Facebook challenges TV for brand dollars with smarter campaigns

Lacking the millions of dollars it costs to broadcast a Super Bowl ad, Britain’s Newcastle Brown Ale gate-crashed the biggest advertising event in the United States by creating an archetypal big budget campaign that it never intended to run on television.

The Heineken-owned brand’s beer commercials, which poked fun at the marketing tactics of rivals advertising in the American football championship game, ran on Facebook and Google’s YouTube instead.

The stunt was a success, generating a similar level of online response as some brands that bought Super Bowl air time.

Brand director Quinn Kilbury said consumers had grown tired of big-budget advertising clichés, such as dramatic voice overs. “They love the fact Newcastle says it as it is,” he said.

One video shows Hollywood actress Anna Kendrick talking about how she had been dumped by Newcastle Brown Ale because they were too cheap to pay for the ad.

The average cost of a 30-second spot in the Super Bowl – which this year was the most-watched U.S. television program in history with more than 111 million viewers – was around $4 million. Newcastle said its campaign cost “a fraction” of a Super Bowl ad, without specifying a number.

The Kendrick video attracted 63,336 shares across Facebook, Twitter and blogs, of which 56,116 came from Facebook alone, according to marketing technology company Unruly.

That would put it 19th in the ranking of online responses to Super Bowl ads, in front of Dannon Oikos Greek Yogurt but a long way behind first-ranked Budweiser, which was shared more than 1.9 million times, Unruly said.

Newcastle’s campaign is held up by Facebook as an example of how the social network can help advertisers by getting hard-to-reach young consumers to engage with, share and talk about the brand.

It a message Facebook has taken to marketers at the Cannes Lions international advertising festival this week.

The social network will work with agencies and marketing departments to create campaigns that engaged users in different ways than television, said Mark D’Arcy, Facebook’s Director of Global Creative Solutions.

“People have absolute freedom of movement across screens,” he said. “So the thought that we are living in the 1990s and we have the ability to command and control somebody’s attention span on any platform is crazy,” he said.

Sales of Newcastle Brown Ale in the United States overtook its home British market around two years ago, the company said. The brand appeals to young U.S. city dwellers looking for an alternative to the big-name beers.

The spoof Super Bowl campaign was the latest in a series of online ads that “tell it like it is”.

AIMING HIGH

Brand advertising, which builds awareness of a product or service’s name, has largely been confined to television, said Ian Maude from Enders Analysis.

“Television is the still the king of brand advertising,” he said. “TV advertising is very robust. But younger audiences, aged 16-24 are shifting to digital devices, dominated by Facebook, YouTube and Instagram.”

He said Facebook was pitching itself as a brand medium alongside television.

“In terms of the scale of the audience, they don’t compare themselves to other digital media, they compare themselves to TV,” he said. “They are gunning for brand advertising.”

Facebook is looking to brand advertising to grow its sales, eMarketer analyst Debra Aho Williamson said. The tech and media analyst group forecasts Facebook’s advertising revenue will rise from $6.99 billion in 2013 to $10.75 billion this year, $14.01 billion in 2015 and $16.96 billion in 2016.

Kilbury said Newcastle’s success was down to the creativity of the campaign, devised by its agency Droga5, which in turn was honed by Facebook’s improved analytical tools.

“A year and a half ago it was difficult to get a readout in real time of how your posts were performing, but Facebook can legitimately tell us an hour after it posts, what’s working here, who we are reaching, and who it is reaching the best,” he said.

For Newcastle, another advantage of using Facebook was the ability to test and tweak ads, nearly in real time.

Changing the placing of the product shot, the number of words in the ad, or the opening image on a video affected the number of clicks an ad received or the number of times it was shared, Kilbury said.

“It’s not so much the creative as the way you package the creative,” he said.

But Facebook does not want to upset users. It is offering 15-second ads to play with the sound muted in newsfeeds in Britain, Brazil and five other countries.

D’Arcy said people were foremost looking for relevance when consuming content on Facebook, and advertisers needed to work with this to build a brand on digital media.

“We have an ingrained sense of entitlement in the marketing industry that we have a right (to advertise),” he said.

The targeted approach, and the requirement to make ads fit with content, can be a disadvantage for marketers, looking for the big splash to millions of people at the same time, something that event television still provides.

“Big brands always look for big, splashy eye catching images that create an emotional pull,” said eMarketers’s Aho Williamson.

“On Facebook you can do so much targeting, it becomes a challenge for advertisers who are used to thinking in broad strokes

Exclusive: SoftBank Capital invests in Kony; move will boost Kony’s Asia presence

The venture capital arm of Japan’s SoftBank Corp (9984.T) is investing in enterprise mobile company Kony Inc, Kony said in a statement on Tuesday.

SoftBank Capital will lead the $50 million financing round, Kony’s largest to date, with existing and new investors including Insight Venture Partners, Telstra Ventures and Georgian Partners.Founded by Raj Koneru in 2007, Kony generates nearly $100 million of revenue and is on the path to an initial public offering, a source close to the company said on condition of anonymity because the discussions were private.

“We have known of the company for a couple of years, we have been talking with the company more seriously about an investment over the last six or nine months,” Steve Murray, a partner at SoftBank Capital, said in a phone interview.

The new financing is expected to allow Kony to get closer to profitability and expand its presence further in Asia, particularly Japan, through SoftBank’s connections.

“In Asia we have a very strong business,” said John Joyce, Kony’s vice chairman and chief financial officer. “With the help of SoftBank we will hopefully expand that. Japan would obviously be one area where Steve and his team will help us with.”

Florida-based Kony calls itself the fastest-growing cloud-based mobile application development platform, helping companies and other clients build apps for smartphones and tablets. It serves 20 million mobile app users across 45 countries each day.

Last year, Kony added 100 new customers including Aetna Inc (AET.N), Anheuser-Busch (ABI.BR), Bayer AG (BAYGn.DE), the Coca-Cola Co (KO.N), Sirius XM (SIRI.O), SunTrust Banks Inc (STI.N) and US Foods Inc.

Kony has spent the last few months building its executive management bench. It appointed Thomas Hogan, former executive vice president of software at Hewlett-Packard Co(HPQ.N), as chief executive officer and Joyce, a former IBM veteran, as its vice chairman and CFO.

SoftBank Capital has been steadily building its startup investment portfolio, which has included companies in industries from social media to online retail.

Apple settles e-book antitrust case with U.S. states, others

Apple Inc reached an out-of-court settlement with U.S. states and other complainants in an e-book price-fixing class action lawsuit on Monday, effectively avoiding a trial in which the iPad maker faced more than $800 million in claims.

U.S. District Judge in Manhattan Denise Cote ordered the parties to submit a filing to seek approval of their settlement within 30 days.

The terms of the settlement, which still needs court approval, have not been revealed.

The U.S. Department of Justice sued Apple and five publishers in April 2012, accusing them of working together illegally to increase e-book prices.

Since then, 33 states and U.S. territories have separately sued Apple on behalf of their consumers, while individual consumers in other states and territories filed a class action lawsuit.

The complainants are seeking up to $840 million in damages for e-book customers. The exact amount of damages was to be litigated at a trial scheduled for July 14.

The publishers – Hachette Book Group, HarperCollins Publishers, Penguin Group (USA) Inc, Macmillan and Simon & Schuster Inc, previously agreed to pay more than $166 million to settle related antitrust charges.

Last July, a federal court found Apple liable for colluding with the publishers after a separate non-jury trial in a case brought by the U.S. Department of Justice.

Judge Cote found that Apple took part in a price-fixing conspiracy to fight online retailerAmazon.com Inc’s dominance in the e-book market.

Apple is appealing that decision and Monday’s settlement is contingent on the outcome of that appeal.

“As set forth in the memorandum of understanding, any payment to be made by Apple under the settlement agreement will be contingent on the outcome of that appeal,” Steve Berman of Hagens Berman Sobol Shapiro, the plaintiffs’ lead lawyer, wrote in a letter to the judge.

Berman declined to comment on the settlement until the final papers are filed. Kristin Huguet, a spokeswoman for Apple, also declined to comment on the settlement.

The cases are in the U.S. District Court for the Southern District of New York, case no: 11-md-2293 and 12-cv-03394.

Boeing-Lockheed venture eyes alternate rocket engine by 2019

The rocket launch company run by Boeing Co andLockheed Martin Corp on Monday said it had signed contracts with multiple U.S. firms to work on a next-generation rocket engine as an alternative to a Russian engine now used for key launches.

United Launch Alliance (ULA), the joint venture run by the two largest U.S. weapons makers, said it would choose one of the companies to develop a new engine by the fourth quarter, which would enable initial launches by 2019.

The U.S. Defense Department, spurred by growing concerns over Russia’s actions in Ukraine, has said it wants to end its dependency on Russian engines to power rockets that launch national security satellites into space.

Controversy about the Russian rocket engine has also put a spotlight on Space Exploration Technologies, a privately held company, that is seeking U.S. Air Force certification so it can compete for some of the U.S. government rocket launches.

SpaceX last month sued the Air Force for excluding it from a multibillion-dollar 36-launch contract awarded to ULA.

ULA said it had signed commercial contracts with multiple firms to investigate next-generation liquid oxygen/hydrocarbon first stage propulsion concepts. It provided no details on the names of the companies involved or the cost.

Aerojet Rocketdyne, a unit of GenCorp, has said it is potentially interested in working on a new engine. It was not immediately clear which other companies might be involved.

ULA said each firm would carry out a technical feasibility analysis, develop plans, identify schedule, cost and technical risks, and cost estimates.

“As the nation’s steward of the launch industrial base and the only company certified to launch our nation’s most critical missions, it is incumbent upon ULA to bring forward the best solutions to preserve that capability for the future,” said Michael Gass, president and chief executive of ULA.

He said the current RD-180 engine, used for the company’s Atlas rockets, had been a remarkable success, but it was time to invest in a U.S. engine.

ULA said it would continue to work with U.S.-based RD AMROSS, a joint venture of United Technologies Corp and Russia’s NPO Energomash, to study the long-term feasibility of the RD-180 engine in competition with the new engine.

It said the companies were discussing product improvements, U.S. production of the engine and other enhancements.

 

Roku CEO discusses state of Internet video, TV

SAN FRANCISCO (AP) — If Netflix CEO Reed Hastings is the star of the Internet video-streaming phenomenon, then Roku CEO Anthony Wood is the best supporting actor.

Both men play pivotal roles in popularizing technologies that are shaking up the entertainment and broadband industries.

While Hastings gets marquee billing for building an Internet video service with 48 million worldwide subscribers, Wood has quietly worked behind the scenes making Roku streaming devices that make it easier and more enjoyable to watch Netflix’s vast library of movies and TV shows.

This isn’t the first time Wood, 48, has helped change the way that people watch TV. In the late 1990s, he invented one of the first digital video recorders and started ReplayTV – a company upstaged by fellow DVR pioneer TiVo Inc.

Roku, based in Saratoga, California, appears to be to doing so well that the privately held company is viewed as a prime candidate to go public during the next year.

Since its first streaming box debuted six years, Roku has sold more than 8 million devices used for streaming Internet video to the TV -still the biggest and most-watched screen in the house. Roku offers about 1,500 streaming channels, including Netflix rivals such as Hulu and Amazon Prime.

Roku’s early success prompted Apple Inc. to start treating its own video-streaming player as something more than a “hobby,” as its late CEO Steve Jobs once dismissively described the device. About 20 million Apple TV streaming devices have been sold, according to current CEO Tim Cook, and the business generates more than $1 billion in annual revenue.

Both Google Inc. and Amazon.com Inc. also have launched video-streaming devices in the past year to establish a toehold in a rapidly growing market. About 35 percent of U.S. households now have TVs connected to the Internet, according to the research firm NPD.

Wood shared his views on the convergence of Internet video and television in a recent interview with The Associated Press. The conversation has been edited for clarity.

Q: Where is TV headed?

A: To me, it’s pretty clear that all TV is going to be streamed. It’s either going to be streamed to a smart TV, a gaming console or a streaming player. That’s the way people are going to watch TV. Things like DVD players are going to go away. Cable boxes are obviously going away, too. DVRs are just a stepping stone technology. When everything is on demand, you won’t have to record anything anymore so that’s going to disappear.

Q: Do you still have a DVR in your house?

A: No, I got rid of my DVR when it broke. That was probably five years ago. It was a ReplayTV. We watch all our TV on demand anyway.

Q: How big do you think cord cutting will become?

A: The coolest thing about streaming is that it gives customers lots of choices. If someone just wants to watch movies on Netflix, they have that option now. There has been an explosion in the types of content you can get through streaming. If they want to have the best cable experience ever, including HBO Go and ESPN Watch, then they get cable service, too.

Where it will end up? I am not sure. I do believe people are watching more TV than ever and they have options. You don’t just have to watch what’s on pay TV or what’s on your DVR. The majority of our customers do have a pay-TV (cable or satellite) subscription, but a pretty good chunk doesn’t. More than 60 percent have pay-TV. About 35 percent don’t and they mostly just stream video.

Q: Are you worried about the competition from Apple, Amazon and Google?

A: Every time one of those companies come out with an announcement, our sales have gotten better. Anything that gets people excited about streaming, we’re for. Our sales are growing stronger than ever.

Q: You once predicted the DVR would be dead by 2020. Do you still feel that way?

Answer: That sounds right. I don’t think many people will be using DVRs six years from now.

Q: Given your history, does that make you melancholy?

A: No, it makes me excited. It’s just a much better world when you don’t have to worry about recording shows. DVRs are noisy, and they break, too.

Tech Five: Yahoo sinks, more clues on Apple’s ‘iWatch’

It appears we have additional confirmation that Apple is working on a smartwatch. Let’s look at the technology stocks to watch on Monday:

Apple. In a profile of company CEO Tim Cook, The New York Times reports Apple is expected to release its long-rumored smartwatch during the fourth quarter, which ends in September. The report doesn’t dig into many details about the features Apple’s smartwatch will include, but notes Cook has been less hands-on in developing products such as the smartwatch than Apple co-founder and predecessor Steve Jobs.

Yahoo. Shares of the tech giant plunged 4.3% in pre-market trading after Chinese commerce site Alibaba reported a slowdown in revenue growth for the year, CNBC reports. Yahoo owns a 24% stake in Alibaba, which is poised to launch its initial public offering on Wall Street.

Amazon. This Wednesday, the online retailing giant is expected to make another jump into the hardware business with the unveiling of a 3-D smartphone. The phone would reportedly include a 3-D interface generated by four built-in cameras. The company has already launched a line of tablets and its streaming TV device Fire TV.

AT&T. The telecom giant confirmed a data breach involving the social security numbers and phone records of an unknown number of customers, according to Re/code. Three employees of an AT&T vendor accessed company records in April, the company revealed in a statement.

Google. The Wall Street Journal breaks down the company’s $500 million acquisition of satellite company Skybox Imaging. The report says Skybox’s rich imaging and data could help Google bolster its revenues by, for example, charging a licensing fee to companies for that data.

A Search Engine for the Era of Apps

A new kind of search engine will make it possible to search inside the apps on your phone.

Once upon a time there was the Web, a vast universe of information and services that were tangled together by hyperlinks but easy to explore using search engines. Then smartphones came along. Now people are spending less and less time on the Web and more in mobile apps, convenient but isolated packages not open to links or visible to any search engine.

A company called Quixey is now dedicating its 150 employees and $74 million of investment funding to changing that. In an old appliance store across town from Google’s sprawling headquarters in Mountain View, California, Quixey is building a search engine that can peer inside apps to find what you need.

Quixey’s goal is to add a search box to your phone that can take in queries such as “Best Thai restaurants in San Francisco” or “taxi home” and produce a list of results that take you, with a single tap, to the relevant screen or function inside an app.

A prototype seen by MIT Technology Review and slated for release later this year focuses on searching for places to eat and drink. When asked to find a particular kind of cuisine, it serves up the highest-rated places nearby from review apps such as Yelp and Urbanspoon. It can also show links to the OpenTable app to make reservations and check availability. Quixey can also offer results from apps not installed on a device. Tapping on one installs it and then opens it to the relevant place.

“The way people interact with the third-party apps installed on their phones is broken,” says Liron Shapira, a cofounder and CTO of the company. It doesn’t make sense for people to hunt through a clutter of icons to find the app they need and to have to memorize how to navigate inside each one, he says. “A search bar is the better way to use third party apps—and the Quixey vision is to put that search bar on every device.” That approach should be able to offer broader functionality than voice operated assistants such as Apple’s Siri or Microsoft’s Cortana, he claims.

 

 

Quixey, founded in 2009, previously worked on search technology that could only find apps in much the same way as app stores do and licensed it to wireless carriers and others. The company will now focus primarily on using its more advanced search technology to establish itself as a brand-name search provider.

Web search engines work by using software to visit Web pages and build an index of the information they have and the links between them. Quixey’s index is built differently. It combines information about apps gathered from app stores and review sites with data from a feature known as deep links, which many developers have recently begun adding to their apps. Deep links are a kind of hyperlink that points to a specific place or function inside a mobile app. A deep link on a mobile Web page or in an e-mail, for example, might take you to a specific product in a shopping app or song in a music app.

Much of the interest in deep links is motivated by the fact that they can make ads on mobile devices more effective (see “The Ad Industry Reinvents the Hyperlink for the Mobile Era”). Facebook, Google, and Twitter all encourage or in some cases require app developers using their advertising services to outfit their apps with deep links.

But Quixey’s effort is an example of how deep links should have more significant effects beyond advertising, says Taylor Davidson, director of kbs+ Ventures, the investment arm of the ad agency of the same name. “The initial use case may be advertising but the longer-term impact and functionality gains are much more important,” he says.

However, deep links are far from ubiquitous today, meaning that Quixey can’t currently provide a link to every app and function a person might hope to find through search. “We’re confident that’s going to change because we’re not the only ones calling for this,” says Shapira. His company has released tools to help developers add deep links to their apps.

 

But Shapira argues that Google’s approach to mobile search is leaving his company an opportunity, because Google often directs people to its own services, such as business reviews on Google Maps or a YouTube video. That has helped Quixey attract the attention of app developers and to open talks with wireless carriers about installing the company’s technology on their handsets, says Shapira.

EU to team up with South Korea in global 5G race

The European Union is teaming up with South Koreato jointly research the next generation of mobile broadband technology, hoping the Asian country’s expertise will help it catch up in a field crucial for economic growth and jobs.

South Korea has one of the fastest mobile broadband networks and is home to Samsung, the world’s biggest smartphone maker.Europe had led the competition in GSM technology – the original standard for mobile networks – in the 1990s, but fell behind the United States and Asia in the rollout of faster 4G connections.

The putative 5G mobile network promises better connections to cope with the ever-increasing number of mobile internet users. The EU estimates a high-definition movie could be downloaded in six seconds with the new technology, up from six minutes with 4G.

Businesses have repeatedly called on the EU to improve the quality of its mobile communications infrastructure, saying that inadequate networks hinder job creation and growth at a time when Europe is slowly pulling itself out of recession.

“5G will become the new lifeblood of the digital economy and digital society once it is established,” Neelie Kroes, the EU commissioner for telecoms, said in a statement on Monday.

Kroes said South Korea and the EU had agreed to set a timetable for the rollout of 5G by the end of 2015 and would work to ensure the necessary radio frequencies were able to support the new network.

European industry players such as Alcatel-Lucent, Deutsche Telekom, Telefonica and Orange, which are part of Europe’s 5G Infrastructure Association, will work with South Korea’s 5G Forum, she said.

The EU said in December it would spend 700 million euros ($953 million) on 5G technology research over the next seven years, while companies in the telecoms sector would provide more than 3 billion euros.

Chinese smartphone maker Huawei announced in November that it planned to invest $600 million in research into 5G, and expected the network to be ready for deployment by 2020.

($1 = 0.7345 Euros)

A Cleaner, Cheaper Way to Make Metals

A startup called Infinium promises to reduce a troubling source of carbon emissions.

 

n lab space across from a yoga studio in an office park in Natick, Massachusetts, Adam Powell holds up a brilliant white ceramic tube that he says is the key to making the production of many widely used metals significantly cheaper and less polluting.

Powell is the chief technology officer of Infinium, a startup spun out of Boston University that’s been operating quietly since 2008 and is now ready to go to market with its first products—the “rare earth” metals neodymium and dysprosium. These materials are needed to make powerful magnets that work at high temperatures and are important for the generators found in wind turbines and many electric car motors.

Infinium’s process addresses a specific part of metal production: transforming partially processed ores—metal oxides—into metals. This can be done by immersing the oxides in a bath of molten salt and running electricity through the mixture. Aside from the emissions associated with generating that power, this process itself releases greenhouse gases. One of the electrodes is usually made of carbon, which reacts with oxygen, forming carbon dioxide.

The ceramic material Powell showed me—which is made of zirconium oxide—replaces the carbon electrode and eliminates those emissions. Researchers have been trying to replace carbon for many years, but the molten salts have corroded the alternatives. The key advance for Infinium was developing alternative molten salts that don’t react with the zirconium oxide, so that it can last long enough to be practical.

This month Infinium is starting up production using a machine that will produce half a ton of rare earth metals annually. In September, Infinium will start using another machine that can produce 10 metric tons a year—enough for the company to be profitable, Powell says. Infinium has also demonstrated that the process works for aluminum, magnesium, titanium, and silicon, and it plans to scale up production of the first two of those by 2016.

The process isn’t a cure-all for the environmental problems associated with metal production. It doesn’t address pollution from mining and separating rare earth oxides from other materials in the ore (other new processes are being developed to address those issues—see “The Rare-Earth Crisis”).

But for metals such as aluminum and magnesium, Infinium says, it can reduce processing costs by 30 to 50 percent. Making these metals much cheaper could, for one thing, transform car-making. Parts made of these metals weigh far less than the steel parts ordinarily used in cars, while being just as strong. The weight savings could reduce fuel consumption by 10 percent, according to an auto industry consortium.

As the company scales up production, one key question will be whether its ceramic electrodes hold up for as long as the company’s smaller-scale testing suggests they will. If the ceramic doesn’t last, the company may not have a cost advantage.

Finding an alternative to carbon has long been the “dream” of the metals industry, says Donald Sadoway, a professor of materials science at MIT who is not involved with the company. “I believe [Infinium’s] technology is sound. It’s real,” he says. Whether the company succeeds “is all about the economics,” he says. “No one cares about the flow chart for the process. You care about the prices. If it produces a good metal at a lower cost, people will be interested.”

 

 

 

GE’s $1 Billion Software Bet

To protect lucrative business servicing machines, GE turns to the industrial Internet.

To understand why General Electric is plowing $1 billion into the idea of using software to transform industry, put yourself in the shoes of Jeff Immelt, its CEO.

As recently as 2004, GE had reigned as the most valuable company on the planet. But these days, it’s not even the largest in America. Apple, Microsoft, and Google are all bigger. Software is king of the hill. And, as Immelt came to realize, GE is not that great at software.

Internal surveys had discovered that GE sold $4 billion worth of industrial software a year—the kind used to run pumps or monitor wind turbines. That’s as much as the total revenue of Salesforce.com. But these efforts were scattered and not always state-of-the-art. And that gap was turning dangerous. GE had always believed that since it knew the materials and the physics of its jet engines and medical scanners, no one could best it in understanding those machines. But companies that specialize in analytics, like IBM, were increasingly spooking GE by figuring out when big-ticket machines like a gas turbine might fail—just by studying raw feeds from gauges or vibration monitors.

 

In 2012, GE unveiled its answer to these threats, a campaign it calls the “industrial Internet.” It included a new research lab across the bay from Silicon Valley, where it has hired 800 people, many of them programmers and data scientists.

“People have told companies like GE for years that they can’t be in the software business,” Immelt said last year. “We’re too slow. We’re big and dopey. But you know what? We are extremely dedicated to winning in the markets we’re in. And this is a to-the-death fight to remain relevant to our customers.”

Peter Evans, then a GE executive, was given the job of shaping what he calls the “meta-narrative” around GE’s big launch. Industrial companies, which prize reliability, aren’t nearly as quick to jump for new technology as consumers. So GE’s industrial-Internet pitch was structured around the huge economic gains even a 1 percent improvement in efficiency might bring to a number of industries if they used more analytics software. That number was fairly arbitrary—something safe, “just 1 percent,” recalls Evans. But here Immelt’s marketing skills came into play. “Not ‘just 1 percent’,” he said, flipping it around. GE’s slogan would be “The Power of 1 Percent.”

In a stroke, GE had shifted the discussion about where the Internet was going next. Other companies had been talking about connecting cars and people and toasters. But manufacturing and industry account for a giant slice of global GDP. “All the appliances in your home could be wired up and monitored, but the kind of money you make in airlines or health care dwarfs that,” Immelt remarked.

There is another constituency for the campaign: engineers inside GE. To them, operational software isn’t anything new. Nor are control systems—even a steam locomotive has one. But here Immelt was betting they could reinvent these systems. “You do embedded systems? My God, how boring is that? It’s like, put a bullet in your head,” says Brian Courtney, a GE manager based in Lisle, Illinois. “Now it’s the hottest job around.” At the Lisle center, part of GE’s Intelligent Platforms division, former field engineers sit in cubicles monitoring squiggles of data coming off turbines in Pakistan and oil rigs in onetime Soviet republics. Call this version 1.0 of the industrial Internet. On the walls, staff hang pictures of fish; each represents a problem, like a cracked turbine blade, that was caught early. More and more, GE will be using data to anticipate maintenance needs, says Courtney.

A challenge for GE is that it doesn’t yet have access to most of the data its machines produce. Courtney says about five terabytes of data a day comes into GE. Facebook collects 100 times as much. According to Richard Soley, head of the Industrial Internet Consortium, a trade group GE created this year, industry has been hobbled by a “lack of Internet thinking.” A jet engine has hundreds of sensors. But measurements have been collected only at takeoff, at landing, and once midflight. GE’s aviation division only recently found ways to get all the flight data. “It sounds crazy, but people just didn’t think about it,” says Soley. “It’s like the Internet revolution has just not touched the industrial revolution.”

GE is trying to close that gap. Its software center in San Ramon created an adaptation of Hadoop, big-data software used by the likes of Facebook. GE also invested $100 million in Pivotal, a cloud computing company. On the crowdsourcing site Kaggle, it launched public competitions to optimize algorithms for routing airline flights, which can save fuel.

All this could sound familiar to anyone who works with consumer Internet technology, acknowledges Bernie Anger, general manager of GE’s Intelligent Platforms division. But he says GE is thinking about what to do next to use connectivity, and more computers, to inject “new behavior” into machines. He gives the example of a field of wind turbines that communicate and move together in response to changes in wind. “We are moving into big data, but it’s not because we want to become Google,” he says. “It’s because we are dramatically evolving manufacturing.”