Google’s Marissa Mayer Live at TechCrunch Disrupt

Marissa Mayer, Google’s vice-president of search products & user experience, is holding a fireside chat at the TechCrunch Disrupt conference this afternoon. One of the best-known faces of the search giant, she often provides clues to where the look and feel of Google’s signature service is heading. She’s talking with TechCrunch editor and newly minted millionaire Mike Arrington.

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Google’s Eric Schmidt Live at TechCrunch Disrupt: What’s Coming Next

Google CEO Eric Schmidt is a surprise visitor to TechCrunch Disrupt, promising to talk about “what’s coming next.” Here’s what he has to say:

What we’re really doing is building an augmented version of reality. It’s really about making people happier. That to me is the opportunity that is really before us.

Three trends are accelerating (though to be honest I’m not sure I divined precisely which three trends he’s highlighting):

* Mobile, meaning smartphones. Your strategy should be mobile first. Mobile Web adoption is occuring eight times faster than the Web on the PC. We have pervasive connectivity. It’s no longer the case that your music player can be disconnected from a WiFi network. LTE (Long Term Evolution), which will bring 8-10 MB of bandwidth, is coming to many cities soon.

* Cloud computing. Example: We can now demonstrate and are about to ship products that allow you to speak in English in your phone and have it come out in another language at the other end. This is the stuff of science fiction. The fact that this can be done in a half-second to a quarter-second, which we think is too slow, is amazing. Cloud computing will be fundamentally expressed in these new services that will make your life just work.

This concept of making humans better is not a new concept–Bill Gates 15-20 years ago. Had to do all the infrastructure and AI work to make it happen.

Essential goal: We want to give you your time back.  This explosion of information is so much larger than we ever anticipated that we need help with. We do more than 2 billion searches a day.

The mobile opportunity is so large it’s breathtaking. The search traffic from Android phones more than tripled in the first half of 2010.

* Openness. He touts Android etc. vs. others’ closed platforms, unnamed of course.

We (Internet companies) fundamentally are giving people an enormous amount of power, which disrupts the power of governments and other institutions.

Imagine a future involving all of us that looks roughly like this: It’s a future where you don’t forget anything. In this future, you never get lost. It used to be fun to get lost. With technology, we will know your location down to an inch. Computers will drive our cars. It’s a bug that cars came before computers.

You can really have all the world’s information at your fingertips. And we can do it dynamically and in real time. You also can know what to pay attention to right now. You’re never lonely because your friends are always online. If you’re awake, you’re probably online, and your children definitely are. Instead of wasting time watching television, now you can waste time watching the Internet.

You’re never out of ideas–where to go, what to eat. This is a future for the average person, not the elites. Because of technology and information access, this is a future for a billion people now, 2 billion people next year, etc.

This is a future committed to doing good, to giving people more of what they want to do.

And now to questions and, one would hope, more specifics and less utopian talk:

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Mike Moritz and Steve Streit at TechCrunch Disrupt

Michael Moritz, perhaps the key partner at Sequoia Capital, is “the most powerful venture capitalist in Silicon Valley,” says TechCrunch editor Mike Arrington. Moritz is onstage with Steve Streit, founder and CEO of financial services company Green Dot, a Sequoia-backed company that went public in July at a $2 billion valuation. They’ll be talking about “The Road Less Traveled.”

Streit’s talking about how Green Dot, which issues reloadable prepaid debit cards, got started. What’s more interesting than the particulars is how this company went public completely under the Silicon Valley radar. Probably has a lot to do with being in financial services and aiming to be a bank holding company, which requires adherence to a lot of regulations–and not shooting your mouth off like so many startups do in ways that we love so much. Plus, it takes a long time to make it work in that business–seven years in Green Dot’s case.

Arrington tries to get Streit to describe how Moritz works, but that’s not really working beyond platitudes. Arrington asks Moritz if he’s better at discovering new talent  or making whatever opportunity is there a success? Moritz implies the former, despite Sequoia’s (not always deserved) reputation for replacing founders at the drop of a hat. In fact, Moritz says they look for entrepreneurs who look like they will be able to take the company all the way.

Now Streit opens up a little bit and says: Mike feels investments like Santana feels the guitar. He feels the investment in many ways more than the entrepreneur. He has said, “Steve, you don’t know what you’ve got here, back up a little bit” to realize it.

OK, well that’s it, and wish we’d heard more.

To IPO or Not to IPO: Live at TechCrunch Disrupt

IPOs traditionally are the grease that keeps Silicon Valley’s gears turning. There’s no lack of startups today, but the big question is whether initial public stock offerings will ever become a viable way for investors, founders, and employees to get a return on their money and work. When even the likes of Facebook and Zynga haven’t gone public yet, the prospects for IPOs look almost as bleak as ever. This morning at the TechCrunch Disrupt conference, Benchmark Capital partner Bill Gurley and Michael Grimes, managing director of global technology for Morgan Stanley, will be discussing what we can expect in coming years with TechCrunch editor Erick Schonfeld.

Grimes says there are new ways for companies to get larger sums of money and to help the founders get some liquidity, such as second markets for private stock. There’s a belief that the IPO market is closed. It’s not, but it’s more discriminating. There’s a bit of a supply issue, but there’s also a bit of a demand issue.

Gurley says there won’t be one IPO that will change the IPO market after it. There are 14 companies that IPO’d in the last few (one?) year, but no one writes about it because not as many are happening in Silicon Valley.

So why aren’t Silicon Valley companies going public as much? Grimes says investors think there’s too much of a leap of faith to believing the apparently ready companies are profitable enough. Gurley says companies must be profitable or convince investment groups they will be. That’s tougher now.

Why aren’t the obvious companies such as Facebook, LinkedIn, etc. going public now? Gurley can do whatever they want. LinkedIn has hired a public-company finance guy, they’re getting ready most likely.

Should Facebook go public? Gurley: They get to do whatever they want, they’re extremely successful. The argument that Facebook doesn’t want the scrutiny of being a public company doesn’t hold up. You don’t hear Salesforce’s Marc Benioff or Amazon’s Jeff Bezos saying that.

But they say they’re still experimenting and don’t want to be limited by the need to show quarterly results. Gurley: And Bezos isn’t? But a company as successful as Facebook can raise whatever they want from private sources.

Of the 40 (or is it 14?) or so companies that have gone public in the past year at $1 billion-plus valuations, why are they not very well-known? Gurley: 75% of the deal value is not from Silicon Valley. So people here have blinders on.

So why should Facebook go public at all? Gurley: To get liquidity for shareholders and employees. To do acquisitions. Grimes: The employee liquidity can keep the team motivated to work late nights.

What are the prospects for tech IPOs this year and next? Grimes: Could be 40 or 50 next year, compared with 30 this year. Gurley: I would predict you’ll see Skype and LinkedIn go public.

LIVE from TechCrunch Disrupt: Peter Thiel

Peter Thiel may be best known for being an early investor in Facebook, though his investments look like a Who’s Who of hot (and once-hot) companies in latter-day Internet startups: Yelp, LinkedIn, Powerset, Friendster, Slide, and many more. The president of the hedge fund Clarium Capital, Thiel is speaking in a fireside chat with my onetime colleague Sarah Lacy at TechCrunch Disrupt this morning in San Francisco.

Q: Is Silicon Valley still the center of innovation? Thiel: Silicon Valley is still the center for a lot of technology innovation. But incredible stagnation in U.S. economy. One of the questions being asked about Silicon Valley is how are we actually doing things to make the country and the world better? Lately there’s not that much to move the dial, outside the Internet. We need to be spending a lot more time on breakthrough vs. incremental things (paraphrasing).

Q: A lot of people say it’s not up to VCs here to do basic science–an obstacle to cleantech development. Thiel: Says that’s true. (But) you want to be focused on some of the harder-tech companies.

Q: What’s the most far-out investment you’ve done? Space-X, Elon Musk’s rocket company. The economics are not terrible–people generally pay in advance for launches. It’s just the kind of thing that’s not in people’s mental framework to look at. We should go back to the 1950s and 1960s and look at the classic science fiction things that were supposed to happen–biotech, AI, …

Q: Back in 2006, you said we’re not in another Internet bubble? Were we, or are we now given even higher valuations? Thiel: I don’t think that we are at a crazy valuation point. I suspect Facebook is still among the most undervalued company in the Internet, even at $30 billion. If you had a choice between Google and Facebook, you should be long Facebook.

Q: Would you fund Facebook today? Thiel: We would not be categorically against it. But I think the angel/early VC thing feels very crowded. You have to be very careful. It’s not as contrarian as it was three or four years ago.

Q: Are we at the point with Internet companies like where auto industry was in 1950s? Thiel: More like 1940s. But it’s a lot harder to make incremental progress. So we’re more focused on breakthrough technology areas.

Q: Has Google joined the Microsoft category of companies that are not fundamentally innovators anymore? Thiel: Maybe not quite yet, but possibly. Apple still very innovative. By definition what is technology, what is disruptive, changes.

Q: What about Facebook–still innovative? Thiel: Yes–if Zuckerberg stays in charge.

Q: Is Zuckerberg an evil genius like the movie indicates? Thiel: I would beg to disagree. Hollywood is this nasty zero-sum game where everyone is trying to stomp on each other. I.e., not like Silicon Valley. If this movie encourages people to go create companies in Silicon Valley, that will be a good impact.

Q: What kind of investing do you like among all you do (venture, angel, hedge fund)? Thiel: I like them all. We haven’t invested in any cleantech companies. The challenge is to create something that’s cheaper than oil. To the extent it’s more expensive, it’s not going to work.

Apparently Thiel has an announcement: We’re offering 20 kids under 20 money to create something great. One of the big problems with the (higher) education system is just that it costs so much more. It’s a lot harder to take big risks. You can apply for the two-year program individually or with up to four partners, and get up to $100,000 to start companies.

LIVE from TechCrunch Disrupt: Fireside Chat with Reid Hoffman and David Sze

Now we’re on to the fireside chat with Reid Hoffman, cofounder of LinkedIn prolific angel investor, and VC David Sze. They’re both partners at Greylock Partners. TechCrunch editors Mike Arrington and Erick Schonfeld are moderating.

Hoffman: Today, we’re announcing Greylock Discovery Fund, a $20 million seed fund to operate very quickly to invest in startups with only a single partner OK.

Facebook, Zynga, Twitter, Pandora, LinkedIn–these companies are some of the most successful startups in the Valley, and most had many naysayers.

Q: What disruptive spaces are underinvested in? Hoffman: Mobile e-commerce. Consumerification of the enterprise.

Q: Are Silicon Valley startups really tackling hard problems? Hoffman: Yes. But is it important to be doing stuff in the hard sciences? It would be great.

Q: What happened to Cuil (which appears to have hit the skids)? Sze: Not close enough to say. Cuil is not done, it’s in the process of a lot of things.

Q: Is it a good thing that things sometimes go wrong? Sze: Yes, it shows you’re taking risks.

Q: Digg seems to be at an inflection point–what’s next? Sze: The last launch didn’t go well, but they’ve made some changes. All the successful companies hit these points. The key is the ability to power through them.

Q: What were LinkedIn’s inflection points? Hoffman: Every year, you actually hit something, no matter how well you’re doing.

Q: Can LinkedIn really overcome Facebook’s more universal appeal? Hoffman: All our numbers are better every month and every quarter. It’s a different consumer value proposition. Sze: Stuff happens in email (but that doesn’t mean LinkedIn isn’t of value in a professional setting). We want some separate between different things. (I agree–very different kinds of services. Some overlap, but I’m doubtful I’ll go full bore on Facebook for all professional things. But the question is how big LinkedIn can be. Less sure of that.)

LIVE from TechCrunch Disrupt: Super Angels Vs. Super VCs

The upcoming panel at the TechCrunch Disrupt conference in San Francisco this week suddenly became the flashpoint for the show last week when TechCrunch editor Mike Arrington wrote a blog post on how he crashed a dinner of angel investors and accused them of collusion. A maelstrom of charges, leaked emails, and countercharges ensued. Now some of the principals in this controversy are onstage together with Arrington: Dave McClure of 500 Startups, Ron Conway of SV Angel, Chris Sacca of Lowercase Capital, Chris Dixon of Founder Collective, Roelof Botha of Sequoia Capital, and Mark Suster of GRP. Oh, and Yossi Vardi has crashed the panel. Here we go:

Arrington asks: Anything else you guys want to add on Angelgate? McClure: No. Sacca: Not really. We have to thank Ron for starting this industry. It seems worth getting past. This whole thing is a total waste of time. Conway: nothing more to say. OK, I guess enough of that.

Arrington: How are super angels different from VCs? McClure: Bigger funds can’t invest a small enough amount to do startups.

Arrington: Do you take money off the table when entrepreneurs do (pre-IPO)? McClure: Yes, but only if the founders cash out some. Botha: No. McClure: Of course he doesn’t, because they’re going for the big score when there’s an IPO. Conway: The rank and file engineer has a right to get liquidity at the same time as the investors and the founder. McClure: True.  Suster: Founders should be able to take “feed the family” money off the table. But if and only if you’ve achieved something in the business. McClure: VCs will get squeezed out of deals if they don’t offer founder liquidity.

Arrington: Valuations are going up. What are you doing to counter that? (Laughter throughout the room, as it’s obvious this is a backdoor into Angelgate.) McClure: We’d have to have dinner on that. (More laughs.) Dixon: None of the last 15 investments we’ve done has been larger than $5 million pre.

Arrington: Why should the entrepreneur care? McClure: Because more startups need to be ready for small exits. You have a higher probability of a $50 million to $100 million exits. If you get too high a valuation or too high a round, you have to go for the fences, and that may not be appropriate (paraphrasing).

Arrington: Is it really best to think small, to go for a $25 million company? Conway: We invest, and two years later the entrepreneur decides if they want to sell or keep going for something more. A great entrepreneur does not talk about the liquidity event when he’s talking to us. Sacca: People get rich on $20 million exits. That’s real money. No one in the audience would sneeze at $4 million (apiece for, say, five founders). (Amen.)

Arrington: There’s a cult of personality developing in the angel community that isn’t good. We need $1 billion-$2 billion-$10 billion IPOs and exits. Sacca: They may not be magazine cover stories. But $20 million-exit companies are not “dipshit companies,” as Arrington called them.

And it’s over, with people on the panel more angry with each other than when they started.

LIVE from TechCrunch Disrupt: John Doerr, Mark Pincus, Bing Gordon

TechCrunch Disrupt, the tech blog’s annual conference in San Francisco, is underway. I’ll liveblog the highlights of this first panel of luminaries, which is looking at Building Internet Treasures. FYI, John Doerr is a partner at Kleiner Perkins, as is Bing Gordon (former longtime creative guy at Electronic Arts), and Mark Pincus is CEO of social game giant Zynga.

Actually, Doerr is soliciting audience questions for everyone, and then they presumably will address them. They’re all over the place–where do you look for new ideas, what about micropayments, the wisdom of developing on a closed platform (in other words, Facebook), is advertising the revenue model for the Internet, what’s the future of companies like Groupon, what matters most for the future of the Internet, what is the future of social games, is the intelligent Web real or a myth, is there a future for Flash vs. HTML5, Internet disruption in health care.

Pincus starts out. 33 million people as of yesterday played a Zynga game. 1200 full-time people. Won’t disclose revenues.

Pincus says the best companies are creating products and services that we now can’t imagine living without–Amazon, Google, etc. That’s what an Internet “treasure” is. He says Zynga measures its users’ “net promotion score,” which has to do with how much they spread the word of their game experiences to others, if I understand correctly.

Doerr says he’s getting a different sense of games culture today–more analytical than creative. “We’re data junkies. We measure everything,” he says, and Zynga has invested in big data warehouses–more than a petabyte of data a day. “We’re adding a thousand servers a week.” Yikes.

But, he adds, design and creativity still really matters.

Doerr: What is disruptive about social games? Gordon: Four big disruptions from the Internet: Social, analytics, APIable Internet (app economy) and new payment methods. What’s disruptive about social games is that they combine all four in one. Pincus: In summer 2007, I was here for the Facebook apps platform launch (so was I). Games and fun were not a big macro on the Internet yet. The disruptive thing for me was not apps and platforms, but that they took down the barriers to entry to playing games–you could now design games that three clicks in, you know how to play them.

Doerr: Is the social Web going to create other great possibilities beyond games? Pincus: We are going through the biggest change in Internet consumer behavior since using the browser. Somebody will become the travel icon on my phone–and be that throughout the Web as a result. Health is waiting for someone to turn it into a consumer product that’s useful.

Turns out John Doerr’s daughter Mary, in high school when meeting Pincus along with her dad and Gordon to assess whether Kleiner would invest in Zynga, sealed the deal by saying, “He’s cool.”

Pincus: Wanted to keep control of the company to avoid “death by a thousand compromises.”

Doerr: Zynga has the notion that every employee is a CEO. That can’t be right, can it? Pincus: We sure try. People have to define what they’re the CEO of, and how they’re going to kill it (that goal).

Doerr: Is it the app economy? Pincus: Every consumer behavior on the Web is going to become an app and a new kind of industry. Consumers are going to expect the way they interact with a service is an app.

Will there be a revenue stream besides advertising? Pincus: I’m a big believer in the user-pay economy. Just as offline, ads will eventually be a small part of the overall Internet economy. Advertising [online] is only a $50 billion industry–smaller than the auto industry.

Pincus: We’re still far far away from being an Internet treasure. People can still imagine life without playing our games. Gordon: I don’t know, I was harvesting wheat at 6:15 this morning. Pincus: We have to make the daily grind have more meaning. It’s a big challenge.

How Long Will Social Games Keep Us Hooked?

Not long after I started my farm (pictured above) on FarmVille, the leading social game on Facebook, I got a message from a friend. He was relaying a question from his wife, who had seen countless semiautomated posts to my Facebook Wall chronicling my progress in the game. Her query: “What’s the matter with him?”

It wasn’t the only such reaction I got from playing Farmville. I started the game as research to write a story on their rise for Graduate School of Business alumni magazine at Stanford University, where a surprisingly large number of social games founders or managers got degrees. It seems that people either love social games (one friend either is doing a very deep research project on them or needs an intervention) or hate them. But it’s hard to deny that they’re a game apart from most previous online games, because millions of regular people who don’t even know the term “gamer,” let alone touched an Xbox console or joined a World of Warcraft guild, are playing them.

I hope my story explains some of the reasons why, but what I’m uncertain about is how far social games can go. Clearly, Zynga and other social games leaders have found a way to provide entertainment people enjoy–and, let’s not mince words, appeal to people’s addictive nature by adroitly manipulating game mechanics to keep players coming back again and again. As a result, Zynga is raking in big bucks and seems headed for a blockbuster IPO. And games may well support a second big business in virtual currency for Facebook.

Given their undeniable appeal, it seems that social games are here to stay for a good long time. But I also wonder if the slowdown and churn we’ve seen in social games this year indicates a certain weariness on the part of players. I’m afraid I don’t have the addictive gene, so much of the appeal of social games is lost on me (although I would like to reach level 12 in FarmVille so I can plant chile peppers…).

But even people who respond to the rewards of these games can feel like they’re on a treadmill. As a result, social games companies are trying to add more wrinkles to their games to keep users from getting bored. But then, like so many tech companies that have fallen victim to the Innovator’s Dilemma, they may start losing the mass market, for whom the simplicity of social games is key. Only a few companies, I’ll wager, will be able to walk that thin line.

LIVE at Yahoo’s Product Runway

Yahoo’s set to announce a new product strategy shortly at what it’s calling Yahoo Product Runway. I’ll blog the highlights as they come from Blake Irving, EVP and chief products officer ad Raymie Stata, VP and chief technology officer.

And we’re underway, with some observations on Yahoo on Irving’s hundredth day here. Things are great, he says, and what else would he say? Essentially, he elaborates, Yahoo is a killer technology company. Deep connection between labs at Yahoo and the product organization. You’ll see things in the next year or three or five that look different from before–more iterative products, but more unified under Yahoo as a whole.

Yahoo will be something you take with you rather than someplace you go–content, friends, etc. We’re going to be finding a lot of harmony between advertisers and consumers (code for behavioral targeting, I think, which isn’t new, but clearly Yahoo could lead in making targeting more palatable).

Now on to Yahoo’s product vision, a graphic of which looks like part of a periodic table of elements:

* Me, for bringing personal meaning to the Web.

* Ec, for building an ecosystem.

*Si, for creating personal relevance through science and data. 300 million log into Yahoo a month, providing a wealth of data about what those people are doing. Yahoo will start honoring Facebook, Twitter and other IDs.

* Cu, for being where the customer goes. Will see a lot more mobile versions of products, sometimes before Web products. More folks will be typing on glass vs. keyboards before long.

* So, for owning real social relationships on the Web. Social networking is just starting, despite Facebook’s apparent dominance. People still want more control to socialize with lots of small groups of friends.

* En, for “engage and delight.” Best-in-classes news, sports, entertainment, mail, etc.

Now on to products that are being demonstrated here today:

* Mail: Has been re-architected from the ground up, from infrastructure to user interface.

* What’s New page: Twitter integration and other things.

* Search: More visually appealing and with more of an ability to act on the search result. People don’t want to just search, they want answers.

* Lots of Twitter integration, such as the ability to tweet from particular stories on Yahoo.

So we’re going to be moving fast, with more incremental changes to products.

So far, my socks are still on.

Now Stata comes on to tell about the technology underpinnings of all this. Lots of generalities to my ears, but some specifics:

* Relevant, personalized content for consumers. Much deeper than it has been–content optimization on every page, including those of partners such as AT&T. This will produce higher engagement, he says, which is what advertisers want as well.

Yahoo’s services are supported by a cloud infrastructure, a network of data centers of various sizes all over the world, to make the services faster for users anywhere they are.

I think of Yahoo as a big ship, need to maintain powerful engines while swapping some out. But the new engines are now in place.

Now it’s time for questions:

Q: Can you expand on the new search experience? Shashi Seth, who runs this, steps up to explain: We’re going to provide the best guess we can but provide an “accordion” to let people expand on what they really want.

We’re going to need to see the demos outside the conference room, clearly, to judge what Yahoo’s doing on all these products.

Q: On mail, what sort of innovation will we see that goes beyond regular email, which can be inefficient? Irving: Raise the things most important to you on the top (sort of like Google’s Priority Inbox? Sorry…). At its core, Yahoo’s new email service is faster, will incorporate instant messaging as needed.

Q: How are you distinguishing Yahoo search from Bing? And in three years, what will Yahoo be? Seth: On search, Yahoo no longer has to do the backend stuff like crawling and determining relevance. In three years, search won’t look or act anything like what search is today. We’re trying to take the science and tech we used to apply to backend and bring it to the forefront to reimagine what search can be. Nothing specific yet, though–that’s on the come.

Irving: In three years, Yahoo will be a global series of experiences… that are very personalized and targeted. (Uh-oh–sounds a little amorphous again, which is Yahoo’s perennial problem.) I would hope that when you look at us, you’ll say we delivered on that.

Q: Skeptical question asking for specifics, but we don’t get much.

Q: Several of these products now elevate Facebook and Twitter–are you allowing them to drive Yahoo products? Irving: It’s just providing users with what they want to do. But there are holes in what people want to do in social networking. The social networking game isn’t over because we’re doing integration with Facebook and Twitter.

Q: How are you integrating on various platforms like Android, iPhone, Windows, etc.? Irving: We’re a friendly company to do business with, helping companies provide a good Yahoo experience on all the platforms.

Q: What were your misconceptions about Yahoo before you came? Irving: One, I wasn’t sure about the technology company thing (as opposed to a media company that Yahoo kept saying it was). Found that Yahoo at its core is a tech company that finances itself through media/advertising. For another, found that there was in fact a horizontal platform that allows acquired services (such as Flickr and many others) to get off their own platform stack and use Yahoo’s underlying technical resources.

Q: Could you sum that up in a tagline? Irving: I’m in the product team, so no.

And that’s about it.

Update: I think Yahoo might have better off leading with the demos, which were pretty interesting. Yahoo Mail, in beta inside Yahoo but slated to be rolled out to all users this fall, looked fast and clean, and might keep me from my longtime threat to abandon it.

On the advertising front, Yahoo is testing out several new kinds of ads. One, called a Content Mashup, has tabs inside the ad for videos, Twitter, and other custom categories the advertiser can set up and populate with content. Another, called a Digitorial, can run games, videos, polls, and other services inside the ad, all trackable so advertisers know what’s most engaging people. And there’s also an interactive video-in-a-banner ad; when you mouse over the ad, there are links overlaid to other experiences such as games.

And there’s a new search interface coming as well, one that has vertical tabs that let you reach Yahoo content relevant to a particular search result.

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