boost its appeal. The promise of Flash is that it commoditizes the phone itself by making content available regardless of device. So it might be a while.

-Ben Worthen

Source: WSJ.com: Business Technology

Need further evidence about the simmering rivalry between Google and Facebook?

Which party would you choose?

The Mountain View, Calif., Web search giant and the Palo Alto, Calif., Web social-networking darling scheduled their holiday parties for reporters on the same date this year – December 8th – and shot out the snazzy invites within half an hour of each other Monday.

But lest reporters fear that Facebook was trying to rain on Google’s parade, the startup quickly switched its party date.

“We hear that our friends in Mountain View had similar ideas for the evening of Dec. 8, so we’ve changed our date to December 10. Lot’s [sic] of Valley cheer to celebrate this year,” wrote Facebook in a second email drawing attention to the change.

Now all that remains to be seen is who has the best egg-nog.

-Jessica E. Vascellaro

Image: Lotus Head via Wikipedia

Source: WSJ.com: Business Technology

It’s been all the rage for Silicon Valley technology startups to reduce their workforce in recent weeks to gird for an economic downturn. Now tech startups outside Silicon Valley are following suit.

Hatteras Networks, a well-financed startup whose equipment enables telecom companies to deliver carrier Ethernet and broadband services over existing copper infrastructure, has laid off a quarter of its staff. The Research Triangle Park, N.C., company let go of 20 employees, spread evenly across all departments, bringing the total remaining staff to 60, said Kevin Sheehan, the company’s chief executive. News of the cut was reported earlier on WRAL.com.

“Starting when the financial markets began to collapse, we started looking at all of our spending for 2009 and 2010,” Sheehan said. “Having lived through 2001 and 2002, we decided to proactively reduce our spending.”

The company currently has more than 100 customers and ships equipment to at least 40 carriers every quarter. Its revenue has grown more than 100% every year for the last three years, Sheehan said, though he declined to disclose specific figures.

Since its founding in 2000, Hatteras Networks has raised $89 million in venture capital. Its investors include Columbia Capital, ComVentures, Globespan Capital Partners and Grotech Ventures, according to VentureWire records.

-Scott Denne, VentureWire

Source: WSJ.com: Business Technology

Silicon Valley is grappling with the killings of several start-up executives at wireless semiconductor startup SiPort. On Friday, three top SiPort executives were allegedly gunned down by a former employee at the company’s Santa Clara, Calif., offices.

The three were Sid Agrawal, chief executive; Brian Pugh, vice president of operations; and Marilyn Lewis, human resources manager.

According to police reports, computer engineer Jing Hua Wu was terminated by SiPort on Friday morning and then requested a meeting with the three executives that afternoon. Wu allegedly shot and killed these officials at the meeting, and was later arrested by police on Saturday.

Founded in 2004, SiPort is backed by more than $30 million from venture capital firms Intel Capital, Lightspeed Venture Partners, Morgenthaler Ventures and New Venture Partners.

Several investors reached by phone said their priority was ensuring the safety and well-being of the company’s employees and families, while continuing operations at the company. Investors also emphasized the strength of the company and said they were confident SiPort would continue growing. The investors and the company have been in contact with customers, suppliers and partners to reassure them.

Aiman Kabakibo, the company’s founder and chief executive, has returned to his role as CEO. Kabakibo had been senior vice president of engineering. The company has set up a charitable fund in honor of the victims.

Agrawal had joined the company in 2004 as CEO. Agarwal built out the executive staff, helped raise venture funding and developed the early customer base, investors said. Pugh was vice president of operations and responsible for building out the company’s manufacturing operation. Lewis was human resources manager and handled a number of functions including recruiting, payroll and vendor management.

SiPort designs and markets semiconductors that allow devices to receive digital radio signals. The company focuses on high-definition radio, and its chips are used in MP3 players, navigation devices, mobile phones and car and portable radios that receive HD signals. In October the company began shipping its chips to customers for the first time.

-Tomio Geron, VentureWire

Source: WSJ.com: Business Technology