Joost gets $45m to play with
Joost; the peer-to-peer video service developed by those behind Skype, has raised $45m from Index Ventures, Sequoia Capital and the Li Ka Shing Foundation, to "...accelerate product development, global expansion, localization, and service offerings". Index Ventures are old mates from Skype, while Sequoia Capital are new to the table. The Li Ka Shing Foundation is based out of Hong Kong and their inclusion reflects the increasing importance of Asian markets for internet businesses. Joost is technically impressive, but for a service still in beta-testing to describe itself as "...the world's first broadcast-quality Internet television service" seems a little arrogant, especially when the recent expansion of the beta has demonstrated some scaling problems and their current content offering is less than impressive. Episodes of "Fat Actress", "Beavis and Butthead" and "CSI" (everywhere) might make the service attractive to some, but Joost are going to have to tie up some deals for better content than that if they're going to get enough users to pay off the investment; unless the service can be sold off before that happens.

Jajah taps Intel for $15m
Intel Capital is the lead investor in a $20m funding round for Jajah, the internet telephony software firm. Intel is pumping in $15m to help Jajah in its goal to supplant Skype as the mass-market VoIP provider of choice, the company said today. Jajah uses PCs for internet phone calls - but only to set up the calls. It then connects two landline or mobile phones together to chat over the IP network. Intel will promote Jajah through its OEMs and developers, and it will license 16 PC telephony patents to the company. Which is nice. Jajah thinks so too. On the company blog today, co-founder Roman Scharf writes. "The deeper Jajah can be embedded into Intel solutions, the better for customers everywhere. It is our intention to bring a best-of-class, next generation solution to the market which can be embedded and optimized for any computing device." Intel Capital is not usually a lead investor. It likes to take a back seat in funding rounds and is particularly interested in promoting companies that design apps or products that will encourage customers to buy more expensive PCs with bigger chips.

Retailers are Shrinking
As consumer electronics get smaller and competition intensifies, retailers are reacting by shrinking their new stores. The two leading stand-alone electronics chains, Best Buy Co. and Circuit City Stores Inc., this year intend to open most of their new stores in sizes 30% to 40% smaller than their standard formats of the past decade. Two factors primarily are fueling the smaller-store phenomenon: Consumer-electronics chains need less space for merchandise as some products get smaller and shoppers increasingly buy music and movies online. And Best Buy and Circuit City, which operate a combined 1,500 U.S. stores, now need smaller structures to penetrate fast-growing suburbs, rural areas and gaps between their larger stores -- places that can't support one of their superstores. While many big-box retailers have attempted small offshoot stores for specific merchandise concepts, only a handful so far have scaled back the size of their entire store. That could change as investors increasingly pressure U.S. retailers to focus on wringing the greatest returns out of their operations rather than relentlessly expanding. Among the retailers now experimenting with smaller formats are Home Depot Inc. and Lowe's Cos. Wal-Mart Stores Inc. recently has opted for slightly smaller supercenters in some markets to bolster its flagging returns on invested capital. And Office Depot Inc. has reined in its average store size in recent years. The store downsizing by Best Buy and Circuit City, is more dramatic. Roughly 65% of Best Buy's U.S. stores measure 45,000 square feet. Yet most of the 90 U.S. stores Best Buy plans to open this year will measure 30,000 square feet or less. Similarly, most of Circuit City's stores cover 34,000 square feet, but the majority of the 160 new stores on its drawing board for this year and next will measure 20,000 square feet. Aside from size, the smaller stores look a lot like their larger brethren. They use roughly the same layout and color scheme -- blue and yellow for Best Buy, red and white for Circuit City. Rows of TV screens dominate one wall, sometimes two. Best Buy's standard racetrack aisle guides customers on a lap around the sales floor before depositing them at a bank of cash registers near the front door. Best Buy and Circuit City say they don't anticipate converting many, if any, large stores into the smaller format; rather, the smaller stores will arrive as new construction. Circuit City has 50 vacant stores it is trying to sell or sublease; Best Buy has only six. With more consumers buying entertainment online, Circuit City stocks 30% fewer CDs and DVDs at its smaller stores than in larger ones, primarily by keeping fewer of each title on hand. Meanwhile, televisions require less storage space now that prices are plummeting on flat-panel TVs.

Hybrids costs to level out
Toyota Motor expects to cut costs for hybrid cars enough to be able to make as much money on them as it does on conventional gasoline cars by around 2010, a top executive said Thursday. Japan's top automaker has been keen to see the fuel-saving power train enter the mainstream since launching the Prius, the world's first hybrid car, in 1997, but sales have come at the expense of profitability, given their high production costs. But Masatami Takimoto, executive vice president in charge of power train development, said cost-cutting efforts on the system's motor, battery and inverter were bearing fruit and that the cost structure would improve drastically by the time Toyota reaches its sales goal of a million hybrids annually in 2010 or soon after. "By then, we expect margins to be equal to gasoline cars," he told Reuters in an interview at Toyota's headquarters in Toyota City, central Japan. If it succeeds, Toyota would be removing the main hurdle preventing rivals from pushing the expensive power train, which twins a conventional engine with an electric motor, and likely widening its sales lead as more consumers seek better mileage amid rising fuel costs. Data this week showed U.S. gasoline prices at an all-time high above $3 a gallon, and Takimoto said he expects energy prices to continue rising. Toyota likely achieved cumulative hybrid sales of a million units this month, having moved 998,900 by the end of April. In 2006, it sold 313,000 units, accounting for the majority of the world's hybrid cars, and aims to lift that to 430,000 units this year with ramped-up production of the popular Prius.

Mobile TV predicted to be a hit
TV could overtake gaming and music as the consumer's favoured application for mobile phones, according to research. Services in Japan, South Korea and Italy are attracting millions, confounding critics who said people would not watch TV on a small device. But consumers remain confused by what is on offer, as competing service offer different content and quality. For the UK, a shortage of spectrum needed for mobile TV means adoption of services might have to wait until 2012. Research firm Screen Digest forecasts that mobile TV will put gaming and music in the shade. It predicted that there will be 140 million global subscribers generating revenue of £3.1bn by 2011. There has been a lot of cynicism about mobile TV and the big unanswered question has been whether people would watch it. A slow-down in mobile gaming and the fact that music via mobiles is unlikely to be a money-spinner for operators as people continue to 'side-load' music from their PCs, makes TV the best option for operators to make money. As data services fail to make huge revenues and with regulatory and competitive pressures meaning the money people spend on voice and messaging is falling, operators need to make mobile TV a success, he said. In Japan and South Korea there are now 5.8m people watching TV on their mobile phones, and even more watching TV on other hand-held devices and via in-car systems. In Italy there are 500,000 subscribers to newly-launched mobile TV services such as that run by Vodafone in conjunction with Sky Italia. The Vodafone service offers consumers the choice of 17 channels and can be paid for either monthly or is offered free for people that sign up to contracts.

Silicon Valley Work Perks
The work day has just begun yet some Google Inc. employees are already taking a break to get a haircut in the Internet leader's parking lot. Rather than lamenting the distraction, Google encourages it. Every day three refitted Winnebago mobile homes roll into famed Silicon Valley high-tech companies such as Yahoo, eBay, Cisco Systems and Genentech. The service by Onsite Haircuts illustrates Silicon Valley's distinctive work culture and is welcomed as firms seek to motivate workers and give them a sense of community. Ultimately, experts say, such an environment boosts productivity. Google offers free organic food, laundry machines, a gym, massages, volleyball court, bike repairs and on-site doctors. Workers with new babies can bill the company for up to $500 for take-out food. Many area companies are in industrial parks with few commercial establishments nearby, and heavy traffic in the region can make driving offsite unappealing. Because workers do not punch a clock, they can come and go as they please. Companies with resources were smart to encourage employees to spend time on campus.

China Commits to Buy $4 Billion In U.S. Technology Goods
China committed to purchase U.S. technology valued at more than $4 billion as part of a widely anticipated spending spree on American goods to smooth the way for a delegation of top Chinese officials to Washington this month for economic talks. The 27 purchasing and investment agreements, signed by Chinese and U.S. trade officials and executives in San Francisco late Wednesday, include a deal by Lenovo Group, China's biggest personal-computer maker, to buy up to $1.3 billion in software from Microsoft. The United States Information Technology Office, an industry group that helped organize the trade forum, said the total value of the contracts and other agreements signed was $4.3 billion. It didn't provide a breakdown of that figure. The deals come ahead of what is expected to be one of the biggest delegations of top Chinese officials ever to travel to the U.S. More than a dozen Chinese cabinet-level officials are slated to attend the May 23-24 round of the Strategic Economic Dialogue in Washington – the second round of a regular series of talks started in December by U.S. Treasury Secretary Henry Paulson and Chinese Vice Premier Wu Yi. With anger over America's trade deficit with China rising in Congress, analysts say Chinese officials are concerned about the reception their delegation will receive.

Cable's 'Million Dollar Eyeballs' Study
The cable networks have coined all types of phrases to describe their coveted, upscale viewers -- Discovery's "slambrosia" and Bravo's "affluencers" are two of the more colorful examples -- but a recent survey from Monroe Mendelsohn Research is helping those networks put their viewers where their mouths are. Affleunt households spend the most hours watching Fox News. The "Million Dollar Eyeballs" study, conducted between June and September 2006, tabulated how many hours viewers in households above and below the $1 million mark in total income and investments watched cable TV over a seven-day period. Though the usual suspects cropped up (Fox News ranks No. 1 for the upscale set with 7.9 hours, Discovery's "slambrosia" watched 3.8 hours to rank sixth in the same category), there were a few surprises. CNBC, the No. 2 network above $1 million, had the biggest disparity between its two categories, with 7.3 hours watched in upscale households and 2.6 hours on the other end of the income spectrum. Fox News, while top-ranked among the affluent, dipped to No. 6 in the "under million" category, with ESPN taking top honors among that segment.

The top 10 most-watched cable networks by affluent households:
Fox News, 7.9 hours in seven days
CNBC, 7.3 hours
CNN, 6.9 hours
ESPN, 6.4 hours
ESPN2, 4.6 hours
The History Channel, 4.3 hours
HBO, 3.9 hours
Discovery Channel, 3.8 hours
HGTV, 3.7 hours
A&E, 3.5 hours

The top 10 cable networks among households under $1 million:
ESPN, 5.8 hours
CNN, 4.8 hours
The Discovery Channel, 4.5 hours
HGTV, 4.5 hours
Fox News, 4.3 hours
HBO, 4.1 hours
The History Channel, 4.1 hours
The Food Network, 3.8 hours
ESPN2, 3.6 hours
A&E, 3.2 hours

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