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A new crop of apps from Amazon, LinkedIn and Box.net are the latest to take advantage of HTML5. They also signal this young language already has business’ blessing.

FORTUNE — Something in the last 18 months kicked the HTML5 adoption machine into overdrive. Maybe it was tech giants Apple and Microsoft joining hands and dubbing it the future of the web. Maybe it was Google’s launch of the Chrome Web Store, with its focus on HTML5, last December. Maybe it was the HTML5-friendly iPad’s meteoric sales. Whatever it was, a recent wave of consumer-facing web apps from Amazon, Box.net and LinkedIn confirm that this much-hyped language has business’ blessing.

HTML5 is the latest version of the Web’s bedrock markup language, HTML. But it has come to stand for much more than the average, slow-gestating technical standard. HTML5 is also shorthand for a set of features and capabilities intended to make web sites behave more like conventional desktop applications, incorporating video, complex interactions and data as well as greater compatibility with new devices like smartphones and tablets. In development since the early-2000s, HTML5 was rocketed into the mainstream in April last year when Apple (AAPL) boss Steve Jobs issued a public missive deriding Adobe’s (ADBE) Flash and anointing HTML5 as the web’s future. Now, companies are turning to it to cut down on costs that can soar when developing simultaneously for Apple’s iOS and Google’s (GOOG) Android as well as to circumvent the headaches of varying app stores.

Indeed, adoption has soared. A recent survey from video search engine MeFeedia showed that at least 69% of web video is now available for playback via HTML5. Last December, that number was 54%; in January 2010, months before the iPad became a hit, it was 10%. “Developers out there are getting better at supporting all of HTML5′s more critical features, which is why we’re seeing more publishers building the actual experiences they want using web technologies,” says Faruk Ates, a creative design and web consultant who worked at Apple for three years.

Amazon’s (AMZN) Cloud Reader made waves when it was announced a few weeks ago. While it has a polished user interface and offline reading capability, it’s still rough around the edges with limited web browser support and a lack of notable features Kindle e-reader users already take for granted, including text highlighting, notes and full-screen reading. Still, that hasn’t stopped user from kicking the tires. Amazon would not disclose numbers, but a spokesperson told Fortune that its Cloud Reader had the best first week of any Kindle app to date. The company says missing features will be folded into future updates.

LinkedIn (LNKD) and Box.net’s HTML5 apps, meanwhile, use the technology for different reasons. While Amazon’s Cloud Reader seems intent on becoming the primary web app for Kindle users, LinkedIn’s is merely supposed to complement apps developed for Android and iOS. In other words, users who don’t own either type of device will still get functionality that approximates the native app. Same goes for Box.net’s new web-based offering. Although the Palo Alto-based cloud storage provider uses some HTML5 coding in its main site, it didn’t fully embrace the Web technology until more recently thanks to a new wave of engineers. “We probably could have supported it a year ago,” says Box.net CEO Aaron Levie. He says HTML5′s increasingly powerful tools blur the lines between Web and cloud, desktop and client-like functionality.

That doesn’t mean the technology doesn’t face obstacles. HTML5 apps are often limited when compared with their native counterparts. In LinkedIn’s case, the feature sets are similar but the user interface is noticeably less flashy. Some mobile device’s assets, like the camera, remain off-limits to HTML5. “Generally, there are certain areas where native is going to do better for you, like media photos and pictures,” explains Joff Redfern, LinkedIn’s mobile product head. “It’s sometimes a little harder to get at via HTML5. Other areas, like say, ‘infinite lists’ that scroll with dates that continue on and on, are handled a lot more gracefully in native code.” Box.net’s Levie admits certain programming tasks are still difficult to achieve in HTML, like getting the iPhone and iPad’s built-in Safari browser to allow file uploads.

Another problem is distribution. Apple’s App Store and Google’s Android Marketplace are partly popular because they keep the barriers to entry low for native apps. Currently, there aren’t many equivalent web app stores besides Google’s fledgling Chrome app store. And, consumers don’t have an awareness of HTML5, the way they might of the Amazon, Apple or Google brands.

What’s certain is that HTML5 will likely play a pivotal role as companies position themselves vis-a-vis each others’ devices and marketplaces. It may take years before new HTML5 apps tackle more rigorous tasks that process lots of data, like video editing for instance. In the mean time, more and more major firms are likely to find the technology’s flexibility and low costs too tantalizing to resist.

Filed under: Uncategorized

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Warren Buffett seems to be getting tired of those who call him a hypocrite on taxes.

At this point, I’m not really sure who’s allowed to advocate for higher taxes on the rich. Certainly not the lower 98%, lest they be accused of engaging in “class warfare.” And apparently not the uber-wealthy like Warren Buffett, who is to be ignored until he donates a cargo plane full of gold bullion to the IRS.

The latest attempt to discredit Buffett came today from the Wall Street Journal editorial board, which argued that Buffett’s recent $5 billion investment in Bank of America (BAC) “represents another tax-avoidance triumph for the Berkshire chief executive.”

Here’s the gist:

U.S. corporations are subject to a top federal income tax rate of 35%, the second highest in the world. But the Journal’s Erik Holm notes that Mr. Buffett and the Berkshire bunch won’t pay anything close to that on their investment in BofA preferred shares. That’s because corporations can exclude from taxation 70% of the dividends they receive from an investment in another corporation… With the 70% exclusion for Mr. Buffett and his fellow shareholders, Berkshire will enjoy an effective tax rate of 10.5% on the $300 million in dividends it will receive each year from Bank of America.

It’s a bit of an odd argument, because WSJ never really shows that Berkshire is doing anything different from any other investment firm that buys into a dividend-paying company. And the dividends are hardly the bulk of the money that Berkshire hopes to make off of BoA (that would be capital gains on the underlying investment, which also comes in lower than the 35%).

More importantly, however, Buffett is pushing back against even the little bit of math WSJ offered up. In an unusual move, Berkshire today issued a press release arguing that it is housing its BAC preferred shares in property-casualty subsidiaries where all of its dividends are taxed at a 14.175% rate. That means Berkshire would pay around $42.53 million in taxes per year on its BAC dividends, rather than the $31.5 million claimed by WSJ. So far, WSJ has neither corrected its editorial nor offered a public reply.

Filed under: Term Sheet

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From consumer spending to business investments, it seems nothing is the same this time around.

FORTUNE – It’s hard to pinpoint exactly what has continued to hamper the U.S. economy. Economists and the media have popularly adopted the term “The Great Recession” to describe all that’s gone wrong since the housing market collapsed several years ago, implying that Americans have just come out of a typical recession that, if anything, was only more severe.

Needless to say, the near implosion of the U.S. financial system was severe. But as Harvard University economist Kenneth Rogoff has pointed out, the recovery today is something that can only be called “The Great Contraction,” suggesting that the aftermath of a financial crisis does not look anything close to that of a typical recession.

“In a conventional recession, the resumption of growth implies a reasonably brisk return to normalcy,” Rogoff wrote earlier this month in Project Syndicate. “The economy not only regains its lost ground, but, within a year, it typically catches up to its rising long-run trend.”

The recession officially ended more than two years ago. And yet, during the first half of this year, the economy barely grew. With Federal Reserve Chairman Ben Bernanke acknowledging in his speech in Jackson Hole, Wyo., last week that the problems plaguing the marketplace are beyond the powers of the central bank, it becomes all the more important for Washington lawmakers to help reboot the economy.

Members of Congress might be scratching their heads over what to do next, but perhaps as a starting point, members should look at how this recovery is different from previous ones.

Long-term business investment: Since 1949, construction has been a major component driving economic recoveries. Not only does construction of new buildings and factories help make companies become more productive, but it also creates jobs for the overall economy as each order of concrete, for instance, demands workers to do everything from taking the order to delivering it from the warehouse to the building site.

But unlike the end of other recessions when business investment surged, companies today aren’t building many new factories or buying up much commercial real estate. Business investment has continued at a slow place, averaging 10.3% of GDP since the start of the latest recession – the lowest average for any business cycle since the 1970s, according to the Center for American Progress.

Given that S&P 500′s non-financial companies altogether hold more than $1.1 trillion in cash and short-term investments, it’s not as if America’s biggest companies don’t have the money to invest. So what’s to blame for the pullback in spending?

“It’s a question of why is it that we no longer in a recovery can fund long-term assets –basically 20 years or more – and the answer essentially is that there’s a huge element of uncertainty in this economy,” former Federal Reserve Chairman Alan Greenspan said in a recent interview with The Financial Times.

Greenspan has urged Washington lawmakers and policymakers to stand aside and let the economy heal on its own. However, the pains of slow growth and high unemployment might be too much for many to endure. What’s more, doing nothing would certainly be politically unpopular especially given the 2012 presidential election.

Government job loss: The private sector may have shed millions of jobs during the depths of the latest recession, but part of what has added to the persistent gloom of the economic recovery is the slash in government jobs. For instance in July, the private sector added 154,000 jobs but the bump was counteracted by the fact that the economy shed 37,000 public-sector jobs.

Government employment today is about 1.9% lower than it was at the start of the recovery, a fall of 430,000 jobs, according to a recent report by the Economic Policy Institute. By contrast, government employment rose by 1.1% or 232,000 jobs during the same stage of the recovery following the 2000 recession.

The stubborn woes of today’s government job market have been largely due to falling tax revenues while spending on unemployment and Medicaid has surged. State and local governments, unable to legally run deficits (unlike the federal government), have been dealing with glaring budget holes by slashing headcount at an unprecedented rate. And that likely will continue – not only at the state and local level, but also the federal level depending how a special congressional committee assigned to reduce America’s debt decides to find $1.5 trillion in savings.

Consumer spending: In the years leading up to the latest recession, households clearly overspent. They’ve since been working to improve their finances but we’re still a long way from the point where household debt levels fall where consumers feel comfortable spending more and saving less.

Consumption, which makes up roughly 70% of the U.S. economy, dropped off significantly during the depths of the recession and has continued to be slow through the economic recovery. But as the Federal Reserve Bank of New York recently noted, what has been unusual is the decline in spending on discretionary services like education, entertainment and meals at restaurants.

Spending on such luxuries partly drove the decline of real GDP during the latest recession. It is down nearly 7% — more than double the percentage decline seen in the early 1980s recession.

Housing: During most economic recoveries, the housing industry typically rebounded in a big way and helped drive overall growth.

Needless to say, this hasn’t played out this time. And it become less likely that it will, given expectations that home prices could fall further as an onslaught of foreclosures could eventually seep into the housing market already in excess.

This not only impacts home sales, but it also means consumers will spend less on furniture and appliances and other housing-related goods and services.

Bernanke, acknowledging that economic policies supporting strong economic growth in the long run are beyond powers of the central bank, has urged Washington lawmakers to adopt “good, proactive housing policies” to undo the depressed real estate market. 

Filed under: Term Sheet

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By Alex Taussig, contributor

(I originally published this at my blog infinitetoventure.com. Go check it out!)

It’s that time of year again. Summer is winding to a close, and students are returning to campus. The energy in the air is palpable, especially in a place like Boston, which seems to live and breathe along with the student population.

Yesterday, I spent the afternoon at Harvard Business School, meeting with former professors and chatting about what the next year holds for their entrepreneurship curriculum. I’m admittedly envious of what faculty members like Tom Eisenmann have planned for the MBAs this year. You guys are so lucky!

My nostalgia got me thinking about what I wish someone told me before I started my first week of business school. Here are my top 3 pieces of advice.

1. Use school as an excuse to develop relationships with really important people.

For some reason, whether it’s simple karma or #payitforward in action, important people are more likely to return an email from a student than from your average cold caller. As long as messages are (1) well-written, (2) short [very important!], and (3) cite some sort of common connection, they tend to be well received and can be the first step in developing mentor relationships that will last throughout your career.

An old sage of venture capital once told me, “You don’t find a mentor; they find you.” But, I think he was referring  to the “convincing them” part of the process. Initially, you have to take the initiative to put yourself in front of great mentors, and business school gives you a great platform to do that.

2. Start the job search now.

I can’t stress how competitive really good jobs are. By the time you’re sitting in that interview chair in April of your second year, the statement, “Well, I think I would be a good fit for your company because I’m a good problem solver” won’t cut it. Sorry.

You need to be able to actually tell a company why you’re passionate about their industry and why you are the best person to solve a particular problem they have. To do that, you need to develop “expertise.” I put expertise in quotation marks because, of course, you won’t be an expert by the time you’re in your second year. Yet, for some reason, the magic of an MBA program is that it creates the illusion that you know what you’re doing (so long as you can speak intelligently and passionately about a particular opportunity).

So, the search starts today. Start doing things that build your expertise over time: Set up an RSS reader that follows top industry blogs, schedule coffee meetings once a week with classmates who have worked in your industry of interest and cold call influential executives in your network. By the time the job search rolls around, you will have a leg up on everyone else.

3. Dedicate time to develop a few lifelong friendships.

If you’re in business school, you probably have a “work hard / play hard” attitude. The problem with that philosophy is that it can leave little time to develop actual, deep relationships with your classmates. Some of my fondest memories in school were the long discussions over lunch, the trips we took together and the hours we spent planning pranks to play on our sectionmates and professors.

Make sure you take the time to have real discussions and meaningful interactions with your classmates. You will learn a ton from them, but you will also develop a few friendships that will last a lifetime.

Here are a few other suggestions from my Twitter followers. Enjoy!

• Ignore recruiting if it’s not for you.
  @andrewrosenthal, HBS ’12
• Travel. A lot.  Don’t get so caught up in rat race that you forget that this is your last chance to go everywhere, see everything.
  @kcapelluto, HBS ’10 || GM Superchannels, AOL
• Do the maximum number of field studies.
  @bijans, HBS ’04 || General Partner, Highland Capital Partners
  @ellwheeler, HBS ’11 || Senior Associate, Greycroft Partners
  @joverdorff, Wharton ’11 || Associate, TechStars NYC
• A non-traditional background doesn’t mean you’re behind. So don’t be afraid to speak up.
  @cmwalla, HBS ’10 || Co-founder, Quincy Apparel
• JFDI. Really, stop talking and posturing and do something…
  @jamesreinhart, HBS ’09 || Co-founder & CEO, ThredUp
• Listen more.
  @davealevine, HBS ’09 || Investment professional, Paulson & Co.

  Stay curious and humble. Experiment. Use the resources. Take risks. Fail. Blaze your own trail.
  @vlgreen, MIT Sloan ’11 || Co-founder & CEO, OnChip Power

Alex Taussig is a Principal with Highland Capital Partners and invests in early stage technology companies. You can find this blog post, as well as additional content on his blog infinitetoventure.com. You can also follow Alex on Twitter @ataussig.

Filed under: Contributors, From the Crowd, Venture Capital Deals

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By Jonathan Tower, contributor

I recently met with a promising start-up led by a husband-and-wife founding team. This was not a standard investor pitch meeting. I had known the husband for several years and agreed to meet informally to be brought up to speed on the company’s progress.

Admittedly, it is not often that I meet with a founding team that is connected via bonds any deeper than college, a previous work experience or a long-standing friendship. Start-ups founded by married couples or other familial bonds amount to a tiny fraction of the companies that successfully raise venture funding each year. On the one hand, might appear odd given how many “mom and pop” businesses factor into America’s current economy and economic history. The dearth of family-founded venture-backed start-ups, therefore, is intriguing.

To be sure, there have been family-founded start-ups that have raised venture money and gone on to be quite successful. WebMethods is one such company. However, the bias in traditional venture circles against investing in such startups is long-standing and rooted in some uncomfortable realities.

1. Idiosyncratic risks in a husband-wife or family-dominated team. It’s axiomatic that investing in young, unproven companies involves a great deal of risk. To be successful, a venture investor must adroitly balance that risk. That involves making choices and tradeoffs over which risks are tolerable and acceptable as part of the venture process, and which risks are not. What differentiates family-run startups to a venture investor is that they introduce risks that are unique by their very nature. Hence, these risks are idiosyncratic and not in evidence at start-ups backed by the more common assemblage of former colleagues, college roommates, and friends.

One such risk is that of divorce in a husband-wife team or a severe disruption in a familial relationship. Both can cripple management effectiveness. Any venture investor who has been involved in the removal of a founding member from a portfolio company can attest to how complicated and disruptive that process can be. Add to that the aspect that the co-founder being removed could be bound by marriage to another co-founder–with the common circumstance that one co-founder is engineering the removal of the other–and one can quickly see what a morass this situation can become. Sons firing fathers or brothers firing brothers play out no less dramatically and painfully for the companies and the investors involved. The emotional fallout in such disruptions can all but disable a company.

2. Recruiting difficulties. For any emerging growth company to scale effectively, it must attract a world-class team. However, top management talent interested in advancement will typically avoid a family-dominated startup where decisions on hiring, promotions or compensation could be colored by family relations or other marginalia. Accurate or not, the perception will persist that a talented manager will be unable to ever take the top leadership post at a company where the competition for that post is likely a family member. Additionally, few people who ever sat through a tense Thanksgiving dinner of their own relish the idea of ever getting in the middle of a familial or matrimonial spat, much less on a daily basis.

3. Lack of defined roles. Finally, there is the touchier discussion about the importance of clearly defined roles in both the business context and in the familial/marital one. Couples and family members that go into business together too often learn that this is a decision that can damage their underlying romantic or familial bonds in ways they never imagined. The bluntness and constructive criticisms that must occur in order for there to be efficient business communications can often fray emotional connections and strain relationships, sometimes permanently. Roles get convoluted. Spouses and siblings lose their identities in service to the needs of the business and find they have trouble talking about anything outside of work but work itself.

As any management textbook will attest, the effective management of teams requires clear leadership, objectivity in decision-making, some reasonable approximation of “professional boundaries” and a clear demarcation of roles and responsibilities. The blurring of lines that comes from founders and/or managers having one role at the office with their “colleagues” and another role at home too often flies in the face of that reality for venture investors to ever become sufficiently comfortable in order to proceed with an investment.

Jonathan Tower (@jonathan_tower) is a Managing Director at Citron Capital, a global private equity and venture capital firm, where he focuses primarily on Consumer Internet, Software, Digital Media, and Web Services investments. He blogs at Adventure Capitalist.

Filed under: From the Crowd, Venture Capital Deals

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Will private equity join venture capital in the fund-raising abyss?

An endowment manager recently suggested to me that private equity funds could soon face the same type of fund-raising chill that VC funds have been shivering through for the past four or five years. He basically argued that median PE returns have been unimpressive, particularly due to excessive fee-taking (a practice that has not really abated, despite all the talk that it would).

Just like some institutions have virtually stopped investing in any VC funds outside re-upping with their own top-performers, the same thing could happen to private equity.

So I pitched the theory to a couple other institutional investors, but couldn’t find agreement. Or, as Erik Hirsch of Hamilton Lane, put it: “LPs are very bad at saying no and private equity GPs are very good at asking people to say yes.”

Hirsch and others do believe that there will be some PE shakeout, in part because so many firms who raised in 2006-2007 must return to market in the next 12-24 months. But not anything close to what venture capital has faced, in part because top-quartile PE outperforms while outperforming VC is often confined to the top decile. And this sentiment is supported by the most recent Coller Capital Barometer of LP sentiment.

But it’s still an interesting theory, and I’ll be keeping tabs to see if it materializes even a little bit…

Filed under: Private Equity Deals, Term Sheet

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This morning I was on CNBC’s Squawk Box to discuss the current state of deal-making, in light of recent market volatility. It would seem that I’m a bit of a bull… Here’s the video:

Filed under: Private Equity Deals, Term Sheet

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