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FON, the wireless Internet company, has raised €18 million from a Who’s Who of Internet companies and venture capitalists. The round was led by Index Ventures and other investors are Google, Skype and Sequoia Capital.

To me it seems like some major IP players putting a modest amount of money into a company that could become an Internet access alternative not dominated by telecom (fixed or mobile) or cable. Could be very interesting.

FON founder Martin Varsavsky: A dream come true
Skype: Skype invests in FON to increase Wi-Fi availability
Om Malik: Google, Skype Fund FON
Dan Gillmor (FON advisor): FON Times
SiliconBeat: FON goes for “WiFi nation” — a start-up to watch

“Those who would give up Essential Liberty to purchase a little Temporary Safety, deserve neither Liberty nor Safety.” - Benjamin Franklin

Some quick thoughts on the Windows Live Session I attended in London last Thursday. I haven’t been keeping up that much with Live since the announcement, but found the presentation by Phil Holden, director Windows Live, informative and interesting. (Hey, I need to get some beta invites to the Live services. Mail me!)

First, the web is the platform. Not Google, Yahoo or MSN as portals with multiple services. Developers are either using the web or specific services, like Amazon for e-commerce, as their platform. Compared with the PC world I’d say that the web is Windows and the most popular web services in each vertical are individual applications like Photoshop and Excel. The portals are like Office, and you see most plug-ins built on top of one specific application in the suite, not on the suite as such.

If you call it vertical or horizontal integration doesn’t really matter, the really interesting stuff is in interopability between services from different providers. Thinking in terms of a supply chain can be tricky on the web. Instead of starting ‘upstream’ with access to raw materials, you start ‘downstream’ with access to user attention. And not all services are on the same horizontal layer. Search, e-mail (possibly IM) and a start page (my.whatever.com or a generic one) I consider to be the closest to the consumer in such a chain. B2C, auctions, listings etc are better described as being further ‘upstream’. I.e. Freemont to me seems to be vertically integrated rather than horizontally. It would be more interesting to be able to leverage the knowledge in my MSN Messenger network on listings from eBay, Craigslist and Monster, rather than only on ads on Freemont.

What I missed about Freemont especially and the other services as well was the limited talk about business models. To be able to break free from the standard ad formats and at the same time become really profitable, business models innovation is really important. One of the key reasons why Google is successful is its application and continous improvement of search advertising on top of a very good search service. While I see that Freemont could become a very good platform for trading old goods and services, I didn’t see any real thinking on the business model that could allow it to scale. (I assume such thinking is being done, but not revealed to outsiders.)

The Live services defintely seemed better than the current crop of MSN stuff, but it seemed to be more about operational efficiency than strategic advantages. Don’t really see how Live is different in a strategic sense, rather it seems (like with offerings from Google, Yahoo!) to be about to some making sure that rivals don’t get to dominate sectors that could become important.

Still, excellence in one important area has created a lot of value in both Google and eBay. I think MSN could gain a lot from reaching excellence in mail and communications. Especially mail is an important tool that is working sub-optimally today and MSN has a lot to win from making mail a much better experience.

As always, a great thing about the Live Session was talking to the other people attending (Tom, the Mess.be team, LiveSide and more). The really interesting stuff began after the formal presentation was over and everyone had a beer and started chatting. Which is nothing new.

More about the Session at other blogs:

i-Wisdom
A Welsh View
MSBlog
LiveSide

Burnham’s Beat: The Walled Garden “Hit List”. The threat from search engines to web services with “walled garden” data can be analysed by looking at 1) Content Availability, 2) Index Affinity and 3) Process Simplicity, according to Bill Burnham. Really, really good post. Appropriate framework to use when trying to understand why traditional media organisations do not have the upper hand on the Internet.

OnlyOnce: New Media Deal, Part II - the We Media Deal. “The We Media Deal has two components to it: (1) the value of the service to you increases in lock-step as you contribute more data to it, and (2) the more transparent the value exchange, the more willing you are to share your data.” When designing new services one should try really hard to incorporate the first part into the basic design of the service.

Dion Hinchcliffe: Notes on Making Good Social Software. The pillars of social software (a.k.a. community sites, forums etc) are 1) Establishment of Handles, 2) Allow for Members in Good Standing, 3) Barriers to Participation and 4) Protect Conversations from Scale. Good reference when trying to understand the failure of most newspapers’ article commentary. Weblogs, Inc’s TV Squad has designed its commentary function in a way that uses the four pillars. Media companies should watch and learn.

BeyondVC: The Arms Race for Talent. “This next phase of ramping up companies is not about how much you spend on marketing as most services today are spread word-of-mouth. It is not about technology spend as it is way cheaper than years past. It is about finding and hiring the key people who know how to scale a back end infrastructure, who can create and deliver innovative product, and who know how to leverage word-of-mouth to create a huge opportunity.” Just because a startup can use commodity hardware and software it doesn’t mean that great people is a commodity.

MSNBC: “Overall, sales of console and portable hardware, software and accessories reached $10.5bn, 6 per cent higher than the $9.9bn generated in 2004 and beating the record of $10.3bn achieved in 2002.”

Games are probably the form of entertainment most suitable for the connected and interactive world we are living in. It is especially notable to see how the games industry, historically worse plauged by piracy than either film or music, has begun turning its products into services. Services are difficult to copy, products beg to be copied in a digital world.

“The man who dies rich dies disgraced.” - Andrew Carnegie

Feld Thoughts: “Fundamentally, whenever you are thinking about supply and demand on the Internet, you have a math problem to solve. Effectively creating the drivers for both supply and demand – at the right price – and then figuring out how to turn it into money is hard – eBay, PayPal, and Google AdSense / AdWords are brilliant examples of getting this right.”

Om Malik: Even in Web 2.0 Scale & Size Matter. “However, the lack of planning for scale is a clear sign that we are living in a “built to flip” age. No one, is thinking (or planning) about long term business models!”

Bubblegeneration: Scale, 2.0, and Intent. “Scale is important because the network is, for successful players, exponentially valuable; not just in textbooks, like it was in 1999, but in the real world, as I’ve demonstrated.”

Three important points to bring into both the technological and business development of Internet services/companies.