Snooping in Silicon Valley, Microsoft’s assault, Google Checkout & more

Here’s the latest Silicon Valley action:

Tacit says it can pick the brains of your friends and colleagues — The NYT has a glowing story about the Palo Alto company Tacit, which boasts software that lets you send questions via email to acquaintances and only solicits answers from the experts among them. Tacit has been around for a while, and we’ve written about them before (four years ago). Tacit has tried to maintain privacy protections. That much is good. What is surprising about this NYT piece on Tacit’s latest product, called Illumio, is that there’s no skepticism expressed whatsoever about the practicality of this latest service, and about whether it will actually work. The service will be tested next month. No mention, either, of the investment by the CIA’s In-Q-Tel, and whether the targeted people (experts), with all the spying going on lately, will really want to use this thing.

Snooping in the valley, continued — Speaking of snoopstes, we’ve mentioned Silicon Valley start-up Narus’ technology, used by the NSA/AT&T to track Internet traffic in their facility in San Francisco. Now here’s the latest Merc story, mentioning how the information captured by Narus can be mined by another company, Attensity, of Palo Alto, for suspicious patterns. The majority of Attensity’s customers are government agencies, including NSA and Homeland Security. Maybe it should come as no surprise, either, that Narus’ board includes a former deputy director of NSA. And the CIA’s venture arm, In-Q-Tel, invested in Attensity, as we mentioned four years ago (notably, in the same piece referenced above about Tacit) And then there’s CallMiner, which can be used to convert audio phone calls into text, also backed by CIA’s In-Q-Tel.

Microsoft unveils new image format — Microsoft says its new image format, Windows Media Photo, will have more detail than the JPEG and JPEG 2000 formats compressed at similar levels, and will be supported by Windows Vista and also made available for Windows XP. Microsoft says it will save storage space, make transfers faster and conserve batteries on devices such as cell phones and cameras.

Microsoft’s digital assault (continued) — Microsoft is backing Urge, a music service released two weeks ago by MTV networks, and which is still in testing mode. Urge, like iTunes, is hardware neutral. Its downloads are compatible with any device certified through Microsoft’s “PlaysForSure” program, including players from Creative, iriver and Samsung. It goes beyond Apple’s offerings. Merc columnist Mike Langberg describes this, notes a challenger to the iPod: the iriver clix, which Microsoft and MTV are heavily promoting to Urge subscribers. You get 2.2-inch color screen, compared with a 1.5 inch color screen on the nano. Also has a built-in voice recorder and FM tuner.

CNET launches AllYouCanUpload — Speaking of new photo products, this is a photo uploading service that is disruptive because it lets you upload the images on other Websites very easily: You don’t need to register, there is no limit to the number of photos you can load, and because it is free, undercutting folks like Photobucket and Imageshack.

Google Checkout — Lot’s of speculation about a Google PayPal, but nothing firm.

BitTorrent’s Bram Cohen against Net Neutrality? — Here’s a piece about how BitTorrent, the peer-to-peer file-sharing protocol company in San Francisco, has linked up with Cachelogic in the UK, which is creating “data stores” around the Internet to accelerate the BitTorrent sharing process. Companies that subscribe to the service won’t have to worry about whether certain carriers are prioritizing traffic or not, this piece says, because BitTorrent will help their traffic zip along unaffected. We’ll be writing more about this shortly for the Mercury News and will post a link to it.

A tax credit for angel investors? — Here’s a good piece written up by VentureWire about a new bill introduced in the U.S. House of Representatives last month offering certain accredited individuals a 25% tax credit for investments up to $500,000 per year in small businesses. It mentions the pros (would help spur more investments into small businesses), and the cons (could create a bubble). Angels may not like our response here, but last time we checked, the angels were back in form here in Silicon Valley, and don’t need much help. Look at Kaboodle, a bizarre case where ten angels piled in with $3.55 million. Perhaps this might be more useful in the hinterlands, but we also think that the more tax loopholes and exemptions there are, the more complicated and distorted everything becomes. We’re headed toward a German tax code, with thousands of credits and whatnots, at a time when the Germans are desparately trying to move way from such an opaque tax code. Good grief. Why not keep things simple, and let market forces channel money to where the best investment opportunities are? Don’t we have a record deficit right now?

Tim O’Reilly having difficulty enforcing trademark on “Web 2.0” name — Publisher Tim O’Reilly and his crew came up with the name “Web 2.0” to describe the latest wave of Internet technologies, just as they’ve come up with a number of other names. And like any good business, they’re trying to protect the word by saying it is one of their trademarks (or at least, they’ve applied for the trademark), and that other folks shouldn’t be throwing conferences with the Web 2.0 name in it. They sent a cease-and-desist letter to an Irish group, it@Cork, planning such a conference. But O’Reilly, and CMP Media, the group he has partnered with to organize a Web 2.0 conference, were attacked by blogger critics saying Web 2.0 has now entered the general lexicon for most people, and the whole point of Web 2.0 is about sharing in the first place. What do you guys think? (Tom Raftery, of it@cork, posted the letter here, and you can follow subsequent debate on his blog, at tomrafteryit.net). In response, CMP has relented, and decided to let it@Cork use the name for now.

Airgo’s 240 megabits chip to be used in set-top boxes — The Palo Alto company announces today that its True Mim Gen chipset will allow you to move several high-def videos around your home at the same time. It will be included in Caton Overseas, a German set-top box, among other places.

Bank of China IPO world’s largest in six years — comes Thursday, in Hong Kong. Relevant to Silicon Valley only in that local venture capitalists are investing heavily in China these days, and this rickety bank (it has all kinds of debt) is going to be interesting to watch.