This presentation from David Heinemeier Hansson is a great presentation for people who want to make money from their rich Internet application.

Via CNET.

Ribbit, the Flex based Internet telephony company based in Silicon Valley, has been acquired by British Telecom for $105 M.

After the news earlier today that Babbel received significant funding, maybe there is money in Flex development after all? :)

Om Malik has more.

I posted an article this morning on Picnik moving towards a free model, and then went through my RSS feeds, and found a link to a great article by Chris Anderson at Wired on why Free is the Future of Business. Well worth a read, and very timely given Picnik's announcement today.

Picnik has announced that it is making its premium editing features, previously restricted to Premium members only, available to everyone for free. They will maintain the Premium subscription, at $24.95 USD per year, for people who want new advanced editing tools, full screen editing, fonts from FontShop, and more.

This is a sad day for people, who like me were hoping that rich Internet applications would be monetized by subscription, rather than advertising. (Picnik will be adding in advertising for non Premium members to supplement the loss of revenue.)

The move is obviously a reaction to FotoFlexer's announcement that its editing tools will be made available for free.

Still, I'm disappointed. First, I don't think that having advertising in an RIA like Picnik makes any sense whatsoever (banner ads rarely make sense anywhere). Unless they find a way to make the ads relevant, users will end up with mass media advertising at the top of every page - surely a distraction to most, and something that negatively affects the (otherwise amazing) user experience.

Secondly, its sad to see that the value of an amazing online application continues to erode. I really like Picnik, and actually think its worth $24.95 a year. Its disappointing that not many others see the value in that. I'm hoping that one of the online editors can find where the value is for the end user - with these two announcements its obvious not in the editor itself.

Here's hoping that someone figures it out soon - the last thing we need is more banner advertising online.

More at Mashable. Ryan Stewart also has some great things to say.

Flex continues to gain ground with large enterprise adoption. Information Builders, one of the leading companies in the business intelligence space (BI), yesterday announced a new product called WebFOCUS FLEX Enable that allows developers to easily create dashboards for business intelligence. Details are available in the press release. Information Builders' provides software and support to more than 12,000 customers, including most of the Fortune 100 and U.S. federal government agencies.

Nice to see Flex continuing to gain momentum with large enterprises.

Matt Voerman has started a blog series on what motivates people and businesses to build rich Internet applications. The two initial articles, focusing on Web 2.0 and SOA, and user experiences, are great reads for anyone who is interested in building out an RIA.

One thing that Matt nails in his discussion on user experiences is the fact that UI and experience design are becoming much more critical to applications than ever before. However I think he fails to mention one of the primary reasons for this: more and more services are becoming commodities that anyone can use and build into their applications. Amazon, eBay, Yahoo, Google, Facebook and others have created a set of services that are freely available to anyone - just sign up and go. Their work, along with that of a number of open source projects (like Drupal for instance) means that the backend for an application can't be the differentiator - anyone can take the services that those applications offer and build out an application.

Combine that with the fact that competition online is incredibly intense. Small start up costs allow pretty much anyone to start a company that can build out an app using those services. What's the difference between the company that I start and the company that you start, if we're both hosted on Amazon EC 2 (for performance), storing our data on Amazon S3 (unlimited storage paid as we use it), and integrating with user information from Facebook (so users don't have to register for our site). Why will someone use my application and not yours? The main difference, as those services become available to everyone, is the user experience. Which application do I prefer using? Which application allows users to get the job done faster?

Don't get me wrong, a great user experience won't solve all your problems. Network effects are also important - being first to market can provide a company with more users than another, and the network effects from these users can make a company difficult to overtake. (Its not impossible however - look at how Facebook is taking over MySpace and LinkedIn as the primary social networking tool though one could argue that Facebook also provides a better user experience than MySpace as well.) However, as more services come online that allow anyone to create high performing, scalable applications, its becoming increasingly clear that the user experience will be the primary differentiator.