For a company whose chief executive laughed off the iPhone when it was first announced, Microsoft is sure making a lot of iPhone applications. The company unveiled another app, Tag Reader [iTunes], at CES today, marking the second time it’s released an app to Apple’s App Store in the past month.

Just like Seadragon Mobile, its first iPhone app, Tag Reader is more of a demonstration app than anything useful — for now. You see, the point of the app is to be able to read Microsoft Tags, a new barcode-like technology developed by Microsoft Research. If you know what QR Codes are, square barcodes that a mobile phone can scan to get coupons or other promotions, this is similar except that Microsoft is calling its tag technology High Capacity Color Barcodes (HCCBs).

But there are some differences between HHCBs and QR Codes. HHCBs are smaller, they’re in color and they don’t actually store any information except for an ID to grab information from Microsoft’s servers when you scan one, as the Microsoft blog istartedsomething points out.

The idea is to connect you with information that resides somewhere else without having you type in a long URL. Microsoft hopes these will take off in traditional marketing media — print advertising, billboards, packaging and merchandising, as it notes on the app’s page in the App Store. Because these codes link to information stored elsewhere, publishers will be able to gather analytical data about how the codes are being used.

But individuals can also make their own tags to create links to their own information on the web. This could be useful for putting on a business card.

It’s a neat concept, but just as with QR Codes, Microsoft Tags will have to take off for them to be useful. I have the iPhone app installed right now but I can’t do anything with it because I have yet to come across one of these codes. Google has been working with QR Codes for a while, but while they are popular in places like Japan, they haven’t yet taken off in the U.S.

Microsoft Tags aren’t confined to working on the iPhone, the company has readers for Windows Mobile, J2ME, BlackBerry and Symbian S60 phones, as TechCrunch points out. Tag Reader is available for free in the App Store.

Here’s the latest action:

One Laptop Per Child cuts 50 percent of staff — The group says it is refocusing its efforts and that the remaining 32 team members are facing salary cuts.

Investment group eyes Yahoo takeover — Silicon Valley executives and investment bankers are putting together a takeover deal that would be largely financed by debt from Microsoft, according to TechCrunch.

Google’s Eric Schmidt wishes he could save newspapers — But he says there’s no clear solution yet, and it doesn’t make sense for Google to buy the papers up.

Yelp user sued over negative review — At issue is Christopher Norberg’s critique suggesting that a chiropractor with whom he’d had a billing dispute  was dishonest.

Wal-Mart, Netflix sued for monopoly — The logic behind the suit seems a little shaky since you can’t have an online video monopoly when major competitors exist.

The outlook for video startups in 2009 — A lot of companies will struggle, but the silver lining is that more and more people are watching online video, says NewTeeVee’s Liz Gannes.

Online TV network Revision3 hires TV producer Ryan Vance — Vance, who has worked at cable network G4 and the Sci Fi Network, is now Revision3’s vice president of programming and production.

Facebook and Power.com have almost resolved their issues — The details of the settlement are still being worked out. Facebook sued social network connector Power.com in December for improperly accessing Facebook data.

Macworld selects best of show — The list includes some obvious choices, like the new version of iPhoto, but also some cool hardware and software that I hadn’t heard about.

Three former Broadbus execs try to launch venture firm — Broadbus was a television on-demand company bought by Motorola in 2006 for $189 million. Now three guys who worked there together are raising funds for a new early stage venture capital firm called Genovation Capital.

In yesterday’s keynote address at Macworld, Apple unveiled a series of software product upgrade that will potentially encroach on the territory of a handful of startups and larger companies. Should you be worried?

What iPhoto might maim

For starters, one of the big announcements revolved around changes to iPhoto, which, sometime this month, will add people- and geo-tagging functionality. The people tagging works via Apple’s automatic and adaptive facial recognition software, which you’ll find is pretty spiffy — unless you happen to be running the startup iLovePhotos, which has been doing pretty much the same exact thing, specifically for Mac users, for free.

But one doesn’t have to dig so deep into Apple’s new product architecture to see more of the obvious potential losers, like Google’s photo organization tool Picasa, which launched its software for the Mac a day prior to the Macworld keynote address — or Animoto, which helps you create photo slideshows on your computer or iPhone. Yep, iPhoto ‘09 covers this all.

But wait, there’s more. The shiny new iPhoto books, which now let you easily include related maps, might creep into the domain of photo-enthusiast-friendly, self-publishing startup Blurb (which has a relationship with Flickr). As a piece of the overall iPhoto pie, Apple’s new photo books are currently being marketed more to soccer moms than aspiring professional photographers. We’ll just have to wait and see if the product itself is compelling enough to seep through these audience boundaries, potentially via iPhoto’s new integration with Flickr.

(Re-)making the band

Another neat nugget revealed yesterday was the new “Learn to Play” feature of Garage Band ‘09, which lets you take interactive music lessons, like educational software companies including SmartMusic and Adventus do. Naturally, Apple also added a little pixie dust for its fanboys by offering a suite of lessons from celebrities in the music industry, ranging from Sting to OneRepublic.

Cornering Google’s and Microsoft’s workaholic market?

But it’s not just the fluffy, personal-use product merchandisers that might be getting nervous with today’s announcements. With the unveiling of iwork.com, a new online component to its iWork suite of office products, Apple seems to be entering the territory of services like Google Docs and Zoho.

The products aren’t painfully similar — and there’s some confusion revolving around whether you can actually use iwork.com to edit your documents in a browser and why you need to download the documents before editing them. Still, it’s a step into the realm of online document collaboration, which apparently Microsoft was also looking to penetrate — for its Mac users, no less (its Mac Business Unit is said to be planning a new companion application for Mac Office 2008 that allows folks to share documents through the company’s SharePoint and Office Live Workspace collaboration services.)

But what the mobile-dependent workaholics with a penchant for giving presentations will find far more exciting is the new Keynote Remote, which lets you control the new Keynote ‘09 straight from your iPhone or iPod Touch. This new feature might just convince those who still use Microsoft’s PowerPoint to switch. Let’s see how fast MS comes up with its own version of a mobile app. Who knows? It might even be free (Keynote Remote will be selling for $0.99 in the Apple App Store).

[Photo: Flickr/Theta75, Flickr/marcopako]

Microsoft said today that Xbox 360 sales have topped 28 million sold since the game console launched in 2005, allowing it to claim a solid second-place position in the game industry.

The Redmond, Wash.-based software company also said its Xbox Live player community has now grown to more than 17 million active members, up from 14 million before the holidays. Those members have increased their online spending more than 84 percent from a year ago. Since 2005, Microsoft said more than $1 billion has been spent on Xbox Live, with revenues fueled this season by a new user interface dubbed The New Xbox Experience.

Microsoft said it has doubled its market share in some key territories. In places such as Japan, that doesn’t mean much since Microsoft’s position there is dead last. But it matters more in areas such as Europe, the Middle East and Africa. Sony is in third place with about 17 million consoles sold (pre-holidays).

The sales suggest a strong holiday showing for Microsoft, though it is still far behind Nintendo’s Wii, which has sold more than 40 million units worldwide by various accounts. It also means that video game sales as a whole have likely held up well despite the economic tumoil. The strong year end sales of Xbox 360s was probably helped by lower prices and new models, code named Jasper, that are said to be more reliable.

The company said that between Christmas and New Year’s Day, Xbox Live had its busiest week ever with more than 1.4 million concurrent members online. The company said that its new Netflix movie-streaming service on the Xbox 360 was one of the most popular new features.

Popular movies included The Dark Knight, Harold and Kumar Escape from Guantanamo Bay, Hellboy II: The Golden Army, Iron Man, and Tropic Thunder. Popular arcade games (available for download) included A Kingdom for Keflings, Castle Crashers,  Super Street Fighter II Turbo HD Remix,  Puzzle Arcade, and  Worms. And popular game-related downloads included   Rock Band,  Guitar Hero, Halo 3,  Gears of War 2, and Call of Duty 4.

When it launched last year, Roku was a compelling device because it was the first set-top box that streamed Netflix Watch Instantly movies to you television. Now, several other devices do that as well, including Blu-ray players, TiVo, the Xbox 360 gaming console and now LG televisions. Roku needed something else to help set it apart from the others — and today it got just that: Amazon Video on Demand.

Roku’s box will now have access to more than 40,000 titles that Amazon offers. Perhaps even more importantly though, it will give Roku owners access to newly released movies for the first time. Netflix Watch Instantly only offers catalog (older) films, but with Amazon, movies will be available the day they are released on DVD.

I speculated back in July that winning such a deal could be a big win for Roku, and it is.

Of course, you’ll have to pay for these Amazon titles, and I assume that for the newest new releases you will still have to buy them rather than rent them. But the prices for Amazon’s service aren’t too bad. Also great is that anything you buy on the Roku box can be access on your PC or Mac as well. And just as with Netflix, streaming movies will scale in quality to your bandwidth, according to Gizmodo.

Back in September, Roku announced it was opening its box up to content providers — a smart move given its competition, and one that now will keep the $99 box alive for the foreseeable future. It will be interesting to see however how quickly other competing boxes offer this Amazon functionality, because you know that is coming.

It will also be interesting to see how Apple, which makes the rival Apple TV, will respond. Could Apple use tomorrow’s keynote address at the Macworld Expo to announce something new for the Apple TV, the blog Webomatica wonders?

Considering the device has neither Netflix support (unless you use the Boxee add-on) nor Amazon support (which it probably won’t be getting since that is a direct competitor to iTunes), Apple TV looks weaker than the competition in many regards. Could we see an Apple TV/Netflix deal in 2009? Perhaps, but remember that Netflix chief executive Reed Hastings is on Apple rival Microsoft’s board of directors. Though that hasn’t stopped Netflix from rolling out on other boxes that compete with the Xbox 360’s Netflix streaming capabilities.

And one major question remains: Which will be the first set-top box with native Hulu support?

Roku raised an undisclosed but supposedly substantial third round of funding back in October from Menlo Ventures. This free Amazon update will come in “early 2009,” according to Roku’s site.

This past November, Microsoft’s web browser, Internet Explorer (IE), saw its market share fall below 70 percent for the first time, according to data from Market Share. And the numbers look worse for the limited data from December so far, with IE now accounting for 68.15 percent of web browsers, The Dallas Morning News points out.

Now, that’s still a huge share — over three times larger than the second most popular web browser, Mozilla’s Firefox, which has 21.34 percent — but there’s an undeniable trend that IE is losing ground, and pretty quickly. In early 2007, the browser had an 80 percent market share. By early 2008 it was down to 75 percent, but by the time the early 2009 numbers come it could well be near 65 percent, since the rate of loss is clearly increasing.

Meanwhile, Firefox’s share is at its highest levels ever, Apple’s Safari browser is also at its highest level ever (just about eight percent in December 2008), and guess who else is rising fast? Google’s Chrome browser. The early numbers for December have it on pace to surpass a one percent share for the first time — and that’s with no Mac support, something which will change in 2009.

All of these players are not-so-slowly whittling away at Internet Explorer’s lead — and for good reason, it’s simply not a very good browser, and it hasn’t been for a long time. Back in 2004, IE controlled well over 90 percent of the market. Those days are long gone.

As you no doubt have heard by now given the huge amount of coverage, Microsoft’s Zune 30GB media player failed last night. Yes, all of them.

Microsoft has finally gotten to the bottom of the issue, the failure was apparently related to an internal clock driver error that couldn’t handle a leap year (what is this, amateur hour — literally?) and a “fix” is at hand (or will be tomorrow at least).

The statement from a Microsoft spokesperson:

Early this morning we were alerted by our customers that there was a widespread issue affecting our 2006 model Zune 30GB devices (a large number of which are still actively being used).  The technical team jumped on the problem immediately and isolated the issue: a bug in the internal clock driver related to the way the device handles a leap year.  That being the case, the issue should be resolved over the next 24 hours as the time change moves to January 1, 2009.   We expect the internal clock on the Zune 30GB devices will automatically reset tomorrow (noon, GMT). By tomorrow you should allow the battery to fully run out of power before the unit can restart successfully then simply ensure that your device is recharged, then turn it back on.  If you’re a Zune Pass subscriber, you may need to sync your device with your PC to refresh the rights to the subscription content you have downloaded to your device.

Customers can continue to stay informed via the support page on zune.net (zune.net/support).

We know this has been a big inconvenience to our customers and we are sorry for that, and want to thank them for their patience.

The solution kind of reminds me of the “Bob’s” solution for getting rid of Milton in Office Space: “We, uh, we fixed the *glitch*. So he won’t be receiving a paycheck anymore, so it’ll just work itself out naturally.”

Microsoft’s media player device, the Zune, is a failure. No, really.

Sometime around 2:00 AM last night, the 30 gigabyte version of the device “totally unresponsive and practically useless,” according to Gizmodo. Yes, that apparently means all of them. Microsoft has confirmed the worst on the Zune Insider blog:

We were made aware of a widespread issue facing owners of Zune 30 devices this morning. We have a technical team working hard to isolate the issue right now and will update everyone as much as possible. Thanks for your patience while we get to the bottom of this.

The last update, just before 11 AM, says they’re getting close to figuring out the issue, but still haven’t resolved it. I make fun of the Zune — a lot — it’s just always felt like a half-hearted attempt to compete with the iPod. But today’s news is just pathetic.

This kind of reminds me of those blinking lights on the Pink Floyd Pulse CD that were all supposed to go out at the exact same time. Except this isn’t cool, nor is it funny if you actually own this Zune model.

It’s no fun to kick a man while he’s down (literally), so I’ll stop. Instead I’ll dream up another possible scenario for why this failure occurred. Perhaps, like its Skynet brethren in Terminator 2: Judgement Day, the Zunes have become self-aware.

We don’t realize it yet, but in a few hours, the Zunes are all going to wake up at the exact same time and launch a war on humanity. They will start by disabling our…wait, there probably aren’t even enough of them out there to do much of anything (I couldn’t resist).

Everyone’s predicting doom and gloom for the tech industry next year, and hey, who are we to argue? New Year’s Eve may be coming up, but when VentureBeat’s writers were feeling far from festive when we pooled our thoughts about the year ahead. The verdict: Dark clouds for startups, venture capitalists and the tech industry as a whole. Still, 2009 won’t be bad for everyone, so we tried to bring out some silver lining, too.

Note that each entry comes from one member of the team — some predictions were shouted down as completely nuts, but this list still represents individual thoughts from individual writers, not the consensus of some VentureBeat Hive Mind. So, we make no apologies for the fact that some predictions come pretty close to contradicting each other. Isn’t it more fun that way?

The tech IPO market will be dry for the whole year. Silicon Valley produced just one initial public offering in 2008 with the launch of a security systems firm called ArcSight. Compare that to 22 a year ago and an average of 28 per year since 1985, according to the San Jose Mercury News. It’s hard to fathom that next year could be worse, but it’s entirely possible given the state of the economy, the weakness of the investment banks, the malaise on Wall Street, and the pounding that is just beginning for a lot of the tech industry’s bigger companies. (Dean Takahashi)

Spending will boom on energy infrastructure. This may seem like an obvious pick, since president-elect Barack Obama has already promised as much as $800 billion of economic stimulus, including a large cut for infrastructure. That will include everything from highways and national broadband to sewers. But with the push for cleantech, energy will certainly play a major role. The question is where the money will go, and our bet is that flashy projects that employ large numbers of workers, like building wind farms or high-voltage interstate power lines, will take precedence over quieter but possibly more effective ideas, like education campaigns teaching homeowners how to consume less energy. (Chris Morrison)

There will be more than 40 Android mobile devices next year, and the Android platform will be outselling the iPhone by July. I made a similar prediction to Russell Buckley earlier this month, and I haven’t seen anything to change my mind. Rumors are swirling about how many Android devices will appear next year. There’s even talk that Google has commitments for 50 devices already, which makes this prediction somewhat moderate. Android adoption has surged in the industry after the G1 launch; on Android mailing lists and forums, you can see that many notable companies have started Android development projects without publicizing them yet. Many mobile startups are depending on the mass adoption of smartphones, so it would be good news if this prediction comes true. (Matthaus Kryzkowski)

Apple’s financial performance will continue to defy gravity as iPhone, MacBook and iPod sales stay strong. With the iPhone just now rolling out to Wal-Mart stores and new countries such as China likely for 2009, sales of Apple’s hottest device will keep their heat. Likewise, the iPod touch and iPod nano will continue to sell well while MacBooks will eat up notebook market-share (despite being higher priced than their PC counterparts). Apple’s actual adjusted net income grew an “astounding” 124.6 percent between the fourth quarter of 2007 and the same period in 2008, but that was underreported because of the subscription method of accounting used. (MG Siegler)

The cloud computing market will heat up, but Amazon will remain the king. Tech companies, especially smaller ones, will be taking a close look at cloud computing as a way to save money during the downturn. Big players like Microsoft, Google and Rackspace all announced their own platforms for cloud applications this year, and all of them will probably find some success in 2009 — but we haven’t seen major startups build their business on Google App Engine, and Microsoft’s Windows Azure remains a question mark. With its built-in lead, existing ecosystem, and plans for additional features, Amazon will end 2009 the way it began, as the leader of the pack. (Anthony Ha)

Cleantech scams will multiply. A job in cleantech is akin to working for UNICEF; reducing emissions or building solar panels is the next best thing to curing cancer or ending a war. Right? Well … maybe not. This year saw an unpleasant hint of scandals to come in cleantech, including complaints of corruption and intimidation about wind projects in upstate New York, solar manufacturing pollution in China, project application fraud in Spain, lawsuits between electric car companies, and a nationwide rash of solar panel thefts. As the pace picks up and cleantech becomes a booming industry, expect similar problems and others including dubious carbon credits and offsets, fake coal carbon capture-schemes, short-circuited electric car sales, and more. (Chris Morrison)

Twitter will roll out its business model — and if it doesn’t work, will sell. Look for the model to include corporate accounts to make money off of tweets for shilling purposes. If that business model succeeds, Twitter will keep growing and going along solo; if it doesn’t, look for one of the big players to step in and buy Twitter for something in the nine-figure range. Twitter chief executive Evan Williams will be busy tonight cooking up a “master plan” for 2009. (MG Siegler)

Microsoft will launch an iPhone competitor. The so-called Zune phone rumors have been making the rounds for a while. While other companies simply give up when they fail, Microsoft just launches a fully integrated product. Consider the Zune music player itself, born after Microsoft became frustrated with the whole group of PlaysForSure companies and their inability to knock the iPod out. Now that Apple’s mojo has shifted from iPod to iPhone, Microsoft will likely have to follow, even though that means releasing a phone that competes with the company’s Windows Mobile software customers. Once again, Microsoft is the underdog. There are enough tea leaves showing that a design is well under way. It’s just a question of whether Microsoft will pull the trigger. We think it has no choice. (Dean Takahashi)

iTunes will go completely DRM-free. It has been well-reported that Apple is in talks with the major music labels about having them all include their music without digital rights management (DRM) in the iTunes store. Currently, only EMI has done this, but some recent iTunes anomalies suggest things are about to change. Back in 2007, Apple chief executive Steve Jobs said that half of all music in iTunes would be DRM-free by the end of the year. We’re now entering 2009, and that still hasn’t happened. Don’t think Jobs doesn’t know that. (MG Siegler)

Venture capital funding will drop sharply. VCs already acknowledge that a decline is likely, according to a survey by the National Venture Capital Association; the only question is how much funding will fall, and who will get hit the hardest. It’s safe to say that if you’re an early-stage web company hoping to make money from advertising, things will be tough. Still, companies with strong products and strong business plans that don’t rely on big infusions of VC cash could find themselves positioned for real growth in 2010 and beyond. (Anthony Ha)

David Edery and Ethan Mollick are co-authors of Changing the Game: How Video Games Are Transforming the Future of Business, published in 2008 by Pearson Education. Edery, the Xbox Live Arcade games portfolio planner at Microsoft, wrote this piece, about the trend dubbed Funware in out past stories, for VentureBeat.

Over the past several years, my co-author and I have watched as video games have become a powerful tool through which organizations teach, persuade, and motivate people. For example, medical schools have used game-like simulators to train surgeons, reducing their error rate in practice by a factor of six. America’s Army, a recruiting game developed by the U.S. Army for just 0.25% of the Army’s total advertising budget, has had more impact on new recruits than all other forms of Army advertising combined. Google is using video games to turn its visitors into a giant, voluntary labor force –  encouraging them to manually label the millions of images found on the Web that Google’s computers cannot identify on their own. And of course, it’s remarkable how quickly video games have evolved from scapegoats for childhood obesity into the next great fitness craze.

The use of video games as advertising vehicles is one of the oldest and most common business uses of games in general (we’ve identified good examples from the early 1980s.) One of the most remarkable and relatively recent examples can be found in the fast food industry. For decades, multinational titans such as McDonald’s have generally attacked the market in a very traditional way — with expensive television advertisements and short-term promotions. But in 2006, Burger King changed everything by recognizing the increasing popularity of home video game consoles. The company developed and released three packaged games that were explicitly designed to promote the Burger King brand. Each game incorporated Burger King’s highly-recognizable characters, such as the King himself, and the Subservient Chicken. The results of this promotion exceeded everyone’s expectations.

Over 3.2 million copies of these games were sold in Burger King restaurants for $3.99 each, which resulted in one of the most effective promotions in the history of the franchise. So many consumers dropped by their local Burger King to purchase these games (and eat a meal while they were there) that during the period of this promotion, the company’s quarterly profit jumped by 40%. Better still, many consumers continued to play the games long after the promotion ended, which effectively meant free long-term advertising for Burger King. Compare that to the typical TV advertisement!

Of course, the executives at McDonald’s have taken notice of Burger King’s success, and have escalated the war for the hearts and minds of the gaming public by launching a virtual world centered around the McDonald’s brand. (Or as their website once noted, “The happy meal has gone digital!”) Children are encouraged to become citizens of this world, which contains a variety of gameplay experiences, and their sense of belonging is enhanced through customization features like the creation of their own avatar, and the opportunity to vote on the name of features within the world — not to mention the very name of the world itself. (The kids ultimately voted for “McWorld,” which suggests how, er, “creative” McDonald’s was with the choices.)

The overlapping space between business and games has become so active that we hear of interesting new projects on a near weekly basis. In the short time since we finished writing Changing the Game, we have learned that over half of the teams in the NBA are using NBA Live 2008, a popular basketball game, to simulate potential trades and evaluate personnel. That games are being used to significantly reduce the pain and suffering experienced by burn victims. That the US Army is using games to help prevent suicide. And that Allstate is using games (not driving simulations, but specialized casual games) to estimate the driving skill of people over the age of 50.

The big question is no longer “will businesses ever leverage the power of games?” That question was answered years ago. The question now is, “what major market will be revolutionized by video games next?”