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General Cannabis, whose admirable mission is to “improve your quality of life”, has acquired a dime bag of Weedmaps, as first pre-announced back in September. General Cannabis, formerly known as LC Luxuries Limited, is buying the “Yelp for pot” for a mix of cash and stock with additional earn-out potential for the company’s duo of founders, although the exact terms of the transaction were not disclosed.

Stoner jokes aside, General Cannabis, a publicly traded company on the Pink Sheets, says it had been planning the acquisition of Weedmaps for a long time.

As part of the deal, Weedmaps co-founders Justin Hartfield and Keith Hoerling have entered into long-term employment contracts with General Cannabis and will assume the roles of Chief Web Officer and Chief Technology Officer, respectively.

The combination of both companies make sense, particularly considering General Cannabis actively manages medical marijuana dispensaries under the name US Cannabis.

Weedmaps.com is essentially an online community where medical marijuana patients connect with other patients in their geographic region to discuss and review local cannabis co-operatives, dispensaries, medical doctors and delivery services.

Weedmaps is also quite a solid business. As our own Sarah Lacy reported last month, Weedmaps brings in roughly $400,000 in monthly revenues, of just 50,000 registered users.

Hartfield told Lacy that the newly formed combined entity intends to acquire and “roll up” (ok, so one more stoner joke doesn’t hurt) several smaller companies in the future, likely also around the cannabis issue.

We’ll be watching this joint closely (ok, I’ll quit now – oops!).

As a reminder: Tim Draper of Draper Fisher Jurvetson fame was allegedly too chicken to make an investment in WeedMaps in recent times.

On Thursday, I suggested that Sarah Palin's kids' ill-judged behaviour on Facebook could be traced back to their mother's attitude towards online critics.

The post garnered a range of considered and thoughtful responses from commenters, ranging from warnings that I should expect to be shot, to the suggestion that (I quote) "PAUL CARR PROBABLY ABORTED I.E. MURDERED ALL OF HIS OWN ILLEGITIMATE SONS & DAUGHTERS." One helpful commenter even suggested I "go home and talk to [my] children. Tell them your a traitor to your country and your fellow Americans" – which, given I'm a Brit, was somewhat wrong-headed and, given I apparently killed all of my children, was remarkably insensitive.

For all the sound and fury, though, there was one distinct theme: that, in the absence of a clear technology angle, stories about political figures have no place on TechCrunch. And that's a reasonable point: the Facebook angle was a stretch; a flimsy hook on which to peg my broader thesis that Sarah Palin is setting a terrible example to her kids. Kids who she herself thrust into the spotlight the moment she put them on stage at the Republican National Convention. Because she's just an awful, AWFUL human being.

Nonetheless, never let it be said I don't listen to my critics. The next time I write anything about Sarah Palin (who, for the avoidance of doubt, I dislike intensely), I'll make sure there's a totally iron-clad justification for it to appear on TechCrunch. Like if, for example, she uses Twitter to prompt her publisher to take legal action against a hugely popular gossip blog for reposting extracts from an electronic copy of her new book. Which she's been heavily promoting through social media.

You know, like just happened.

Sweet!

The story began when Gawker- taking a rare break from paying for lurid, non public-interest tittle-tattle about celebrities' sex lives – acquired an advance pdf copy of Palin's new book, “America By Heart” (original title: "America Written On The Back Of My Hand").

Arguing the fair use doctrine – which allows "limited use" of copyrighted material for the purposes of criticism, review or news reporting – the blog posted various extracts of the book, along with their "trademark" "snarky" "commentary". It wasn't long before Palin, spotting another opportunity to pose as the victim of a conspiracy by members of the media establishment , raced to Twitter…

The short answer to Palin's question is "no, probably not". But I'll forgive Sarah Palin for not having read the law before commenting on it; after all she thought Laura Schlessinger quitting her radio show was a first amendment issue. What's takes a bit longer to fathom – save through the cynical lens of publisher idiocy – is the grounds on which Palin's publisher, Harper Collins, fired off a cease and desist letter to Gawker. And why, when Gawker ignored the letter, they decided to go ahead and sue for breach of copyright. Still, for good or ill, a federal judge in New York has now ordered Gawker to remove the post and barred them from “continuing to distribute, publish or otherwise transmit pages from the book”, pending a hearing on November 30th.

Much of initial online commentary around the story pointed out how clueless both Palin and Harper Collins are when it comes to the promotional benefits of having a book extracted online. There's almost no evidence to suggest that having even lengthy chunks of a work available for free does anything but encourage sales. This is particularly the case with an author like Palin: her army of supporters will buy the book anyway (not least because most of them don't read Gawker), her army of opponents won't, and those sitting on the fence now have an additional opportunity to try before they buy, much like they could in a book store. Thus, from a purely promotional point of view, Gawker's post – snarky as it was – can only be A Good Thing.

But arguing on that point alone shows a lack of understanding of how publishing works. Publishers know damned fine that releasing previews of books before publication helps sales. My next book isn't out until early next year but already there's half a forest's worth of preview copies of the (non-final) manuscript floating around the offices of journalists, bookstore buyers and anyone else who might be useful to the book's prospects. Eventually my publicist will sidle up to carefully selected publications and offer them copies of the complete, finished book, in the hope that they will be interested in reviewing it or – better yet – publishing a lengthy extract.

In the case of my book, that extract will almost certainly be offered for free (the promotional benefits of being syndicated in a newspaper are consideration enough) but in the case of a book like America By Heart, the first syndication rights could be very valuable indeed. And therein lies the real point of the Harper Collins / Gawker lawsuit: by publishing unauthorised extracts from Palin's book, Gawker has seriously damaged the publisher's ability to earn a fortune from selling those extracts to others. They've also upset a meticulously planned timeline whereby extracts will be released to the press at a succession of times designed to optimise the publicity surrounding the book. No wonder Palin is pouting and Harper is suing: Gawker just cost them both a shit-ton of money, and screwed up a publicity plan that was months in the making.

Unfortunately, though, the reality of the Internet / social media / whatever it's called this week – age is that publishers simply don't have the luxury of controlling the flow of information any more. The idea that they can release thousands of preview copies of a new title, in electronic form, weeks (or even months) ahead of publication and rely on a gentleman's agreement with the press that their embargo will be respected is simply laughable.

Wholesale piracy is one thing, and if Gawker were offering the complete downloadable pdf (or even a full chapter) then the lawsuit would be both right and proper. But the only way to prevent fair-use extracting online is either to forgo the distribution of preview copies entirely, or to take a leaf out of Apple's book and escort the preview editions from door to door under armed guard. Neither of those suggestions is practical, or desirable.

The only option left to publishers, then, is to engage with high-traffic bloggers, rather than fighting them. The first step down this road requires the book industry to realise that their days of controlling who can publish pre-publication extracts of hot titles are over. It won't be an easy realisation, much as it wasn't easy for PR people to comprehend that their days of holding journalists to embargos on press announcements were behind them.

The second step demands that they get creative: having realised that the moment they start distributing preview copies, it's only a matter of time before extracts start to show up online, they should focus their attentions on owning that process. Create a pdf of all the funny, juicy or in other way controversial extracts of the book and send it to bloggers; encourage them to publish the extracts, along with their own commentary, snarky or otherwise. Many minor-league bloggers be flattered by the suggestion, others will just be glad of the free content. As for the bigger blogs; any snark on the part of sites like Gawker will hopefully be balanced out by more positive coverage elsewhere (unless your author really is evil, but why would you give a person like that a book deal, Harper Collins? Oh yeah.) And if any sites do publish unauthorised extracts? As long as it's not more than a page or two, ignore it. The fight isn't worth the candle and it probably just means you didn't pick the right quotes to send out in the first place.

Will this new strategy reduce the likelihood of some publications paying for exclusive extracts? Probably. But that's easy to fix too. Along with the extract, influential blogs should be offered an exclusive interview with the author, and the promise that she will provide quotes and stories that can't be found in the book. That kind of content is un-stealable, which is why music piracy can't make a dent in the profitability of live performance. Given the choice between a sit-down with Palin or the crappy traffic he got from the book extract, I guarantee Denton would take the sit-down. Hell, he nearly soiled his pants when Fred Durst sent him flowers.

I've long been an advocate of protecting intellectual property, and an opponent of slackening the laws just because the Internet makes everyone a thief. But what's happening here has little to do with the law and everything to do with publishers trying to cling on to their ability to control every aspect of the promotion of their titles. Gawker's publication of quotes from America By Heart is just the latest example of that reality. Now it's down to publishers whether they waste even more time and money on legal fees, or refocus their energies on new and more interesting ways of promoting authors and their work.

Sadly, especially given today’s judgement, I suspect I know which approach Harper Collins and Sarah Palin will take.

(Next Week: Sarah Palin embarrasses herself on FourSquare, is still awful)

Something is up on the Facebook vs. Google data reciprocity front. It looks like Facebook is removing Gmail from the list of third party email providers on  “Find Friends”, whereas we were seeing direct link downloads to Gmail contacts still offered as an option just a couple of days ago.

It gets stranger. Some new users who sign up with their Gmail accounts can still see the option to add friends from Gmail, but when I tried to import contacts I got the below “Everyone on this contact list is already on Facebook or has already been invited” message. In other words it didn’t work.

Signing up with a non-Gmail account eliminates the option entirely even though you still have the capability to manually download and upload your contact files. This seems to be the latest development in the ongoing Facebook vs. Google slap fight, even though it’s not exactly clear who slapped whom.

Here’s our ongoing tally:

1. Google To Facebook: You Can't Import Our User Data Without Reciprocity
2. Data Protectionism Begins In Earnest
3. Facebook Finds A New Way To Liberate Your Gmail Contact Data
4. Google's Response To Facebook's Response To Google's Facebook API Ban
5. Google Gets Feisty, Kicks Data Portability Fight With Facebook Up A Notch
6. Google No Longer Claims Facebook Will "Trap" Users. Or Do They?

I’ve contacted both Facebook and Google for more information and will update this post when they respond. For the record, Mark Zuckerberg called Gmail Priority Inbox “pretty cool” onstage at Web 2.0 Summit after Facebook announced their own email product last week.

Update: Word from Google is that nothing has changed from its side. Atul Arora also points out that the Gmail contact import button is now gone from Facebook property Friendfeed as well.

Before …

After.

A couple days ago, we noted that Twitter was back on the new feature charge with the new People area they’re testing out. Well, make it two-for-two, as yesterday they rolled out another new feature — one that many users have been asking for since New Twitter was unveiled: full conversation threads.

Yes, if you click on a tweet with the chat bubble icon, you’ll see the detail of what that tweet was responding to in the right pane of New Twitter. Previously, you could only see one level deep into the conversation. But now, Twitter will show you an entire back and forth (assuming the users responded using the “reply” button each time). And depending on where you hop in to the conversation, you’ll see all the “in reply to” message above, the tweet you clicked on in the middle, and the “replies” below in this pane.

This is a much easier way to follow conversations on Twitter, and it’s something that the standalone Twitter Search product has had for some time. Several third-party clients offer this functionality as well (as do Twitter’s mobile apps). But this is yet another reason not to leave twitter.com.

Back in June, we noted that Twitter had hired the creator of the app Twitoaster, which was interesting since that app specialized in surfacing conversations on Twitter. No word on if that played a roll in this roll-out. I’m just glad it’s here.

And it really doesn't matter if I'm wrong I'm right where I belong, sings Paul McCartney on his latest album Sgt. Pepper's Lonely Facebook Band, which sits high on the iTunes charts. Boy, is he not kidding. He's taking the time for a number of things that weren't important yesterday. So should we.

On the surface it seems like business as usual, with the heads of big Internet companies sitting down with John Battelle and Tim O'Reilly at this week's Web 2.0 Summit. The Android tablets are starting to drop now; they're half the size, half the weight, and amazingly the same price. What? Here's some guy with a Comcast XFINITY iPad app, which lets me control my DVR at home but doesn't let me view any of the network content that is choking the hard drive nor the on-demand versions that would let me not record them in the first place. What?

Much is made of data portability but how it ain't gonna happen because it wouldn't be good business. Mark Zuckerberg was personable and engaging and all that good stuff, but why on Earth would he want to fix something that is so not broken? Why would Evan Williams want to give away Track for free when he can release a new iPhone app with Track push notification tied directly to our credit cards? What?

It really doesn't matter whether we can get our data back out of these warm, cozy, interactive game-like interfaces. I already know what I know; what I'm interested in is what other people, the ones I care about and the ones they care about, know. That is the value of these services, and I want them to guard it carefully. Not the raw data, but the inferences, the analytics, the swarm sentiment, the speed with which these signals can be delivered to the priority queue.

Forget the noise about standards, the contortions Adobe and RIM go through to explain why Flash is important. Standards are what happens while we're busy making other plans. They emerge from the rubble of innovation, not as the result of freedom-loving patriots who are trying to catch up with those who acted first. Sounds harsh, but Darwin doesn't wait around for stragglers. Sometimes we need the winners of the world to do whatever it takes to get us to swallow our medicine.

Flash? What? The Adobe CEO is still several paragraphs away from saying OK, we're shipping a tool to convert everything to iPad specs. How about an HTML streaming server so we can see everything in realtime now that it's actually possible. Instead, we get marketing about an aging technology that developers are fleeing as they rush toward iOS. The mobile investment path goes: iOS, then Android, then RIM, then HTML 5 to work across the rest. If RIM is not careful, they will be among the rest once they get a Web experience (Playbook) that works.

Steve Jobs is not worrying about RIM or even Android. He's trying to figure out how to get the carriers and Hollywood paid enough to seed the next generation of the iPad and iTouch. Facetime is the path to unify those two markets, forcing a new generation of IP services and Office-next business processes. Not only does it bypass the voice networks, it produces full motion video on a Flashless $250 iPod Touch. Meld the services together once iOS multitasks and you have everything you need for migrating realtime video, text, and notification streams.

Already Comcast ads promote movies appearing 30 days ahead of NetFlix. Orb TV throws away the remote in favor of iOS and Android apps to control Hulu, YouTube, and NetFlix. The network windowing strategies are collapsing together into multiple overlapping services that add up to big trouble once customers realize they can cobble enough together while waiting for the big players to co-opt the change. This is what we've seen with the carriers, as Verizon bundles a hot spot with the WiFi iPad and Google Voice finally reaches the iPhone.

Even the Beatles gave in to the new reality, almost as an afterthought with no fanfare and little excitement even for those of us who see reality only as a pale reflection of those 13 records that changed the world. In the end, the deal was more a business decision to prop up EMI as the record cartel struggles with its myopia about the new order of things. Fixing a hole where the rain gets in. Stops the mind from wandering. Where it will go.

Back in August, Gmail launched what is perhaps my favorite new feature ever: integration with Google Voice, which lets you make and receive calls directly from your computer.

Earlier this month, there were some initial reports that Google had improved on this feature with a nifty addition: the ability to record inbound Google Voice calls directly from Gmail. Now it looks like Google is rolling out the feature more broadly — we’ve polled a few people and they’re all seeing it, and there are plenty of reports on Twitter of people noticing it for the first time.

Now, Google Voice has let users record some phone calls for a long time, but it’s not exactly intuitive — you have to hit the number ’4′ on your keypad (most people probably don’t even realize they can do this). The feature is only available on inbound calls, and there’s a verbal notification given to both parties on the call that recording has been activated.

The Gmail implementation seems identical in terms of functionality — you can still only record inbound calls, and there’s the same notification when you activate it. But it’s a heck of a lot more convenient.  A new ‘record’ button sits just above the dialpad, and it’ll probably introduce a lot of people to the handy feature for the first time.

There do seem to be a couple caveats: first, as mentioned earlier, this is only available on inbound calls. Second, it looks like this doesn’t work on voice calls that are routed directly from one Gmail contact to another (without using Google Voice).

We’ve reached out to Google to see if the feature has been activated for everyone.

The Gillmor Gang convened this week in the wake of the Web 2.0 Summit conference in San Francisco. Much of the conversation, however, concerned TechCrunch editor Michael Arrington’s water crisis. We did get a chance to intermingle some attitude about Facebook’s new Message platform, which apparently only Robert Scoble has wangled an active account.

The Gang was split down the middle on Facebook’s credibility in the data portability space, with Arrington and searchengineland editor Danny Sullivan arguing that Facebook are a bunch of liars and salesforce.com Cloudblogger John Taschek saying everybody in Silicon Valley was challenged in the truthiness department. Gillmor, of course, argued back and forth just for the sake of it. Arrington eventually veered off into a discussion of virtual reality, leaving us with the thought that whoever invents that will get all the money.

See Updates at bottom of post.

Facebook would probably just consider this a feature, but the rest of us will definitely consider this a big security hole. The creator of http://guntada.blogspot.com (don’t visit that site just yet) emailed us this morning to explain.

If you’re already logged in to any Google account (Gmail, etc.), and visit that site, he’s harvested your Google email. And proves it by emailing you immediately.

And it even works in “incognito” mode (also known as porn mode).

What is the exploit? We don’t know, and Google has yet to respond to us about it. We note that the site doing the exploiting is on Google’s own blogging platform. One developer we spoke with was confused as well, saying:

i have no idea what this is exploiting but there’s a decent chance it has something to do with Friend Connect and the way it passes data between iFrames (ie yes, it very well could be opensocial related). whatever is going on it’s an extremely serious security and privacy violation and i am confident google will address this in moments counted in minutes.

i can’t recall ever having seen anything like this on a major IdP’s website. it’s scary stuff.

If you insist on trying this yourself (hey, I did), the email to you will likely be in your spam filter.

This isn’t a particularly dangerous exploit, but it sure is something a lot of people would love to have on their own sites. The ability to harvest emails from anyone already signed into Google, not to mention just see exactly who’s visiting the site, is extremely valuable. See the second comment thread here for a related issue with App Engine a month ago.

Update: The site is now down. Here’s what it looked like:

Update 2: Email from Vahe, the man behind this:

Hi Mr. Arrington,
I see you have already shared the news. It’s good that google got it down, I really don’t want people to know about how that was done (if Google contacts I will definitely tell them – they just don’t answer my emails). Problem relies solely on Google.
Problem is I asked a lot of people, and most of them don’t really understand and care about this kind of things and big companies act like they all really protect our privacy and such, but they see that people don’t care and don’t do anything really.

Regards,
Vahe G. (Armenian 21yrs guy whom Google doesn’t wanted to even talk to)

Update 3: From Google: “We take potential security issues very seriously, and our team is actively investigating this one. We’ll share more information soon.” I suggest Google contact Vahe directly, he seems like he’d love to talk to them.

Update 4: Google says the issue is now resolved: "We quickly fixed the issue in the Google Apps Script API that could have allowed for emails to be sent to Gmail users without their permission if they visited a specially designed website while signed into their account. We immediately removed the site that demonstrated this issue, and disabled the functionality soon after. We encourage responsible disclosure of potential application security issues to security@google.com."

Editor’s note: Guest author Tim Wu is a profesor at Columbia Law School and most recently author of The Master Switch: The Rise And Fall Of Information Empires. Last week, he sparked a debate here about the nature of information monopolies.

While the antitrust spotlight has long been pointed at Google, the company that really has to watch its step is Apple. Beginning in the 1980s, Apple's Steve Jobs left behind Apple's original open design and began to champion a "closed"—or as the firm prefers, an "integrated"—approach to computing and entertainment delivery. This fact is familiar to any Apple user. Apple's products are designed to work well with humans, other Apple stuff, and, at a distant third, other companies. "Foreign attachments" to the Apple system are sometimes accepted, but never quite loved.

Contrary to what devoted "openists" might suggest, there are some advantages to Apple's approach. Products engineered to work together often work better, if only because the firm's engineers have more information. An Apple engineer building an application for the iPhone knows much more than someone programming an App for all the phones Android runs on. Moreover, to its credit, Apple isn't an integration purist, like AT&T in the 1950s. Apple runs standard protocols like WiFi, allows outside Apps on the iPhone, and hasn't tried to reinvent the World Wide Web. You might say that a clever, nuanced balancing of open and closed is Apple's real secret.

But closed comes with a hidden cost. As Apple's market power grows, its ideology is destined to bring Apple into chronic conflict with American and European competition laws. Take a monopoly in several markets, mix it with an ideology of exclusion and its easy to predict antitrust problems, in the sense that a Dodge Challenger is destined to get speeding tickets.

Things were different back in the 2000s when Apple was the rebel, the outsider that made more beautiful products. When it released the iPod, Apple's ideology had little legal relevance, because it had no market power. Tension with the antitrust laws will be a feature of the next decade because Apple is such a success: it has gained market share, and indeed a likely monopoly in several markets, such as online music downloads and portable music players. While different studies may give slightly different numbers, most credit Apple with 70% or more of the markets for both music downloads and portable music players with iTunes download and the iPod.

Success, of course, is not illegal. The antitrust law does not make achieving a monopoly a crime. Rather, what American law bans is use of monopoly power to maintain the monopoly; or, as relates to Apple, in a way that is "unreasonably exclusionary." That's a legal phrase, of course, but unfortunately for Apple it translates readily to a single word: "closed."

The Microsoft case from 2001 makes this clear. This was the famous Netscape case. Microsoft took various measures to exclude the Netscape browser from Windows 98; some, but not all, were judged unreasonable exclusionary actions and thus illegal. A more recent example is the 2005 Dentsply case where a manufacturer of artificial teeth imposed a rule on its dealers: no selling any competitor's products. Dentsply owned 67% of the market by unit, and a federal appeals court ruled its monopoly power was used "to foreclose competition."

Is Apple's design ideology really "exclusionary" in this sense? Not always, but consider, for example, the iTunes-iPod setup. The "exclusion" occurs when a consumer wants to sync a music player other than an iPod to iTunes. It doesn't work, and arguably, Apple is "excluding" or "refusing to deal" with independent music players so as to defend its monopoly.

More specifically, Apple's habit of "upgrading" its products to exclude competitors could be a source of trouble. In 2009, Apple modified iTunes several times to prevent the Palm Pre from syncing with iTunes. While its hard to know exactly what the upgrade did, at least some of the upgrades, like 8.2.1 seemed to have little purpose other than blocking Palm's sync capacities. Apple, for its part, stated blandly "iTunes 8.2.1 provides a number of important bug fixes and addresses an issue with verification of Apple devices." That turned out to be a code-word for blocked the Pre.

The exclusionary upgrade is, ironically, something that got Microsoft into trouble in the 1990s. Back then, Microsoft upgraded Windows to make Explorer and the operating system into a single product, and Netscape cried foul. A federal appeals court agreed that the upgrade lacked any "pro-competitive justification" and was therefor an illegal act of exclusion. Microsoft could not, as the court said, show that its "conduct serve[d] a purpose other than protecting its operating system monopoly."

I hasten to say that none of this means that the iTunes-iPod upgrades setup is clearly illegal. In the United States, the federal government or a private party would have to prove that Apple actually has a monopoly or is close to monopoly in both markets, and probably need to prove that the setup harms consumers. (I wouldn't mind being able to sync my regular phone to iTunes, or buy a cheap MP3 player that works with my iTunes library, but Apple may convince the courts that lack of competition is better for us.) As for its upgrades to block Palm, the question is whether, in fact, they really were product improvements, or just plain acts of exclusion. And one further point on Apple’s side is that many of its products have long been closed—it didn’t close them to kill competitors, like Microsoft did in the 1990s.

The point is not to dwell on any individual case. It is, rather to establish that Apple's exclusionary practices are habitual, and therefore likely to put it on a collision course with competition laws. And incidentally, this analysis is why, despite the attention to Google's monopoly, I'd suggest Apple is likely to run into antitrust problems first. The benefits of Google's open ideology may be debatable, but it translates in antitrust language to "non-exclusionary." To be sure, there are definitely ways Google could get into trouble, if it begins to close its once-open platform. Say, for example, if Google refused to take advertisements from firms who compete with Youtube. While the iPhone versus Google Android is a matter of taste, the latter's design does tend to avoid a lot of antitrust problems.

If all I say is true, why hasn't something happened already? There are a few reasons. When Apple was that beautiful outsider, it lacked the key predicate of antitrust action: market power. Second, the Bush Administration, as a general rule, declined to enforce the competition laws with much vigor; about the most significant thing the firm did was dropping the Microsoft lawsuit. Finally, the fact is that the Justice Department is watching Apple very carefully. Earlier this year, in fact, reports surfaced of an early investigation into Apple’s iPhone development practices based on complaints from Adobe and others.

Based on previous experience with writing about Apple, I suspect that some readers will read this and react with great anger. Should the federal government really be interested in product design? Isn't all this just unnecessary meddling with Apple's vision? Maybe so, and I am not trying to suggest that the Administration make Apple a priority. It is simply, again, to make clear that Apple's exclusionary practices coupled with its gains in market share put it on a collision path with the competition law. It's not a statement of what should be, but a statement of what is.

(Image via j/f/photos).

There is something about exchanging information by bumping fists that is deeply satisfying. What I like most about the iPhone app Bump is that it’s different. Its features are nifty enough; transfer money, information, and as of last week, music to someone else by tapping your phone against theirs. More importantly, though, it’s a harbinger of the next wave of the mobile revolution.

Unfortunately, that also means Bump is already doomed.

Most app developers treat smartphones as little more than very small laptops. Location-based apps are the only real exception, which is why they’ve provoked such excitement. But that is obvious low-hanging fruit. Only a very few apps take advantage of the fact that smartphones are constantly with us, portable enough for actions that laptops can’t perform, and frequently within range of a shifting mesh of other devices.

Apple and Google bear much of the blame. In theory, their devices can talk to the nearby world via Bluetooth. In practice, though, the two titans have wired Bluetooth’s jaw shut. Apple’s API only permits connections to very simple services (keyboards, headsets, etc.) or other iOS devices—for anything else, developers must join a special program and sign a sheaf of NDAs. Android is far more open, but still requires explicit user approval every time an app asks to connect to a new Bluetooth device.

You can see why. Apple doesn’t want users downloading songs from iTunes and immediately beaming copies to their friends, and Bluetooth is a battery hog and security threat. But there are other solutions, such as an HTTPS-like certification mechanism. The existing restrictions have all but eliminated a whole genre of apps that could have been: for instance, only a tiny handful of multiplayer games allow Android and iPhone users to go head-to-head, and I’m sure GroupMe would love to form groups out of Bluetooth mesh networks connecting every enabled device in a given room.

Alas, Bluetooth won’t be unshackled anytime soon—but a whole new kind of connection is about to emerge. Last week Google confirmed that Android 2.3 will support Near Field Communication, as will Nokia and RIM smartphones, starting next year. And judging from Apple’s recent hiring of an NFC expert , and patent filings for a probably-NFC-powered iTravel app, the iPhone 5 will boast NFC too.

(Full disclosure / odd coincidence; the iTravel app currently in the App Store was created by, er, me. Let me stress that it has nothing to do with whatever Apple is cooking up.)

NFC opens up a whole cornucopia of possibilities. Phones serving as credit cards, keys, and ID are the most obvious, and least imaginative. Interestingly, NFC can also be used to automatically authorize Bluetooth connections. Next year we’ll see the emergence of a whole new category of apps and startups—and, hopefully, some new unexpected left-field brilliance. Developers, start your engines.

But spare a thought for Bump in this brave new world. What need will anyone have for a service that brilliantly mimics NFC, once the real thing appears? They might eke out a year or two as a substitute service for obsolete phones, but beyond that, I’m sorry to say, the only answer is none whatsoever. So long, Bump. You were a bold pioneer. Cash out while you can, and rest in peace.

In case you’re confused by @tsagov, @tsabloggerbob, @tsaagent, @TSAsupervisor, @tsablog and countless other parody accounts, the real Transportation Safety Administration is actually on Twitter at @TSABlogTeam and wow, talk about the worst social media job ever (but definitely not the overall worst job ever).

For those of you who haven’t been following along, the Internet has been one big anti-TSA flash mob ever since the TSA implemented its new Advanced Imaging Technology body scanning and pat down procedures on November 1st.  Just take look at these @replies.

It’s no surprise that the TSA “porn scans” would get so much backlash — Nobody I repeat nobody is comfortable with their body, but especially those of us who spend most of our time online. As representative for the nerd contingent, software engineer John Tyner’s “Don’t Touch My Junk” blog post was the viral tipping point that unleashed the Pandora’s box of meta OMG WTF TSA round ups like this one.

Between “Cancer Surviving Flight Attendant Forced To Remove Prosthetic Breast During Pat-down,” “Woman Says She Was Cuffed And Booted From Airport For Questioning Body Scanners,”“TSA pats down a screaming toddler““TSA Agents Absolutely Hate New Pat Downs“ and this, the story is one of the messiest media fests I’ve seen in my lifetime.

So what does the @TSABlogTeam account actually do? Well, it used to spam reply people with defensive TSA blog posts but it seems to have given up in the past day or so.

The guy who runs the account, aka Blogger Bob, insists that the job is “not that bad actually… It’s a challenge. I dig it.” I’m willing to bet that tweeting every 12 hours or so is way better than being one of the poor schmucks that has to feel up obese people because the government made some deal with Rapiscan. Yes it’s actually called Rapiscan.

“If something doesn't change in the next two weeks I don't know how much longer I can withstand this taunting. I go home and I cry.”

– TSA Employee

In the meantime, here are some inspiring videos, and tweets to get you through however long it takes for the TSA to capitulate.

The Europas, the European Startup Awards, were held last night in London. It was the culmination of a month of online voting by the European tech startup industry for the finalists, where some 33,126 votes were cast across 23 categories, eight judges deliberated over the results, 350 attended and joined the cream of Europe’s startups, VCs and entrepreneurs at a stunning venue in central London.

Over the last couple years, the hunt for employee liquidity has been a hot topic around companies like Facebook and Zynga, where valuations have surged but exits could still be years away. This has led to a rise in marketplaces like SecondMarket, which help connect employees eager to sell stock with potential buyers. And Russian firm DST has made major investments in Facebook, Zynga, and Groupon, which have gone toward giving founders and early employees some liquidity without increasing the number of company shareholders. Now there’s a new firm that’s hoping to add a new twist to the liquidity market.

It’s called 137 Ventures, and it’s giving early employees the opportunity to forgo selling their stock for the time being — by using their stock as collateral for a non-recourse loan. The firm was covered today by The Wall Street Journal, which reported that 137 Ventures is raising upwards of $100 million to be used as loans to employees at these hot companies; the Journal also reports that 137 Ventures will charge “12% interest on the loans, as well as a 10% fee paid in stock”. But Justin Fishner-Wolfson, a Founders Fund alum who now heads 137 Ventures, contends that the articles published today aren’t entirely accurate.

Fishner-Wolfson declined to comment on how much money 137 Ventures has raised, but he does say that the terms outlined in these reports are misleading, because deals are established on a case by case basis. 137 Ventures is in the business of making money, but Fishner-Wolfson says that it sets out to structure its deals such that it can share in the upside that an employee sees from their stock. He wouldn’t get into specifics, but deals often include a base interest fee on the loan in addition to a percentage of the upside on the stock.

If for some reason the value of the stock being used as collateral falls to zero, the employee is not responsible for repaying the loan. Because of this, each loan is an investment — 137 Ventures will only lend money to employees at companies that it sees having strong growth potential. The firm is working with employees from private, high growth-potential tech companies, but Fishner-Wolfson says he has a broad definition for “tech company” — he isn’t only talking about consumer-facing firms. He declined to mention any companies by name, but some logical guesses include Facebook, LinkedIn, and Zynga.

Also important is how these loans can affect employee incentives. The WSJ article included an example detailing how someone could use a loan to exercise their options and run (it explains that many employees can’t afford to exercise their options without outside funding). But Fishner-Wolfson paints a picture where these loans can actually help incentivize employees to remain at a company. In other words, he contends that 137 Ventures is giving employees an alternative to selling.

One common example: employees can use a loan to purchase their stock so that it can begin counting toward long-term capital gains, which will ultimately make it more valuable once there is a liquidity event. In fact, 137 Ventures has established friendly relationships with some companies to help set up this sort of tax benefit. Companies also like it because no stock changes hands as part of the loan, so there’s no impact on the cap table or a chance of ‘accidentally’ going public by having too many shareholders.

137 Ventures isn’t the first firm looking to capitalize on this new wave of stock-rich tech employees. See this report from Venture Capital Dispatch for more on the investors who are willing to buy up stock from Facebook and other companies, in the hopes of getting a big return onces these companies IPO.

Getting tagged in a drunken photo is no longer the most embarrassing thing that can happen to you on Facebook. Earlier this year St. Petersberg resident Melanie Beacham fell $362 behind on her car payments.  Her debt collection agency MarkOne Capital tried contacting her through the phone (up to 20 times per day) but then moved on to using Facebook to send bizarre messages to her friends and family.

Feeling like something wasn’t right about being contacted through her social graph by the absurd user profile Jeff Happenstance (whose profile image now seems to be an ominous array of cars), Beacham went to Morgan and Morgan consumer protection attorney Billy Howard who then filed an unprecedented lawsuit against MarkOne Financial.

It turns out that contacting debtors through the social network is a big no no, at least in Facebook’s perspective. In a statement they gave to The Atlantic.

“There are state and federal laws and FTC regulations that govern the actions of debt collectors. The collector in the St. Petersburg case likely violates a number of these laws and regulations and we encourage the victim to contact the FTC and her state Attorney General.

In addition, Facebook policies prohibit any kind of threatening, intimidating, or hateful contact from one user to another. We encourage people to report such behavior to us, only accept friend requests from people that they know, and use privacy settings and our blocking feature to prevent unwanted contact.”

The FTC Fair Debt Collection Practices Act is currently in the process of being amended (it hasn’t been updated since 2006) and does not specifically deal with social networking. It does however protect against “contact by embarrassing media” and it remains to be seen whether Facebook messages will count.

The Beacham case will be the first time someone has sued a debt collector for their use of Facebook and the first time someone has put through a motion to enjoin the use of Facebook to contact a debtor’s family and friends. Howard says the danger with Facebook is that collectors can reach out a lot easier and reach a lot more people than a phone call.

Howard recommends that anyone who receives a Facebook message from a debt collector screen capture and save the messages as evidence, “Contacting family and friends through Facebook is 21st century buggery. Some of these tactics that debt collectors take, wouldn’t even know if John Gotti would have allowed them.”

Court documents below.

Image: Switched.

A few nights ago, I was discussing with a friend the practicability of putting content behind a paywall. He felt it was an outdated notion and that advertising or some other method would pay. I disagree. Despite recent setbacks, like the decimation of the Times UK’s readership during their paywall experiment, I think that the paywall will eventually succeed, and even thrive — but the advances and sacrifices necessary to make that happen aren’t likely to happen for at least a few years.

Consumers are wary, for good reason, of paying for content online, for the obvious reason that it’s usually available elsewhere for free. Even “exclusive” items are usually duplicated shortly being made available. Publishers and content providers are scrambling for ways to retain their status as news-breakers and innovators — things worth paying for. But miserly consumers and new rules of distribution mean that things must change. The way I see it, the future may be free, but somebody still has to pay for it.

Continue reading…

Back in September, we broke the news that not only had two of location startup Brightkite’s founders left the company, but that they were working on a new project together. While we weren’t able to dig up much about the new startup at the time, we did learn that it was called Forkly. Today, co-founder Brady Becker is opening up a bit more. “We're hungry, and this time it's personal,” he writes.

So what is Forkly? Essentially, it’s a recommendation app for finding food. But unlike the popular Foodspotting, which focuses on individual dish pictures, Forkly is focusing on personalized restaurant recommendations based on your own tastes.

How exactly they’re going to do this is still a bit vague. Becker writes that the current power players that rely on star ratings from people you don’t know is a flawed system. And he also says that simply asking your social graph is flawed too because friends have different tastes. Here’s the key part:

We're building Forkly to make it ridiculously easy to match your taste buds with the food and restaurants around you. Forkly helps you to quickly capture your opinions about your dining experiences. We then use those opinions to offer personalized restaurant, food and drink recommendations, based on YOUR individual tastes.

So it sounds like they’ll have an app which will allow you to quickly rate a restaurant and its food based on certain criteria. They’ll then match those criteria against others in the system to recommend new places and dishes to you. Of course, that’s my overly simplified guess, I’m sure. The magic will be in if it works or not.

I’m sure we’ll hear more in the coming weeks and months.

Just in time for the weekend, it’s time for another episode of TechCrunch TV’s OMG/JK. Even better, this is a special episode, because we spend the show talking about two especially big topics, instead of our usual three. Get excited.

This week’s show focuses primarily on the new Facebook Messages, the social network’s take on the future of communications. It’s got chat, SMS, and email, bundled in a package that will probably make teens leap for joy (the word’s still out on everyone else).

We also talking about Path, the new photo sharing service started by long-time Facebooker Dave Morin. Make sure to check out our launch coverage here.

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Oh, Nic Brisbourne. Unlike most VCs who come on Ask a VC who are used to my rude, outspoken American ways, Brisbourne is British and therefore incredibly polite. As this interview goes on he gets more visibly uncomfortable until the end when he brings up Spotify, and I just go a little pit-bull on him.

But social graces aside, we have a fascinating chat about the investing scene in London and Europe generally. We discuss when an entrepreneur should stay in London, when they should move to the Valley, whether funding activity is picking up as it is in much of the rest of the world and the beauty of lifestyle businesses. Enjoy.

Location-based services are currently in a race to lock up the biggest brands and retailers they can. Earlier this month Facebook ran a major promotion with the Gap; Chipotle is also using the platform to offer buy-one-get-one-free deals. This morning, Fast Company reported that Foursquare has forged a deal with Pepsico. And today SCVNGR is announcing that it’s scored a partnership with arguably the biggest brand of all: Coca-Cola.

SCVNGR CEO Seth Priebatsch says that the company has been gunning to land Coke for some time (and that its competitors have as well). The campaign will take the form of custom, coke-themed SCVNGR challenges that will appear in 10 major malls across the country through the end of the year. Players who complete these challenge will be eligible for rewards like Coke bottle openers (meh) and $100,000 worth of American Express gift cards (more tempting). Players will be able to redeem these challenges at each malls’ information booth. And on Black Friday, Coke will actually have teams of people in the malls urging customers to try out the challenges.

Obviously this is a big win for SCVNGR, especially if it can maintain a relationship with Coke to run more campaigns in the future. Since its rewards platform launched over the summer, Priebatsch says that SCVNGR players have redeemed some $1.5 million worth of free goods.

The timing of today’s soft-drink related announcements seems like more than a coincidence, but it’s worth noting that Foursquare’s deal is quite different from SCVNGR’s. As reported in Fast Company today, Foursquare has actually partnered with Safeway/Vons to integrate with the grocery chain’s existing rewards program — this helps lower the barrier to get users playing the game, because it happens automatically at check-out. Users are rewarded with different Pepsi products based on their Foursquare history.

In contrast, SCVNGR probably won’t be going the auto-checkin route any time soon, because it’s focused primarily on offering engaging challenges rather than the check-in itself.