Thursday, March 26, 2009

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More Security Loopholes Found In Google Docs Top
Security consultant Ade Barkah checked in with us to alert us to a couple of serious security issues associated to Google Docs, the web-based office software from the world’s most famous search engine company, giving a whole new meaning to its mission to make the world’s information universally accessible. On his blog on software, infrastructure and security, Barkah outlines no less than three issues that he discovered while investigating some potential security lapses. Since he did the right thing by contacting Google about his findings (only to receive no response after five business days), we’re hoping that this article will help trigger the company’s engineering team to plug the holes asap. In case you missed it, earlier this month we uncovered some major privacy blunders going on with Google Docs, which the company later confirmed and fixed (we pinged them for this too). So what’s up? First, apparently when you embed an image in a protected document it gets uploaded to a Google server where people you’ve not given access to the file can still see and download it , even after you’ve deleted the document in question. I’ve uploaded an image to a protected file in my account for testing, and deleted the document right after. If you see the image embedded on top of this post, or click this link to find you can still get to the image, that means the above checks out. I concur with Barkah, who writes: If you embed an image into a protected document, you'd expect the image to be protected too. If you delete a document, you'd expect any embedded resources to be deleted also. The end result is a potential privacy leak. Images can potentially contain confidential information, both personally and professionally, and it basically only takes finding out what the dedicated URL for an image is for anyone to access it freely, which is a massive privacy blunder. Second, it appears that if you share a document carrying a diagram - a feature Google introduced yesterday - with anyone, this person will be able to view any version of any diagram that has been embedded in the document . That basically means that if you create a diagram with sensitive information and later decide to strip some of it away before sharing the document in view-only mode, the person you share it with will be able to revert to previously saved versions simply by tweaking the URL a bit, uncovering what you thought you were still hiding from him or her. The third issue Barkah lays out is such a serious bug that he doesn’t go into the details of the mechanics behind it yet, pending further research and feedback from Google. The security specialist claims that if you take away the permission for another person to access your documents, they could in some cases still be able to get to them later without your knowledge . If that last claim turns out to be valid, I’m leaving Google Docs and never coming back. Crunch Network : CrunchBoard because it’s time for you to find a new Job2.0
 
Europeans still shopping as Russia's KupiVIP raises another $8m Top
Online shopping clubs along the lines of Vente Privee (which started in France) and Brands For Friends in Germany are spreading like wildfire across Europe - and no wonder. They are business models tailor-made for the recession, offering big discounts on designer goods among almost guaranteed buyers. They hit revenue almost from the word go and the jungle drums tell me that Vente-Privee is on course to deliver hundreds of millions in revenue this year alone. Now Russia’s KupiVIP is set to accelerate with a new injection of cash. Crunch Network : CrunchGear drool over the sexiest new gadgets and hardware.
 
Mystery PE Fund Throws A Lifeline To Niche Social Network Sneakerplay Top
A new private equity fund has picked up what was left of Sneakerplay , the social network for sneaker fanatics that we deadpooled late last year when its founders pretty much abandoned the service (but kept the website online, hoping for a buyer to step up). The fund, dubbed Keroch , has acquired the assets and IP of Sneakerplay and plans to grow the niche community site to a more relevant property. The terms of the deal were not disclosed, but Sneakerplay has always been a completely bootstrapped venture so we can safely assume the founders are happy with the sale, especially since they’ve basically moved on from the project some time ago. What struck me is the fact that everyone seems to be doing their best to conceal the names of the people involved with the private equity fund. The website won’t teach you a thing about that, except for the tidbit that the team consists of four partners, who “possess 30+ years of combined experience in the technology/internet industry ranging from large companies such as Yahoo! to small start-ups.”. The only name we came up with so far is Brian Rothenberg , former product manager for Yahoo! Real Estate. Either way, the acquisition of Sneakerplay is Keroch’s first move and they plan to turn the small community of sneakerheads into a relevant niche social network with more features and a clear path to monetization through sponsorships and on-site advertising on the roadmap. As an aside, some people were upset when I deadpooled the company (and now of course I happily admit they were right) but it seems like the article at least got the Sneakerplay team the necessary attention to engage in bidding wars with potential acquirers. Co-founder Robleh Jama has promised a post on his personal blog with all of the juicy details from dealing with investment bankers, to press coverage, bidding wars and exploding term sheets , which should be an interesting read. Crunch Network : MobileCrunch Mobile Gadgets and Applications, Delivered Daily.
 
Visible Measures Raises $10 Million Series C Funding To Track Online Videos Top
Viral video tracking and measurement firm Visible Measures has closed a $10 million series C round of funding, led by Northgate Capital. Existing investors Mohr Davidow and General Catalyst also participated, bringing the total capital the company has raised since launch to $29 million. The last time it raised money was in January, 2008 . Visible Measures lets both ad agencies and big video publishing sites on the Web track viewership and engagement with videos across the Web. Ad agencies can measure the effectiveness of specific video ad campaigns, and publishers can see which of their videos are being played and passed around the most. The company is currently tracking more than 200 million different online videos and video ads. Each day it measures the equivalent of 100 years worth of collective online video viewing consumption. It is trying to bring the types of metrics normally associated with direct response ads to brand awareness. Crunch Network : CrunchGear drool over the sexiest new gadgets and hardware.
 
Meebo Turns Into One Big Ad, But Users Seem To Like It Top
Web chat service Meebo , always innovative with advertising , is trying out something fairly aggressive: full takeover ads that show a persistent advertisement in the background. The company says that they already got 1% or higher click throughs on existing ads units on the site, which included rollovers at the bottom of the screen and another unit right in the middle. But the new units actually take over the entire background of the site, meaning users are literally slammed with the messaging. They are presented with an option of removing the add with a click. And the users don’t seem to mind at all. Founder/CEO Seth Sternberg wrote a blog post today on the new ads and asked for user feedback. Most of the 100+ comments to the post are very positive. Example comments: “Awesome…Black is a really nice look for Meebo…The ad is really subtle, too — not all up in your face…"Did we strike a good balance between not disturbing your use of Meebo, while acknowledging the need to run ads?"…Hell to the yes!” “I read your message about why the background changed and everything, and I definitely agree with what you're saying. (Especially the sucky, flashy ads that cover your page you're trying to view). With that said, nice work! I actually really like the way the ad is incorporated into the background, and slightly opaque. It's not too distracting, and if the ads are helping you guys out, by all means, keep doing it this way! : )” “I think this is a brilliant way to put ads up without being obtrusive and annoying. No one likes banner ads or popups. This does look like a good balance. I hate ads as much as the next guy, but know the need for them to support your business, and the fact that you concidered your clientell in your design means a lot. It means my willingness not to click the 'backtoblue' button and get rid of it because it simply being there and me not clicking is paying you for a job well done.” YouTube, ESPN, MySpace and others have tried similar ads in the past, and these things command great fees. If Meebo really has gotten the users to buy into this, we may be seeing similar stuff all over the place, and soon. Crunch Network : CrunchBoard because it’s time for you to find a new Job2.0
 
Zimride: A Carpooling Startup That Actually Makes Money Top
Zimride - a startup with a tagline that reads “A Carpool Community” - sounds exactly like the sort of benevolent Web 2.0 service that will never make a cent. As it turns out, since launching in 2007 and winning fbFund last summer, the company has managed to carve out a nice niche for itself that saves its users money, helps the environment, and actually manages to generate revenue. And, unlike some of its carpooling competitors, it has also managed to avoid getting sued by Canada. Zimride offers an application on Facebook Platform, inviting users on the same network to meet eachother and share a car trip. Users can also visit the service on its website at Zimride.com and find trusted users through Facebook Connect. After entering their current location and their destination, Zimride will generate a list of potential matches arranged by how far out of the way each one wants to travel. Users can also post a destination they’d like to travel to some time down the line, and receive alerts through Email when a match pops up. The service is offered for free for up to 50 members per school or company network, but once it crosses that threshold Zimride seeks out the network owner and asks them to pay a subscription fee if it wants to continue allowing its students or employees to use the service. While this sounds a bit risky (Zimride stands a chance at pissing off students if their school decides not to join), COO John Zimmer says that institutions have generally been very receptive to the idea. The company works with transporation departments and student governments at universities and large companies, and charges universities $9500 a year for the service (they can pay month-to-month). So far, the company has managed to sign up 20 instutitions, including Stanford which has seen over 14,00 new users share 300 rides in three weeks. And aside from earning money as a carpooling company (which is impressive in itself), Zimride is also notable for being a Facebook application that generates revenue through something other than advertising. Crunch Network : CrunchBoard because it’s time for you to find a new Job2.0
 
Mortgage Recommender Home-Account Secures $1 Million In Seed Funding Top
Home-Account, a recently launched mortgage search and counseling service, has secured $1 million in seed and angel funding. The largest investor is Charles River Ventures, which gave the startup $300,000 through its QuickStart Seed Funding Program (the program usually only gives startups $250,000 but saw promise in Home-Account). Additional investors include many well-known Silicon Valley entrepreneurs and investors: Marc Benioff, Ron Conway, Mark Pincus, Jeff Clavier, Arjun Gupta, and Gigi Brisson. Home-Account offers a compelling service for those who are looking for mortgage or to re-finance. In the current economy where credit is difficult to access, Home-Account helps consumers find the right mortgage for their needs and credit histories. Here’s how it works. Consumers fill out a free online mortgage profile to determine if their credit history qualifies them for a mortgage and what interest rates they could qualify for. Once Home-Account determines that a consumer qualifies for a mortgage, the startup will get mortgage offers from its partner lenders (this service costs users $10 per month). With credit standards tightening for mortgages, many consumers may not qualify for a mortgage in the current climate. Home-Account offers a second service (also $10 per month) which will help consumers with poor credit history improve their credit scores and get their financial history in order to become more desirable applicants for mortgage lenders. CEO Mark Goldstein says that he wants Home-Account to be the Kayak.com of mortgages. He says that Home-Account creates a better, more transparent way to get a mortgage. A good mortgage broker should do a lot of hand holding, says Goldstein, and recently, mortgage brokers haven’t been doing their jobs correctly. Home-Account doesn’t make commissions from the buyers or the lenders, like some online mortgage services like LendingTree.com and LowerMyBills.com. It makes money solely from the consumer subscriptions. Goldstein formerly co-founded BlueLight.com, which was Kmart’s foray into e-commerce during the first dotcom bubble. The Home-Account team is partly made up of mortgage technology experts from Washington Mutual. Since the startup’s launch, 25,000 consumers have used the mortgage evaluator and several hundred have signed up for the paid mortgage finder service. For a subscription service, however, there is sure to be a lot of turnover. Once a consumer finds a mortgage, they won’t need the service anymore. Only people with the worst credit will have any incentive to keep their subscriptions going, and Home-Account will have the perverse economic incentive of keeping their hope alive as long as possible. Crunch Network : CrunchBase the free database of technology companies, people, and investors
 
Apple's iPhone App Refund Policies Could Bankrupt Developers Top
We reported yesterday about Apple’s alleged delay in payments to iPhone app developers, but there is more alarming news from iPhone developers about Apple’s refund policies. Apparently, if iPhone users decide that they want a refund for an app (users can get a refund within 90 days, according to Apple policy), Apple requires that developers give back the money they received from the sale. But here’s the kicker—Apple will refund the full amount to the user and says that it has the right to keep its commission. So the developer not only has to return the money for the sale, but also has to reimburse Apple for its commission. Apple charges a 30% commission on all paid apps sold through the App Store. So basically, developers get 70% of a given sale but if the end-user wants a refund, the developer has to pay Apple 100% of the sale. Here’s the clause in the contract: In the event that Apple receives any notice or claim from any end-user that: (i) the end-user wishes to cancel its license to any of the Licensed Applications within ninety (90) days of the date of download of that Licensed Application by that end-user; or (ii) a Licensed Application fails to conform to Your specifications or Your product warranty or the requirements of any applicable law, Apple may refund to the end-user the full amount of the price paid by the end-user for that Licensed Application. In the event that Apple refunds any such price to an end-user, You shall reimburse, or grant Apple a credit for, an amount equal to the price for that Licensed Application. Apple will have the right to retain its commission on the sale of that Licensed Application, notwithstanding the refund of the price to the end. The developer we spoke to seemed to think that the app would become unusable if a consumer gets a refund for a particular application, but the developer was unclear if this actually happens. We were also told that this section of the contract is new, and developers are being forced to sign this in order to sell apps in the next generation App Store (for when the iPhone OS 3.0 is officially released). But we saw a contract from another iPhone developer who signed the agreement back in December and the same clause was part of the contract. We are assuming that Apple still has to pay bank fees on a charge if a consumer wants a refund, but certainly bank charges don’t amount to 30 percent. This policy still seems incredibly unfair to developers. Apple should instead require developers to return the exact amount they received from a refunded sale, not extra. Apple has a ton of money in the bank and could stand to make a lot more from the app store down the line as the iPhone user base grows. With these fees, Apple is pointing a big red arrow at why developers shouldn’t be developing for the iPhone—namely, they’re at the mercy of Apple, which is making a habit of treating its developers like dirt. Here’s a copy of the actual contract: iPhone app contract - Get more Information Technology Crunch Network : CrunchBoard because it’s time for you to find a new Job2.0
 
Troubles At Imeem, But Company Says No Shutdown Imminent Top
Imeem , the free streaming music site backed by Sequoia Capital, Warner Music and other prominent investors, is rumored to be in serious trouble. Music insiders are saying a shutdown of the company is imminent after a failed attempt to sell the company or raise more cash. A spokesperson flatly denied the shutdown rumors today, but confirmed that the company layed off staff last week (six people from a staff of around 70). He wouldn’t comment on funding or sale rumors, although plenty of potential buyers tell us they’ve been pitched to buy the company over the last year. The “problem” with Imeem, like all streaming music services, is that they have to pay a flat rate per stream to the music labels that’s hard to cover with advertising alone. Some companies pay as much as $0.01 per stream, which doesn’t seem like a lot - but at volume it’s crushing, particularly in a down advertising market. One source tells us that Imeem owes the labels as much as $30 million to date with no hope of paying any of it. Imeem says that is “extremely innacurate,” but confirms that they are playing “in excess of a billion songs and videos per month.” Online music is a tricky business, where rabid users can actually quickly put you out of business simply by listening to too much music. Imeem says they’re refocusing their efforts on additional revenue streams, such as paid downloads, tickets and ring tones. One new feature allows users to download entire playlists for a fee with the click of the button, which is sure to be popular. The big question is whether that will be enough to make the business even remotely profitable. This is one tough company that has reinvented itself more than once to find a way to profitability and success. I wouldn’t necessarily bet against them. But the clock is ticking on this startup. Crunch Network : MobileCrunch Mobile Gadgets and Applications, Delivered Daily.
 
Gay Dating Makes Its Way To The iPhone Top
The iPhone is a hotbed for location-based social networks, which tap into the phone’s geolocation features to help users find nearby friends and strangers that they might like to meet. We’ve seen a handful of dating applications that cater to the straight community, and today brings the launch of Grindr (iTunes Link), one of the first iPhone applications geared towards gay and bisexual men. While privacy is an issue for all location based social networks, it is of the utmost importance on gay networks. Without proper security measures, bigots could easily download such applications and use them to pinpoint targets for hateful slurs and potentially even violence. Grindr deals with these issues by obscuring a user’s absolute location by default. Rather than plotting each user on the map. Grindr displays how far away they are (distances can range from a few feet to miles away). The application presents users with a list of nearby strangers, arranged in a grid of photos (you can click on a photo to see their personal profile). From here, users can strike up a real-time chat. If they decide they like their new acquaintance, they can they optionally choose to reveal their exact location. One of my concerns with new iPhone-based dating networks like Skout is they they have to face off with huge, well established players like Match.com , which are slowly releasing their own iPhone applications. Grindr’s Joel Simkhai says that there are a number of well established dating sites for gay men, but says that many of them feature adult content which Apple likely will be opposed to, giving Grindr a better shot. Other gay dating apps on the iPhone include The Gay Community App , which appears to have been hampered by a number of bugs that were recently fixed in an update. Crunch Network : CrunchGear drool over the sexiest new gadgets and hardware.
 
Want A Free, Cheesy Wedding Planned By Millions Of Strangers? Head to MySpace. Top
If you have ever wanted a cheesy, media-sponsored wedding like those on reality TV shows or on the Today Show, perhaps you should look to your social network. MySpace is now accepting submissions for "Married on MySpace," an online reality TV series that will let couples receive the “wedding of their dreams” planned by and shared with the entire social network . Engaged couples can enter their video submissions here. MySpace is partnering with The Knot to provide editorial content and wedding planning expertise and the contest is co-sponsored by Disney, who is releasing “The Proposal” soon with Sandra Bullock and Ryan Reynolds. And MySpace is partnering with Endemol, a European reality television production company that has created classy reality tv shows like FearFactor, Extreme Makeover and Big Brother. After submissions have ended, MySpace members can chose their favorite couples from a group of finalists. Once a finalist has been selected, members will continue to vote on elements of the wedding, including what the bride and groom will wear, where the couple will celebrate their bachelor and bachelorette parties, the wedding location, and more. The series will debut on MySpace in May with the announcement of the chosen couple and conclude in early August with the wedding ceremony. “Married on MySpace” will consist of 13 webisodes that document the wedding planning process the same way that wedding reality shows like “Whose Wedding Is It Anyway” profile weddings. I have no doubt that MySpace will be able to enlist plenty of attention-hungry couples who want their few moments of reality web TV fame. And it certainly doesn’t hurt that News Corp. will foot the bill for your wedding. I’m just curious as to how many MySpace executives would allow the social network’s millions of members to plan their dream weddings. Here’s the publicity video for the series: Crunch Network : CrunchBase the free database of technology companies, people, and investors
 
Atlanta Gets Its Own Y Combinator In Shotput Ventures Top
Silicon Valley has Y Combinator. Boulder, Colorado (and now Boston ) has TechStars. Boston also as of today has Start@Spark . Washington, D.C. has LaunchBox Digital. Philadelphia has DreamIT Ventures. And now Atlanta is joining the seed incubator movement with Shotput Venture s. Started by a group of Atlanta tech entrepreneurs who want to attract and keep startup talent in the Southeast, Shotput Ventures is accepting applications from young, first-time founders for its summer program. The deadline is April 10. Mitch Free, the founder of industrial marketplace MFG.com , is one of the backers. He explains in an email: We are looking for “capital light” web startups. We think there is so much open source software, web services and cheap cloud computing capacity (like Amazon S3) that web business can be prototyped and launched very inexpensively. Ideally we are looking for a small team of co-founders, most likely still in college. We will pick 8 to 10 teams and give them $25k each so they don’t have to get summer jobs and can work on the product full time. We (all seasoned entrepreneurs) will mentor them through the summer. We will take a 5% to 10% equity stake. At the end of the summer we will pick some to further fund and/or help raise capital and some we will probably kill. There has been nothing like this in the Southeast. We have lots of great breeding grounds such as Georgia Tech but the people with the next big idea have had to reach out to the Northeast or West Coast to find seed capital and support. Our goal is to create an eco-system in the Southeast to encourage and support web startups. And once they are up and running we don’t want them having to relocate to Boston or San Jose The first summer round is funded with $300,000. Who needs a summer job, when you can create a startup instead? Crunch Network : CrunchGear drool over the sexiest new gadgets and hardware.
 
Pet Airways: Forget Cargo, Your Pet Needs To Fly First Class Top
Flying your pets isn’t fun. A few airlines allow small pets on airplanes if they fit under the seat. But most of the time they’re stuck in the cargo hold and come with the rest of the baggage. The one time I flew my dog Laguna she arrived in Seattle shaking and covered in her own feces. Must have been a blast for her. If you are rich enough you can bring them on your own private jet. Another trick is to have your animal certified as a “service animal,” (you can even do this online ) and I hear you can then take them just about anywhere. It’s a loophole that is sure to be plugged once too many people take advantage of it. Enter Pet Airways , a new startup launching next month that flies pets and only pets: “With Pet Airways your pet will be safe and comfortable, flying in the main cabin, not in cargo. From check-in at our Pet Lounge, and throughout the flight, our Pet Attendants will be caring and catering to all your pet’s needs. You can even monitor how your pet is doing.” Fees start at $150. Sadly, only your pet can fly, not you (they won’t even put you in the cargo area of the plane). Flights will be limited to start , basically from Los Angeles to the East coast with stops in Denver and Chicago. The company says they’re funded but aren’t giving details yet. Each flight has a pet attendant on board at all times, and the airline will start with a fleet of twenty planes, ranging from twin props to 727s. I have no idea if this airline is going to be a commercial success, but I’m hopeful. If they start flying from San Francisco to Seattle, Laguna will be a regular customer. And I’d pay a lot more than $150. Crunch Network : CrunchGear drool over the sexiest new gadgets and hardware.
 
Justin.TV Is Bigger Than Hulu . . . Overseas Top
Live video on the Web is starting to take off, judging by the massive jump in traffic that Justin.tv is witnessing. According to comScore, the live video site’s global audience saw a massive jump from 9.3 million unique visitors in January to 15 million in February, which is about the same number of people who went to Veoh and nearly twice as many as visited Hulu.com. Of course, Hulu is only available in the U.S., where it is fourth most popular video site , and its videos are watched on other sites as well. In the U.S., ComScore only shows Justin.tv attracting 1.4 million people in February. So most of its audience and growth is global, with particular strength in Spain, Brazil, Germany, and the UK. Quantcast, which directly measures all three sites, shows a similar trend. Globally, Justin.tv has 22.1 million monthly uniques, compared to 15.8 million for Hulu, and 11.9 million for Veoh. While the U.S. numbers are 3.9 million for Justin.tv, 14 million for Hulu, and 4 million for Veoh. (Ustream.tv seems to be the second-largest live video streaming site with 6.7 million global monthly visitors and 1.4 million in the U.S.). These are all site numbers, Quantcast also measures “network” numbers which presumably includes videos embedded elsewhere, and those are about double the site stats for each service. Justin.tv itself claims 1,800 percent year-over-year growth in unique visitors based on its internal Google Analytics numbers. What all of these number show is that live video is beginning to make its mark, and could soon challenge the top video sites for the attention of audiences. There are 428,000 channels broadcasting live video on Justin.tv. Of those, 40,000 channels broadcast 1.75 million hours of video each day. And the level of engagement seems to be just as high as on regular video sites. ComScore’s VideoMetrix estimates that the average Justin.tv viewer in ethe US. watches just over an hour a month (64.7 minutes), almost exactly the same as a Veoh viewer (64.5 minutes), but still well below a Hulu viewer (87.2 minutes). So why is Justin.tv so popular overseas? Could it be all the live sports events streamed over the service? Soccer and female wrestling seem to be particulraly popular. Crunch Network : MobileCrunch Mobile Gadgets and Applications, Delivered Daily.
 
Now that China Is the New Israel…What's Israel? Top
Tel Aviv, Israel— When I moved to Silicon Valley in early 2000, I quickly became fascinated with Israel. A very tight relationship had formed between the holy-land-for-all-things-tech and the actual Holy Land, bolstered by the success of people like Yossi Vardi and Checkpoint's Gil Schwed. The rapid pace of liquidity in the late 1990s meant Valley investors couldn't find enough start-ups to stuff their money into, and unlike dot com fluffiness that was roaming around San Francisco, Israelis were hard-core techies with a work ethic that seemed to defy basic human needs like sleeping and eating. Most of all, Israelis, particularly those in high-tech and cosmopolitan Tel Aviv, had a reputation for living like there was no tomorrow, because when you're surrounded by hostile neighbors there may not be. The 1990s were a period of a lot of structural change in the venture business. It was no longer about families and private money investing—money came from big public pension funds and endowments, and more of it was coming online as the baby boomer retirement accounts swelled and the American stock market made everyone richer. That kind of scale forever changed the venture game. Meanwhile, the Internet enabled companies to be flipped in under two years—also unheard of before. Similarly, Israel represented one of the first times the cozy boutique Sand Hill Road firms ventured overseas and made money as a result. For a time, Israel had more Nasdaq-listed companies than any other country in the world. Then the crash, happened here and there. Only Israel got a double whammy of the Second Intifada and a resurgence of violence starting around the same time. The talk was always that Israel would come back as a hub for brilliant, crazy, ballsy entrepreneurs, and the returns would come back too. Weren't these things just cyclical? A positive sign was how many Israeli VC firms were opening their doors. For much of the last ten years, investments in Israeli companies by Israeli VC firms has roughly equaled foreign investment in Israel, according to stats from Ben Gurion University’s School of Management. That’s a huge strength, as Valley and Boston investors always like to invest with local partners, and a lot of developing economies don’t yet have that local infrastructure. By 2004, an executive from Silicon Valley Bank was quoted in the San Francisco Chronicle after leading a contingent of VCs back to the Holy Land saying Israel was poised to explode again. He crowed that the crash and violence aside, Israel was getting more venture money than anywhere other than Silicon Valley and Boston and it was only ramping up. But it turned out, he was wrong. Money continued to invest along the same $1.2 billion-to-$1.4 billion a year range, and returns fell off a cliff. Israeli companies have raised just over $10 billion since the beginning 2001, but acquisitions and IPOs have returned just over $860 million over that almost eight-and-a-half-year period. Bear in mind, the industry tends to measure performance over ten-year periods, and not many people expect a roaring acquisition or IPO market for the rest of 2009, and arguably 2010. Compare those numbers to start-ups in Europe, a continent that has long been characterized as risk-adverse, thanks in part to labor laws that work against start-ups. Sure, Europe is a bigger place, so its to be expected that European companies have raised a much bigger 36 billion in Euros since the beginning of 2001. But European companies have returned $6.3 billion. If you do the percentages, Israeli companies have returned 8.6% of the money invested over the last eight-plus years. I don’t know how to account for Euro-to-Dollar conversation rates over eight years’ time, so let’s pretend for a moment that it was 36 billion in dollars invested in Europe. If that were the case, European companies would have returned 17.5% of the capital invested. The real percentage is undoubtedly much higher, although still pretty poor as an industry. Most investors like to get all their money back, and then some. (All stats are from Dow Jones VentureSource.) Ten years after the peak of the last bubble, it's clear that when foreign investment fell in Israel from about $4 billion a year to $1 billion a year, the country wasn't just weathering a recession. Somewhere along the way, the entrepreneur scene here lost its mojo. Now, before the hate mail starts, let me be clear, that numbers aside, I still believe Israelis are singular entrepreneurs. There is interesting stuff here and always will be. There's an element of risk taking that even the Valley can't rival, and it's no secret Israelis are brilliant technologists. They also share a lot of qualities with some of the best entrepreneurs I know: They're born hackers. They love to work within constraints  to make something happen. They love when odds are stacked against them. They're ballsy. They're brash. As I said in this interview with Loren Feldman yesterday, they start companies like they drive. In either case—you don't want to be in their way. So I don't say this to trash Israel, but facts are facts. In sheer numbers, Israel’s place on the global scale of investing has been dwarfed by China, and matched by the United Kingdom. And after three days of talking to dozens of entrepreneurs and investors in Tel Aviv, this seems like a country wandering in the desert, looking for a new tech movement to own and dominate. What happened to Israel is a bit like what happened to Boston—the story and opportunity moved away from what the city's entrepreneurs were good at. In the case of Israel, security and encryption was always a strength, but that's not the growth industry that it was. In the case of Boston, enterprise technologies and telecom were always strengths. Now, as media has become the story of the last boom, it's not a surprise New York surpassed Boston in the amount of venture capital raised. Internationally, China has become the new obsession, with India a close second. It's not that Chinese entrepreneurs are better than Israeli entrepreneurs. And so far, there are certainly a lot of concerns about returns in China. But when it comes to international entrepreneurship—at least in terms of attracting those billions in U.S. venture dollars—entrepreneurs need to give VCs a compelling reason to come to them. In the 1990s, Israel gave them superior technologists. Now, China is giving them an exploding demographic that needs all manner of goods and services. Was a booming Israel just a relic of the 1990s boom like Webvan and the Pets.com sock puppet? I don't believe so. But I'm in Tel Aviv for the next two weeks looking for the company and the tech movement that will prove me right. If you find it, drop me a note. Crunch Network : CrunchBoard because it’s time for you to find a new Job2.0
 
EMI Drops Lawsuit Against Project Playlist, Licenses Catalog Instead Top
Music search and streaming service Project Playlist may finally be turning the tide in its ongoing battle with the music industry. EMI Music, one of the three major labels which was suing Project Playlist for copyright infringement, dropped out of the litigation and is announcing today that it has licensed its entire catalog to the service instead. EMI joins Sony BMG , which was never part of the lawsuit, in licensing its digital catalog of music to Project Playlist. That is two down, two to go. Warner Music and Universal Music Group are still party to the suit. If Project Playlist CEO Owen Van Natta can get them to license their catalogs as well, maybe the vultures circling the company will go away. The service is currently banned on both Facebook and MySpace . Getting the other two labels on board would be necessary for lifting those bans. Warner and Universal don’t seem to be in any rush to settle, however. And Project Playlist doesn’t have much time. The number of U.S. unique visitors going to its site has dropped from 10.4 million in November, 2008 to 6.1 million in February, 2009, according to comScore. Crunch Network : CrunchGear drool over the sexiest new gadgets and hardware.
 
Spare Change On Track To Process $30 Million In Micropayments On Social Apps This Year Top
While advertising revenues have been disappointingly low for most applications on Facebook and other social networks, another option app developers are increasingly turning towards is micropayments for virtual goods or premium features. Both Facebook and MySpace have admitted that they are working on their own payment systems, and Apple could play a role as well since it already has a payment system in place for iPhone apps (although even Apple is running into some bumps) . While the bigger players are fiddling with their payment system plans, nimbler startups are moving in to fill the gap. One of these is Spare Change Payments , which is trying to become the Paypal of micropayments. A year after launch, more than 700 apps across Facebook, MySpace, and Bebo use Spare Change for micropayments. Spare Change is processing $2.5 million a month in micropayments, which is a $30 million annual run-rate. The apps that are having the most success with micropayments are games and ones that sell virtual goods. Over a million people have already signed up for Spare Change. Hundreds of thousands of those use it actively on a monthly basis. And it is not all nickels and dimes. Last year, 250 people spent more than $1,000 apiece on digital goods through Spare Change. Now, the company is making it easier for consumers to pay through Spare Change with a new payment widget that pops up in each app instead of sending people off to a separate payments page. You can choose between several payment methods including a credit card, Paypal, Spare Change credits, or through your mobile phone bill. Once you buy a minimum of $2 worth of Spare Change credits, you can use them as currency for apps that charge as little as $0.10 at a time. It is also introducing a PIN ID for users who choose to tie their accounts to a credit card so that they can use the same PIN across any app that uses Spare Change. The experience is designed to be familiar to anyone who has ever downloaded an app from the iTunes store. You enter your PIN, and then go back to the app. The company accepts payments from 190 different countries. The first app to launch with the new widget is Mind Games on Facebook. It requires developers to add only three lines of code. Spare Change will roll it out to MySpace and Bebo soon. Spare Change is designed specifically for social networks. Customer support is done via the direct messaging systems inside each network, and the company analyzes the social graph to sniff out fraud. For instance, it looks at how many friends someone has and other factors to assign risk scores to individual consumers. Spare Change has been bootsrapped with only about $500,000 in seed funding, and two of the co-founders (Mark Rose and Simon Ru) previously worked at Paypal. For micropyaments, Spare Change is much cheaper than Paypal, which offers its own micropayment option . Paypal charges 5 percent plus $0.05 for transactions less than $12, but only for premium accounts that qualify (otherwise, for most small accounts, it is the normal rate of 2.9 percent plus $0.30) . In contrast, Spare Change takes a processing fee of 8 percent for each transaction. CEO Lex Bayer points out that while Paypal has a micropayments offering, it does not seem to be a huge priority. “PayPal is not well designed for micropayments or digital goods,” he says. The logic driving Paypal is to encourage larger transactions because that is where Paypal makes more money. A bigger concern for him should be if Facebook, MySpace, or Apple ever decide to jump into the micropayments game. Meanwhile, he has an opportunity to stake out a piece of the micropayments market and fight it out with the other startups eying the same prize. For instance, Zuora recently launched subscription billing for Facebook apps , Zong and Mobilecash are trying to tap into mobile payments (although the fees are still too high ). Whoever figures it out first will be collecting more than just nickels and dimes. Crunch Network : CrunchGear drool over the sexiest new gadgets and hardware.
 
Spark Capital Launches Seed Funding Program Start@Spark Top
The latest venture fund to set up a separate seed financing program is Boston-based Spark Capital , a profilic investor in Internet and new media companies such as Twitter, Boxee, Tumblr, Veoh and KickApps. The initiative is dubbed Start@Spark , and is primarily geared towards startups from the Boston and New York areas. Early-stage investments will amount up to $250,000, and will not be restricted to information technology companies but also periodically be granted to startups offering financial or educational services. Entrepreneurs who get into the program will have access to Spark’s partner network and legal counsel, and will also be prepared for a second, more formal round of funding at a later stage if progress is deemed satisfactory by the firm. You can apply here . This is not the first program of this type we’ve seen. In fact, it seems like they’re popping up all over the place, conceivably thanks to independent initatives like Y Combinator and TechStars who’ve paved the way. Charles River Ventures debuted its “QuickStart” program back in November 2006, Sequoia simply invested $2 million of its own fund into Y Combinator to give them more runway, and other firms have set up platform-specific seeding funds in the past (e.g. Kleiner Perkins’ iFund and Bay Partners’ Facebook-apps only fund ). We should probably note Spark Capital in fact a partner to TechStars, and General Partner Bijan Sabet is listed as a mentor for the seed program, but undoubtedly they’ll be competing for the same investment sooner rather than later. CrunchBase Information Spark Capital Information provided by CrunchBase Crunch Network : CrunchGear drool over the sexiest new gadgets and hardware.
 
Online Deal Marketplace FatWallet Gets A Facelift Top
Online deal marketplace FatWallet.com is getting a makeover. FatWallet redesigned its existing site to give it a slick, user-friendly interface. The money-saving site also added a new feature to organize its deals called Coupon Search, which is stocked with with online coupons for consumers. And FatWallet expanded its roster of retail partners. While the site originally had relationships with 800 retailers, it now gets deals from over 2,400 online retailers. FatWallet also revamped its Cash Back feature, which consumers get cash back from shopping at certain sites. The cash back feature actually has some pretty good deals. For example, if you book a United Airlines flight, you could get 4 percent back. The site also offers consumers a forum where they can share money saving tips and shopping deals. FatWallet has deals from some pretty well-known retailers like Dell, Sephora, Macys and Travelocity. And FatWallet’s forums for consumers are fairly extensive and useful, ranging from threads addressing the the best deals on tech gadgets to which credit card to get. Online coupons are becoming increasingly in demand as consumers looks for deals in the current economy. It’s of no surprise that FatWallet made its coupon offerings more prominent than before, especially when the competition for online coupons is stiff. CouponCabin, Retailmenot.com, Smash Deals, Gotodaily, and SavingPiggy are just a few of the multitudes of online coupon databases that compete to offer consumers the best deals at checkout time. But FatWallet has created other incentives for consumers to check out its site, like the community forums and cash back features, so perhaps the site could differentiate itself from the pack in the future. Crunch Network : CrunchBoard because it’s time for you to find a new Job2.0
 
Yahoo Shuttering Travel Bargains Site FareChase Today Top
Yahoo is cutting more fat today by closing its travel bargains website FareChase , which it originally acquired back in July 2004 and re-launched two years later. The company will be announcing the shut-down later today, and will start redirecting visitors of the service to its main travel site soon. The service let customers perform comparative searches for pricing on flights, hotels, cruises and cars, but it was apparently not enough of a strategic product enhancement for Yahoo Travel, hence the company discontinuing it altogether to tighten its focus and cut costs in these difficult times. Sounds like a plan to me. According to Travel Weekly , Yahoo signed a new agreement with partner Travelocity in late February 2009, ensuring that the latter could continue its role as the primary booking engine for Yahoo Travel. In the past, Travelocity sparred with Yahoo over the prominent role that Yahoo gave FareChase on Yahoo Travel. This is the latest deadpool decision from Yahoo in a long series of announcements. The company had previously sold off shopping engine Kelkoo and shuttered online storage service Briefcase , photo sharing service Yahoo Photos , social network Mash , live video streaming service Yahoo Live , Ads in RSS , web-based video editing service JumpCut and student community website / job board KickStart . Which service could be next on the chopping block? Crunch Network : CrunchBase the free database of technology companies, people, and investors
 
Please Miss, How Do You Re-Tweet? - Twitter Heads To UK Schools Top
No, it is not April Fools day - yet. The British government is proposing that Twitter be taught in elementary schools as part of a wider push to make online communication and social media a permanent part of the UK's education system. And that’s not all. Kids will be taught blogging, podcasting and how to use Wikipedia alongside Maths, English and Science. The draft plans were due to be published next month, but have leaked early. Children will also learn "fluency" in keyboard skills, and how to use a spellchecker. Luckily they will still be taught how to spell themselves, rather than rely on Mr Clippy. Crunch Network : CrunchBoard because it’s time for you to find a new Job2.0
 
Radionomy Doubles Funding For Custom Internet Radio Platform Top
Radionomy , based out of Brussels, Belgium (yes we do have a startup scene here ), has secured more funding in order to bring more enhancements to and enable scale for its personalized web radio application, which it is debuting in public beta today. The size of the financing round wasn’t shared in detail, but the startup did say its total capital now exceeds €1.5 million (roughly $2 million). Radionomy essentially offers everyone a chance to set up their own Internet radio station free of charge and share a personalized radio show complete with music programming, jingles and commercials with friends and the rest of the world. Users get to tap into readily available music libraries and jingles and add custom sequences, interviews, reports and podcasts to the mix, enabling anyone to build a genuinely personalized radio show and broadcast it for free, worldwide. Radionomy takes care of the associated costs (including royalties), and shares advertising revenue with radio station creators, relative to the size of their audience. Read more about the project, which is European in scope, right here . I’ve known the company and its founders for a while and have always been quite skeptical of the concept, since there are so many options these days for users to build custom music playlists and stream purchased (or non-purchased) tunes on the Web, leading me to believe few people would bother to set up their own radio station. But I’ve been playing around a bit with it earlier this morning, and have to admit it’s all pretty well executed, with lots of social features and decent search functionality. Turns out traffic to the web radios built by users is picking up nicely too. The company reports a growth of 175% in terms of audience in the past 4 months, and also says nearly 1 million unique users paid a visit to the platform in December 2008, citing independent research performed by Médiamétrie//NetRating. Also, about 26,000 users have registered for the invitation list so far, waiting to be accepted to the public beta version, which the company is launching today. The company has set its goal to 5,000 user-created radio stations by this Summer. Radionomy says it’s going to put more focus on developing its presence in France, where it claims to have become the number one music streaming website, before Last.fm, Jiwa and other more established players. They were probably cheering when Last.fm yesterday announced that they would be turning Last.fm Radio into a subscription-based paid product for its users outside of the US, UK and Germany. Crunch Network : MobileCrunch Mobile Gadgets and Applications, Delivered Daily.
 
White House Using Google Moderator For Town Hall Meeting. And AppEngine. And YouTube. Top
Google is getting some major national exposure for both its AppEngine platform and Google Moderator , a simple tool that helps groups determine which questions should be asked at all hands meetings, conferences, Q&A sessions, etc. The White House is using Moderator, hosted on AppEngine, to determine which questions President Obama should answer at an online Town Hall meeting on Thursday. In just a few hours 6,932 people have submitted 7,037 questions and cast 236,048 votes on the site - which proves out the AppEngine promise that you can build highly scalable applications with little effort. The top question, based on votes so far, is “As a student, who like so many others works full time and attends school full time, only to break even at the end of the month. What is the government doing to make higher education more affordable for lower and middle class families?” Google also hosts the President’s video message for the meeting, on YouTube. I’m surprised he’s not wearing a Google tshirt, too. Google should be paying him an endorsement fee for all this promotion (Obama previously used Moderator for his Change.gov transition site). See our recent coverage of Google Tip Jar , which also uses Moderator. Crunch Network : CrunchBoard because it’s time for you to find a new Job2.0
 
MySpace Toolbar Launches To The General Public Top
MySpace has just launched its official toolbar, giving users immediate access to their MySpace activity notifications regardless of what site they’re currently browsing on the web. MySpace has been testing the browser plugin since last year (we originally wrote about it in December), but it was only available to a limited number of users. Beginning today, it will be available internationally to all users, and the site will begin to publicize it. The toolbar is available on Windows for Firefox and IE users, as well as on Mac for Firefox (there’s no Safari support yet). You can grab it on this page , which also includes a nifty interactive demo of the toolbar so you can get a feel for it before installing the plugin. Using the toolbar, MySpace members can update and keep track of their status updates, messages, comments, and other alerts. The toolbar also includes links to a variety of MySpace’s services, along with its Google-powered search engine. I don’t think I’ve installed a browser toolbar since around 2002, but there’s no question that many of MySpace’s devoted users will love to get their friend requests and messages in real time. There have been a handful of unofficial MySpace toolbars released in the past, but they are occasionally broken when MySpace rolls out site updates and had to use scraping to detect status changes. But while they may not offer the same functionality and stability as the official plugin, some of them do offer one nifty feature that the official toolbar doesn’t have: the ability to hit a button to ‘Simplify’ a MySpace user’s profile, removing the irritating flare that some users seem to love so much. Crunch Network : CrunchGear drool over the sexiest new gadgets and hardware.
 
No! Never Surrender To Your Users, Facebook. Top
“A camel is a horse designed by committee.” ( source ) The camel/horse quote (no disparagement to camels meant, of course) perfectly captures the problem when too many people have input into a product. Seth Godin talks about how the Walkman would never have been built if Sony had asked its customers what they wanted (see Purple Cow ). A few days ago Robert Scoble talked about how a Porsche would be a Volvo if they let their buyers decide on features: “if you asked a group of Porsche owners what they wanted they'd tell you things like "smoother ride, more trunk space, more leg room, etc." He'd then say "well, they just designed a Volvo."” The bottom line is, when you listen to your users, you get vanilla. feature creep. boring. It takes a dictator to create the iPhone and change the course of an entire industry. Imagine if Steve Jobs let other people add features to that device. So I’m surprised that Facebook, which has stared down its users so many times in the past, is folding on the most recent redesign flareup and reverting back to some old features. Just because, oh, a million people demanded it . Facebook has always pushed the envelope with users, and those users always hate it (the original News Feed was hated, now people are up in arms to keep it from changing). In an interview last year, Facebook CEO Mark Zuckerberg talked with me about how users are willing to accept change over time, and that Facebook would continue to push things along. Suddenly, though, they surrender because a few users have a belly ache over a redesign. If they wanted to make these changes anyway, they shouldn’t have titled their blog post “Responding to Your Feedback.” They should have just continued to ignore the ranting, and announced further changes. Showing that you’re listening to feedback just invites more of it. Someday, if they’re not careful, someone is going to do to Facebook what Facebook did to MySpace, who in turn did it to Friendster. Making users happy is a suckers game. Pushing the envelope is what makes you a winner. Crunch Network : CrunchBase the free database of technology companies, people, and investors
 

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