Twitter was great for communicating with the West, but other online tools aid increasingly sophisticated activists

By Jia Lynn Yang, writer

During protests in Iran this summer over the re-election of President Mahmoud Ahmadinejad, social networking tool Twitter’s raison d'être overnight went from frivolous to vital: The world outside Iran followed every spurt of  information that trickled out on mobile phones outfitted with the Twitter application.

Since then, activists have only grown more sophisticated in how they organize protests and spread information online. These days all the action—inside the country and among politically active émigrés—is on Facebook and a Digg-like site called Balatarin.com.

Nikahang Kowsar, an Iranian political cartoonist based in Toronto who also runs an Iranian news hub, has more than 11,000 friend connections on Facebook. The limit per profile is 5,000, and so Kowsar runs three profiles, spending 11 hours online a day, responding to emails, running his news site and maintaining his profiles.

Iranian journalist Masih Alinejad, who’s been living in exile in London for two years, also maintains three profiles. Alinejad says she asked Facebook to lift the limit, arguing her profile was a tool for political protest. She says Facebook denied the request.

How protesters protect themselves on Facebook

The Los Angeles-based founder of Balatarin, Mehdi Yahyanejad, attributes Twitter’s rise last summer to the fact that it was the only English-language source of information during the first few weeks after the disputed June 12 presidential elections. And so the Western media instantly gravitated towards it.

But, in fact, other social media are more popular among Iranians, especially educated, middle-class folks who support opposition leader Mir-Hossein Mousavi.  “In Iran people use Facebook,” says Yahyanejad.

Iranians also like Yahyanejad's Balatarin, a community site that helps users find online news and information about Iran and issues of interest to Iranians around the world. Though Balatarin (the name means "highest" in Persian) officially has been blocked inside Iran for three years, politically and tech savvy Iranians have found ways to get to the site.

To protect their anonymity, some politically active Iranians still inside the country adopt pseudonyms, such as changing their last names to “Irani.” The fear is that the government will use Facebook as a tool for spying on its citizens. Journalist Alinejad says that when one of her friends in Iran was arrested, her brother sent a message to her through Facebook saying he was removing Alinejad from his sister’s profile, so the government couldn’t use the connection to incriminate her.

Balatarin's Yahyanejad and others also said that people entering Iran have been stopped at airports and asked about their Facebook profiles. As a result, there is advice spreading that people take down their profiles before entering the country and then reactivate them after they leave.

Accounts suggest the site is blocked inside the country, although protesters can use software to get around the filters.  Facebook told FORTUNE it could not release the number of users in Iran, or confirm whether the site was being blocked.

Alinejad recently organized a whole campaign from London using just Balatarin, which focuses on political news coming out of Iran, and Facebook. In the most recent wave of demonstrations, centered around National Student Day last week, the Iranian government apparently arrested Majid Tavakoli, a student leader, and forced him to go on TV wearing a hijab, traditionally an item of women’s clothing. Alinejad wrote a post on her blog suggesting that other men wear hijabs too in solidarity. A link to her site wound up on Balatarin, where a debate ensued, and soon the campaign moved to Facebook, where men began posting pictures of themselves wearing hijabs. Alinejad says more than 500 people have sent photos as part of the campaign.

Says Alinejad, “[The government] thinks if they arrest journalists, they can stop news from spreading around the world, but they can’t.”

As airwaves become crowded with apps and chatter, government needs to preserve lanes for public safety and emergencies.

By Bob Hunsberger, CEO, NetMotion Wireless

Hunsberger distinguishes niceties and necessities. Photo: NetMotion Wireless.

I have been active in the wireless industry since the mid 1980s and privileged to witness one of the most transformative periods in the history of modern communications. Wireless technology has advanced in countless ways in recent decades, but there has always been, and will always be, one fundamental truth. Spectrum matters.

There has been a great deal of talk lately about the impact of consumer wireless devices, particularly smart phones, on our mobile networks.  Many of us enjoy using wireless data networks to access video and other bandwidth intensive applications as we go about our day.

There also is concern that these applications will bring networks to their knees.  As we debate the proper allocation of spectrum –essentially the right to transmit signals over electromagnetic wavelengths, and the scarcest resource in wireless technology – it makes sense to consider some of the benefits that mobility brings to us all, and how mobile broadband applications improve our lives in ways that we might not consider.

While enabling consumers to use high-bandwidth applications on their devices is a nicety, providing millions of mobile field workers with next-generation mobile broadband access is a necessity. For many people, the term “mobile professional” conjures up images of consumer handsets, but there are millions of mobile workers who are far more reliant on wireless networks to do their jobs.

Public safety trumps your mobile Facebook app. Really.

Police officers, firefighters, EMTs, visiting nurses, utility workers, cable and telecommunication technicians, claims adjusters, and countless others rely on wireless communications to serve our communities everyday.

Their needs transcend the consumer entertainment pursuits and should be front-and-center in the discussion about spectrum policy.

Over the years, these businesses and agencies have resolved many of the technological hurdles associated with providing wireless data communications to their field personnel, including: security, remote policy management of devices and applications, application persistence, cross-network roaming, quality of service and numerous others.

However, they all remain constrained because a lack of spectrum prevents the deployment of high-bandwidth applications that could reshape service delivery in the United States.

What's the frequency, FCC?

The Federal Communications Commission should adopt a spectrum policy that serves the broad interest of businesses and government agencies and positions the United States as the leader in mobile broadband. With a broader allocation of spectrum for mobile broadband applications, the opportunities would be profound. For example:

• Law enforcement agencies could routinely use real-time video surveillance and monitoring from patrol vehicles, instead of relying on primitive taping systems.
• EMTs with video-equipped systems could conduct additional on-scene wireless video consultations from an accident location with doctors at a hospital.
• Emergency responders, such as local Red Cross Disaster Action Teams (DAT), FEMA personnel, or the National Guard, could upload images and data directly from the field.
• Utility workers responding to power, water, or gas outages could count on downloading schematics onsite, saving precious time and resources.
• Delivery personnel could run multiple applications simultaneously on their wireless PDAs or notebooks to check inventory, route locations or place order fulfillment.
• Mobile clinics-on-wheels that deliver healthcare services to underserved communities could reliably communicate remotely with larger medical facilities and transmit X-rays and other high-bandwidth images in real-time.
• Insurance adjustors could capture and record additional video footage onsite and send information to centralized databases for processing.

As envisioned by the Administration’s current broadband stimulus efforts, entire underserved towns or communities could receive true broadband access for the first time by using wireless technology. Such access would benefit businesses, municipal departments, schools, and individual consumers in areas where service providers have opted not to provide DSL, cable, or fiber infrastructure because of cost.

As a businessman, I expect my smartphone and laptop to work while I am on-the-move. When they do not, it is an inconvenience. For the millions of mobile workers in public safety and field service jobs, the implications are usually far more serious.

In October of this year, FCC Chairman Julius Genachowski said, “I believe that the biggest threat to the future of mobile in America is the looming spectrum crisis.”  We should adopt a spectrum policy that serves the broad interest of businesses and government agencies and positions the United States as the leader in mobile broadband. This requires giving our mobile field workers the spectrum they need to run these mobile broadband applications and get their job done.

Bob Hunsberger is CEO of NetMotion Wireless, a leading developer of mobile software that enables the mobile workers to remotely access their corporate networks.

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.

With its “Give It A Ponder” campaign, the handset maker walks the line between lecture and laughs

LG's viral marketing campaign is using humor to get teens to think before they text. Image: Facebook.

One in five teenagers have received a naked picture in a cell phone message. That's one scary stat that LG marketing executive Ehtisham Rabbani uncovered while researching how teens use mobile technology.

Most interesting, though, is what Rabbani did with the information. Rather than ignore the trend – or engage in a lot of hand wringing about the problems with kids today – he set out to change it. To that end, he and his team built a unique yet risky marketing campaign about bad mobile manners like sending racy pics, bullying and spreading rumors. Called "Give It A Ponder," it embraces YouTube (GOOG) videos and Facebook networks to spread its message virally online, and tries to convince teens to think before they text.

The risk? Well, as any parent will tell you, teens don’t like being told what to do – so Rabbani and his team had to be sure and get the tone just right, or they’d end up alienating the very audience they are trying to influence.

“There was a certain amount of nervousness about having this conversation with teens and how well it would be received,” Rabbani says. “So we did a bunch of research.”

To figure out the right approach, LG set up a series of mini focus groups, interviewing young people in groups of three so they’d be more comfortable saying what they really thought. Fortunately, the teens really opened up.

Ehtisham Rabbani, vice president of marketing for LG Mobile Phones, set out to talk to teens about their behavior without sounding preachy. Photo: LG.

“What we heard over and over again was, this is a message that teens are ready to talk about,” Rabbani says. “But it was important that whoever led that discussion didn’t talk down to them. And it had to be somewhat humorous, entertaining, and at the same time provide kids with a guiding principle.”

What they ended up with was an edgy video series starring James Lipton of Inside the Actors Studio. Though Lipton isn’t the obvious choice to reach a teen audience – he’s 83 – he has established his comedy chops in stints on Saturday Night Live and Late Night with Conan O’Brien. In LG’s “Give It A Ponder” videos, Lipton removes his beard and lends it to teens so they can stroke it as they think twice about sending risqué messages. There's nary a BlackBerry (RIMM) or an iPhone (AAPL) in sight – all of the teens in the commercials, of course, use LG phones.

The videos seem to be a hit so far. Since the campaign launched late last month, the Ponder Beard Facebook page has snagged more than 1,000 fans, and the YouTube videos have pulled in nearly half a million views. And that’s just the online audience – LG is also showing the ads on the Channel One network in high schools and in movie theaters before teen-centric movies like The Twilight Saga: New Moon.

The early success is a source of satisfaction for Rabbani, who has a personal connection to the campaign. At a recent family gathering, one of his teenage nephews left the room upset after receiving an intimidating message from an acquaintance – an example of mobile bullying, which LG’s survey found is even more common among teens than sending naked pics.

So Rabbani hopes LG’s message about mobile manners continues to catch on – and, he insists, not just because it’s good brand exposure for LG. “We have literally seen the traffic since the day we launched it go up 10x every single day,” he said earlier this month. “I’m hopeful that as the word gets out it will become a destination for kids to have a conversation.” It’s too soon to say whether LG can convince teens to change their mobile manners. But it's certainly built some nice buzz.

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.”

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."

Apple’s gadgets win adulation, but research shows the sector needs a jolt if it wants to grow

By Wouter Koetzier, global managing director-Accenture’s Innovation Performance Group, and Adi Alon, North American managing director-Accenture’s Innovation Performance Group

Large consumer technology companies are underperforming in the global innovation battle.

The culprit: Widespread flaws in how they manage and invest in innovation.

If tech companies want to grow, they need to invest in breakthrough, high-impact innovations and more systematically and rigorously manage their innovation processes.

This conclusion is based on our daily interactions with clients and recent Accenture research in which we interviewed research and development decision-makers at leading consumer technology companies in North America, Europe and Asia. Collectively, the executives represent companies that generate almost two-thirds of global industry revenue.

The data revealed that innovation is a top priority for companies seeking to grow. But shortcomings in managing innovation, such as not having uniformity of command, are resulting in poor returns on innovation investments.

Accenture believes these poor returns can be turned into profitable, sustainable growth by systematically managing innovation end-to-end — with the same rigor and discipline as other major business processes. According to Accenture’s consumer technology research:

• There is a lack of innovation pipeline management with potentially too much emphasis on incremental versus long-term, large-scale innovation. One respondent indicated that incremental, as opposed to breakthrough, innovation accounts for 60 percent of his company's pipeline. There was a wide variance among participants in how often product pipelines and portfolios were evaluated.

• There are far too many self-centered business unit silos. These silos impede collaboration on innovation efforts that can benefit the company.  As devices, content and communication technologies converge, cross silo collaboration becomes more critical for successful, ground-breaking innovation.

• There is an overdependence on backward-looking innovation metrics such as the number of patents, revenue realized from new products and the percentage of revenue derived from innovation initiatives versus forward-looking indicators such as sources of ideas, pipeline velocity and project risk profiles.

• There are far too many ad hoc innovation processes, especially for larger breakthrough innovation efforts, making it difficult to deliver value. To achieve excellence and deliver value, innovation needs to be managed as a business discipline with supporting processes and tools; few companies approach innovation in a holistic and systemic way.

So what should consumer technology companies do to generate better returns on their innovation investment? Here are a few ideas:

• Companies can reorient their innovation culture to start with the consumer, rather than the technology, and increase their tolerance for failure in the quest for breakthroughs.

• Companies must manage innovation like other disciplines—some don’t and it’s a major mistake. Innovation must be managed with rigor in an integrated way, blending marketing, customer service, sales, research, operations, performance management and risk management.

• Companies must design and actively manage an innovation portfolio consistent with their strategy, balancing short term incremental innovation with longer term, market moving bets.  Particularly during an economic downturn, the natural tendency of “hunkering down” and investing in short term incremental innovation only compromise a company’s competitive position for years to come.

The typical corporate response in a down economy is to cut costs. But companies cannot simply cut their way to prosperity. They must invest in growth through innovation—yes, even during tough times. Managing innovation well, in a uniform, well-structured fashion, is as important as an act of innovation itself.

Koetzier and Alon are managing directors for Accenture's Innovation Performance Group, which works with clients on processes for addressing business challenges.  Koetzier can be reached at Wouter.koetzier@accenture.com and Alon can be contacted at adi.alon@accenture.com.

(MSFT) (AAPL) (GOOG)

Deal for AdMob accelerates scramble for a whopping $416 million in revenue.

As was trumpeted across the Internet Monday, Google (GOOG) is buying mobile display advertising startup AdMob for $750 million in (increasingly) precious Google stock. Wall Street digested the news and sent Google stock up almost $11.

Citi analyst Mark Mahaney says the deal “makes sense, because Google is moving aggressively to take advantage of the strong growth opportunity in mobile, which is fueled by smartphones.” Sandeep Aggarwal at Collins Stewart likes the deal, arguing “mobile advertising will be a $4 billion revenue opportunity by 2012-2013.”

Over my dead BlackBerry.

OK, I am in agreement that the whole smartphone movement is big, really big. But the ads on them? They are small, really small. In its own FAQ on the deal, Google brass acknowledge that mobile advertising is pint-sized today. They cite a number from eMarketer that pegs spending on mobile advertising at $416 million in 2009. That compares to the nearly $24 billion spent overall on online advertising.

It is true that $416 million ain’t chump-change, but it’s not Google dollars either. Estimates for AdMob’s gross revenue are in the neighborhood of $50 to 75 million, with a net of around $20 million. That is tiny, but presumably it will grow fast once AdMob’s display ads and universe of publishers and advertisers can plug into Google’s AdSense. But let’s get back to that small thing.

If you think online display ads are at best an annoyance on a 30-inch monitor, what about a three-inch screen? Ignoring ads on a PC is easy enough; on something I pay $60 or $80 a month for (especially if serving up the mobile ads slow my wireless network even more) ignoring the ads will be the default mode. Yes, there will be location-based bells and whistles to go along with the mobile ads — 30% off a ham sandwich and shoe-repair 30 feet from where you are standing — but that is still a ways off, and do you really want mobile coupons? Mobile advertising has been one of those things that gets promised year after year, and never seems to quite materialize (sort of like true broadband in the United States).

The mobile Internet is happening, and fast, the iPhone has shown us that. Whether an advertising experience works well enough on smartphones to really move the needle (and not simply cannibalize the non-mobile online ad world) remains to be seen.

Google: Buy vs. build

And by the way, Google knows how big this mobile Internet thing is going to be. Why couldn’t they figure it out, and save the $750 million? They have buildings filled with very smart people, and a good culture of “rolling their own,” as it were. I guess if your stock is up 83% since the beginning of the year you don’t have to sweat that too much.

Respect to AdMob for getting this deal done (barring any regulatory issues). Big ups to Sequoia Capital, Accel Partners and Draper Fisher Jurvetson who will make a bundle on the acquisition (and LiveOps CEO Maynard Webb who invested his own eBay money in AdMob). AdMob is clearly running fastest in this new mobile advertising world, and Google has the money to pull them off the startup track and install their 140 employees at the Googleplex. It seems there are plenty of Odwalla smoothies to go around, but I wonder, when will the big mobile advertising dollars arrive?

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By Jon Fortt, senior writer

AdMob CEO Omar Hamoui doesn’t take himself too seriously. When I had lunch with him recently and he eyed the gourmet burgers on the menu, he had no qualms about asking one of his employees what aioli is. (It’s garlic mayonnaise.)

He shrugged and explained that he usually grabs a cheap sandwich, so he’s not used to the cloth napkin fare.

Hamoui’s easygoing manner shows in other areas. He doesn’t have an office in AdMob’s modest San Mateo headquarters — in fact, he doesn’t even have a cubicle. He works at one end of a row of computers, shoulder-to-shoulder with other engineers.

As you’ve read above, my colleague Michael Copeland is a bit down on Google’s decision to purchase AdMob for $750 million. Let me quickly offer another view. I think the AdMob deal is both a great business move and a signal that Hamoui can still fit in at Google — because the search giant is levelheaded enough to swallow its pride when it matters.

Let me explain. AdMob’s approach to mobile advertising is starkly different from Google’s. While Google has tried to squeeze its wildly successful PC-centric advertising onto the phone, AdMob has built a custom system that treats the phone as a unique sort of device. The differences between Google and AdMob were more than academic; they sometimes led to flare-ups between two passionate competitors. (Kind of like Copeland and me.)

A couple of sparks actually flew at Fortune’s Brainstorm Tech conference this past July. During my “Future of Mobile” breakfast roundtable, Google engineering VP Vic Gundotra argued that Google’s approach to mobile ads was superior. Hamoui listened quietly before offering a rebuttal. But in the audience, under his breath, AdMob executive Jason Spero used some colorful language to inform his neighbors that Google was full of it.

Right after breakfast, Gundotra confronted Spero. A Google employee nearby had picked up Spero's comments on her audio recorder, he said — and he casually suggested that if the recording ended up online, it could make AdMob look pretty bad. The clear implication: Watch what you say about us.

Less than four months later, bygones are bygones. Google executives realized AdMob is better positioned in the must-win mobile market, and decided to pay up before AdMob gets even more expensive — or worse, gets acquired by Microsoft (MSFT) or Yahoo (YHOO).

Sure, you could look at this as evidence of a problem. You could argue that Google has an expensive habit of failing to build the best products in new markets like online video and mobile ads, and getting outsmarted by spry startups.

But here’s another take: Google knows how to pick its battles. CEO Eric Schmidt has openly declared that mobile advertising is a key piece of his growth strategy, with the potential to be as big as Google’s core PC-based business. If Schmidt believes that, it doesn’t matter that AdMob’s revenues are small today — what matters is that AdMob has the right people and the right technology to win in mobile.