SiliconBeat

I’m in Vegas at the Consumer Electronics Show. Today is press day, where there is a series of press conferences from 8 a.m. until around 6 p.m.

I’m live-blogging/Twittering throughout the day. You can read my latest observations below.

Intuit, the Mountain View maker of TurboTax and other software, recently said it will pay $120 million over the next ten years to an unnamed party for the right to use an unspecified technology — and that’s prompting speculation among patent and licensing experts.

The Recorder, a San Francisco-based newspaper aimed at the legal community, reported last week that the other party in the deal is Intellectual Ventures, a company started by former Microsoft chief technology officer Nathan Myhrvold. If true — and the newspaper only cited unnamed sources — it would be the latest of several sizable deals that Myhrvold’s firm reportedly has struck with major tech companies.

Those deals have sparked some consternation because a big part of Intellectual Ventures’ business involves buying up the rights to hundreds of patents and then seeking licensing payments from companies that use the technology. Myhrvold told the Wall Street Journal last fall that he’s simply enforcing legal rules that require businesses to pay for using intellectual property that isn’t their own.

Some have compared Myhrvold to so-called “patent trolls” who buy up obscure patents with no intention of using the technology themselves, and instead concentrate on filing patent infringement lawsuits against a variety of defendants. Critics say some of those are no more than nuisance suits aimed at extracting huge payments from companies that may make only minor use of the patented technology.

So far, however, Intellectual Ventures has reportedly obtained payments of up to $350 million from companies like Verizon and Cisco without filing lawsuits. It does invite some of the same companies to invest in a fund that it uses to buy more patents.

Intuit makes a variety of financial software and has been increasingly offering software and services on-line. A spokeswoman said she couldn’t comment on the licensing agreement, which the company disclosed in a recent SEC filing.

Four of America’s most accomplished entrepreneurs shared memories of embarrassing moments and personal challenges at a soiree held in their honor in private home Atherton on Thursday night.
Recognized as visionaries by SDForum, Silicon Valley’s venerable software developers organization, Jim Clark, Vinod Khosla, Kay Koplovitz and Judy Estrin accepted their awards with a series of self-deprecating stories that highlighted the high-tech industry’s culture of grit and perseverance.
Clark, who famously co-founded five companies, including Silicon Graphics, Netscape and Shutterfly, denied that he ever caught more than one glimpse of the future when he co-founded Netscape and unleashed the Internet boom. But Clark allowed that he may have had been acting as a visionary when he figured out how to escape poverty as a high school dropout in Plainview, Texas by joining the U.S. Navy. Clark added that his “next visionary step was getting out the Navy.”
Clark also described how being in the Navy and learning about pay-day loans give him his first idea for a company. He recalled that he “started a loan shark business” after enrolling in Louisiana State University.
Kay Koplovitz, the founder of USA Network, the first basic cable network delivered via satellite nationwide, said she got hooked on the idea geosynchronous orbiting satellites after hearing a lecture by science fiction writer Arthur C. Clarke while she was a college student visiting London. She stuck with the idea even as USA Network struggled for years, going through multiple ownership changes.
Now a unit of NBC Universal Cable, USA Network will be more profitable this year than all of NBC, according to Tom Wertheimer, a former executive at MCA and ABC who introduced Koplovitz to the audience, which was made up of a who’s who of the Silicon Valley tech industry.
Judith Estrin, a networking pioneer who served as chief technology officer for Cisco Systems, recalled how she was “not completely sober” when she first heard Bob Metcalfe talk about the Ethernet, which became a networking standard. She had been celebrating her 21st birthday with a group of friends before Metcalfe’s talk at Stanford. Luckily Metcalfe, who endured a bit of heckling from Estrin and friends during his talk, was also at the celebration, she said.
Vinod Khosla, a co-founder of Sun Microsystems and venture capitalist at Kleiner, Perkins, Caufield and Byers, said he was initially rejected from Stanford University’s MBA program. But Khosla refused to take no for answer. Looking over at John Hennessey, Stanford’s president, and a past recipient of the award, Khosla said Stanford finally yielded “four days before classes started — on September 21, 1980.”
Khosla said he believed what is recognized as “vision” is “bumbling around long enough” to finally get something right. “It is sort of embarrassing to be called a visionary,” he joked. “But I guess its better than being called a past visionary, as some of the name tags of the past award winners say.”
Over the years, SDForum has recognized Bill Gates, John Chambers, Michael Mortiz, Carol Bartz and other industry leaders at the annual fete that is held in the home of Heidi Roizen, venture capitalist and former Apple executive. The event was sponsored by Deloitte, Microsoft, Nokia and Nitro software.

Hewlett-Packard has announced a couple of interesting developments regarding Halo, its high-end video conferencing service that uses souped-up cameras, screens and other hardware and software to make you feel like you’re in the same room with others who might actually be on the other side of the globe.

First, HP says it’s offering the capability for customers to use their Halo facilities as studios to produce high-quality Webcasts, which can be streamed live or at a later time to an audience of employees or others watching on their PCs or laptops. According to HP, it’s also possible for the audience to participate in live sessions using instant-messaging or phones.

In the second part of the announcement, HP said it’s “re-aligning” the Halo business, meaning Halo is being moved on the organizational chart from HP’s Imaging and Printing Group to its business-focused Technology Solutions Group, where it will be part of HP’s ProCurve Networking business.

There’s a back-story: Halo competes with other video-conferencing services, including the TelePresence service offered by Cisco — a sometime partner and, increasingly, a rival for the attentions of HP’s corporate technology clients.

Cisco has been expanding its own video business; CEO John Chambers has said video will be a huge part of the data that streams over public and private computer networks in the future. Meanwhile, HP has been expanding its ProCurve business, which competes with Cisco’s primary business of selling networking gear for data centers.

And Cisco, of course, has begun selling computer servers, a business in which HP has traditionally been a market leader. So the competition continues.

In yet another sign of power shifting in the American economy, Reuters reported today that Google, Cisco and Apple are candidates to replace General Motors and Citicorp in the Dow Jones Industrial Average.
The Dow, which was created by the editors of the Wall Street Journal in 1896 to provide a clear, straight-forward view of the country’s economic health, is supposed to contain the biggest and the best.
While the index is reviewed once a year, its composition rarely changes for the sake of continuity. “A stock typically is added only if it has an excellent reputation, demonstrates sustained growth, is of interest to a large number of investors and accurately represents the sector(s) covered by the average,” Dow Jones explains.
In retrospect, the addition of three new companies last year — Bank of America, Chevron and Kraft — was a sign that a major makeover was coming, not just to the index but to the entire economic landscape.
“Every phase or epoch of capitalism has its own distinct geography, or what economic geographers call the ’spatial fix’ for the era,” Richard Florida writes in this month’s Atlantic. “The physical character of the economy—the way land is used, the location of homes and businesses, the physical infrastructure that ties everything together—shapes consumption, production, and innovation.”
But even as technological change became the key driver of the American economy, Silicon Valley remained peripheral to understanding the industrial vitality of the country, according to the guardians of the index.
Only two Silicon Valley companies are part of the Dow: Hewlett-Packard, which was added in 1997, and Intel, which was added in 1999.
But with some investors betting that the Dow will hit 5,000, dragged down by stocks like Citigroup and GM, which are now trading at less than $2, the need for a boost has never been clearer. Google and Apple could recover faster than most current index members, according to some financial analysts, and as their stocks rise, so will the Dow and Americans perception that the economy is on the mend.