For Kiaya Steele, the men in suits and dark glasses who appeared suddenly through the raindrops of a New Hampshire morning were the first sign that something very unusual was going on.

One of the men stood under an umbrella next to the car Steele and her friend Kellin had been riding in moments earlier and delivered a message. As Kelli’s sister Jenna was brought out of a second car that had pulled up mysteriously behind them, Steele was told that if she couldn’t quickly prove that she was “the real Kiaya,” the bomb planted inside Jenna would explode.

And this was just the tip of the iceberg of a day spent driving all around the countryside, complete with vans, staple guns, cameramen in trees, threats, red phone booths, and a series of hidden clues.

But this wasn’t a situation for the FBI. Rather, it was a very small-scale–and low-tech–version of what is known as an alternate-reality game, an entertainment genre that has grown in popularity in recent years, especially because its traditional use of mixed-media–the Web, cell phones, social media, and others–can allow large numbers of people to play together collaboratively.

Over the years, the games have become a favorite marketing tool of large companies like Microsoft, which has commissioned huge ARGs, as they’re known, for the launches of things like the video game Halo 2 and Windows Vista. Indeed, the first widely known ARG was called The Beast, and was used as a promotion for the release of the Steven Spielberg film “AI: Artificial Intelligence.”

Those versions of ARGs have seven-figure budgets and allow thousands of people to participate. Yet while they get most of the ink written about ARGs, there has long been a steady stream of games built for very small audiences or, as in the case of Steele and the friend with a “bomb” insider her, an audience of one. It turned out that the intrigue was all part of a day-long mystery concocted by Steele’s boyfriend, and involving several of their friends, as part of an elaborate marriage proposal.

“It’s such a cool format, and the people who can make it through a whole one of these get an experience that no other media can provide.”

–Jim Babb, founder of the AGR Awkward Hug

“We use a lot of fictional analogies in our lives–gangsters in an alley (and) later in the quest there was a Soviet scientist, all themes that had played out in our courtship,” Steele recalled. “We would write stories of sorts to one another before we dated. We’d take an image and run with it until it was too tired to move anymore. The whole thing was kind of a collaboration of our lives together.”

Given that the game Steele’s new fiance planned for his proposal had such a small audience, it was, to be sure, at the extreme end of the size and complexity spectrum for ARGs. But at any given moment, there are several ARGs being played that have slightly larger, yet still very small, numbers of participants. And it is these games, usually carried out at minimal expense and with no deep-pocketed sponsor, that may well be the true lifeblood of the increasingly popular world of ARGs.

And while there are practical limits to the kinds of interactions that are possible between the people running the larger games–the so-called puppetmasters–and the players, these smaller adventures offer everyone involved a much greater chance at direct communication.

“There are quite a few people making [small] ARGs, either without profit in mind or marketing [who are] saying, ‘Look at me, I can do this,’” said Michael Andersen, who runs ARGNet, the leading source for news and information about the genre. “The motivations for a lot of these things vary. [One] advantage of doing these grassroots games is working for yourself. [And], it becomes a lot easier to have those one-on-one interactions [and the] feeling that not only can you communicate, but you can change what’s going on” for fans.

Robot love

Earlier this year, a New York duo calling themselves Awkward Hug built and pulled off a small-scale ARG called Must Love Robots, which was centered around the idea of helping make love connections between people and robots.

Through a series of Web sites, social media, YouTube videos and more, Awkward Hug founders Jim Babb and Tanner Ringerud turned a $3,000 budget into a 3-month-long game with at least 300 participants.

Babb said that the project, which was entirely self-funded, came out of an original desire to create a Web series about a robot. But when the two realized that they could “make it so much more” by adding the various multimedia elements, they set out to build a bona fide ARG, one that would allow them to communicate directly with almost anyone who wanted to talk with them, even to the point of playing online games of Scrabble. And, of course, there were real-world meetings between prospective “dates” and the game’s signature robot (see video below).

Given the huge gap in size between a large-scale ARG and something like Must Love Robots, it might be surprising that many of the ultimate goals are the same. It certainly was to Babb.

“What surprised me the most,” Babb said, was that “players want more and they want to do things with you. It becomes a collaboration. The audience becomes characters.”

And while it’s not always possible for everyone to participate in person–Must Love Robots attracted players from around the world–one of the great things about the ARG genre is how many people who play do participate directly in one way or another. In Babb and Ringerud’s game, for example, 20 people created costumes related to the story line and sent in pictures of themselves wearing the outfits, all of which were intended to be folded into the larger story line.
Kids creators
A different kind of small-scale ARG was Find Chesia, a project put on by the Finksburg, Md., library on behalf of its local schoolchildren and their summer reading program.

The story, said organizer Heather Owings, was centered on the story of Chesia, a 14-year-old girl whose parents have gone missing on an archaeological dig and who sets out to find them. The game was designed by five small teams of 11- to 15-year-olds.

Like with many small-scale ARGs, Find Chesia encountered a series of structural problems, most notably, Owings said, the fact that the kids turned out to be resistant–mainly due to regular conditioning about the dangers of online anonymity–to the idea of posting information in character to the game’s Web site. In addition, there was the unforeseen problem that almost none of the kids were old enough to drive to the game’s real-world locations.

Still, the game was successful enough for Owings to want to run the game again next summer, incorporating some of the lessons they learned this year. And despite the problems, Owings said that she came away with an appreciation for what the ARG genre can offer its organizers and participants.

“I like that ARGs use tools that were set up to do something else, and they’re used to create something new,” Owings said. “It’s the taking of something and changing it and using it for something it wasn’t intended [for] in a new and creative way.”

Plus, she said, Finding Chesia turned out to be a perfect way to get the kids in on the enjoyment of building their own game, even though they lacked many of the skills generally considered necessary for such a task.

“It’s a way for teens to create their own game,” Owings said, “and we really enjoyed that aspect of it…They don’t need to be computer programmer [and] here is a way for them to take ownership for creating a game on a fairly small level. [As well, it] helps them to realize how much the Internet does facilitate networking within the community, as well as outside the community.”

These days, said ARGNet’s Andersen, there are at least as many small, grassroots ARGs being produced as the larger, corporate-backed games. And those numbers could grow as an increasing number of people become versed in the tools for building them. According to Andersen, teachers at the University of Texas at Dallas and the University of Mary Washington are both teaching classes about ARGs.

But the real upside in the genre’s growth will come naturally, as more people in more local communities get exposed to ARGs and discover the joy of playing something truly interactive and truly collaborative.

And while it’s true that most small ARGs quickly peter out as players and organizers discover that they don’t have the time or energy to follow through, there are those who feel that the ultimate payoff of participating is there for anyone with the stamina or commitment to grab it.

“For an independent ARG, the most successful thing you can do is complete it and have your core audience go all the way through,” said Awkward Hug’s Babb. “It’s such a cool format, and the people who can make it through a whole one of these get an experience that no other media can provide.”

Copyright ©1995-2009 CBS Interactive Inc. All rights reserved. Used by permission.

In the furthest reaches of India’s rural heartland, the cellphone is bringing something that television, radio and even newspapers couldn’t deliver: Instant access to music, information, entertainment, news and even worship.

Despite its rapid modernization, many of India’s 750,000 villages remain isolated except for the cellphone reception that now blankets almost the entire country after a decade of rapid expansion by operators. So in villages that don’t receive any FM radio stations, people have begun calling a number that has a recording of Bollywood tunes and listening to it on their headsets.

This primitive cellular “radio” service was used by close to 20 million Indians last year, phone company executives estimate.

“I call it the poor man’s iTunes,” says Mahesh Prasad, president of Reliance Communications Ltd., one of India’s largest cellular companies. “A villager waiting for a bus has nothing to do. When he wants to kill some time, this is the only entertainment media available.”

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One thing that strikes me about Chrome OS and Litl is that neither bother trying to do everything Windows or Mac OS X can do. Not even close. I don’t think either even bothers trying to serve as one’s primary computer.

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China Mobile Ltd. (CHL), the world’s largest mobile operator by subscribers, is pinning its hopes on new third-generation services such as mobile television and mobile readers to drive growth amid increasing competition and falling voice revenue.

Chairman Wang Jianzhou said Thursday the company plans to launch mobile-reader services next year and is working with Datang Telecom Technology Co., Taiwan’s Hon Hai Precision Industry Co. and Hanwang Technology Co. on electronic reading devices.

It is also planning to launch a trial service for mobile TV on third-generation handsets by the end of this year.

Mr. Wang said the company is targeting several million subscribers to its mobile-TV service in the first year and tens of millions of users in the second year.

The new services should help China Mobile achieve profit growth, he said.

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Washington policy makers, long concerned about how marketers use consumers’ personal data to their guide sales pitches on the Internet, have stepped up scrutiny of the increasingly sophisticated ad-targeting techniques used in other media, ranging from mobile phones to TV commercials to the ads consumers get in their mail boxes.

In recent years, marketers have grown more adept at culling consumer data from an array of online and offline sources–including real-estate and motor-vehicle records, consumer surveys, credit-card data and logs of Web visitors’ online behavior–to identify the most receptive audiences for their ads.

At a hearing Thursday, a House subcommittee plans to explore the impact of these practices on consumer privacy, and will hear from witnesses including advertising giant WPP, database-marketing company Acxiom (ACXM), privacy advocates and others.

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I remember my brother showing off a new device in the late 1990s that let him navigate the Internet on the television. Back then, there were no dogs riding skateboards on YouTube or NBC dramas on Hulu, but the technology from WebTV appeared to be a breakthrough in the convergence of the two mediums.

The frustrating thing about WebTV was that the dialup connection was so slow–at times crippling–that you often sat on the couch waiting minutes for a page to load. Plus, the resolution on TVs then was far from hi-res, and the lack of multimedia on the Web made the task rather boring.

Fast forward more than a decade: While you can now search the Web at lightning speed on the tube, watch television shows online at will and view Internet videos with clarity on any screen, companies are still struggling to come up with a business model for the Internet-connected television market.

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Federal regulators are considering whether the government should take greater control of the Internet and ask consumers to pay higher phone charges in order to provide all Americans with cheaper access to broadband Internet service.

The Federal Communications Commission Wednesday will lay out the case for expanding broadband Internet service, outlining current obstacles to making it widely available. The agency is considering whether to force Internet providers to share their networks with rivals and raise fees charged on consumer phone bills to pay for the broader access.

The proposals, which have sparked criticism from telecommunications and cable companies, represent a reversal from the Bush Administration, when regulators cut back on government control of Internet and telephone service.

The new commission, controlled by Democrats, is considering whether more government control is needed to ensure competition and more affordable Internet service.

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The black/grey markets in Beijing will blow your mind! On Saturday and Sunday (November 14/15) I had a chance to do a bit of undercover work. I hired a guide to help me navigate the Zhongguancun shopping mall maze–Hailong, Dinghao and e-World Kemao. Jennifer, my guide/interpreter, was in the market for an iPhone (our ruse) and I was going to buy it for her.

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First, let’s set the scene: In one corner, you have Verizon (VZ). The company recently launched a series of ads attacking AT&T’s (T) 3G network. The spots, revolving around the phrase “there’s a map for that,” show side-by-side maps of AT&T’s and Verizon’s networks and claim Verizon has five times more 3G coverage. Combine those with the ongoing series of iPhone-bashing Droid commercials, and you’ve got a powerful one-two punch heading straight toward AT&T’s kisser.

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As the temperature drops, some cold-weather commuters are trying out an iPhone app that lets them climb in to an unlocked, pre-heated car.

Directed Electronics, the company that sells the Viper car-alarm system, has developed an accompanying app called SmartStart that lets customers use their phone to lock or unlock the car, or turn the alarm on and off.

“There’s so many apps that are neat but don’t necessarily bring much more utility to the user,” said Kevin Duffy, president of Directed. “This really makes your life better.”

They can also press a button to start it–something customers like because they can avoid a chilly ride this way, he said–open the trunk, or press a panic button that makes the headlights flash and sounds the horn. The panic button doubles as a car finder in crowded parking lots and has been known to be used as a wake-up call as well, he said.

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Matching a recent move by Wal-Mart (WMT), Amazon.com (AMZN) has unveiled a new promotion on Research in Motion (RIMM) BlackBerry phones, giving buyers of certain models who sign up for new 2-year plans free $100 “e-gift cards.” The deal runs from November 14 through November 20. The gift cards will be mailed automatically 6 weeks after the phones are purchased.

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The biggest concentration of developers for Apple’s (AAPL) iPhone is in Northern California, as a story in The Wall Street Journal’s San Francisco Bay Area section points out. But the ubiquity of the Internet makes it possible for a software developer anywhere in the world to make apps.

According to Mobclix, which operates the largest ad exchange network on the iPhone, the largest number of app developers come from the U.S., followed by the U.K., Canada, Germany and Australia. But there are developers in such far-flung countries as Malta, Reunion, Brunei, Kazakhstan and Azerbaijan.

One example is Sameer Jain, the 39-year old founder of Net Solutions in Chandigarh, India. He established an iPhone app team alongside his mainstay Web app business almost a year ago. Of about 170 employees, about ten of them work on iPhone apps.

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Google (GOOG) plans to buy back $750 million of its common stock to offset dilution from shares to be issued in the pending all-stock acquisition of AdMob, CEO Eric Schmidt told Bloomberg yesterday.

In a research note, Broadpoint.Amtech analyst Benjamin Schachter notes that this will be the first time Google has ever repurchased any of its own shares, despite its $22 billion cash position.

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Statistics tell us that there are already more than two million iPhones in China, and the number is expected to rise (at least a little) following the recent official launch of Apple’s (AAPL) iPhone 3G in the country through local telecom carrier China Unicom.

Both Chinese and foreign firms have been releasing apps targeting China’s iPhone users, even before the Apple smart phone was officially launched in China. Among the most popular apps are Chinese-English dictionaries and Chinese city maps.

Big local players have already flocked to the market. Leading Web portal Sina.com has promoted its offerings on the iPhone App Store to feed users with Chinese news and enable them to update their blogs via iPhone. Tencent, the Internet company that runs the popular Chinese instant messaging system QQ, also offers QQ for iPhone users in and outside China.

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The Council of the European Union has approved new legislation that would require Web users to consent to Internet cookies.

Cookies, small programs that can be used to track Web movements, have come under fire as consumer groups, including the Federal Trade Commission, have sought to regulate companies that engage in targeted behavioral advertising.

While the current EU telecom law states that cookies are allowed if Internet users are notified of them and have an opt-out option, in practice, the law has been interpreted more loosely. In the United Kingdom, for example, the information commissioner’s office issued a directive emphasizing that sites should clearly direct users to a page where they can opt out.

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