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Adobe has just released the latest version of its popular Flash Player in testing mode, and it includes a bunch of features that allow developers to do new, beautiful and weird things with Flash content. These improvements should also help Adobe continue fending off competition from Microsoft’s upstart Silverlight platform.

Perhaps the coolest part of Flash Player 10 (code named “Astro”) is the integration with Adobe’s new Pixel Blender toolkit, through which developers can create scripts for filters, blend modes and fills — basically, a wide range of motion graphics and effects — that transform Flash content in real-time, to sometimes disorienting effect. (See one such transformation in the screenshot below.) Adobe even offers a Pixel Bender exchange where, as the name implies, developers can swap different effects that they’ve created.

Other features include the ability to turn two-dimensional images into three-dimensional animations — say a rotating circle of cell phone photos, allowing you to compare them all — and more text options. Flash content creators will be able to include vertical and right-to-left text, which is crucial for compatibility with other languages.

Now, Adobe likes to brag about Flash’s 98 percent market penetration, and the fact that the last Flash update reached 62 percent penetration within three months of its release. By continuing to add new features to enrich the videos, widgets and websites built on Flash, Adobe is working hard to ensure that the Flash Player’s dominance continues in the face of competition from Microsoft, whose new Silverlight platform can also create fairly rich multimedia content. The features will also be incorporated into Adobe AIR, the company’s tool for creating web-desktop hybrid applications, and the Open Screen Project, a partnership that should help Flash gain a stronger foothold in the mobile world.

Adobe is launching an update to its free Photoshop Express image editing tool today, including support for Yahoo’s Flickr online photo service.

The public beta of the tool now includes changes based on feedback from the community. The company says that it will keep enhancing the web-based tool and that’s a good sign.

[Update: Adobe issued this statement Wednesday evening:
"As you know, we were preparing updates to the Photoshop Express beta on May 7th that added significant new functionality to the product.
However, prior to going live, we discovered a bug that requires a fix.
We're committed to delivering a quality experience with Photoshop Express and don't want to send out an update that isn't ready for prime time. We're working on a quick resolution. Stay tuned - we'll have an exact time frame on when you can expect these new Photoshop Express features soon."]

Adobe, like other traditional software companies, run the risk of being undermined by web-based software if they don’t move into this market fast. Adobe launched its Photoshop Express beta in March.

With it, consumers can upload up to two gigabytes worth of photos to their own online storage account. They can edit the photos using quick-and-easy tools. There are, for instance, buttons for removing moles or red eye from a photo. You can share the photos with friends or make them publicly available too. You can tag and organize photos into libraries, increase or decrease the size of photos, email them through Adobe’s web-based email, and embed photos in a page. In contrast to past online photo business models, you can also download them to your computer in edited form without paying a fee.

Once you pull a photo down to your desktop, you can edit it with the local client software for smoother performance. The whole point is to deliver desktop-like drag-and-drop ease-of-use and fast performance to people who aren’t totally serious about photo editing, said Geoff Baum, director of Express product for Adobe in San Jose.

Now it is adding features such as “save as” so that it is easier to save an edited file and give it a new name. you can look at a historical time line that shows all of the different versions of an edited photo. You can undo effects or keep layering on new ones, such as changing the color of someone’s sweater.

Over time, Baum said there will be more premium services for hobbyists or professionals. That probably means there will be options to pay for more storage.

The new Flickr feature will allow the same kind of editing with Flickr accounts as is already possible with Photobucket, Picassa, MySpace and Facebook. With those social networks, you can grab photos that you have uploaded to the social networks and edit them with Photoshop Express. You can also upload your slide shows from Photoshop Express to those sites, using an Adobe embeddable player.

Since the release a month ago, there have been hundreds of thousands of users registering to use the software and they have uploaded over 65,000 public web albums. Photoshop Express works with any web browser. It is currently available only in the U.S., though overseas users can try it with likely limited performance.

Just in case you think Adobe’s Flash Player (which powers YouTube and an enormous number of other sites) isn’t ubiquitous enough, Adobe is pushing for even greater adoption from developers and designers. Through an initiative the company is calling the Open Screen Project, Adobe will lift a number of restrictions on Flash in the hopes creating even greater usage, especially on web-enabled devices.

Adobe’s goal, says Standards and Open Source Director Dave McAllister, is to create a consistent runtime environment for applications running on computers, televisions, mobile devices and consumer electronics. Right now, if companies want to build apps that run on multiple devices, they need multiple development teams — one for the regular web version, one for the mobile version and so on. As more and more devices get connected to the web, the situation will just get more complicated. But if Adobe succeeds, developers can just create one app that’s compatible across the board — and, naturally, those applications will run on Flash (or AIR, Adobe’s player for hybrid web-desktop applications).

“This is the first true step into making sure that the extended web of desktops and devices is also an open web,” McAllister says.

One component of the Open Screen Project is financial. Right now, the Flash Player is distributed for free online, but Adobe charges licensing fees for the mobile version. As of the next release of Flash and AIR, those licensing fees will be eliminated. (To be clear, this doesn’t cover Flash Player 10, which is already in private testing mode, but the version of Flash that comes out afterwards.) Of course, that means one of Adobe’s revenue streams will disappear. But if it leads to greater Flash usage, McAllister thinks Adobe can more than make up for that on the developer side by charging for tools.

Adobe will be be making some technical changes too, like removing restrictions on SWF and FLV/F4V, publishing the application programming interface (API) layers for Flash’s porting layer and publishing the Adobe Flash Cast and AMF protocols.

For non-techies, those details may be well-nigh incomprehensible, but here’s the gist: These moves will be to make it easier for developers to create Flash applications, to create more kinds of Flash applications and to release those applications without having to strike a deal with Adobe.

A number of other companies have signed up as partners for this project, including mobile manufacturers like Motorola, Nokia, Samsung and Sony Ericsson, as well as content providers BBC, MTV and NBC Universal. These partners will help Adobe create versions of Flash and AIR that run and update easily on all those devices. (No word yet, however, on when we’ll see Flash on the iPhone …)

Overall, these moves may seem a little unnecessary, since — despite the fact that Microsoft’s competing Silverlight player has landed high-profile deals like broadcasting this summer’s Olympics — Flash is already so dominant. After all, Adobe likes to brag about how Flash reaches 98 percent of Internet-enabled desktops. For Flash, the real frontier isn’t the web, but mobile and other devices. Sure, the company says Flash and its mobile version Flash Lite have been installed on 500 million devices, and that number will increase to 1 billion sometime next year, but McAllister adds, “In terms of all devices that could connect into Internet, that’s not very big.”

Adobe is trying to move front-and-center in the online video market with today’s launch of the Adobe Media Player and its related content network, Adobe TV. Through its Flash Player — which powers sites like YouTube — the company already played a big part in the dramatic growth of web video. But now Adobe wants to get involved more directly in the media game, and hopes to get a bigger piece of the revenue.

Built on Adobe’s AIR technology, the media player is a hybrid web/desktop application, through which users can stream or download videos to their computer.

With options like Windows Media Player and RealPlayer already out there, you probably weren’t thinking, “Gee, what this world needs is another media player.” Adobe aims to be more like a TV on your computer — the company will provide content directly to its player via deals with CBS, MTV, Universal Music Group, PBS, CondeNet and Scripps Networks. But that means it’s competing with iTunes, which is a pretty steep hill to climb.

Adobe’s player seems to have two big advantages: plenty of free, advertising-supported content (you have to pay for most of the videos you find on iTunes), and the fact that it’s the first player that allows you to download high-definition Flash video to your desktop. (Because it’s so fast and easy-to-use, low-definition Flash has already become nearly ubiquitous.)

The other big question is whether viewers really want standalone video players, which you need to download and install. Joost seems to be struggling with a similar business model, and says it will soon offer in-browser videos. Meanwhile, NBC-Universal and Fox recently teamed up to launch Hulu, where viewers can watch high-quality video without a separate player.

Adobe TV, meanwhile, will focus on educational videos about Adobe products, and will be divided into sections for photographers, designers, video professionals and developers. This may seem rather limited in scope — and it is, compared to the other how-to video sites out there — but it also speaks to the breadth of Adobe’s offerings. The number of people wrestling with, say, Photoshop alone should guarantee a decent-sized audience. Adobe probably isn’t going for CSI-sized numbers here.

The company is only the latest in a long-line of tech giants trying to become major media players, too. Even if these new offerings don’t grab the number one spots right away, they still seem like smart moves — the media player reinforces Flash’s dominance, while Adobe TV supports the company’s other products. And hey, a similar expansion worked out pretty well for Apple.

Adobe AIR, a platform for running Internet applications on your desktop, is now available in early testing mode for Linux. Adobe is also joining the Linux Foundation, a nonprofit group that promotes and standardizes the open source operating system.

AIR is already available for Windows and Mac, but this is still an important move. AIR officially launched with great fanfare a month ago, in part because of its “build once, run anywhere” potential — namely, it allows developers to create an application on AIR without worrying about which operating system their customers are using. By making AIR compatible with Linux, Adobe adds some extra weight to that promise.

Of course, I was pretty darn excited about AIR already. Not only is it part of a larger wave of companies working to bridge the gap between your desktop and the web, it also beat competitors Mozilla Prism and JavaFX out of the gate, and it launched with high-profile clients including eBay, NASDAQ and The New York Times.

Adobe says that joining the Linux Foundation will allow the company to accelerate the development of rich internet applications in Linux. A bunch of other high-profile tech companies are already members, including Hewlett Packard, Google and Nokia.

In fact, software giant Microsoft is becoming more and more conspicuous in its absence. That absence isn’t exactly surprising — since Microsoft alleges that Linux violates more than 200 of its patents — but it does mean that Steve Ballmer and friends are looking more and more like John Hodgeman in those Apple commercials. That may not make a difference in the short-term, since I hear Microsoft offers some pretty popular products. It may not mean much to AIR either, since Microsoft isn’t offering any directly competing software.

But it could hurt Microsoft in one area where it’s actually the underdog — the company’s web application developer Silverlight, which Microsoft is pushing as an alternative to Adobe’s market leader Flash. Adobe already has a huge lead here, so Microsoft needs to win over a lot of developers.

Now let’s say you’re a developer — again, the very audience that Microsoft needs to befriend — particularly one with an interest in open source, and you’re choosing between Flash and Silverlight. On the one hand, you’ve got a nearly ubiquitous product offered by a company that just joined the Linux Foundation. On the other hand, you’ve got a product that’s the clear underdog, and is offered by a company widely seen as Linux’s number one enemy. Hmm, tough call.

Updated

Remember Steve Jobs’ complaints that no version of Adobe’s Flash Player is right for the iPhone? It looks like Adobe agrees — the company is now developing a version of Flash specifically for Apple’s mobile device.

This is a big win for Apple, since an enormous amount of websites use the Flash format, and any mobile browser without Flash compatibility will seem increasingly wimpy. (Among other things, YouTube videos are in Flash, a fact the iPhone has worked around by including a special YouTube application that uses the H.264 video codec.) On Monday, Adobe announced that Microsoft had licensed Flash Lite — the mobile version of Flash — for the Windows Mobile operating system (our coverage).

This move, however, gives the iPhone an advantage over competing smartphones. For now, at least, they’re still stuck with Flash Lite.

The decision is also an obvious move for Adobe, and a blow against Microsoft, which is trying to take on Flash with its browser plug-in Silverlight. We’ve noted that Silverlight — which doesn’t work on iPhones — faces tough odds due to Flash’s market dominance, but it may have a window of opportunity while Adobe improves its mobile technology. Today’s announcement signals the window is closing.

Surprisingly, the announcement doesn’t come with a lot of fanfare from Adobe, but was instead mentioned at Adobe’s Q1 earnings conference call. (The company said its earnings increased 37 percent compared to last year.) Asked about Flash mobile developments, chief executive Shantanu Narayen said: “We are also committed to bringing the Flash experience to the iPhone and we will work with Apple. We’ve evaluated the SDK [software development kit, which Apple just released for the iPhone]; we can now start to develop the Flash player ourselves.”

(That’s pretty much all Narayen said on the subject, but you can read the full call transcript here.)

Two weeks ago, Jobs said that Flash Lite is too simple for iPhones, while Flash proper is too advanced (our coverage). Presumably, Adobe is developing something just right.

Update: Adobe has released a clarification: “Adobe has evaluated the iPhone SDK and can now start to develop a way to bring Flash Player to the iPhone. However, to bring the full capabilities of Flash to the iPhone web-browsing experience we do need to work with Apple beyond and above what is available through the SDK and the current license around it.”

Microsoft has licensed Adobe’s Flash Lite and Reader, so users of devices with the Windows Mobile operating system can access Flash and PDF web content on their smart phones.

Flash Lite is Adobe’s tool for mobile devices to view some of the content created using Adobe’s Flash Player. For example, the newest version of Flash Lite can play Flash videos, including movies on YouTube and MySpace. Adobe Reader, meanwhile, allows users to read files in the popular PDF format.

On one level, this is a surprising move, because Microsoft clearly wants to compete with Adobe on the mobile front. Earlier this month, the software giant announced it was moving its Silverlight web application developer software onto Nokia smartphones, with Windows Mobile compatibility coming soon. As we noted at the time, Silverlight is going to have a tough time taking on Adobe’s dominant Flash player for regular browsers — but it has a better chance in the mobile market, where Adobe is still bringing Flash Lite technology up to speed.

On the other hand, there’s so much Flash content on the web that any smartphones claiming web-browsing capabilities will start seeming increasingly crippled without Flash Lite. The licensing deal gives Windows a leg up over Apple, where founder Steve Jobs said he isn’t planning for any Flash or Flash Lite compatibility with the iPhone — read our coverage. (Rather than playing YouTube videos through its browser, the iPhone has a special YouTube application utilizing the H.264 format.)

Neither company has announced exactly when Flash Lite will become available for Windows Mobile.

The wall between the web and your computer continues to crumble with today’s launch of Adobe AIR, a runtime environment that allows you to deploy Internet applications on the desktop. AIR has already been available in public testing mode for several months, but the official launch should lead to greater usage — and, if we’re lucky, a flood of innovative web/desktop hybrids.

In what may be the first big wave, several companies are also launching their AIR-based applications today. eBay and NASDAQ will use Adobe AIR to keep customers up-to-date about market news and account status, cable TV children’s channel Nickelodeon has created a video jigsaw puzzle application and The New York Times is using AIR to build the desktop component of ShifD, which will allow Times readers to move newspaper content back-and-forth between their computers and their mobile devices. (For a full list of today’s launches go here.)

AIR offers a “best of both worlds” approach, says Michele Turner, an Adobe vice president of product management and marketing. Web developers can use the technologies they’re used to, such as HTML and Ajax, and the applications can be built quickly and accessed remotely. But, like a desktop program, AIR apps can also read and write local files, as well as work with other applications on your computer.

AIR’s official launch puts it ahead of competitors JavaFX and Mozilla Prism, which are still in development or public testing. (Many think of Microsoft Silverlight as a competitor, but that’s a misconception, Turner says, because it’s a browser plug-in, not a desktop runtime environment.)

Adobe is also releasing Adobe Flex 3, a tool for building Flash applications. Like AIR, Flex was previously available in public testing mode. Components of the Flex software developer kit were already open source, but the release means the Flex SDK is now completely open.

Start-ups are already making use of AIR too. For example, Unknown Vector used AIR to build its desktop video player (our coverage), and Acesis, which launched at last month’s DEMO, based parts of its medical records software in AIR (our coverage).

Here’s the latest action:
1) Dan Farber takes the helm at CNET
2) Mozilla launches email-focused subsidiary
3) Scribd creates iPaper, an Acrobat competitor
4) Hewlett-Packard has great first quarter
5) Tesla Motors pulls in another $40M
6) Verizon, AT&T unveil new unlimited wireless plans
7) Oligarchs, proletariat run amok in Silicon Valley
8) Scientists suck up CO2 to make alternative fuel

Dan Farber takes the helm at CNET — One familiar figure is stepping aside for another at CNET, where long-time editor-in-chief Jai Singh is ending his long rule over the editorial arm of the media company. Farber, a veteran journalist and former EIC at some of the tech world’s most recognized publications, takes on the role at a time that CNET is struggling with activist investors including Spark Capital and Jana Partners. His own thoughts on the transition are here. (Image by Scott Beale of Laughing Squid.)

Mozilla launches new subsidiary to improve email — The Mozilla Foundation, which makes the Firefox browser, has launched a subsidiary called Mozilla Messaging that will work on improving the Thunderbird email client, another of the company’s products. In a painfully vague blog post, David Ascher, the CEO-to-be of Messaging, says that the new division will give Thunderbird the kind of attention Firefox has always gotten, adding new features and opening it to more contributions from outside developers. Despite the vagueness, as a major competitor to Microsoft Outlook, a next-generation version of Thunderbird may (eventually) be big news.

Scribd creates iPaper, an Acrobat competitor — Does clicking a link only to find it opening up a PDF file in a separate window bug the hell out of you? Scribd is hoping it can tap into that pain point to get a foothold over Adobe’s Acrobat, with a new document viewer called iPaper that will be embedded directly in web pages. The viewer will be able to display a variety of formats including normal text and Powerpoint presentations and, get this, advertisements powered by Google Adsense, without requiring a download. The app is quite similar to Macromedia’s FlashPaper, which Adobe effectively abandoned when it acquired that company. Ironically, iPaper is also made with Adobe Flash.

Hewlett-Packard has an excellent first quarter — Giant computer maker HP had an excellent first quarter, especially as compared to the recent earnings and stock performance of most of its compatriots on the NASDAQ. The company saw a small bump in North American revenue, accompanied by a jump in Asia and Europe. It’s often considered an indicator for the enterprise sector, so strong results coming now from HP suggest that the recession might not be so bad after all, at least for tech.

Tesla Motors pulls in another $40 million — Electric car maker Tesla has taken another $40 million, raising total investment in the company to date to $140 million, as we briefly mentioned yesterday. The lead investors were Valor Equity Partners and Elon Musk, the company’s chairman. Tesla is shooting for $250 million more over the next two years, and the launch of a new model; for more details, see yesterday’s article.

Two major carriers unveil new unlimited wireless plans — Verizon and AT&T now both offer unlimited-use wireless plans, starting at $99. Directed at the high-end market, the new packages are a significant step away from the set-minute “buckets” that the largest carriers have favored to date. They mark a further move toward using value-added services like applications and data as the major differentiator between wireless plans.

Oligarchs, proletariat run amok in Silicon Valley; middle class vanishing — Petit bourgeousie, where art thee? Recent employment figures for Silicon Valley show that overall employment levels are rising, but jobs in the $30,000 - $80,000 earning range are on the decline. Worse, the job growth for low-end earners  making less than $30,000 was at five percent, while growth for the $80,000-plus group was at only one percent. This might have something to do with an increasingly common business model: One well-paid CEO, one small army of interns.

Suck carbon dioxide from the atmosphere to make fuel — A couple of new schemes hope to pull carbon dioxide from the air to create an alternative fuel. The idea reported here by the New York Times involves using a nuclear plant as the power source for the electrochemical reaction that would produce the fuel, though, so don’t plan on seeing it any time soon.

updated
While YouTube ran away with the video-sharing crown in the United States, the race is still heated in China, the world’s second largest Internet market and fastest-growing.

There, two leaders are fighting it out, Tudou.com and 56.com. Tudou commands 22 percent of searches for video on China’s most popular search engine Baidu, compared to 56.com, which gets 19 percent. In third place is Youku.com, with 13.9 percent.

56.com seeks to catch Tudou, today announcing it has raised $20 million in venture capital, led by Hikari Private Equity and Susquehanna International Group China. Hikari, a publicly traded Japanese company, focused on the mobile sector in Asia, is expected to help develop 56.com’s mobile strategy. Japan’s mobile video market is hot, and 56.com sees mobile becoming an important offering, though more likely later next year and in 2009. Hikari also sees more potential in pushing anime in video.

Tudou got ahead early, always enjoying more capital. After raising an early undisclosed amount last year, it raised $19 million more in July. It also dominated because it was quick to let people easily upload video they’d taken from TV or ripped from other places. 56.com, on the other hand, was moved first to let Chinese upload their photos and turn them into slideshows.

Both sites are seeing significant growth in people uploading their own videos, with 56.com now getting about 60,000 new videos a day, according to Jay Chang, president and chief financial officer of 56.com, in an interview early Friday. He said the levels of video being uploaded match the levels seen by YouTube when it was acquired last year. 56.com now has 30 million registered users, he said.

56.com is also the Chinese equivalent to a combined RockYou and Slide, because it commands about 90 percent of the third-party slideshow widget market in China, according to Chang. Unlike in the U.S., where people are easier with uploading videos of themselves, the Chinese initially tended to be somewhat more reserved, and were swifter to upload photos and turn them into videos via slideshows. That has since changed, as more people turn to video. But slide-shows remain popular. Todou has since moved to embrace slideshows too. Another reason for the relative slowness of video to catch on was China’s under-developed broadband infrastructure, Chang said. This financing will help the company buy more servers to handle traffic, he said.

Also investing in 56.com are Adobe Systems Incorporated and the CID Group, and previous investors Sequoia Capital and Steamboat Ventures, the venture capital firm affiliated with the Walt Disney Company. (Sequoia also backed YouTube). 56.com earlier raised $6 million.

Youku, meanwhile, has raised $28 million (see our coverage) from Farallon Capital, Bain Capital’s Brookside Capital Partners, Chengwei Ventures and Sutter Hill Ventures.

Tudou.com is backed by Capital Today, General Catalyst Partners, Granite Global Ventures, IDG China, JAFCO Asia, KTB Ventures and JAIC.

56.com is using compression technology that keeps its bandwidth costs lower, compared to other sites, it says. 56.com is led by Kitty Zhou (left), who earlier was product manager at NetEase, managing its email, photo album and other applications for that early leading Chinese portal. She has brought the company a tech focus and concentration on ease of use. Chang calls her the “Marissa Mayer of China,” referring to the respected product manager at Google.

Chang said he hopes the company can become profitable within 12 to 18 months.

56.com also hopes to draw on the video technology expertise of the new investor Adobe.

Update: Corrected reference to Chang’s position, originally misunderstood in our call.

Here’s an (updated) summary of the latest action:

–Adobe launches online-offline media player, and Share. Other applications launch using Adobe’s AIR
–Microsoft launches Office Live WorkSpace
–Joost officially launches its online TV service
–Skype makes earn-out. EBay takes $1.43 billion impairment charge for Skype, and co-founder Zennstrom steps down.
–Facebook to let you group your friends
–Findory shuts down

Adobe launches new online-offline media player, and lots more – Adobe’s new player lets you watch Flash videos whether or not you’re connected to the internet. Videos are offered through deals with other publishers. The media player is an Adobe Integrated Runtime, or AIR application that combines online access with a user interface normally seen in desktop applications. Last night, we covered the purchase of Virtual Ubiquity, a company with a word processor called Buzzword, also an AIR application. Like other software companies that offer a platform for developers and services for users, Adobe is both helping and competing against startups: Veoh, a competitor, is another AIR media player, for example. The Adobe player is part of several Adobe announcements being made at its Adobe MAX conference today.

Another of these announcments is eBay’s desktop application, running on Adobe. AOL is also using the platform to feature the top 100 videos. Nickelodeon Online also has an interactive game using it. Also featured at the conference: Playyoo, a Flash-based mobile gaming startup that will be launching in December.

Another Adobe announcement is Share, a service still in private testing mode that lets you upload and share documents with friends or with anyone on the web. Adobe hosts up to 1GB of documents and lets you view documents in any format, using its Flash player.

Microsoft, not to be outdone (it hopes) — Microsoft is launching Office Live Workspace, another online service where you can store, access and share documents.

Joost officially launches its online TV service – The public release of the much-hyped Joost offers a couple of user interface improvements such as search and better navigation across videos in the site. It is also offering an open application programming interface so third-party developers can build widgets for Joost users, which it first announced a month ago. Check out the video interview with Joost chief executive Michael Volpi on NewTeeVee.

Zennstrom steps down from Skype — In related news, Joost co-founder Niklas Zennstrom — co-founder of internet calling service Skype — is stepping down as chief executive of that company. He will become the non-executive chairman of Skype’s board of directors, and the reason is in the following item

EBay takes $1.43 billion impairment charge for Skype — eBay had promised to pay $1.5 billion to Skype if it met certain performance milestones after eBay acquired it in 2005. But Skype hasn’t done very well, and eBay has just announced that prior Skype shareholders will only get about $530 million of a possible $1.7 million for meeting targets. In addition, eBay is taking a hit to its earnings. It says the charge includes a $900 million reduction in “goodwill,” or value that it had assumed it was getting after acquiring Skype. The Skype co-founders have now finished their earnout period, which is one reason why Zennstrom is stepping down.

Facebook to let you group your friends – “We’ll let you organize that long list of friends into groups so you can decide more specifically who sees what,” the company says about its forthcoming feature, which it hopes will help users better separate personal and work relationships within the site.

Findory shuts down – Personalized online news service Findory has announced it will cease operations on November 1. The site launched four years ago, offering each user a home page of fresh content — news articles, videos, etc. — based on what the user had previously read or viewed.

Summary:
*AjaxWindows offers operating system in the browser
*IBM researcher says “racetrack memory” could unseat flash
*Noise reducing headset Jawbone wins backing from Sequoia
*Lemonade, latest company to offer online kiosks
*Adobe previews Photoshop Express
*MobiBucks, the latest start-up targeting mobile payments
*Scouta, offers personalized video and podcast recommendations

AjaxWindows offers operating system in the browser — Michael Robertson, creator of the SIPphone and the Gizmo Project, has unveiled something called ajaxWindows, which lets you do all your computing straight from your browser. It’s essentially a virtual PC, used from any browser on any Web-connected computer. He blogs about it here. His site has been pummeled with traffic, however, so we couldn’t sign up. He points to an online demo and video, which were also hard to reach this morning.

Basically, browsers are finally getting sophisticated, because of the inclusion of things like AJAX technology, which store more information. So AjaxWindows makes the browser work as both the operating system and engine for all your needed applications, Robertson says. AjaxWindows directs you to other online services for many of your needs, for example Gmail for storing email, documents and other file types. For example music files, it connects you with a MP3tunes locker. AjaxWindows automatically creates an MP3tunes account and guides you through the Gmail set up if you don’t have an account already. Similarly, it lets you handle bookmarks, contacts, wallpaper and other stuff. Now, much of this was already possible, of course, before AjaxWindows came along. You can use browsers to access most of these services anyway. We haven’t tried AjaxWindows yet, so we’re not certain how revolutionary this is. But if he can make it easier for the average user to get by without needing desktop files, the project may do well.

IBM researcher says “racetrack memory” could unseat flash — IBM researcher Stuart Parkin’s is working on a new form of memory, called “racetrack,” that may allow electronic devices to potentially hold 10 to 100 times more data in the same amount of space. People are looking for alternatives, because flash memory is slow at story data (NYT has story ).

Jawbone, the headset which shuts out background noise, gets backing from Sequoia — We last wrote about the expensive high-tech headset, when it raised $5 million from Khosla Ventures. Techcrunch says it has raised money from Sequoia capital. Here’s a good video showing how Jawbone works.

Lemonade, lets users a way to make money from online kiosks — The South Norwalk, Conn. company lets people display ads for goods in widgets on their profile pages on Facebook or MySpace, and then lets them make money when people click on the goods and buy them. Lemonade, featured in the New York Times, lets users choose the goods from a catalog of 250 online retailers, including Zappos.com, iTunes and Walmart.com. However, the idea is not new. Companies like Buy.com’s Garage Sale, and Zlio (see our coverage), already do something similar. With Lemonade, the retailers pay commissions of 5 percent to 15 percent of the sale price. Lemonade will keep 20 percent of the commissions on behalf of people who create online kiosks, and pay users the rest of the money.

Warner Bros opens a Studio 2.0 — Details here.

Private equity firms are worse than mafia, when it comes to lack of transparency, says union boss in UK — Story here.

Adobe previews Photoshop Express — This is still secretive, but Adobe is apparently about to offer an online version of Adobe’s image editing software Photoshop. This is analogous to the move earlier this year, when Adobe offered Premiere Express, a free, Flash-based online video editor for creating mash-ups and remixes. More about the latest here. And here’s a screenshot of the app in action, which apparently shows how to adjust an image just by rolling over the different versions shown at the top, previewing the results & then clicking the desired degree of modification.

MobiBucks, the latest start-up targeting mobile payments — Mobibucks, which launched in April, says it has signed up 115 retailers and 2,000 users in a program that lets people make payments by keying in their cell phone number and a PIN at a store register. The company is now looking for a VC round. Its selling point: MobiBucks charges 15 cents per transaction, about half the usual fee for a debit transaction. The Mountain View, Calf. company was founded last year by Jorge Fernandes, who earlier founded ViVoTech, a Santa Clara, Calif. company that makes devices to conduct credit and debit transactions. With PayPal, Google, Visa and Mastercard all moving into mobile e-commerce, along with other start-ups already active, this company is a long-shot — but then most start-ups are (Mercury News story here).

Scouta, offers personalized video and podcast recommendations — Scouta is an Australian company offering a recommendation service based on what you bookmark in a “My Scouta” account, or what you listen to on iTunes, using the Scouta Agent.

Television and especially high definition television is something that we’re already seeing as a viable method for internet distribution. Best found in the rampant use of torrents, the widespread availability and demand for high-definition TV (HDTV) is already upon us.

But currently there’s no efficient method to stream media at such high resolution - a problem that Akamai is attempting to solve by expanding the company’s delivery hardware. Akamai plans to overcome speed limitations by building closer proximity to cable providers and more importantly, to the end user. Diminishing physical distance helps to not only maintain faster speed but also a more consistent bandwidth.

While bulking up on hardware isn’t sexy in a peer-to-peer age, Akamai’s push into HD marks a decisive advantage over competitors, like Limelight and Move Networks. Akamai has aggressively maintained its dominance in the content-delivery-network (CDN) market, despite the recent influx of companies, by buying up a P2P competitor (Red Swoosh) as well as content management tools (Nine Systems). By integrating Red Swoosh’s efficient distributed delivery mechanism (read P2P) into its hardware, Akamai is lowering its distribution costs to manage while other CDN companies begin a price war.

Thankfully, updating software for HD television on the internet will not be as costly as Akamai’s hardware upgrade. Adobe’s adoption of the video codec H.264 (a compression for video that uses substantially smaller file sizes) into the ubiquitous Flash will only fuel the fires of delivering HD content over-the-web. The improvements to Flash’s video have taken cues from the continued popularity of the Apple Trailer web site with its use of H.264 for high-definition video. Similarly hopeful for internet HD TV is the implementation of Microsoft’s Silverlight technology. Built into Netflix’s new Watch-Now service, Silverlight allows interaction with other users as well as solid Operating System for video watching. Netflix’s service was built in less than three weeks for a presentation and left many drooling in the audience.

However, the timing of Akamai’s announcement comes after a disappointing second quarter for the company and facing the “possibility that after two years of extremely rapid expansion, video streaming and consumption is flattening.” The glimmer of hope is that streaming HD television through the internet is a market with large potential. For the broadcasting industry, who are particularly interested in maintaining vertical distribution, streaming is the ideal method of providing content without worrying about pricing, piracy and ownership - the main issues which resulted in NBC’s recent pullout from iTunes downloading service.

Virtual Ubiquity has just released more group features for Buzzword, its powerful new word processor.

The word processor, still in a private testing mode, is notable because it puts the key desktop features popularized by Microsoft Word onto the web, including desktop-style formatting and commenting. The Buzzword upgrade now lets you add multiple authors to a document, add icons to user profiles, print comments and scroll more seamlessly through long documents.

No other online word processor, including Google Docs, can currently match it. However, Google’s momentum is significant, as it integrates Gmail with Docs, Spreadsheets, Calendar and other applications — making its overall offering steadily more useful to most people. Google’s brand power is dominant, too.

Both companies are preparing to push their products to students starting school this Fall. While Buzzword may be a great stand-alone product, we think it will need more than support from its investor and technological benefactor, Adobe, if it is going to challenge the Google juggernaut.

The product is already a showcase for Adobe’s AIR, a Flash-based platform for developers to build such “rich internet applications” (AIR stands for Adobe Integrated Runtime and had previously been code-named Apollo). This has resulted in some great Buzzword features. One is real, working what-you-see-is-what-you-get (WYSIWYG) document formatting: people can actually view, edit then print a document from the web without affecting its formatting. Contrast this with Google Docs and most other online word processors, where text appears differently across web browsers and computer screens — which leads to confusion about how final drafts will appear in print. Buzzword also features in-line notes, where users can leave notes for each other in reference to particular sections of text. It lets users work offline then sync back once an internet connection is made — good while on a plane, for example (discussion here).

Boston-based Virtual Ubiquity, backed by Adobe, may not have near the same recognition as Google, but Buzzword has made an impression on the tech crowd. Here’s Robert Scoble’s take after a demo at a conference last winter: “I have a new way for rating how cool a demo is. How many keystrokes per second can I count [in the audience]? You know, tap, tap, tap, tap on keyboards. Virtual Ubiquity is on stage right now showing off a killer Word Processor that works online. Teaches Microsoft quite a few lessons.”

AIR is, in a nutshell of oversimplicity, Adobe’s bet that users want a “richer,” more desktop-software-like experience on the web (in-depth coverage of it here).

Meanwhile, Google’s big bet is that what users want first and most of is interconnectivity between applications. Google employees tell us Docs has been experiencing a “near-vertical” growth rate almost entirely due to its integration with Gmail. When a Gmail user receives an email with a Word document attached, she can open it in Google Docs instead of downloading it and opening it in Word. Google has also recently parried AIR’s offline option with Google Gears (our coverage), which allows web applications to be taken offline, similar to Buzzword; and it’s already available for Google Reader. Furthermore, Google Docs’ upgrade last week introduced folders and better search. The company has been working hard to make its Apps the educational software solution of choice for students and their universities.

So where does this leave AIR? We’ve covered how Adobe has set $100 million aside specifically to fund Virtual Ubiquity and other companies that showcase AIR. If Adobe’s goal is to demonstrate how it can help to make companies successful, why not go for integration with Adobe’s many other high-quality, powerful applications? Photoshop for editing photos, Illustrator for digital drawings (etc.), InDesign for print layout, and other Adobe desktop software, are already staples of designers and publishers everywhere, and present in many classrooms. In fact, a separate Adobe word-processing product, InCopy, is actually designed for workflow processes that feed into InDesign. If the company can find ways to integrate Buzzword in a useful way with other Adobe software, this would at least partially counter the usefulness of integrated Google Apps.

Google Gears, a technology created by Google to allow developers to create offline Web applications, was released today.

Google Gears comes as a browser extension.

It is a very significant move, because most applications until now have worked either entirely online, or entirely on your desktop — not both. Microsoft has moved to make applications like Outlook work on and offline, and has upgraded its efforts with its Silverlight project. Adobe, too, recently introduced Apollo, a similar technology. However, these are nascent efforts.

Google move is particularly noteworthy, though, because Google has no legacy paid software to protect. Its products are for free. Most people have resisted switching to Google, because of the unreliability of online-only applications. This latest move will assuage those concerns, and could eventually gouge a big portion of Microsoft’s business.

Wondering what direction Microsoft’s stock price heads tomorrow?.

While Microsoft hasn’t pushing its own online-offline products aggressively, Google is about to. Today, for example, it released an RSS reader, which works both offline and online. It will likely to do the same soon in word processing, spreadsheets and other applications.

Notably, Google Gears will be open source.

So not only will Google create offline web applications, it is encouraging others to do so too. In its statement, Google said it hopes to help the industry move to a standard for creating such applications.

The Gears API will also be available in Apollo. Google Gears offers new JavaScript APIs for data storage, application caching, and multi-threading features.

Here’s the latest action:

Scribd hype — Maybe because it calls itself the “YouTube for documents,” the young Scribd is getting a lot of interest from Silicon Valley’s venture capitalists. We’ve talked to some eager to invest. Rumors are leaking out, including at Gigaom and Techcrunch that the round is almost done, with GigaOm saying it is done and citing a large $10 million valuation. We talked with Scribd’s Trip Adler today, and he didn’t want to say much. He said those other reports are “inaccurate.” He hasn’t closed the round yet, he added. (Our coverage of Scribd here.)

Adobe open sources Flex platform tools — The company announced that outside developers can use its Flex platform to participate in building rich Internet applications for the Web, including Apollo applications for the desktop. This is significant because Adobe’s Flex/Flash platform — around which many cutting-edge Web sites are being built these days — has remained relatively closed. Announcement here, and more details here. Robert Scoble had an early look.

TheStreet.com buys Stockpickr.com — This is another success for Web 2.0. Stockpickr offers place for people to compare and exchange investment tips. (Story here).

Grand Central offers its one-telephone number feature via mobile devices — You’ll recall (VentureBeat’s coverage) that Grand Central is the company that lets you create one telephone number for all your needs. Through a Web dashboard, you can direct calls to whatever phone you want to use, and centralize voicemail. Now, you can control all this from your cell-phone too. (Grand Central Mobile)

Oak Pacific Incorporated falling apart? — The Chinese Web company that some have called the Chinese Myspace, backed by U.S. venture capitalists, has laid off serious numbers of employees. From recent blog posts (here and here, you’d think the company is disintegrating, and chief executive Joe Chen out of control. However, we talked with David Chao, partner at DCM and an investor in OPI, and he said bloggers have focused on the visible lay offs from units that have struggled, in part because of new regulations imposed by China Mobile. Those regulations increase the revenue share on wireless services such as SMS, MMS and voicemail management, and also restrict their use in some ways — so the revenues of all wireless companies got hit, not just OPI. That said, OPI is sort of like IAC — a holding company with lots of properties. Some units are going to do poorly, and they’ll be cut. Others are growing quickly, including Mop.com and Xiaonei, which Chao likens to the Facebook of China, and is on fire — one of the fastest growing companies in China, in terms of page views and visits. We covered Xiaonei here. All told, Chao says the business is a “net positive.” And chief executive Joe Chen is talented at making multiple bets, he said.

Red Herring not as dire it seems — While we had Chao on the phone, we asked him about the struggling business magazine Red Herring, where Chao is a board member. ValleyWag says the mag is in default, and that it has the proof to show it — in the form of lawsuit papers filed by Comerica. Sighing at the question, he said he didn’t want to get in a pissing match with another publishing company (i.e., Valleywag’s parent, Gawker) but that the financials aren’t as bad as they appear.

Tim Draper in Vietnam — Tim Draper, who has been expanding his Silicon Valley venture firm, Draper Fisher Jurvetson more aggressively internationally than just about any other firm, announced a $50 million Vietnam fund last year (see our coverage). He was in Ho Chi Min City a few days ago to celebrate its launch, and looks quite at home.

Razz, the voice-mix service, raises another round — The San Francisco company, earlier known as Phonebites, lets you insert noises while you are talking on the phone. As Thealarmclock puts it, “farts” for example. Mayfield Fund, one of the alleged new investors, did not respond to our request for confirmation of the investment, reported by PE Wire. Besides Mayfield, Cardinal Venture Capital, Garage Technology Ventures and Greenpark Capital also reportedly invested. (Our past coverage)

Cozmo.TV, latest personalized TV site — The San Francisco start-up joins a crowded space of players wanting to let you personalize and share the TV programming you watch. With Cozmo, you select shows from places like YouTube, Google, MySpace and combine them into channels that you then roll into an embeddable widget, which you share. Problem is, there are other sites that do something similar. There’s Blinkx, Channels.com, Joost and MeeVee. (See Techcrunch)

Speaking of Blinkx, it is being taken public — The video search company will go public on the London AIM exchange, which has somewhat of a flimsy reputation. Om says Blinkx has been adrift, and suggests public investors may be duped.

Speaking of Joost, it is signing up lots of advertisers — This is advantage you get if you have the name recognition Skype co-founders Niklas Zennström and Janus Friis. The duo haven’t even formally launched their company Joost, yet have lined up several major advertisers. The company wants to send free videos and other programming to your TV. The NYT says United Airlines, Microsoft, Sony Electronics and Unilever are among 30 on board as “launch partners.” The launch is planned for Tuesday, the Times says.

In other news:
– Metamatrix, a company backed by venture firm Kleiner Perkins, has