To promote democracy, the United States is working to get Eastern Europe connected to the 'net. The results are more practical.

By Julia Ioffe, Contributor

When the village of Syn’kiv in Western Ukraine first got a computer with web access in 2003, the local priest encouraged people to come out for the grand opening of the library’s Internet center. It had been paid for by the U.S. Embassy in Kiev, and the web access, which was free, was a novelty for this hamlet of 1,100 people.

Since then, however, the residents of Syn’kiv, a town known for its early tomatoes, have used the web to find out more precise local weather forecasts as well as the breeds of tomato best suited for the area and how to grow and fertilize them. In the last six years, this knowledge has helped Syn’kiv double its tomato crop.

Syn’kiv was part of a larger U.S. Embassy push to hook Ukraine, which has one of the lowest Internet penetration rates in Europe, to the web.

(Lately, American embassies in the region have been promoting the web as a tool of democracy. In Azerbaijan, for example, the embassy sponsors a project that shows Azeri youth how to be citizen journalists through YouTube. But locals are finding they don't exactly have online freedom of speech: Two bloggers, who held a mock government press conference with a person in a donkey costume, are now in jail.)

In Ukraine, the U.S. Embassy managed to get over 140 local libraries online, and now they have help from the Bill and Melinda Gates Foundation, which last year committed over $25 million to wire up 1,100 more in a project called Bibliomist, or Book Bridge. The project is currently in the rollout stage and, last month, nearly two hundred Ukrainian libraries applied to get their own Internet centers.

Books and more online

Each winning library, those that are ready and have the local authorities’ support (because they are, after all, footing future maintenance bills), will get up to 15 up-to-date computers, training for its staff, and networking equipment that will allow as many as seven local branches to use the same connection. Microsoft (MSFT) is also donating over $4 million worth of software. (Conveniently, all the donated computers are required to run on the Windows Vista operating system.)

“In Ukraine, libraries are seen as cultural institutions,” says Colin Guard, who runs Bibliomist through IREX, an international education non-profit. “They are seen as warehouses where culture is kept but little is known about the other services a library can provide to improve the quality of life, like finding jobs or answering healthcare questions.”

The hope, Guard says, is to encourage people to use the wealth of information on the Internet to improve governance, improve business and lifestyle, and thereby jumpstart development. So far, the lucky plugged-in libraries have taken a series of initiatives, like posting government regulations and budgets online, or helping blind journalists improve their work.

Sometimes, however, the real victories are in the individual discoveries that Ukrainians make online, like the doctor from Kirovograd who used his library’s Internet connection to diagnose his patient with a rare genetic disorder called Brugada Symptom that he hadn’t been able to find in any Russian or Ukrainian textbooks. The patient survived.

With ownership of the SMB market, is Citrix Online a threat to Cisco?

Caine's Citrix owns unified communications - for now. Photo: Citrix.

Hoopla around Google Wave service, launched publicly in September, has brought resurgence to the idea of unified communications — a single platform that integrates voice, email, fax (really!), chat, and web conferencing. Long a dream of the telecommunications industry, unified communications is gaining some buzz among corporate tech teams as a possible tool for enhancing employee productivity.

As tech executives ponder their options, vendors of communications services are racing to grab share in the nascent market. But so far, it's not online voice purveyor Skype or event Google (GOOG) that is making real waves in unified services — so far. Instead, the leader is a relatively unknown company: Citrix.

Citrix Online is the dark horse — some would say underdog — of the web conferencing space. (Citrix Systems was founded in 1989, acquired Expertcity in ’03 and renamed it Citrix Online, which oversees the company’s remote collaboration tools.) As Cisco (CSCO), Microsoft (MSFT), and IBM (IBM) fought for big Fortune 500 enterprise clients during the 2000s, Citrix focused on small to medium-sized businesses. From 2006 to 2007, Citrix’s revenue increased 50% and jumped more than 100% the following year to 101.4 million, according to Gartner data. And analysts expect the same growth this year.

The company delivered a product that had the right amount of features at the right price, says Roopam Jain, Frost and Sullivan’s principal analyst for collaboration.

“Citrix has been very aggressive around the SMB market,” Jain says. “Citrix has seen the fastest growth in this space; it’s brought meaningful market prices and hit what everyone wants — the sweet spot.”

Serving the small business sweet spot

Citrix is now hot on the heels of IBM and Microsoft — and if it continues to grow at the same rapid speed, it would be a surprise to no one if Citrix surpassed both these tech giants in market share. But compare Citrix's 2008 101.4 million revenue to Cisco’s $551 million revenue figure, and Citrix still has a long way to go.

Timing is everything. For years, small-to-medium businesses were notorious for their reluctance to invest in new technology. But as the recession kicked in, so did Citrix’s business. As enterprise clients decided to wait on investing in more technology, small-to-medium businesses were pressured to cut back, says David Smith, Gartner’s collaboration analyst.

And so small-to-medium businesses looked toward the best technology solution to replace travel expenses and unnecessary overhead — at an affordable price.

“The SMB market was very much underserved in 2004 and 2005,” says Brett Caine, president of Citrix Online. “At the time, the existing options required a lot of training and the prices were unpredictable. That’s when we stepped in and saw our opportunity.”

Citrix’s lucrative success in the SMB market has garnered the attention of many of its competitors, which has also expanded its reach and focused on this segment. Specifically, IBM and Microsoft have made big pushes for SMB in the past few years, Gartner analyst Smith says.

For Cisco, more competition has driven the company to work harder than ever to maintain its market share dominance, says June Bower, vice president of Cisco Collaboration Software Group. After acquiring WebEx in 2007 for $3.2 billion, Cisco recognized the need to expand its client base in the market and is now fully armed to not only serve its existing enterprise clients but all the small-to-medium business clients as well.

As the tech giants look to expand their reach and try to appeal to both enterprise and SMB clients, Citrix will continue to focus on small-to-medium businesses, with the hopes of gaining more and more customers (this year the focus is abroad), and effectively, more and more market share. Ironically, despite not targeting enterprise clients, those companies are actually approaching Citrix, Caine says.

But will Citrix be a lasting success? Caine says that Citrix Online has no intent on moving toward a unified communications platform, unlike the rest of the industry. His argument is that his clients don’t want that.

Web conferencing is the leading web collaboration tool that both enterprise and SMB clients want after email, but actual implementation is slow, according to Forrester research. But right after web collaboration, companies also want video conferencing. So would it not make more sense to invest in a service that could provide a unified communications solution?

We’ll see. The market is still too young to tell. But Caine says Citrix is ready to adapt to whatever changes or demands his clients want. And if the company adapts its tools as quickly as it has grown, well, then this dark horse could win the race.

High profile private equity shop appears to be chatting up a new fund despite string of struggling investments.

Word is that Elevation Partners, the high-profile if poorly timed private-equity firm headlined by rock star Bono and star investor Roger McNamee, is considering raising a new fund.

Elevation's investment partners (from left): Bret Pearlman, Fred Anderson, Bono, Marc Bodnick and Roger McNamee. Photo: Elevation Partners.

As surely as dogs chase rabbits or night follows day, PE shops raise more money when the existing fund is mostly used up. (Elevation's is about 70% invested.) Yet when all you have to show for your first effort are embarrassing misses — no rabbits caught, mostly grim darkness, metaphorically speaking — it's got to be tough to collect fresh cash.

This is the tough position in which Elevation finds itself. Despite having raised $1.9 billion in 2004, the ballyhooed firm is far from a successful experiment. It's got all of one exit, a gaming-company sale to Electronic Arts (ERTS), headed by an Elevation co-founder.

Two of its investments are seriously sick. One is the online real estate dog Move.com (MOVE), better known by its scandal-ridden former name, Homestore.com. The other is Forbes Media, the parent for FORTUNE competitor Forbes Magazine, in which Elevation invested at perhaps the worst time in decades for media enterprises.

The snafus sting, of course. But the fate of Elevation's first fund rests almost solely on one investment, its $460-million stake in beleaguered smartphone maker Palm (PALM). That investment is barely in the money for Elevation. It's worth about $500 million currently.

Elevation is demonstrably in for the long term: It chose not to sell late last year when the stock peaked around $18, compared to Tuesday's close of $11.65. Palm recently raised $500 million in a stock offering, so its near term is secure.

Still haven't found what they're looking for?

But the company is a long way from a home run, unless Elevation forces a sale to a bigger player like Dell (DELL) or Microsoft (MSFT). Remaining independent is an expensive proposition, however, as Barclays analyst Amir Rozwadowski notes to clients.

"We believe that its improved cash position should enable the company to be very aggressive in its marketing efforts over the next few quarters, particularly as the company looks to improve brand recognition, carrier distribution, and overall awareness of its products," he writes. "We do however expect the company to continue to burn cash at a healthy clip in the near term, as expanding scale is at the top of management’s agenda."

Elevation declined to comment on its fundraising agenda. It needs to raise a new fund, though, in part because it recently added longtime eBay CFO Rajiv Dutta to its ranks as managing director. New bigshots typically don't get to participate in the "economics" of five-year-old funds, so if Dutta, a skilled operations and financial executive, is to make some serious money at Elevation, he'll need a fund from which to invest.

Elevation doesn't have trouble getting meetings. Endowment heads are likely to agree to a sit down if Bono shows up. Once in the room, there are few better talkers in Silicon Valley than McNamee. (A wonkish fantasy: a "talk-off" featuring McNamee, venture capitalist John Doerr and Apple's Steve Jobs. Imagine the possibilities.) McNamee and his partners will have their work cut out for them, though. One win, two disasters, a couple fresh investments and one still risky possibility. Not the strongest lineup to bring into a pitch meeting.

Sorry, Google. The apps (and by that we mean appetizers) won out.

At long last there is proof of Google’s (GOOG)  long-anticipated smartphone. Late last week, the online advertising giant started handing out an Android-powered phone to employees. While refusing to detail the specs, the official Google mobile blog refers to it as a “mobile lab.”

The Googley vagueness continues on the blog, where it is described as, “A device that combines innovative hardware from a partner with software that runs on Android to experiment with new mobile features and capabilities.”

Of course, the gadget-obsessed immediately ran to the Federal Communications Commission to get those specs, and photos have been popping up all over. So, we now (mostly) know that it is a sleek-looking touch-screen phone made by HTC, powered by a high-end Qualcomm (QCOM) processor and featuring the latest Android 2.1 OS. From the looks of things, this GSM phone could operate on any number of networks abroad, but seems destined at least for T-Mobile in the United States.

With all the Googlers eager to show off their new gizmos, and this, the calendric peak of the holiday party season, it was inevitable that in the Bay Area at least, the two would combine.  Sure enough, a friend attending a holiday party over the weekend in San Francisco with a number of Google folks making merry was presented with the new phone. “Mostly, I wanted to see the photo of the engagement ring that was on it,” she says, requesting anonymity. “It wasn’t an iPhone, and besides, there were pigs-in-a-blanket and these really good mini-cheeseburgers, and I was hungry, so I didn’t pay too much attention. “ So there you have it.

Table stakes: iPhone quality hardware

Discounting for a moment that this occurred in gadget-jaded Silicon Valley (and that the mini-cheeseburgers were really good), it does offer a point worth examining. Great hardware is the minimum starting point in the smartphone market these days, and it doesn’t get anyone’s blood racing by itself. As a piece of hardware, the Google phone, dubbed the Nexus One according to employees, had better be on par with an iPhone. If not, as we have seen time and again with would-be competitors, it will be a non-starter.

Let’s assume Google’s phone is tip-top in the hardware department. What sells smartphones these days has as much to do with the software running the phone and the applications available as the hardware. Again, Apple (AAPL) leads the pack by a wide margin with its mobile apps store.

Google’s open-source mobile OS Android has been getting mostly good reviews, especially in its latest incarnation running on Motorola’s (MOT) Droid phone. What Google needs to do, however, is get more Android phones out there to attract more developers and get the critical application mass it needs.

What has everyone most excited at the moment is the (rumored) prospect that Google will sell its Nexus One as an unlocked, carrier-agnostic piece of gear starting in January. Fine, as long as the phone is still relatively cheap. If Google comes out with a $500 unlocked phone, it will fade as quickly as all of Nokia’s similar unlocked and pricey efforts.

But if Google sells its phone contract-free for the same $199 the iPhone sells for (with a two-year AT&T (T) contract) it will have a monster on its hands. How could that happen? Google, rather than a carrier could subsidize the phone, and make up the cost via mobile advertising (it just bought AdMob), or maybe just take a hit to build a market. Google can certainly afford it. Either way, Android gets very huge, very fast, and that is what Google really wants.

Would that upset Google’s roster of current Android customers, including Motorola, Samsung and some of the wireless carriers? Sure it would, but this isn’t about the old-school wireless ecosystem, it’s about the mobile Web and Google’s designs to own it. If Google wants it, it needs to step up. If not? Those pigs-in-a-blanket sure look good.

Check out some of our favorite picks that will let you keep track of your spending and eating — and help you make a drink or two.

Monitor holiday consumption with the Calorie Tracker app. Image: Livestrong.com.

The holiday season can be stressful: the shopping, the spending, even the parties can be incredibly stressful.

Luckily, all you Apple (AAPL) iPhone users have more than 100,000 apps to help your holiday season go a little smoother. Yes, there's the obvious "Better Christmas List" app or the “Asking Santa” app, but maybe before it gets too close to the yuletide cheer, you should make a trip to the iTunes app store. That'd be one way to make the trip to your in-laws a little more bearable.  All in all, a happy app holiday!

Make your shopping experience easier — and more affordable

Everyone's trying to find the best deals this time of year. And besides tackling someone on Black Friday or being glued to your laptop on Cyber Monday, you can look for apps that can help your shopping. Try Red Laser, priced at $1.99. All you do is take a picture of a product barcode, and it'll recognize the product and search for prices on Google (GOOG) and TheFind. So instead of buying something marked-up, you can see where you can get the item for the cheapest.

Stop using a checkbook and start using an app

There are more than enough apps to help you keep track of your finances. Mint.com, for instance, has caused a small revolution in the iPhone and digital community, showing you how much you're spending and how much you’re actually making. Mint.com is like having a digital version of your loving, but overbearing, scolding mother living in your inbox and iPhone. But for the holidays, try BudgetCare for $1.99. It's especially tailored for individual transactions. So this way if you just want to track your holiday expenses, it's a bit easier to sort through.

I'll be home for Christmas…on Wednesday at 5:32 p.m.

Many of us will be traveling for the holidays, and let's face it, we might enjoy the in-flight movie, but what we all care about is our destination — and whether we'll be home in time to make the holiday festivities. So rather than being preoccupied, you can stay occupied by checking your flight status in real-time with FlightTrack. For $4.99, you can check whether you'll have any delays, if they've switched gate numbers or if you just want to see which other planes are flying in the air with you.

Eggnog, anyone?

So you're finally home and you're in charge of drinks. No fear! Here comes (the free) Mixologist: Drink Recipes to the rescue! You've got almost 8,000 recipes at your disposal. Pick the liquor, pick the spritzer and shake it up–your iPhone, that is. And then you can pick up the real shaker and be the life of the party! This is one holiday app that keeps on giving.

Watch those calories!

Now that the party has really gotten started, it's easy to get stuck eating hundreds of obligatory holiday feasts. That really doesn't do much for your diet though — nor your pant size. So maybe it's best not to completely pig out and use an app that'll give you a handle on your eating. With livestrong.com's $2.99 Calorie Tracker app, you can search a food item, add it to your database and then you can search for the appropriate workout to burn those calories you just added to your system. Might as well get a head start on that New Year's resolution.

Let's make some Christmas cards

And no holiday would be complete unless you took some crazy photos and made them your Christmas card for next year. But why wait until next year, when you can dress them up and send them now? For $2.99, with the Grinch edition of the Dr. Seuss Camera, you can take a picture of your holiday antics, lay some Grinch illustrations on top of the faces you and your nephew are making and then send those greetings out to your loved ones right away. Who said the Grinch ruined Christmas?

The newest trend in e-commerce: Social media meets local networking.

Social commerce site Groupon offers daily deals to nearly two million subscribers in 27 U.S. cities.

When David Morton, owner of the Pompei chain in Chicago, signed up with an Internet startup to offer a coupon online, he expected to sell a few thousand at most. Instead, during the 24 hours the coupon was posted on November 22, more than 9,000 local consumers purchased an offer that got them $10 worth of pizza for $5.

The coupon was an all-time sales record for Chicago-based Groupon, a hot startup that brings the buying power of the masses to the social web. After launching with local merchants in its hometown one year ago, Groupon today offers deals to nearly two million users in 27 cities in the U.S. including New York, Charlotte and Austin.

Here’s how it works: Groupon sends a daily email to subscribers with a deal, or “Groupon,” for a local business or event, like a salon, restaurant, class or concert. If they want in, users then sign on to Groupon’s site to pay by credit card and have a year to redeem the coupon.

Before “the deal is on,” however, a minimum number of users must agree to buy. This spurs buyers to post the deal to social networks like Facebook and Twitter (or go the old-fashioned route: email) so the quota will be met. Many of Groupon’s offerings also tend to be social in nature, like attending a class or an event or checking out a new restaurant, making them ideal for rallying Facebook friends.

“Groupon layers nicely on top of the social graph that’s developed over the last few years,” says Groupon CEO Andrew Mason.

The site shows nearly one million Groupons sold, claiming to have saved users over $42 million. The company, which takes a cut of the deals it sells, is profitable and predicts revenue of $100 million over the next 12 months.

Investors get their Groupon

These numbers caught the eye of exalted venture capital firm Accel Partners, which led a $30 million investment round with New Enterprise Associates, announced last week. The infusion will go towards hiring, investing in technology, growing the customer base and expanding geographically.

Accel, an investor in Facebook, doesn’t need to be convinced of the social web’s potential: Another portfolio company, Playfish (it makes "social games" for Facebook and other social media platforms) last month sold to Electronic Arts (ERTS) for $400 million.

“We’re in the middle of another transition, of search to the social web,” says Accel’s Kevin Efrusy. “Just as Google [through its search business] enabled a whole new crop of businesses, the social web is enabling a lot of things that just weren’t possible before.”

Groupon’s model is appealing to investors in part because of is its operational efficiency. There is no need for inventory or shipping–users simply print the Groupon and take it to the vendor. And unlike other group buying sites, because most of the offers are services or experiences, there’s a nearly unlimited supply. (Some offers do need to be capped though, as Mason experienced when the company sold 4,000 Groupons for a nail salon with only two technicians, which was booked solid for months after).

Groupon might not the best idea for impulse buyers on a budget. But much of what the site offers are things you might do anyway: get a haircut, go out to eat, attend a sports events. And Groupon claims a high threshold of quality. “We knew that if we did bottom of the barrel, that would be self-fulfilling, we would be bargain basement, cheap stuff site,” says Mason, referencing past Groupons for James Beard award winning-restaurants and the Art Institute of Chicago.

Word-of-mouth, Facebook-style

For all Groupon’s promise and buzz, it’s still early days for the space and not everyone is convinced. Forrester analyst Nate Elliott points out that buying clubs and word of mouth marketing have been around for years. “Look at Avon, Tupperware, Amway—these are five to ten billion dollar companies. Marketers have long understood the power of influence marketing.”

But Groupon's advantage seems to be its ability to harness the power of local communities online. “Groupon really cracked the code because they realized it was about local business,” explains Efrusy. “Local has been difficult to make money on since beginning of the Internet. How do you find out about yoga, a hair salon, a spa? Word of mouth.”

In addition to being an untapped source of ad revenue, local businesses are an attractive target for Groupon because they are highly relevant to users, who enjoy discovering new places and events in their hometowns.  This also helps create the perception that Groupon's deals are more about content and information, rather than advertising.

“We’ve been a Chicago institution for 100 years, but we thought this was a way to reach new customers,” says Pompei owner Morton. “It’s much more powerful and direct than traditional media.”

Cisco CEO John Chambers and strategy chief Ned Hooper address analysts. Photo: Jon Fortt.

Cisco has its swagger back.

When the networking provider hosted Wall Street analysts at its San Jose headquarters Tuesday for its annual update on the state of the business, the most striking thing was the full-scale return of confidence. After a year in which most of tech has struggled to regain its footing in a global financial crisis, CEO John Chambers and his lieutenants told the financial community that they’re poised to grow sales faster than big companies typically can.

To be specific, Chambers says that in normal economic times Cisco (CSCO) can deliver annual sales growth of 12-17%. Off of his current revenue base of $36 billion, that translates into a promise to find more than $4.3 billion in new revenue this year alone.

Chambers believes he can do it because a fresh set of Internet technologies is changing the way we communicate – and giving Cisco a chance to grab a greater share of the spoils. Chambers has outlined three opportunities he believes will reap big rewards: video, collaboration and virtualization.

In the simplest terms, Cisco is betting that video will continue to grow its share of overall Internet traffic as carriers use the Internet video to deliver movies and TV, businesses use it to help employees share ideas and close sales more quickly, and consumers use it to express themselves on the go.

All of that new video traffic should create demand for Cisco’s highly profitable networking gear. It should also create new openings for someone to sell communication systems, back-end servers and management software to run it – and Chambers is positioning Cisco to make that sale.

Skeptics point out that Cisco has stronger competition than ever. Hewlett-Packard (HPQ) and IBM (IBM) sell their own packages of virtualization technology. Microsoft (MSFT) and IBM have their own collaboration suites. Each has resources to rival Cisco’s – and it would be foolish to count any of them out.

So can Chambers deliver? More than a few analysts think he can. They point to Cisco’s cash hoard that’s approaching $40 billion, its track record for successful acquisitions, and its knack for spotting trends early enough to get a jump on rivals. He’ll probably need to use all those tools – and some new ones – to meet his own lofty growth targets.

Tech's top vendors see small companies as a big opportunity.

Software giant Microsoft (MSFT) tops a new ranking of technology companies effectively serving small businesses online by providing a rich, educational web experience for small companies.

Compass Intelligence, a Scottsdale, Ariz.-based consulting firm, analyzes the websites of dozens of tech companies – and interviews small business owners and executives – to come up with its rankings, which it publishes twice each year.

Microsoft leaped to the No. 1 ranking from No. 6 in the first quarter of 2009, essentially switching places with computer maker Dell (DELL) which slipped to No. 6 from the top spot in the first quarter. (Remember, the Compass rankings look at just one part of the tech company's small-business strategy: online reach. All these companies also work through resellers, local affiliates and even have direct sales folks marketing to and servicing small entities.)

That said, the top ten, in order, are:

1. Microsoft
2. AT&T
3. Cisco
4. HP
5. IBM
6. Dell
7. Verizon
8. Sprint Nextel
9. Nortel
10. Symantec

"All these companies are commited and focused on the [small-to-medium sized business market](in different ways)," Kneko Burney, chief strategist for Compass, writes in an e-mail. " They all 'get' small business."

And that may prove to be smart business. Compass estimates that U.S. small businesses – companies with 20 to 100 employees – will spend more than $230 billion on technology in 2009. And a separate new report suggests smaller companies are loosening their purse strings on tech spending even as large enterprises remain cautious.

The Global Technology Distribution Council, a consortium of technology distributors such as Arrow Electronics (ARW) and Avnet (AVT), last week said its members' U.S. sales in the third quarter rose 10.7% over the second quarter.

Large companies "have cut back tech spending, and they're still hunkered down," observes consortium CEO Tim Curran. "SMB (small to medium business) in this instance seems to be a leading indicator of companies starting to invest."

Curran said his members, which serve value-added resellers and other "channels" that, in turn, directly sell to smaller firms, have been seeing particular interest in investing in security solutions and cloud computing services that deliver business software and other applications over the Internet.

Even tech executives who deal primarily with the very largest global companies are talking about their companies' ability to serve small-business clients.

"We have a porfolio that fully meets what small businesses need," says Ann Livermore, executive vice president of HP (HP) Enterprise, a $54 billion-a-year unit that includes consulting, hardware and software sales to businewsses of all sizes. Adds Livermore: "You'll see us being very focused" on the segment.

Entrepreneurs also rely heavily on mobile technology to run their companies. Today there are hundreds of mobile applications that enabling small biz executives to operate while on the go (everything from an application for sending and tracking FedEx (FDX) packages to an app that turns an Apple (AAPL)  iPhone into a voice recorder).

No wonder a Yankee Group study released in September found 28% of small businesses said "smartphone implementation" — the deployment and upgrade of Internet-enabled mobile devices – was their top tech priority in the next 12 months.

Small businesses reliance on mobile means wireless operators have an opportunity to expand their relationship with small businesses, perhaps acting as a distributor for other tech companies' hardware and software or even offering integration and other services in competition with companies such as HP and Dell.

In many ways, the telcos are already seizing the small-business opportunity. AT&T (T) is the No. 2 company on the Compass Intelligence report. "What I love about AT&T is that they are very aggressive in rolling out new "cloud" services tailored just for this market," Burney writes.  "They are focused on providing a suite of services to enable these customers using the power of the network. That's definitely the future."

The rapper-turned-entrepreneur sees cash money in the commodity's boom.

MC Hammer has had many professional careers: he’s been a preacher, a rapper, and a tech entrepreneur.

Now the pioneer of the parachute pants has an equity stake in Cash4Gold, a Pompano Beach-Fla., refinery. Customers who send in their gold—grandma’s necklace, dad’s watch—will receive an estimate of its worth. If they’re happy with the estimate, they get a check.

With the price of gold hitting new highs, it’s hardly surprising that pawnshops are flourishing. Cash4Gold claims to be the first such service to operate fully online; indeed, its backers include a handful of tech venture capital firms, including Luxembourg-based Mangrove Partners ( an early backer of Skype) and Boston’s General Catalyst and Highland Capital Partners.

Hammer (nee Stanley Burrell) says it’s not far from his technology passions. “If you don't think this is a technology driven business,” he says, “what do you think it takes when we have 5000 pieces of gold in a warehouse and one person asks for their piece back?” It’s a huge technical operation.

From spokesman to investor

CEO Jeff Aronson started the company in 2007, just as the price of gold began to soar and the economy turned down. MC Hammer joined forces with him last fall, first agreeing to be a celebrity spokesperson. Even with the money Cash4Gold pays back to sellers and a huge marketing budget—Hammer starred in a Super Bowl Ad last year with Ed McMahon—the company brought in $90 million in revenues last year. Since then, Aronson says it has grown steadily and will hit “several hundred million” in 2009.

But if Cash4Gold is raking it in, some customers claim they’re not. A class-action suit filed in October alleges the company never mailed some people their checks. It alleges that Cash4Gold frequently claims that it has lost items that were mailed in for estimates and offers poor customer service to people trying to follow up on the lost items. The company says the complaint is “seriously flawed” and that it intends to defend the case.

Meanwhile, several copycat companies have popped up as the price of gold continues to climb, but Cash4Gold has achieved name recognition and is now expanding internationally. Two weeks after its UK launch this fall, Aronson says the company had acquired as many customers as it had in its first six months of business in the US.

As Hammer says in the commercial, “We’re meltin’ gold, baby!” And making money.

The chip giant settled with AMD. But another rival is making noise about anticompetitive behavior.

Nvidia's Huang is gunning for Intel. Photo: Nvidia

You’d think Nvidia CEO Jen-Hsun Huang would be happy.

After bumping along as low as $7 a share at the beginning of the year his stock is up near $14. Several months ago Apple (AAPL) began using his graphics chipset – a group of circuits designed to work together – across nearly its entire line of Macs, giving him a very high-profile endorsement. And in the white-hot netbook segment, his Ion processors have won raves for turning underpowered laptops into HD video machines.

Problem is, both of these acclaimed Nvidia (NVDA) products might be dead in the water.

Why? Huang blames chip giant Intel (INTC). Nvidia’s graphics chipsets, which Steve Jobs liked enough to buy by the boatload, aren’t allowed to work with Intel’s latest offering, code-named “Nehalem” – and in the computer world no Intel compatibility means no mainstream future. Nvidia’s Ion chip is designed to work alongside the chip giant’s Atom processor, but lately it’s been priced out of the market by – you guessed it – Intel.

Feeling AMD's pain

All of this has piqued the interest of the Federal Trade Commission, which is looking into whether Intel has improperly used its power in the computer chip market to choke rivals. For those who are handicapping the chances that the FTC will bring charges, Nvidia’s gripes have recently taken on new importance: Advanced Micro Devices (AMD), which had been Intel’s main critic, recently settled its antitrust complaints with Intel for a tidy sum of $1.25 billion. That leaves Nvidia to bang the anti-Intel drum.

“I’m sympathetic to what AMD had to go through over the years,” Huang says.

Intel says it’s a tough but fair competitor, and that Nvidia has caused its own problems. To wit: The two companies signed a limited patent-sharing deal five years ago, and Intel says that if Nvidia had read the fine print, it would have noticed that designs like the current Nehalem chips weren’t covered in the agreement. And the Ion dispute? Well, Intel says it just lowered prices on its Atom chipsets to stay competitive. What’s wrong with that?

Nvidia tells a different story. Executives there say they’re a victim of the same kinds of tactics that got Intel into antitrust trouble in Europe and Asia. Nvidia believes it should be authorized to make Nehalem-compatible chipsets under the 2004 agreement; it claims Intel is just getting litigious to stop a competitive threat. And with Ion, Nvidia accuses Intel of unfair pricing that locks it out of the market. Intel says Nvidia just doesn’t understand the incentives it offers customers.

(The two companies are battling in court over the chipset agreement. Intel has asked a Delaware court to clarify whether Nvidia has the right to build Nehalem chipsets, and Nvidia has countersued for breach of contract.)

The courts will ultimately decide who’s right – that is, unless Intel decides to ink a settlement with Nvidia, too. Even then, that probably won’t be the end of Intel’s legal headaches. Maybe that’s the trouble with being a giant. There’s always some kid with a slingshot gunning for you.

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