In this segment, Bambi Francisco interviewed Tom Gruber, co-founder and CTO of Siri, a company that recently came out of stealth mode, and is a virtual assitant on the iPhone.

BF: We were going to talk about the business model. It's a great application as soon as it launches. It's going to be a free application but you have to make money somehow. So how is Siri going to make money?

TG: The great thing is that when you're in a mobile situation with your phone, and the virtual personal systems exist to help you do things such as things you want to do online or offline. For example, if you want to get tickets to a concert, game, make a restaurant reservation, or see a movie, all of these things cost money. So being close to the process of which people make these transactions is easily monetized. The other thing that is interesting is that the intent to do things is known to be valuable. This helps gain any other kind of attention for this monetization. It's extremely targeted because we have a deep understanding of what they are trying to accomplish and wouldn't be wasting their time with any irrelevant ads.

BF: Let's go back to the transaction. So you have relationships with Open Table and several service providers. So when you help book a table through Open Table, you would take a fee?

TG: Each one has a particular contract. But like I've said, if you're near anytime there's a transaction, there's usually affiliate program or particular ways to monetize that.

BF: But if you think about many applications on the iPhone charge a buck. They don't charge much. Did you think about making a subscription base?

TG: The founders created this company because they wanted millions and millions of users.They wanted this to be mainstream consumer and the best way to do that is to give it away for free.

BF: I have been following the mobile industry since 1999 which is not too long. But I remember when the idea was to have your mobile device and pass by a florist and be able to buy flowers right on your mobile device. What is the biggest obstacle in making this a reality?

TG: In terms of the money side of it? It's trust. So the Siri personal assistant is capable of holding your credit card and using it for you. It's all about human trust. Do we have opportunity to have people learn to put their trust in the system? With small purchases like that, people just agree to have it paid.

BF: And what type of services do you think are going to be more prevalent?

TG: Entertaining as well as taking a taxi to it. Buying flowers and having it sent. You might even imagine, you're in a bookstore and you may grab your phone and order music that is playing in a cafe...anything that is an impulse thing to do. I don't think we'd be doing considered purchases like buying a car; we would only do on-the go things. There are countries where this is already a routine.

BF: This is soon to be available on the iPhone in private beta but you have ideas of moving this off to the Kindle.

TG: We don't have the Kindle yet. But the basic thing is that this is intelligence in the cloud brought down to the mobile device. It can work on any mobile device. If it has the ability to talk to the device, it gives speech and so on. We're ready, there are twenty employees, and we are going to be serving millions of people. So we're going to do one thing well and then move to the next.

BF: We wish you the best of luck and I can't wait to be a private beta user.