Ad giant Publicis Groupe this morning confirmed an agreement to buy Microsoft’s Razorfish online advertising agency for $530 million, along with a five-year strategic alliance under which Publicis will buy display and search advertising from the Redmond company at "certain minimum guaranteed aggregate purchase levels."

Razorfish was part of Microsoft’s $6 billion deal for Seattle digital marketing company aQuantive in 2007. The agency, formerly known as Avenue A/Razorfish, was seen as an odd fit inside Microsoft in part because it works on campaigns that run across a variety of sites, including Google, Yahoo and other competitors to Microsoft’s online properties. The clues that Razorfish wouldn’t be with Microsoft for the long haul included the fact that its employees didn’t get the standard Microsoft benefits package.

[Update, 8:40 a.m.: There are "no plans to displace any Razorfish workers in the Seattle region or elsewhere as a result of this agreement," said Microsoft spokesman Lou Gellos in an email message this morning, responding to our question on that topic.]

The cash-and-stock agreement with Publicis follows a bidding war that included ad companies WPP PLC and Omnicom Group, according to the Wall Street Journal, citing people with knowledge of the bidding. Dentsu, Japan’s largest advertising company, bid more than than Publicis did, the Journal reported.

That suggests that details of the strategic alliance may have tipped the balance in favor of Publicis, bringing the promise of guaranteed ad revenue. Microsoft is hungry for online advertising dollars and traction in the search market, as evidenced by its 18-month pursuit of Yahoo for their recently announced online advertising and search partnership.

"The agreement helps Publicis Groupe media clients by allowing their agencies to purchase display and search advertising from Microsoft over the five-year term of the agreement on favorable terms, in exchange for certain minimum guaranteed aggregate purchase levels," the companies said in a news release. "The agreement also provides that Razorfish will continue to be a preferred provider to Microsoft for digital strategy, creative and experiential marketing services, and contains a commitment by Microsoft to spend a minimum amount for those services each year during the term of the agreement."

The Razorfish management team will remain intact, according to Publicis, and the agency will operate under its own name as part of VivaKi, a Publicis umbrella for Digitas, Starcom MediaVest Group, Denuo, and ZenithOptimedia.

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A few weeks ago we reported on speculation about a split between Amazon.com and Target. Well, it turns out the two are headed for a divorce. Target this morning announced it will take the reins of its own ecommerce operation starting in 2011. That would be a big loss for Amazon’s ecommerce platform business, which runs web operations for third-party retailers.

Here’s more from Target’s press release:

“Amazon has been an important strategic partner since we re-launched Target.com in 2001, and the strength of Amazon’s technology and fulfillment services has been a contributing factor in Target.com’s success,” saidSteve Eastman, president, Target.com. “However, to deliver a customized multi-channel experience for Target’s guests, we believe it is in Target’s best interest going forward to assume full control over the design and management of Target’s e-commerce technology platform, fulfillment and guest services operations.”

Previously, Target and Amazon extended their contract to 2011. Amazon and Target will continue to work together during the next two years to optimize performance of the existing platform and fulfillment services.

“We are grateful to have been able to work with Target for the last eight years, and we wish Target the very best as they go forward,” saidSebastian Gunningham, Senior Vice President of Seller Services for Amazon.com, Inc.

Target said it plans to launch its own platform ahead of the 2011 holiday season. With Target out, Amazon’s biggest known customer for the ecommerce platform business will be U.K.-based Marks & Spencer.

In recent years, Amazon has lost other big enterprise customers, Toys "R" Us and the Borders book chain. Amazon may be shifting to a more middle-market strategy with the ecommerce platform business. The company has been working on a secret project code-named Vitamin C to build ecommerce tools for mid-sized retailers.

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and Amazon’s A9: Rumors of its death are greatly exaggerated  

It’s been three years since Amazon.com’s effort to match Google with its own internet search engine, called A9, crashed and burned. Since then A9 has largely fallen off the technology industry’s radar. But the unit is still around, and playing an active role in Amazon’s efforts to improve product search on its network of ecommerce websites.

“People say things like, ‘Oh, you used to work there. What happened to that?’” said Barnaby Dorfman, a veteran of A9 whose online recipe startup, Foodista, secured an investment from Amazon in April. “The public-facing experiment did not work out, but the other piece worked out quite well for them. They’re helping to maximize sales across all Amazon’s sites.”

While A9, based in Palo Alto, has been extremely quiet since Amazon pulled back on its web search efforts in 2006, its name has popped up repeatedly in recent months, providing a glimpse of Amazon’s evolving strategy with the search unit.

In June, A9 acquired a mobile startup called SnapTell that lets people take photos of items with their smartphones and match them to corresponding product images — technology that is central to Amazon’s efforts to let shoppers browse and buy items from their iPhones and BlackBerrys.

Amazon is also reaping a harvest of patents that were germinated during A9’s early years as a would-be Google rival. For example, Amazon on July 21 was granted a patent for a “System and method for providing search results based on location.”

That kind of broad patent could potentially have a huge impact on the mobile market, given that so many iPhone and BlackBerry applications today have location-based search features, using built-in Global Positioning System technology to direct users to local sights, restaurants, etc.

While it’s not clear what Amazon plans to do with the patent, it’s a sign that A9’s early work on search technology has resulted in some interesting intellectual property that could benefit Amazon in the future, giving it leverage in negotiations with other tech companies, for example.

Amazon spokesman Drew Herdener declined to make A9 executives available for an interview and declined to go into much detail about the search unit, saying only that it does “product search for Amazon.com sites and mobile applications.” He said Amazon does not comment on patents.

A9, on its website, says its product search efforts include Amazon’s Search Inside the Book feature that lets people search for terms within the text of books. The unit also works on the Clickriver Ads program that lets advertisers put sponsored links on Amazon sites (the A9 website also lists OpenSearch, an Amazon-inspired effort to create a standardized format for sharing search results).

Product search is a critical element of the online shopping experience. When someone searches for a product on Amazon.com, the speed and relevance of the results can prompt people to buy more and generate more sales. Amazon is also keen to adapt its product search to the iPhone and other smartphones, where more consumers are doing their shopping these days.

A9 has "moved from this very ambitious vision to something that’s a better fit for Amazon’s needs, which is searching for products,” said Oren Etzioni, a University of Washington computer scientist who founded Farecast, an airfare prediction tool. Farecast was acquired by Microsoft last year and its technology was incorporated into Microsoft’s new search engine, Bing.

A9 never made a big dent in the internet search market, which continues to be dominated by Google. For June 2009, Google had a 65 percent share of the U.S. search market, followed by 19.6 percent for Yahoo sites and 8.4 percent for Microsoft sites, according to internet measurement firm comScore (the data came out before the recently announced Microsoft Bing-Yahoo search partnership).

Amazon, which launched A9 in 2004, essentially dismantled the public-facing part of the search engine in Oct. 2006, removing its maps and block view function, its instant reward program, and search history feature.

The A9 unit is headed by Bill Stasior, a veteran of the AltaVista search engine. The A9 site says the unit is hiring for 10 positions, mostly in software engineering.

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We’ve certainly seen our fair share of "down rounds" in recent months, venture capital deals in which the valuation comes in at a lower price point than previous rounds. That recalibration is certainly part of larger economic forces as VCs and entrepreneurs re-think the values they placed on startup companies from a year or two ago.

A survey released today by Fenwick & West points out just how prevalent "down rounds" are becoming — at least in Silicon Valley where the law firm analyzed recent financings for 89 companies.

According to the report, 46 percent of the deals were down rounds while 22 percent showed "flat" valuations. More interestingly, Fenwick notes that the past two quarters are the only two quarters where down rounds have exceeded up rounds since the fourth quarter of 2003.

And the tide has shifted rapidly. During the second quarter of 2008, just 13 percent of deals were down rounds while 68 percent were up rounds.

Furthermore, Fenwick’s Venture Capital Barometer shows an average price decrease of six percent for those companies receiving venture financing during the quarter. That followed a decline in the first quarter — the only two negative quarters since the firm started tracking price movements in 2004.

What does it all mean?

The New York Times’ Brad Stone offers his insights in a story headlined "Falling Valuations: Poison for the VC Industry."

But there are other things at work here too, highlighted by my story yesterday on DevHub which gave up on venture financing earlier this year in order to focus on reaching profitability.

Those stories may become more common as startups try to make their previous venture round last as long as possible or learn to exist on their own cash flows, rather than butt their heads up against tough terms in a new venture deal. (Seattle-based iLike is another example of a company that’s living off its venture reserves and own cash flows at the moment).

Prominent Seattle venture capitalists — speaking in good times — have told me that you should only take venture capital as a last resort. In tough times like these, that’s probably even more important.

The Fenwick report also discusses liquidation preferences, corporate restructurings and other topics.

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and Marchex’s sales; Richrelevance scores cash; CTI; and more  

Seattle online local advertising company Marchex could see its revenue further eroded due to the recently announced advertising partnership between Microsoft and Yahoo, with CFO Michael Arends pointing out potential issues in a conference call this week, reports Domain Name Wire.

Onvia, which provides an online service to connect businesses with government contracts, said that its revenue increased 21 percent during the second quarter to $6.2 million as its clients base grew five percent to 8,500. The Seattle company also trimmed its net loss for the second quarter to $197,000.

In a story from TheStreet.com titled "Honey I Shrunk the Tech Sector," Seattle entrepreneur and venture capitalist Martin Tobias predicts more tech M&A deals in the near future.

Bothell biotech Scolr Pharma saw revenues decline 17 percent to $230,789 during the second quarter as royalty payments from Perrigo fell. The company — which finished the quarter with $3.1 million in cash and cash equivalents on the books and is looking at ways to reduce the burn rate — saw its net loss decrease 26 percent to $1.6 million.

Comcast said it plans to begin reselling its WiMax broadband Internet service — dubbed HighSpeed2Go and currently available in Atlanta and Portland– in Washington state, Philadelphia andChicago this year.

Rosetta Inpharmatics founder Stephen Friend — who is in the midst of creating the new Seattle non-profit Sage Bionetworks — is the subject of a detailed Xconomy profile in which he describes how the life sciences non-profit is taking cues from the open source software movement.

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and Zappos parties it up after big Amazon acquisition deal  

Things have been pretty festive over at online shoe retailer Zappos since the company announced it was getting acquired by Amazon.com. First, Zappos CEO Tony Hsieh said he would hand out bonuses and Kindles to staff. Then the company threw a 10-year anniversary party complete with disco lights, carnival games and an open bar. Here are some video highlights of the over-the-top party. Check out the human hamster ball about 35 seconds in.

Previous coverage:
Amazon and Zappos: a good fit?
A blow-by-blow account of the Amazon-Zappos deal
Zappos CEO: ’Nobody was forced to sell to Amazon’

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Kindle users flock to freebies  

Amazon.com has raised the ire of some in the book publishing industry for pricing Kindle versions of best-sellers and new releases at $9.99. But what about Kindle books that cost, well, nothing? The Associated Press reports that free books have become top "sellers" in the Kindle store, a development that could hold promise — or peril — for publishers.

AP writes:

Publishers and authors have been nervous that the standard cost for electronic editions of new releases, just under $10, will take away sales from the more expensive hardcovers and set an unrealistically low price for the future. They are concerned, but open-minded, about free books, which present a chance and a challenge: Readers may buy other books, or, they may simply seek more free titles.

Scott Shannon, publisher of the Del Rey/Spectra imprint at Random House, tells AP that free Kindle books are "a huge hot-button topic we’ve been discussing within our division and at the corporate level." He said free books can prompt people to buy other titles, but "in the long term, we have to guard the market. We have to make sure people understand that time and energy goes into writing a book."

Right now the top three bestsellers in the Kindle store — "The Angel Experiment" by James Patterson, "The Briar King" by Greg Keyes, and "Paranoia" by Joseph Finder — are all free. In fact, half of the top 20 Kindle bestsellers are listed at $0.00.

Amazon isn’t the only company offering free e-books. Sony and Barnes & Noble have tapped Google’s huge book-scanning project to add free public domain books to their collections. But Amazon appears to be the only one including free titles in its bestselling e-book list — giving them broad exposure.

Interesting side note: Amazon’s Kindle store is now heavily promoting its recently announced collaboration with Shmoop. The new Shmoop Classics for Kindle are a mashup offering, combining literary works with an interactive guide of "smart, fun analysis." Kind of sounds like electronic CliffsNotes. More from the Amazon Kindle blog.

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David Pogue heads to the beach to "curl up with a good electronic book." In the video, The New York Times tech columnist points out that Barnes & Noble’s new electronic book store of 750,000 ebooks is not exactly what it seems.

Pogue also notes that Amazon.com still has a better selection of books you actually may want to read, not to mention cheaper prices on books such as "Dune" and "Freakonomics."

But Pogue does like the fact that you can read ebooks from Barnes & Noble on a Mac or PC, and notes that company’s iPhone app is ‘very nice" since it allows you to change the colors and font and perform other tasks not possible on Amazon’s app.

"So, even if Barnes & Noble’s 1.0 ebook store is a little flawed, it is a good enough start, and competition is always good," says Pogue as he puts on suntan lotion.

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and MRI startup Confirma purchased by Merge for $22 million  

Bellevue-based Confirma, a maker of MRI imaging analysis products, has been acquired by Merge Healthcare in a stock deal valued at $22 million.

Confirma’s CADstream product — with 1,200 systems implemented at facilities throughout the world — provides more detailed analysis and reporting for MRI studies related to breast and prostate cancers.

Last year, Confirma scored $17.5 million in venture financing from Telegraph Hill Partners, Fluke Venture Partners, Northwest Venture Associates, Prism Ventureworks and Versant Ventures. The company — which has partnerships with McKesson, GE Healthcare and Philips Medical — is led by Wayne Wager, a former venture capitalist at Encompass Ventures.

“By combining our patented CAD applications with Merge’s broader health IT solutions and global presence, we can better take advantage of current and future growth opportunities and, thus, extend our solutions to more clinicians,” Wager said in a release.

John Cook is co-founder of TechFlash. Follow on Twitter @johnhcook.

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and Scout blazes trail with Windows 7  

Some aspiring Eagle Scouts clean up parks, run safety campaigns, or refurbish hiking trails to complete the leadership service project required to achieve the Boy Scouts of America’s highest rank.

David Browning, of Troop 600 in Bellevue, is installing Windows 7.

To be sure, this is no simple project. The 16-year-old technology enthusiast, who happens to be the son of a Microsoft employee, is overseeing the deployment of Microsoft’s new operating system across 67 computers at Eastside Christian School in Bellevue — managing a team of fellow Boy Scouts and overseeing a complex software duplication process to help the school make a much-needed technological upgrade.

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First glimpse of a Microsoft store  

Through its official Twitter account this afternoon, Microsoft released this photo of the location of one of its first retail stores. The company announced previously that it would open stores in Scottsdale, Ariz., and Mission Viejo, Calif., this fall. There are no big secrets in the picture — the brands on the sign are the ones you’d expect the company to promote — but it’s notable nonetheless.

As noted by TechCrunch, leaked renderings of the insides of the stores were published by Gizmodo recently, but the company said at the time that the designs weren’t final.

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The social network built around short text messages was shut down from about 6 a.m. to about 8:30 a.m. Thursday by an apparently deliberate automated deluge of messages that overwhelmed its system., more 
and Web attack targeted Georgia blogger  The cyber attack that brought down Twitter for several hours Thursday was aimed at a single blogger located in the country of Georgia., more 

and Cassidy: What did people do before Twitter? Walk around stupid?  Life without Twitter is like a day, well, like a day without knowing what in the world is going on, IMHO., more 

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Murdoch says his news properties’ Web content will no longer be free. But what shape will payment models take, and who will follow suit?, more 
and Betting on the Real-Time Web  No one knows how the microblogging site and similar online social networks will make money, but investors see a new Web revolution, more 

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The beleagured memory chip market won’t see an immediate pick-up from Microsoft’s launch, IDG News Service reports, more 
and Lenovo Sales Recover, but Still Under Pressure  The Chinese PC maker is tripling its sales staff in India, where sales are growing, IDG News Service reports, more 

and Sirius XM Battles for Subscribers  The satellite radio company lost fewer subscribers in Q2. But competition from Internet radio and the possible loss of Howard Stern could stymie a turnaround, more 

Schmidt’s Apple Gig: He Worked for Free  Former Apple director Eric Schmidt took no salary or stock for his board service. What did the Google chief accept? Lots of Apple gear, more 

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Microsoft’s hardware group this morning unveiled a prototype of a pressure-sensitive keyboard that can detect precisely how hard each key is being pressed.

The company describes the potential uses as "limitless," saying it has tested concepts including pressing a letter harder to get a capital letter or a larger font size, or hitting the delete key harder or softer depending on whether the user wants to delete one character or an entire word.

It’s just a prototype for now, and Microsoft Hardware isn’t discussing any plans to bring the keyboard to market. However, the keyboard will be the subject of a student competition at the User Interface Software and Technology conference in Victoria, B.C., in October. Students will be challenged to develop new ways of using the prototype keyboard to interact with computers.

Microsoft researchers have been putting a big focus lately on natural user interfaces, such as the motion-detecting Project Natal interface planned for the company’s Xbox 360 game console, and the new multi-touch capabilities planned for Windows 7. Microsoft Hardware focuses primarily on mice and keyboards, but its engineers also work on a variety of other hardware projects inside the company.

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and Seattle Mayor Nickels ushers in the ‘era of the charging station’  

Washington and Oregon are among five states that will receive new electric vehicles and charging stations as part of a $100 million Department of Energy Grant awarded to Phoenix-based Electric Transportation Enginering Corp.  As part of the iniative — dubbed the largest electric vehicle infrastructure program in U.S. history – eTec will establish up to 2,550 charging stations in the Seattle area.

The program also calls for Nissan to deploy as many as 1,000 battery-powered LEAF vehicles in each of the five markets. The electric car — set to debut in October 2010 — is designed to go 100 miles on a single charge.

"This news heralds the end of the filling station and the beginning of the era of the charging station," said Nickels in a release. "We are going to be leaders in converting our transportation from oil to electricity."

Other states that are participating in the project include California, Arizona and Tennessee.  

Seattle will be one of the first cities in North America to receive the LEAF, which depends on a robust network of charging stations. As part of an agreement announced this week, Seattleites who purchase a LEAF will receive a free 220-volt charging system at their home for free.

At current Seattle City Light electricity rates, it would cost just $190 to drive a Nissan LEAF for 10,000 miles. That’s the equivalent of two cents a mile. A gas-powered car that got 25 miles per gallon, on the other hand, would cost $1,100 to drive for that distance. 

In addition, the car sharing service Zipcar has agreed to introduce electric vehicles into its Seattle fleet for use by city employees and the public.

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Amazon is making progress getting the major college textbook publishers on board with its Kindle electronic reader. Today, McGraw-Hill Education said it will begin offering 100 higher education titles on the Kindle. McGraw-Hill joins the other major textbook publishers, Cengage Learning, Pearson, and Wiley, which are already selling Kindle editions. Amazon is positioning its new large-screen Kindle DX reader as a replacement for physical textbooks — and needs to get as many titles as possible into electronic form.

When Amazon announced the Kindle DX in May, it said Cengage Learning, Pearson, and Wiley were all part of the project, but McGraw-Hill’s name was conspicuously absent. Now, with McGraw-Hill in the lineup, the Kindle DX can offer titles from the four biggest textbook publishers. According to Subtext, a monthly newsletter covering the book publishing industry, the top four college publishers by 2008 annual sales were Cengage ($1.7 billion), Pearson ($1.6 billion), McGraw-Hill ($610 million), and Wiley ($230 million).

McGraw-Hill said the textbook titles will be used in on-campus pilot programs with the Kindle DX this fall. Amazon and a handful of universities (including the University of Washington) are providing Kindle DXs to some students to test as a textbook replacement.

"The modern student body increasingly requires digital access and capabilities, and we are pleased to be strengthening our partnership with Amazon to help meet these critical needs," said Ed Stanford, president of McGraw-Hill Higher Education, in a statement.

Will students take to the Kindle DX? The devices would be certainly easier to lug around than a pile of books. Students spend a lot of money on textbooks today, though the Kindle DX, currently priced at $489, isn’t cheap either.

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and T-Mobile adds subscribers at a slower pace as revenues fall  

T-Mobile USA, the fourth largest wireless carrier in the U.S., said that it netted 325,000 new customers during the second quarter as revenues fell slightly to $5.34 billion.

T-Mobile also has been struggling to hang onto customers, with a contract churn rate that increased to 2.2 percent from 1.9 percent for the same period last year.  The number of new subscribers also has slowed, with 415,000 net additions in the first quarter and 668,000 in the second quarter of last year.

T-Mobile, with 33.5 million subscribers, boosted its operating income before depreciation and amortization (OIBDA) to $1.6 billion. That was up 16 percent over the first quarter and up 1 percent over the same period last year. Full press release here.

Meanwhile, T-Mobile plans to introduce its new myTouch 3G — built on Google’s Android operating system — today in by having 100 skydivers form a "T" as they fall from the sky above San Francisco. (Cnet has a photo gallery of the extravagant launch ceremonies here).

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and John L. Scott Real Estate unveils new mobile site for the iPhone  

Zillow.com grabbed some buzz — not to mention users — when it introduced a slick iPhone application in April that allowed home buyers to pull up information while on the go.  Not to be outdone, John L. Scott Real Estate today unveiled a new mobile service that’s optimized for the iPhone and other smartphones.  

Instead of creating an iPhone app that is downloaded, the Seattle real estate firm opted to create a service that automatically detects the device and provides enhanced features. Those include the ability to pull up nearby for-sale listings based on the phone’s GPS capabilities. It also creates easy shortcuts to contact a John L. Scott agents and nearby offices.

“There’s no assembly required; just switch on your iPhone and our website will do the rest,” said CEO J. Lennox Scott in a release. 

Of course, there’s one big difference between John L. Scott’s new service and Zillow’s app — other than the fact that it doesn’t require a download. While you can search for nearby sale listings on the new service, it doesn’t show every home in the neighborhood as Zillow’s offering does. 

That’s especially helpful for home buyers — not to mention real estate professionals — since they can conduct research on nearby properties as they look at homes for sale in a specific neighborhood.

John L. Scott has been trying to push the envelope when it comes to new technologies, working with Microsoft to create a new social network called JLSconnect and incorporating enhanced online mapping technologies on its Web site.

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Report: Publicis heads the pack to buy Microsoft’s Razorfish  

Microsoft has been looking for some time to unload Razorfish, the digital ad agency that it acquired as part of its $6 billion acquisition of aQuantive two years ago. Now the pack of potential suitors appears to be narrowing down.

French ad agency Publicis is currently in the lead to buy Razorfish, and has bid between $500 million and $600 million for the agency, according to a report today in the Wall Street Journal. Microsoft wants the buyer of Razorfish to commit to purchasing "hundreds of millions of dollars" in ads across its various web properties, an issue that’s now being "hammered out" by Microsoft and Publicis, the Journal reports.

That kind of ad commitment — if Microsoft can nail it down — could boost Microsoft’s newly minted partnership with Yahoo as it takes on Google in the internet search market. According to the Journal, Japanese ad giant Dentsu also made a bid for Razorfish, and Omnicom Group and WPP expressed early interest in the agency.

Many observers believe Microsoft was primarily interested in aQuantive’s technology units, the online advertising platform Atlas and website ad network DRIVEpm, and picked up Razorfish as part of the deal. Razorfish, which has been hit hard by the economic downturn as clients cut back on ad budgets, has undergone several rounds of layoffs over the past year.

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Microsoft this afternoon released an update for Mac Office 2008 that the company says will fix a file-format problem encountered by users after the July 20 release of Service Pack 2 for the Mac Office suite. You can download the fix here.

Mac PowerPoint users originally brought the problem to our attention, saying that the previous Service Pack 2 update prevented them from opening PowerPoint files previously saved with the ".pptx" extension. However, the accompanying support document indicates that Mac Office and Excel files were impacted, as well.

If you were experiencing the problem previously, let us know if the update fixes it for you.

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and Seattle company introduces automatic pancake machine  

Americans have created some pretty cool high-tech gadgets over the years. The iPhone. The Xbox. The Kindle.

Now, get ready for some real innovation. A Seattle company has introduced the ChefStack, a $3,500 automatic pancake machine that creates "perfect panless pancakes" in a matter of seconds. In fact, the machine can spit out fat-free flapjacks at a rate of 200 per hour.  Ah, you gotta love America.

ChefStack was formed earlier this year by R.J. Selfridge, a long-time food executive who spent the past 10 years as head of operations at Tully’s Coffee. The device — about the size of a small microwave oven — has been sold in Australia and New Zealand where it has been deployed in Marriott Hotels and the airport lounges of Qantas airlines.

The company — which also is targeting sales in coffee shops, schools and hospitals — writes in a press release:

Presentation and vending options to end customers are limited only by the creativity and menu selection of the ChefStack partner. From traditional restaurant-style three pancake stacks with butter and maple syrup, to mini-pancake “shooters” with eggs and meat, to fruit-filled pancake turnovers, the possibilities for customer satisfaction and profits are virtually limitless.

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and Blue Nile earnings down, but in line with analyst estimates  

Online diamond and jewelry retailer Blue Nile reported a dip in second-quarter earnings, but the results were in line with analyst expectations. The Seattle-based company said Q2 net income was $2.8 million, or 19 cents a share, compared to $3.2 million, or 20 cents a share, the same quarter a year ago. Analysts had expected earnings of 19 cents a share.

Sales for the second quarter totaled $69.9 million, down from $73.7 million in the year-ago quarter, a drop of 5.2 percent. International sales were $7.1 million, down 12.3 percent, primarily due to the impact of foreign currency exchange rates.

Blue Nile said that excluding the impact of currency exchange rates, international sales would have declined 1.2 percent, but the company also said it "experienced continued economic weakness in key markets, particularly the U.K."

"Blue Nile delivered excellent financial results in a challenging retail environment, with strong profitability and market share gains,” saidCEO Diane Irvine, in a statement.

In an Aug. 4 preview of Blue Nile’s second-quarter earnings, McAdams Wright Ragen analyst Dan Geiman wrote:

We continue to believe that NILE is relatively well positioned within the jewelry market given its competitive price points, relatively affluent and educated customer base, and strong supplier relationships, which should allow the company to outperform its peers. Longer-term, a reduction in store capacity within the jewelry industry should be a plus for NILE as well.

Blue Nile said its inventories were $15.7 million at the end of Q2, a decline of 6.3% from a year ago. The company said it had $48 million in cash and cash equivalents at the end of the second quarter.

Blue Nile Chief Financial Officer Marc Stolzman said expects sales to be "flat to slightly down" in the third quarter. He said he projects full-year net sales of between $288 million and $295 million, and diluted earnings per share in the range of 78 cents to 82 cents.

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RealNetworks cuts 12 more jobs, or 9 percent of its music division  

One week after a tough earnings report, RealNetworks today moved to further reduce its expenses by cutting 12 more positions, totaling 9 percent of its music division, a spokesman confirmed this afternoon. The latest layoffs follow the elimination of 130 jobs last year, and a smaller round of cuts a couple months ago.

The jobs cut today involved employees of RealNetworks and its Rhapsody America joint venture with MTV Networks. The layoffs represent about a half-percent of the company’s overall workforce, said Bill Hankes, a RealNetworks spokesman. He said the company is putting greater emphasis on its mobile and web businesses, and reducing the resources it’s putting into editorial projects and PC client software.

The cuts come despite the fact that music was the only one of the company’s main business units to see an increase in revenue in the second quarter, rising 9 percent to more than $40 million. Revenue in the company’s games unit and media software and services business declined by 15 percent and 34 percent, respectively.

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