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Jeff Bezos seems to be running out of retail categories to move Amazon.com into. (What's next? Puppies? Frozen steaks? Escort services?), In its latest expansion, the web's largest retailer will become another place for you to not buy wine from online.

The story of the online wine business and the arcane interstate commerce laws that continue to thwart it is a long and boring one, so we'll try our best to summarize. Eric Asimov of the New York Times offers a more detailed examination here.

About half the states in the country allow interstate wine shipments. A 2005 Supreme Court ruling struck down bans preventing shipments from out-of-state wineries, but wine retailers didn't benefit from the ruling.

Online wine merchants face many hurdles. It's still not possible to ship legally to many states, and for others, it requires investment, such as having a brick-and-mortar etail outlet in that state.

Naturally, Bezos is unfazed. Amazon.com is reportedly working with a non-profit group called Napa Valley Vintners that is helping the 315 wineries it represents learn how to sell wine through Amazon.

Given that Amazon will be doing business directly with vintners, perhaps the online retailer could argue that the sales constitute transactions between customers and wineries (rather than a retailer); that would get them around the state shipping bans.

But reports indicate that Amazon.com plans to ship from only 26 states, so it appears that for now at least Amazon is playing it safe.

But all legal issues aside, even if online wine sellers were able to ship to all 50 states unimpeded, Amazon would still have to face the fact that people just do not seem to want to buy wine online.

Reuters reports that e-commerce accounts for only 7 percent of the $2.8 billion of wine is sold through retail formats in the U.S. -- that amounts to a $196 million opportunity right now, split between a number of players.

And it's not for reasons Amazon.com is well-positioned to fix, like pricing, or selection, or shipping speed. Dedicated online wine sellers like Wine.com and Vinfolio.com are sophisticated operations with good execution, and yet they continue to face the problem of courting customers.

Wine buying isn't like book buying, where you're likely to have a specific product in mind from the start. How often, when you buy wine, do you go in looking for a specific bottle? Can you even name three specific vineyards and vintages that you like?

Most of us have little enough wine literacy that the limited selection and personalized service of a neighborhood wine store is an ideal buying environment. We are not sophisticated enough judges of pricing to turn to a Web retailer for better value, and we're more likely to need a bottle of wine an hour from now than to plan the purchase in advance.

Of course, all of this goes out the window in the case of an experienced wine buyer, who may very well be looking for a specific bottle and will be thrilled to let his or her fingers do the walking to find it -- no carrying heavy cases of wine, no calling around to wine stores, easy price comparisons across sites.

But unfortunately for Amazon.com, and fortunately for the rest of us, wine snobs come in limited quantities.

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The Department of Justice is taking the Google-Yahoo ad pact seriously.

Reuters is reporting that the Department of Justice has hired top antitrust lawyer Sandy Litvack to consult on its investigation of the deal between the two Web titans.

The appointment of Litvack, who was the Justice Department's chief antitrust lawyer under President Jimmy Carter, as well as vice-chairman of Walt Disney Co., suggests that the feds are ramping up their case against the Yahoo/Google pact.

In April, Yahoo and Google began experimenting with the deal, which would allow Google -- the web search leader -- to begin to serve ads on sites run by Yahoo, the number two search company. For months, both companies have insisted that the deal is not anticompetitive and expressed confidence that it would ultimately pass regulatory scrutiny. The companies stuck to their guns late Monday.

"We have been informed that the Justice Department, as they sometimes do, is seeking advice from an outside consultant, but that we should read nothing into that fact," Yahoo said in a statement. For its part, Google issued a statement saying, "We think it would be premature for regulators to halt the agreement before we implement it and everyone can judge the actual impact."

Yahoo estimates that the deal could pump an additional revenue of $800 million into its coffers.

Microsoft, the number three Web search company, opposes any deal between Google and Yahoo, arguing that it would make the web ad market less competitive. The Justice Department may be preparing to make that very same case.

First identified by journalist Jeff Howe in a June 2006 Wired magazine article, "crowdsourcing" describes the process by which the power of the many can be leveraged to accomplish feats that were once the province of the specialized few.

Howe reveals that the crowd is more than wise -- it's talented, creative and stunningly productive. Crowdsourcing activates the transformative power of today's technology, liberating the latent potential within us all. It's a perfect meritocracy, where age, gender, race, education and job history no longer matter, where the quality of work is all that counts and every field is open to people of every imaginable background. If you can perform the service, design the product or solve the problem, you've got the job. But crowdsourcing has also triggered a dramatic shift in the way work is organized, talent employed, research conducted and products made and marketed. As the crowd comes to supplant traditional forms of labor, pain and disruption are inevitable.

When the original article was published, crowdsourcing still constituted a nascent business model. A few small companies had achieved limited successes with it, and large companies had only begun to test the waters. In this excerpt, Howe argues that in just two years crowdsourcing has revolutionized an entire industry -- stock photography -- and may well be poised to create disruption in other fields as well.

- - -

Adapted from Crowdsourcing: How the Power of the Crowd is Driving the Future of Business, by Jeff Howe.

More at Howe's Crowdsourcing Blog.

Chapter 7: The Canary in the Coal Mine

There's a story people like to tell about Bruce Livingstone. In late 2005, Getty Images, the world's largest photo agency, was looking to acquire Livingstone's company, iStockphoto, the world's most successful crowdsourcing company. Long before the contracts were drawn up, Livingstone, to show his commitment to the deal, tattooed the word "Getty" in cursive across the tender flesh on his inner wrist. Then he e-mailed Getty CEO Jonathan Klein photos of the tattoo under the message: "Don't make me write another word after this!" It's just the kind of tale -- emblematic of determination and just the right amount of quirky eccentricity -- that tends to burnish the reputation of its subject. In Livingstone's case, it has the added benefit of being demonstrably true.

With his penchant for muscle cars, rockabilly haircuts and, yes, tattoos, it's tempting to call Livingstone an unlikely CEO. But I prefer to think of Livingstone as a perfectly reasonable chief for some corporation from, say, the year 2020. A company not unlike iStockphoto. Located in a single, cavernous room inside a former factory in downtown Calgary (Alberta, Canada), iStockphoto houses a tiny fraction of its actual workforce. And Livingstone, dressed in T-shirt and jeans, occupies a desk -- chosen, it would seem, at random -- in the middle of the floor. The corner office clearly loses significance in a company that thrives on decentralization.

Jeff Howe explains crowdsourcing, which activates the transformative power of today's technology, liberating the latent potential within us all.

Westeel Rosco built the factory in 1925 to manufacture nails, screws and other bits of hardware. Unlike Westeel Rosco, iStock's products -- stock photos, illustrations and videos -- aren't manufactured on-site. They're created by a global, fluid workforce of 60,000 part-time photographers and artists, only a fraction of whom make a living from the work they sell on iStock. Yet they have a devotion to the company matched by few traditional firms. The full-time staffers who spend their days in the old Westeel Rosco plant play a support role for the community -- and community is the only applicable word -- that is making the product iStock brings to market every day. And that community has been very, very good to Livingstone and his investors. In the course of several years iStock has grown from a hobby to the third-largest purveyor of stock images in the world. When Getty purchased iStock in early 2006, Livingstone took home more than half of the $50 million Getty paid for the company.

The first stock photo agency was founded in 1920, and for most of the 20th century the industry was an afterthought, trafficking in the outtakes from commercial magazine assignments. Very few photographers tried to make a living off the market in preexisting images alone. This changed after the desktop publishing revolution of the mid-1980s led to a rapid growth in the publishing industry, and to a commensurate demand for images. Suddenly photographers were making six figures a year selling photos they'd already been paid to shoot. It was like minting money. Stock photography is, in relative terms, a tiny industry. The annual global gross for the entire business is estimated to be around $2 billion, which makes it a bit bigger than the market for gift baskets, but a little smaller than the annual sales of orchids. But this little industry has undergone big changes, and could well be a case study in how the crowd will impact much larger businesses.

In just the last few years the influx of talented amateurs armed with inexpensive, high-resolution digital cameras has upended the economics of stock photography. Five years ago, a professional-quality image was still a scarce resource. No more. This isn't to say the market for high-end photographs has disappeared. A gifted photographer will always find work. But the professional no longer has a lock on the middle and lower ends of the stock photo business. With a modicum of training, just about anyone can take a decent shot. Sophisticated cameras and photo-editing software do the rest. iStock exploits this fact. Design firms and other small companies working on a budget quickly embraced what became known as the "microstock" model. One graphic designer told me he went from paying hundreds of dollars an image to less than $10. "I pass on some of the savings to my clients and keep the rest. We're both delighted."

iStock might be great for buyers, but it's caused all sorts of headaches for professional stock photographers. In my original Wired article about crowdsourcing I quoted a Los Angeles-based photographer, Mark Harmel, saying that this influx of cheap images had caused a slight decline in his income from stock photo sales, which had dropped to $60,000. But in the two years since that decline has fallen off a cliff, to $35,000 in 2007. "If I look at the trend line, it just keeps going down. I'm really concentrating on getting assignments now," says Harmel. "I recently came back from London with 70 really wonderful shots. I'll probably use them on my website, but it's not worth my time to bother submitting them to a stock agency. They won't sell."

Harmel's far from alone. In fact, Getty's other businesses have struggled in the crowdsourced era. In the year I spent writing this book the company's stock slid 60 percent, falling to just under $22 by February 2008. That month Getty was acquired by the private equity firm Hellman Friedman for $2.4 billion, a considerably lower figure than the company had originally sought. According to a report released at the time of the sale, Goldman Sachs estimates that Getty's core business -- the sale of rights-managed, professionally produced images -- will continue to suffer an irreversible decline, falling to just 29 percent of its revenues by 2012. In the same period the investment bank projects iStock to continue its rapid rate of growth. iStock sold $72 million worth of images in 2007, a figure expected to jump to $262 million by 2012.

In this light, paying $50 million for a crowdsourced photo company looks like the smartest decision Getty ever made. The company is in the midst of transforming its business, from one reliant exclusively on professionals to one that is at least equally reliant on amateurs. As the Goliath of the industry, where Getty goes its competitors are sure to follow, which is to say, stock photography itself has been utterly transformed through crowdsourcing, in which a once-scarce commodity has become abundant. The question to ask is whether the upheaval roiling stock photography is only a leading indicator, like the minor volcanic eruptions that can precede a catastrophic earthquake.

Already the trend is migrating to other fields. Most immediately, the same dynamics that made the stock photo ubiquitous -- affordable digital SLR cameras and burgeoning communities of enthusiastic amateurs -- are affecting other markets for visual images. So-called "citizen paparazzi" use cellphone cameras to snap impromptu shots of stars and then sell them to new photo agencies such as Scoopt, which specialize in buying up and marketing their work. Amateurs can beat professional paparazzi for the simple reason that they vastly outnumber them. It's a question of probability: The throng of pedestrians in Greenwich Village, for instance, have a much better chance of catching an unkempt Gwyneth Paltrow than a single paparazzo.

And photography may well be just the beginning. iStock itself is doing a burgeoning business in the sale of stock video footage, and the crowd is also making commercials, collaborating on TV scripts, and recording and distributing their own music. They're writing political analysis, creating their own video games, and making feature-length movies. For the time being, all this activity has taken place in something of a parallel universe, without causing any of the economic upheaval visited on the stock photo or pornography industries. But those universes are beginning to collide as more companies attempt to package all this outpouring of creativity into a marketable product.

While crowdsourcing has already emerged as a potent force in the media and entertainment industries, it's also profoundly influenced the way even Fortune 100 companies like Procter & Gamble do business. Once famous for its insular culture, Procter & Gamble now crowdsources much of its R&D process, using global networks of scientists such as InnoCentive and NineSigma, which boast a combined membership of 2 million professional and amateur researchers. Even companies operating in a conventional field such as mining have found crowdsourcing applications. The Canadian gold-mining group Goldcorp put geological survey data online and offered a $575,000 prize to anyone who could identify likely areas for exploration. Goldcorp says the contest produced 110 targets that yielded $3 billion in gold. Following its lead, the mining giant Barrick Gold Corporation recently offered $10 million to anyone who could improve its silver-extraction process. The open call of crowdsourcing is also being used by companies such as Google (to develop applications for its Android mobile platform) and Netflix (to improve its recommendation system). The question is whether the iStock secret sauce can be applied to industries like television and journalism and, possibly, even beyond to any business that traffics in bits and bytes. To answer that question, it helps to know what's in the secret sauce.

The Community Is the Company

iStock has been compared to a cult, and the analogy isn't entirely unfair. It's no accident that the most successful companies in the web's second coming -- most of whom traffic in the crowd's creative output -- are led by outsize personalities. "Bruce is to iStock what Tom is to MySpace," notes Garth Johnson, iStock's VP of Business Development. (Johnson resigned his position after this book went to press.) For those readers over the age of 30, Tom is Tom Anderson, the president of the social networking behemoth MySpace and the first "friend" to greet any new user. Under this new archetype of a company -- in which the community, as much as the customer, comes first -- the cult of personality plays a crucial role in community building, and Livingstone has been as essential to the growth of the iStock community as Anderson has been to MySpace's. "Bruce has a really strong, extremely charismatic personality online," says Johnson. "And that's really helped us build the community."

It's safe to say that iStock has left the community-building phase behind: Sixty-thousand people have combined to create an enormous portfolio of over 3.5 million images and 100,000 videos. By contrast, Getty's other divisions combined only use 2,500 photographers. The iStockers offer the company their artwork, and in return iStock goes to extraordinary lengths to keep the iStockers happy. The site offers the budding photographer all manner of free tutorials, and the forums buzz -- at a rate of 38 posts per minute -- with questions about lens sizes, polarized filters and F-stop settings. iStock doesn't offer a chance to get rich. It offers the chance to make friends and become a better photographer.

"We don't own anything, the community does" says Johnson. "Everything we do affects these people, whether they're just earning enough to pay for their equipment, or they're making mortgage payments from their photo sales. They all want a voice, and we have to give it to them, because really, the community is the company."

The upside to this state of affairs should be obvious -- a dedicated, efficient workforce with no expectation of receiving a living wage -- but there are downsides as well: Even the smallest changes can roil the fickle, passionate community of iStockers. In March 2006, iStock launched a new feature on its web forums, a "forometer" which measured an iStocker's popularity through "bafflingly complex scientific methods" including the date and number of posts to the forum. The forometer displayed its results through a set of red, yellow or green bars. It did not go over well. The community questioned the principles behind the feature, as well as its functionality. Not long after its launch, the feature had been removed. Employees may be hell on overhead, but they're paid to accept all but the most draconian policies with a polite nod. Communities, on the other hand, aren't paid to stick around, and nothing stops them from selling their photos to one of iStock's many competitors. "They don't work for us," Livingstone laughs. "We work for them." If the iStocker feels a sense of ownership over the site, that's understandable: The iStock community predates iStock the company.

Livingstone didn't set out to revolutionize an industry, he just wanted to fill a personal need and help a few friends at the same time. In 2000 Livingstone was running a small graphic design and web-hosting firm in Calgary. Bruce is an avid photographer himself, and over the years he had developed an extensive network of photographers and designers. Early in the year he took 2,000 of his images and put them online. Anyone could download his photos in exchange for giving him an e-mail address. Livingstone's friends decided they wanted to share their images with the public, too. That June the budding community instituted a credit system: A user could download one image for every image of theirs that had been downloaded by someone else.

It was a classic example of the gift economy, the non-monetary exchange that grew up alongside the internet. During iStock's early years, everyone took something and gave something in turn. "The feeders and the eaters were the same people," as Livingstone puts it. Everyone profited by acquiring new images, though no one made (or spent) a dime. Soon friends of friends heard about Bruce's nifty idea and started uploading their images, too. Then around 2002 a wider public got wind of iStock, and the site began to hit critical mass. Soon Livingstone was paying $10,000 a month for the bandwidth to support it. He could have taken advertising to cover the cost of hosting, but he felt that would violate the spirit of the site. "The focus was on the community, and good design. Advertising would have cluttered the site," says Livingstone.

Instead, he started charging a quarter for each image, and he opened the system up to the public. This proved to be a momentous decision. Word quickly spread among publishers that there was a site offering cheap, usable images, and photographers began flocking to iStock to upload their portfolios. Traffic to the site skyrocketed, and soon Livingstone raised the price to $1 per image. "I thought it might become a sideline business," he says. It quickly became much more than that. The quality of the images wasn't always as high (or as consistent) as a traditional stock agency's, but the differences were indiscernible to the general consumer, and after all, you couldn't beat the price. By 2004 a host of other so-called "micro-stocks" had sprung up with strategies similar to iStock's. The professionals panicked. Microstock photos, they charged, were flooding the market with subpar images. At first, the industry aligned itself against iStockphoto and other microstock agencies such as ShutterStock and Dreamstime.

Then in early 2006, Getty announced it would buy iStockphoto for $50 million. "If someone's going to cannibalize your business, better it be one of your other businesses," Getty CEO Jonathan Klein told me shortly after the sale. Smaller magazines, nonprofit organizations, and all manner of websites have continued to flock to iStock's high-volume, low-cost model. As of February 2008, iStockphoto had 2 million regular customers purchasing photographs, video footage, illustrations and animations. "Bruce's brilliance," Jonathan Klein once told me, "is that he turned community into commerce." Livingstone uses a slightly different formulation: "I turned commerce into community,"

iStockphoto has perfected the Jedi Mind Trick that's at the heart of crowdsourcing. It's an incredibly cost-effective strategy -- iStock boasts a 55 percent profit margin. And yet, Livingstone stumbled into this business model by creating a context -- a community of like-minded enthusiasts -- in which financial measures take a backseat to considerably less tangible concerns. Ask someone in the office, and they'll tell you: It's not about the money. Ask an iStocker and they'll tell you the same thing. In fact -- would-be crowdsources take note: If it is about the money, it won't work. It will fizzle, not sizzle, as one of iStock's designers put it. "What's funny is, the money people, they pretty quickly get pulled aside in the forums by the core people. Or they just don't have a voice. People will ignore them, like 'Oh, that's just so and so, they're just here to make money.'"

That doesn't mean the iStockers are unmotivated by self-interest. The more a photographer's images are downloaded, the more recognition they receive in the community, and the more credits they earn to download other people's photos to use in their own designs. And the additional income is also welcome, of course. Unlike other cases in which large corporations have attempted to monetize community, iStock does reward its contributors. It paid out $21 million in 2007. It's significant that people in online communities like iStock's react with great hostility to the idea that crowdsourcing is a form of cheap labor -- despite the fact it demonstrably is. After all, no one wants to feel exploited. In the end, what iStock provides is an invaluable if impossible-to-measure currency: meaning. The crowd will give away their time -- their excess capacity -- enthusiastically, but not for free. It has to be a meaningful exchange.

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Bob Rice is the author of Three Moves Ahead: What Chess Can Teach You About Business, and the former C.E.O. of a tech startup. He now runs merchant bank Tangent Capital, which he founded in 2005.

Love 'em to death, but here's the thing to remember about Google: Your business is its business.

Google doesn't sell software or hardware or content. It sells you -- or, slightly more precisely, its ability to understand your habits and deliver your attention to particular advertisers. And because of this, I am just a touch nervous about installing Chrome, its new browser software.

Of course, Google already collects mountains of information about you from your searches (you do realize they keep track of those, right?), and from the huge cookie collection delivered fresh daily by their ad bakery (the cookie gathers information from all Google products and affiliates -- and doesn't expire until 2038). Gmail users may also have long ago realized they were conceding privacy for convenience and bells and whistles.

Indeed, Google has far more and better data about your habits than the relatively modest amounts that set of privacy firestorms for AOL and DoubleClick (which Google now owns) back in the day. But so far, with Google, it's been like successfully boiling a frog: the temperature has gone up very slowly, so nobody's jumped out of the pot just yet.

Perhaps that's because Google offers so many wonderful services. Who wants to head out without checking the traffic with Google Maps (oops, more footprints)? Or plan an event without checking everybody's calendar (oy...)?

At first glance, Chrome seems just another browser -- and between us, who cares? IE, Safari, Firefox, Chrome -- one has more cup-holders, another has leather trim. So is the idea really just to take a piece of the "browser business," as many say? I doubt it, largely because there isn't one: Nobody's paid for browser software since about 1998. Firefox, remember, is the product of a nonprofit -- one that, interestingly, has been heavily funded by Google, for reasons previously unknown.

At first, Google's goal will be to change the software game and speed your transition from a desktop-driven environment to its "cloud computing" applications: word processing, spreadsheet, and presentation software. Google hopes that soon, you'll create these documents on one computer, leave them on their servers in the sky, and then continue working on them later from any other computer. Natch, you'll collaborate, share and deliver the docs this way, too. And Chrome will be the interface for it all, on top of serving more mundane web surfing functions.

And all the while, Google will be doing the usual, capturing your data, your documents, your habits.

And, how will they use all this information? To do what they do: deliver ever more precisely targeted ads, with concomitant higher response rates, and thus generate more dollars. Maybe we'll see "This cell sponsored by Fidelity" in our spreadsheets soon.

Sure, other companies are in position to track your data, too. The difference is that, for the most part, their business models don't require them to exploit that knowledge. And certainly nobody has the reach that Google has and will have -- especially after they eliminate your last ability to hide with the G-phone this fall.

Now we know Big Brother's real name, do we care? Free software and services are great, and I'd rather see relevant ads than irrelevant ones. But make no mistake: this lunch, too, has a real cost. It's called privacy.

So that's the question consumers have to answer: Is it worth it? If they genuinely don't care about one company controlling a complete catalog of their surfing and working, talking and texting, and meetings and greetings, fine. For me, I think I'd rather pay cash and avoid a virtual peeping Tom who only makes money if he predicts my private behavior well. But, then, I admit it: I'm so 2005.

So, shine up your computer with Chrome if you like; but at least consider getting that "Do No Evil" promise in writing first.

The last time Wired reviewed equipment designed to survive the highest mountain in the world (May 2000), climbers were schlepping 9-pound, $11,000 sat phones on the trek to Everest's 29,000 feet. Climbing tech these days is ultralight, cheaper, and practically Everest-proof. Any season now, mountaineers will be Twittering from the summit ("OMG my toz R bLk!"). Here's some of the latest gear to leave us breathless.

1) Zeal Optics SPP Goggles Besides 100-mph winds, Everest is legendary for causing snow blindness. In 2003, Zeal Optics was one of the first to offer photochromatic polarized lenses in goggles. The new SPP adds a spherical lens design for better peripheral vision. The combo equals near-perfect acuity in all conditions, preventing scorched corneas and errant steps on cliff edges. $200

2) Spot Messenger At the touch of a button, the Spot Messenger grabs coordinates from GPS satellites and sends them to your Spot Web site so Mom can track you on Google Maps. Hanging from an ice wall? Hit the 911 button to ping the International Emergency Response Center. (But try to avoid drama above 21,000 feet, where Spot's accuracy can stray.) $170

3) Roper SwitchBack UltraMobile PC Back in 2000, even mountain-ready laptops weren't up for Everest: "You can actually hear the hard drives screaming," one documentarian said. Standard drive heads ride on a cushion of air, which thins out as you climb. The rugged SwitchBack is available with a solid-state drive that works up to the brain-scrambling height of 20,000 feet. $6,000

4) Black Diamond Cobra Ice Tool The carbon-fiber Cobra features a sawtooth pick on the business end (for ice penetration) and a modular head design that lets climbers attach an adze for chopping steps or a hammer for driving pitons. Everest hopefuls sucking wind up to base camp will barely notice its 600 grams. $300

One key change they had in mind was something called a multiprocess architecture, the system that helps the computer keep going when an application crashes or freezes. Why not extend that idea to browsers, so if something crashes in a tab, the other tabs are unperturbed? Also, for that matter, why not set things up so that you can drag an existing tab to create a new window? Starting from scratch had other advantages. You could design it to look cleaner and run faster, the twin dogmas of the Google corporate religion.

Around June 2006, Goodger, Fisher, and another former Mozillan named Brian Ryner cooked up a small prototype. Their first big decision involved the choice of a rendering engine, the software that processes the HTML code of a Web page into the stuff that appears on your screen. The two major open source options were Gecko, used by Firefox, and WebKit, which powers Apple's Safari browser. The word was that WebKit (which had already been adopted by the group developing Google's Android mobile operating system) could be nasty fast — three times as fast as Gecko, in one example.

In a few weeks, they had a simple application running WebKit on Windows that kept going even when a Web page crashed a tab. Early on, Goodger recalls, "our prototypes had a picture of a little tab that was unhappy, and if a tab died you'd see that. It was the first piece of personality in the product."

Not long after that, Brin and Page came by to check in on the furtive beginnings of their browser. "I remember sitting at my desk, which at the time had a stuffed snake running along the back of it," says Pam Greene, an engineer on the team. "Sergey was bouncing on one of those exercise balls, watching Darin give a demo, and petting the snake."

No one will say exactly when the browser project got the official green light. Pichai recalls an executive meeting when Schmidt no longer seemed as opposed as he had been. If Google did go for it, the CEO said, the team had to produce something very different from Explorer and Firefox. In addition, a Google browser would have to be fast, and it would have to be open source. Which, of course, was exactly what the team already had in mind.

In any case, by the autumn of 2006 the line between unofficial concept and formal project had been crossed. "One Friday, there was a meeting called with like an hour's notice," engineer Brett Wilson says. "We were told, 'The management is thinking about doing our own browser — what do you think about that?' Everybody was a combination of excited and freaked out." Part of the freak-out was they knew full well that building a competitive browser was a massive undertaking. There were also mixed feelings because of the group's attachment to Firefox, an icon of open source development and a hedge against Microsoft's dominance. "The fear was that people were going to read this as sabotaging Firefox," says Erik Kay, an engineer who joined the team in October 2006. The Googlers were mollified by the fact that their browser would be 100 percent open source: Google's innovations could potentially find their way into the Mozilla codebase. "We really want to make Firefox successful, as well as other open source browsers," Upson says.

As part of Google's Firefox effort, Pichai had been meeting with Mozilla head Mitchell Baker, and at some point he told her about Google's project. Baker now says a Google browser is a mixed bag for Mozilla and Firefox. She sees the effort as a vindication of Mozilla's belief that browser choice is essential. "If Google comes up with some good new ideas, that's really great for users," she says. "Competition spurs the best in us." But she also understands that many of her users will download Google's app. "We expect people will try it and come back," she says. "Mozilla exists because independence is important."

A less weighty issue was what to dub the product. After considering some ridiculous codenames (Upson says they were so awful that he took the un-Googly step of a top-down veto), the project borrowed its moniker from the term used to describe the frame, toolbars, and menus bordering a browser window: chrome.

One more hire was key. Because Chrome was supposed to be optimized to run Web applications, a crucial element would be the JavaScript engine, a "virtual machine" that runs Web application code. The ideal person to construct this was a Danish computer scientist named Lars Bak. In September 2006, after more than 20 years of nonstop labor designing virtual machines, Bak had been planning to take some time off to work on his farm outside Århus. Then Google called.

Bak set up a small team that originally worked from the farm, then moved to some offices at the local university. He understood that his mission was to provide a faster engine than in any previous browser. He called his team's part of the project "V8." "We decided we wanted to speed up JavaScript by a factor of 10, and we gave ourselves four months to do it," he says. A typical day for the Denmark team began between 7 and 8 am; they programmed constantly until 6 or 7 at night. The only break was for lunch, when they would wolf down food in five minutes and spend 20 minutes at the game console. "We are pretty damn good at Wii Tennis," Bak says.

They were also pretty good at writing a JavaScript engine. "We just did some benchmark runs today," Bak says a couple of weeks before the launch. Indeed, V8 processes JavaScript 10 times faster than Firefox or Safari. And how does it compare in those same benchmarks to the market-share leader, Microsoft's IE 7? Fifty-six times faster. "We sort of underestimated what we could do," Bak says.

Speed may be Chrome's most significant advance. When you improve things by an order of magnitude, you haven't made something better — you've made something new. "As soon as developers get the taste for this kind of speed, they'll start doing more amazing new Web applications and be more creative in doing them," Bak says. Google hopes to kick-start a new generation of Web-based applications that will truly make Microsoft's worst nightmare a reality: The browser will become the equivalent of an operating system.

Google also brought in reinforcements to implement the multiprocess architecture that allowed each open tab to run like a separate, self-contained program. In May 2007, it acquired GreenBorder Technologies, a software security firm whose technology was designed to isolate IE and Firefox activities into virtual sessions, or "sandboxes," where malware intrusions couldn't mess with other activities or data on your computer. When the deal was announced publicly, tech pundits wondered whether it meant that Google was going into the antivirus business. Only after the acquisition did GreenBorder's engineers learn that their job was to construct sandboxes for the tabs of a new browser. "It was confusing," says Carlos Pizano, one of the GreenBorder hires. "They would not say what they wanted to sandbox."

The team was growing, but the process never got bogged down in bureaucracy. In the project's early stages, Chromers would all have lunch together at a table in one of the Google cafés. Soon even the largest table couldn't accommodate them all. Working in an open source spirit, every engineer was free to check out any piece of code and tweak or improve it. Rakowski always tried to keep things light, one day awarding tins of chrome polish to the best bug catchers.

As the plumbing aspects of the product fell into place, activity focused on user interface. From the beginning, the Chrome team hoped that its visual presentation would be so understated that people wouldn't even think they were using a browser. The mantra became "Content, not chrome," which is sort of weird given the name of the browser. ("We've learned to live with the irony," Mark Larson says.) The clearest expression of this comes when you drag a tab containing a Web application like Gmail to its own separate window and specify that you want an "app shortcut." At that point, the tabs, buttons, and address bars fall away and the Web app looks pretty much like a desktop app. Welcome to the cloud era.

When deciding what buttons and features to include, the team began with the mental exercise of eliminating everything, then figuring out what to restore. The back button? No-brainer. The forward button? Less essential, but it survived. But if you're a big fan of the browser status bar — that meter that tells you what percent of a page has loaded — you're out of luck with Chrome.

And then there was the bookmarks bar. At first, engineers thought they could kill it. Chrome introduces several new navigation methods, including one where the browser figures out where you want to go next with no typing required. And when you do type something in, you use the "omnibox," a combination of address bar and search box: Just tell it what you're thinking and it delivers a Web address, search results, or popular destinations that fit your query, all in non-intrusive text underneath the box. It's a bulked-up version of "I'm Feeling Lucky." Still, user tests showed that some people just love to navigate by clicking on the bookmark bar. The compromise: If the user has previously configured the bar in IE or Firefox, Chrome will import the setup. Otherwise, users won't have a bookmark bar unless they choose to.

It's incredible that something as potentially game-changing as a Google browser has stayed under wraps for two years. It wasn't until mid-2007, about a year into the project, that the team let employees outside the group even see what they were doing. At the first of a series of Tech Talks featuring the current prototype (events designed, in part, as a way of recruiting internally for the ever-growing team) the reaction was volcanic. Googlers broke into spontaneous applause when various features, like dragging a tab into a new window, were demo'd. As the number of people who knew about Chrome increased, the inevitable occurred — word did leak out to a blog or two, yet nothing came of those stray items. No reporter put it all together. "I think it was because rumors about Google browsers have been around so long — it's like sightings of Bigfoot or the Loch Ness Monster," Upson says.

On the eve of the launch, Pichai shares some of his ambitions for Chrome. How many people will use it? "Many millions," he says. "I want my mom to use it. I want my dad to use it." The Google imprimatur doesn't assure success, but Pichai believes that even if Chrome doesn't snare huge market share, its innovations will improve the landscape. "We benefit directly if the Web gets better," he says.

As launch approaches, the team has just moved into new space in a freshly renovated building on the Google campus, and there's another all-hands gathering in the biggest conference room available. It's standing room only. Milk and cookies are provided. After some initial business, Rakowski hands the floor over to Goodger. The rumpled engineer talks about the benefits of making Chrome an open source product — the code will be publicly released and a community will emerge to determine the browser's evolution. "We'll be able to scale our testing efforts," he says. "It'll enable people to do things we haven't thought of. And it'll generate trust that we're not doing something evil."

As the meeting breaks up, the energy level is over the top, and not just because of the sugar rush. The Chrome team is close to unleashing the product that Google was destined to create. First, though, there are five bugs to swat.

Senior writer Steven Levy (steven_levy@wired.com) also writes about Jay Walker's in the October issue of Wired.

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Jack Flack is normally quite suspicious when a supposedly accidental leak leads to wide, mostly positive coverage. Particularly about a new product. And particularly on public holiday that ensures little competitive news on the business pages the next day.

But the Google leak felt like a genuine miscue, detected only because Kara Swisher's Weber apparently has a 3G card.

What makes it seem like a genuine mistake? Well, while the company moved quickly to confirm the reports, it was not prepared to make the new browser downloadable, thus squandering the full benefit of the coverage.

The launch confirms that the war for the supremacy in the next tech era is fully on. Just as Microsoft cannot afford to have Google operate virtually uncontested in search, nor can Google afford to have Microsoft operate virtually uncontested in browers.

Here's the parse.

Google: At Google, we have a saying: "launch early and iterate."

Translation: Outside Google, it's sometimes misheard as "launch early and dominate."

Google: While this approach is usually limited to our engineers, it apparently applies to our mailroom as well!

Translation: Heh, heh, heh. Even our mailroom guys are go-getters.

Google: As you may have read in the blogosphere, we hit "send" a bit early on a comic book introducing our new open source browser, Google Chrome.

These athletes are turning the stereotype of the inarticulate jock on its empty head. But they have more on their minds than endorsements and bad calls. Just try to match the pros with their prose.

1) "Life comes at us in stages. Sometimes, those stages develop slowly ... Other times, they sneak up on us like a sadistic bunk mate with a sockful of pennies."

2) "I think that what's really unpatriotic is sitting by, allowing a president to make bad decision after bad decision ... Silence is the enemy of democracy."

3) "I've done a lot of writing these last two years ... I have written from the heart. I have written as a human being ... To those who have doubted, rest assured I know how to take care of business when it's time."

4) "It seems that in the daily grind of life we get so caught up ... that we don't have time to change and evolve. It's like day to day we are just collecting puzzle pieces, and we need some time and space to actually put it all together."

5) "Just back from CES ... I wanted to throw some kudos to the guys at Flying Labs. I am arguably the last person on the planet to think pirates and that whole genre are cool, but from my first 30 or so minutes of exposure to [Pirates of the Burning Sea], I can't say enough good things about it."

A) Curt SchillingBoston Red Sox, 38pitches.com

B) Ian CrockerUS Olympic swimmer, swimroom.com

C) Evan Tannerformer UFC middleweight champion, evantanner.net

D) Etan ThomasWashington Wizards, huffingtonpost.com

E) Paul ShirleyMenorca Bàsquet, espn.com

Rollover the ??? to reveal the answers

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Bob Rice has had many careers. He was an attorney with the U.S. Department of Justice, a partner at law firm Milbank Tweed Hadley & McCloy, C.E.O. of a tech startup, and now runs merchant bank Tangent Capital, which he founded in 2005.

In his spare time, Rice managed to write Three Moves Ahead: What Chess Can Teach You About Business, one of the more interesting business reads to come down the pike this year, in which he uses the tried-and-true strategies of chess for insight into running a business.

Today, he's squeezing in some blogging. One day. One place: Portfolio.com.

Ah, those Sand Hill Road visionaries, the venture capital guys who finance the future and dictate the trends. It must be fun out there, getting the first glimpses of tomorrow. But suddenly there's a wonderful irony at work: That very future is destroying their industry.

Newspapers are rife with stories about the decline of big V.C. investments, pointing to the trend as a sign of a more conservative investment environment. But I don't think that's really the issue.

Instead, something much more profound is going on: The basic V.C. model is broken. And new technology is driving a much more efficient system for capital allocation to startups.

In fact, technology is largely at fault both for what's wrong with the V.C. world and for what's replacing it. The problem with the industry is this--it's just too cheap to start new companies these days.

Virtual offices allow talent to gather from around the country to work on a new idea without having to quit full-time jobs too early. Servers, computers, and bandwidth are essentially free, and a robust telecommunications platform can be rented for a few tens of dollars a month. Software development can be outsourced without taking on big fixed costs. There are countless programs to manage customer relations, mine contacts, handle the books, and plan and monitor projects. And of course, the internet has reduced the costs of finding customers and testing new concepts to nearly nothing.

Okay, so what? Well, the classic V.C.'s simply have too much money under management, and too expensive a talent pool, to waste time looking at investing anything less than $10 million in a project. Meantime, no entrepreneur wants to give up equity by taking in more money than he absolutely needs. So, when it only costs a few million to get a serious new company off the ground, how can the V.C.'s really play? They have to find places to make gigantic gambles, usually overpaying because the other big V.C.'s are also trying to invest in the few really big-dollar opportunities out there. It has become a system doomed to failure.

The flip side of the story is the rise of angel investor groups. These investment consortiums have always been ideally positioned to provide $500,000 to $5 million equity injections; but until recently, that wasn't enough to get a serious effort off the ground. More fundamentally, however, they have historically not been terribly investor-friendly, largely because the individual members have other occupations.

The individual members didn't work in the same place or even at the same times, so angels were terribly inefficient at evaluating transactions, sharing information, and negotiating and documenting deals.

Those days are over, thanks to software developed by David Rose, founder of the New York Angels (yes, I belong). Angelsoft is a wonderful collaboration platform that manages deal flow, helps match talent and expertise to projects, provides easy-to-use data rooms for potential investors, and generally drives the investment process. It combines project management and social networking in a way that, for the first time, makes the angel process efficient for both the company seeking capital and the potential investors.

The big news now is that, in a period of just a couple of years, over 400 angel groups around the globe have standardized on the platform. That means, of course, that they will also be able to share deals between themselves, vastly expanding the capital and expertise available for any given project.

And entrepreneurs can now create one submission to get access, literally, to a world of sophisticated, organized investors. It sounds like a revolution to me. Check it out at the group's website.

And so, once again, technology is driving a paradigm shift. But this time, it's France in 1789: The progenitors of change are becoming the victims.