Tim Berners-Lee gave a keynote speech at 3GSM last year where he discussed the difference between what he calls a foundation technology and a ceiling technology:

A foundation technology is designed to enable innovation, to be the base which will support other even more powerful things to come. A ceiling technology is not. It is designed to provide a value, and for its provider to cash in and cash out.

He can talk, he developed the most important foundation technology of recent times: The web.

In contrast to the web, instant messaging was largely developed as a ceiling technology. The big players, Microsoft, AOL and Yahoo control more than 90% of the market and all of them rely on a closed technology. The result is that although lots of people use IM, the ecology of companies providing innovative solutions based on IM is tiny.

This is all about to change. XMPP, aka Jabber, is an open source instant messaging technology which had largely been exclusive to geeks until Google decided to base its GTalk client on the technology. Recently, it has been rumoured that AOL and even Microsoft will open up their networks to Jabber based clients.

ReadWriteWeb published an interesting article recently on how XMPP might be the future of cloud computing. Currently, the technology is being used by Tivo, Twitter, Mebo and many others and with the the possibility of other major players opening up their systems, 2008 might be the year when instant messaging evolves from being a ceiling technology to a foundation technology.

Duncan J. Watts is a physicist turned sociologist and author of the book Six Degrees: The Science of a Connected Age. In a recent interview with Fast Company, Watts disputes Malcolm Gladwell’s tipping point theory which became conventional wisdom when his book became a bestseller.

“It just doesn’t work,” Watts says … “A rare bunch of cool people just don’t have that power. And when you test the way marketers say the world works, it falls apart. There’s no there there.”

It’s difficult to build an argument such as Gladwell’s tipping point without relying on anecdotal rather than empirical evidence. Watts on the other hand bases his theory solely on controlled experiments albeit with computer simulations rather than people.

The debate that is sure to follow will be an interesting one and we can safely recommend both books as highly enjoyable.

Last week’s Economist has an interesting article (”Crunchless credit“) on how the recent credit crunch affects peer to peer lending services such as Zopa and Prosper.

Apparently, private lenders haven’t raised their rates as much as the banks have because unlike the banks, they don’t face higher funding costs. The article highlights the intriguing point that peer to peer lenders might possibly be better at assessing risk than the bigger players.

On a related note, a new peer to peer lending site called MicroPlace launched recently. It allows users from industrial countries to invest in start-ups from the developing world.

Last week I attended “The Online Opportunity” at Microsoft’s headquarters here in London. The main attraction was that Steve Ballmer, CEO, was giving a talk about his company’s take on the brave new world of Software as a Service and doing business online in general. Microsoft Startup Zone has a video recording of Ballmer’s and all the other talks.

Ballmer reiterated MS’s “use Suse or be afraid” position on Linux, i.e. that companies should use Novell’s Linux distribution to avoid being sued by Microsoft for patent infringement (Novell is a Microsoft partner).

He also discussed the drawbacks of the “free with ads” business model and noted that Microsoft had never had much luck in monetising Hotmail. He stated that Google was having the same problems even though “they read your mail and we don’t” (a comment that surfaced on Slashdot today).

Although his performance wasn’t as energetic as on some previous occasions, Microsoft’s man in the bridge came across as sensible, pragmatic and knowledgeable.

For more comments on the event, check out the coverage by Simon Willison and Jeremy Keith.

When Bill Gross founded his famous Idealab incubator in 1996, taking an idea and turning it into a functioning business was a venture that would require funds of at least $1 million a pop.

Today, developing an application like Walletproof costs significantly less than a million dollars. This changes the game.

In Return of the startup factory, Business 2.0’s Michael V. Copeland writes about the contrast between the good old days of the bubble and the new high turnover incubators, such as Paul Graham’s Y-Combinator.

The idea is not dissimilar to that of the VC model: No one has a clue as to what business ideas will become successful, just as the Hollywood studios don’t know what movies will become blockbusters. The incubator bets on a fairly large range of ideas and gives each company a small amount of seed capital for an equity stake.

With open source software, cheap bandwidth and distributed teams that don’t need office space, the cost of failure will be minuscule compared to the return if the incubator manages to bet on and support an idea that becomes a blockbuster.

Now, the high turnover incubator has come to London in the form of Seedcamp.

Seedcamp is run by two VCs, Saul Klein from Index ventures (who also runs the OpenCoffee) and Reshma Sohoni from 3i.

Sam Sethi, who formerly edited TechCrunch UK and later Vecosys, announced yesterday that he’s launching blognation, a blog network that will report on European web start-ups.

Sam is well connected into what’s happening in the UK web2.0 start-up scene and Vecosys (as TechCrunch UK was before it) is a must-read for those who are enthusiastic about European web culture.

According to the announcement, Sam has secured editors from various European countries, including Iceland. Being an Icelandic expatriate, I found this very interesting and I’m looking forward to seeing who the Icelandic editor is.

Iceland has a strong and vibrant economy and has everything it takes to foster interesting web start-ups. Strangely enough, one of the most innovative companies on the Icelandic web is Árvakur, a newspaper publisher founded in 1919.

Their blogging platform is the country’s biggest thanks largely to how they integrate their newspaper’s website and the blogs. They even publish excerpts from the blogs in the paper itself - a powerful incentive for those who want their voices to be heard.

It will be interesting to see how blognation will fare in the coming months. Good luck to Sam and his fellow editors.