Monday, April 20, 2009

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Fox News And MySpace Launch uReport (Not To Be Confused With CNN's iReport) Top
FOX News and MySpace are partnering to launch Fox’s citizen journalism social media platform on MySpace, called uReport. MySpace members can share citizen produced content with the MySpace community, as well as have the chance to be featured on FOX News. FOX News and MySpace are both owned by News Corp. FOX News uReport, which is nearly identical to CNN’s citizen journalism initiative iReport, is a platform through which users can upload photos and videos to FOX News from a computer or mobile device. Members of the MySpace-uReport community can become "uReporters" by uploading video and photos tagged by specific news categories, including entertainment and politics. FOX says that this content could be featured in programming on FOX News Channel and foxnews.com, with FOX News maintaining editorial control of the MySpace page. CNN’s iReport has a Facebook page where iReporters can upload footage, photos and content to the platform but it’s unclear if this footage is used on CNN.com or on the CNN news channel. CNN’s iReport famously caused Apple’s stock to drop after someone posted a false rumor about Steve Jobs having a heart attack. Fox may have missed its chance, since the most activity on CNN’s iReport was leading up to the presidential election and inauguration. CNN partnered with Facebook to cover the inauguration events in January. uReport on MySpace Crunch Network : MobileCrunch Mobile Gadgets and Applications, Delivered Daily.
 
Bob Dylan Spurns iTunes, Gives Amazon Exclusive Video Single From Next Album Top
No, that is not a picture of Bob Dylan making out with Jeff Bezos in the back seat of a car on the cover of Dylan’s next album, Together Through Life , but it might as well be. Dylan is giving Amazon a big wet, sloppy kiss by giving it the exclusive video for the first single from the album, “Beyond Here Lies Nuthin.” The video features some great old photo of Brooklyn by Bruce Davidson. But the video cannot be embedded because Amazon either hasn’t yet mastered that technology or it simply wants you to watch the video on its site for easier one-click pre-ordering (the album comes out April 28). Dylan and Amazon aren’t exactly going steady. You can pre-order the album on iTunes as well. But three albums ago, the video exclusive for Modern Times went to iTunes . Dylan switched sometime after that, doing the same marketing maneuver with Amazon for his last album , Tell Tale Signs . Amazon will be promoting the album on its home page until Wednesday. Steve Jobs is a big Dylan fan, so it must hurt not to get Dylan’s undivided digital love. But all is fair in love and marketing. Crunch Network : MobileCrunch Mobile Gadgets and Applications, Delivered Daily.
 
Oracle Wants To Be The Apple Of The Enterprise, But It Just Became IBM Top
Larry Ellison has always wanted to be the Steve Jobs of the enterprise. With this morning’s announcement that Oracle will buy Sun Microsystems for $7.4 billion , he took a big step towards making Oracle more of a soup-to-nuts provider of enterprise technology. With Sun, he will now be able to build and package together everything from chips and servers to operating systems, Java middleware, databases, and enterprise applications. Here is the money quote from Ellison on the deal: Oracle will be the only company that can engineer an integrated system - applications to disk - where all the pieces fit and work together so customers do not have to do it themselves. Our customers benefit as their systems integration costs go down while system performance, reliability and security go up Like Apple, Oracle wants to take away complexity for its customers and bundle the entire IT stack neatly together so that it works without hassles and is optimized for Oracle’s software. With this deal, Ellison has come full circle from his early-1990s mantra of “best-of-breed” systems, which he abandoned long ago. Rather than look like Apple with its dedication to making the perfect product, Oracle just became IBM. It will use Sun’s existing server market share to push Oracle databases and software, and bundle it all with IT services. Sure, it will continue to support Dell and HP and even rival enterprise software, but the sales pitch will be around the bundled product. If that turns out to be a superior product at a lower price, then both Oracle and customers will win out. But to the extent that it takes away choice from IT buyers, it could be an even tougher sell than convincing them to give up their beloved Blackberries for an iPhone. How different really is Oracle buying Sun than if IBM had bought it , other than the price? Sun’s powerful servers are a way to sell expensive software—always have been, always will be. A big motivation for the deal was to acquire Sun’s Solaris operating system and Java. As hardware margins keep getting squeezed, that software component becomes more and more important. At least with Oracle, Sun will stay in the Silicon Valley family, so to speak. But what may be the most valuable part of the deal from Oracle’s perspective, although Ellison hardly mentioned it, is MySQL. Oracle now owns the open-source database Sun acquired last year for $1 billion . As MySQL grows in popularity, it keeps disrupting Oracle’s high-end database business from below. Now Oracle can at least try to disrupt itself, or kill MYSQL (which would be a bone-headed move). What makes more sense is a two-pronged approach: On the high-end, sell highly optimized Sun servers running Solaris, Oracle databases, and Oracle enterprise apps. On the low-end, sell MySQL on Dell and HP servers running Linux. Another unanswered question is what will happen to Sun’s cloud computing efforts , given Ellison’s disdain for the term . Watch him change his tune on that one as well. Crunch Network : CrunchBase the free database of technology companies, people, and investors
 
BlueStripe Scores $8 Million For Virtualization Software Top
BlueStripe Software, a company that sells application service management software, secured a $8 million in Series B funding from Valhalla Partners and Trinity Ventures. The company secured $5 million in Series A funding in 2007 from Trinity Ventures. BlueStripe says it will use the funding to expand business operations, create new products and further sales and marketing efforts. Founded in 2007, BlueStripe helps enterprises stage, deploy, and manage business applications in the server environment. BlueStripe’s flagship product, FactFinder, gives businesses the intelligence to manage business‐critical applications during physical to virtual (P2V) conversions, new application roll-outs, and production deployments. Crunch Network : CrunchBase the free database of technology companies, people, and investors
 
Digg Ditches Microsoft To Sell Its Own Ads Top
Digg is putting an end to its exclusive ad selling relationship with Microsoft after two years, which is one year earlier than the deal was originally set to expire. Starting this Summer, the social news service will begin to rely heavily on its own internal sales force, which will be responsible for selling the majority of its ad inventory, reports Clickz . Microsoft gets the leftovers, i.e. remnant inventory. The partnership between Digg and Microsoft was initially supposed to last until mid-2010, but according to Mike Maser, Digg’s chief revenue and strategy officer, the two always had an understanding that Digg would at some point start selling the majority of its own ads. He added that the company’s internal sales efforts will focus on custom, non-IAB inventory combined with standardized banner ads. This is not necessarily a sign that Microsoft was underperforming, although it’s clear Digg stands to make more money from advertising running its own sales. The move is not a surprise in that regard, and this type of switch happens regularly when websites grow enough to build their own internal sales teams. In January, Digg hired former Yahoo sales exec Thomas Shin , its first ad sales executive, and is currently recruiting a nation-wide sales force. By the end of the year the company hopes to hire a total of five to seven reps in San Francisco, the Los Angeles area, Chicago and New York. Ironically, Digg CEO Jay Adelson put the two following bullet points together in a blog post published earlier this year in which he highlighted what Digg’s focus in 2009 would be on its path to profitability: - Building on our advertising infrastructure - Building on our successful partnership with Microsoft I guess we can now stop calling that last one a priority for this year. Crunch Network : CrunchGear drool over the sexiest new gadgets and hardware.
 
Oracle To Buy Sun For Approximately $7.4 Billion - Hold On To Your Hats Top
Oracle Corporation is to buy Sun Microsystems for $9.50 a share in a deal valued at approximately $7.4 billion, just a few weeks after a deal by IBM to buy Sun fell apart . It looks like Oracle will pay a premium of $2.81 a share, or 42%, over Sun Micro’s closing price of $6.69 a share on Friday. Oracle said the deal is valued at $5.6 billion excluding cash and debt. Oracle is calling Sun’s Java “the most important software” it has ever acquired. The deal, which is expected to close in the Summer and was unanimously approved by Sun's board of directors, has massive implications for the future openness of Java and MySQL. As the NY Times points out , Oracle and Sun are two heavyweights that have been partners for more than 20 years, even if Oracle has been distancing itself a bit from Sun’s server line in favor of competitors like HP and Dell lately because of Sun’s business decline. As a result of this deal, Oracle will now become a behemoth in both the software and the hardware market, and the implications this acquisition will have on the its closest rivals and the market in general will be noticable for years to come. The official release , with emphasis ours: Oracle to Buy Sun SANTA CLARA, Calif. April 20, 2009 Sun Microsystems (NASDAQ: JAVA) and Oracle Corporation (NASDAQ: ORCL) announced today they have entered into a definitive agreement under which Oracle will acquire Sun common stock for $9.50 per share in cash. The transaction is valued at approximately $7.4 billion, or $5.6 billion net of Sun’s cash and debt. “We expect this acquisition to be accretive to Oracle’s earnings by at least 15 cents on a non-GAAP basis in the first full year after closing . We estimate that the acquired business will contribute over $1.5 billion to Oracle’s non-GAAP operating profit in the first year , increasing to over $2 billion in the second year. This would make the Sun acquisition more profitable in per share contribution in the first year than we had planned for the acquisitions of BEA, PeopleSoft and Siebel combined,” said Oracle President Safra Catz. “The acquisition of Sun transforms the IT industry, combining best-in-class enterprise software and mission-critical computing systems,” said Oracle CEO Larry Ellison. “Oracle will be the only company that can engineer an integrated system - applications to disk - where all the pieces fit and work together so customers do not have to do it themselves. Our customers benefit as their systems integration costs go down while system performance, reliability and security go up.” There are substantial long-term strategic customer advantages to Oracle owning two key Sun software assets: Java and Solaris. Java is one of the computer industry’s best-known brands and most widely deployed technologies, and it is the most important software Oracle has ever acquired. Oracle Fusion Middleware, Oracle’s fastest growing business, is built on top of Sun’s Java language and software. Oracle can now ensure continued innovation and investment in Java technology for the benefit of customers and the Java community. The Sun Solaris operating system is the leading platform for the Oracle database , Oracle’s largest business, and has been for a long time. With the acquisition of Sun, Oracle can optimize the Oracle database for some of the unique, high-end features of Solaris. Oracle is as committed as ever to Linux and other open platforms and will continue to support and enhance our strong industry partnerships. “Oracle and Sun have been industry pioneers and close partners for more than 20 years,” said Sun Chairman Scott McNealy. “This combination is a natural evolution of our relationship and will be an industry-defining event.” “This is a fantastic day for Sun’s customers, developers, partners and employees across the globe, joining forces with the global leader in enterprise software to drive innovation and value across every aspect of the technology marketplace,” said Jonathan Schwartz, Sun’s CEO, “From the Java platform touching nearly every business system on earth, powering billions of consumers on mobile handsets and consumer electronics, to the convergence of storage, networking and computing driven by the Solaris operating system and Sun’s SPARC and x64 systems. Together with Oracle, we’ll drive the innovation pipeline to create compelling value to our customer base and the marketplace.” “Sun is a pioneer in enterprise computing, and this combination recognizes the innovation and customer success the company has achieved. Our largest customers have been asking us to step up to a broader role to reduce complexity, risk and cost by delivering a highly optimized stack based on standards,” said Oracle President Charles Phillips. “This transaction will preserve and enhance investments made by our customers, while we continue to work with our partners to provide customers with choice.” The Board of Directors of Sun Microsystems has unanimously approved the transaction . It is anticipated to close this summer, subject to Sun stockholder approval, certain regulatory approvals and customary closing conditions. There will be a conference call today to discuss the transaction at 5:30 a.m. Pacific time. Investors can listen to the conference call by dialing (719) 234-7870, passcode 923645. A replay will be available for 24 hours after the call ends at (719) 884-8882, passcode: 923645. A live audio webcast of the call will be made available at www.oracle.com/investor and a replay will be available for seven days after the call ends. About Oracle Oracle (NASDAQ: ORCL) is the world’s largest enterprise software company. For more information about Oracle, please visit our Web site at http://www.oracle.com. About Sun Microsystems, Inc. Sun Microsystems develops the technologies that power the global marketplace. Guided by a singular vision — “The Network is the Computer” — Sun drives network participation through shared innovation, community development and open source leadership. Sun can be found in more than 100 countries and on the Web at http://sun.com. CrunchBase Information Sun Microsystems Oracle Corporation Information provided by CrunchBase Crunch Network : CrunchBase the free database of technology companies, people, and investors
 
Tweetie For Mac: A Powerful, Native Twitter Client For The Masses Top
Today sees the public launch of Tweetie for Mac , the desktop-based big brother of what many (myself included) consider to be the iPhone’s best Twitter client. I’ve been playing around with a beta version of the app for the last few days since my initial preview last Thursday, and I’m happy to say that my enthusiasm for the application hasn’t waned. It’s sleek, it sweats the small stuff, and it’s going to be my Twitter client of choice for the foreseeable future. But it isn’t perfect, yet. First things first. If you’re one of the so-called ‘power users’ who rely on TweetDeck’s custom grouping features, Tweetie probably isn’t for you. The application goes well beyond most basic Twitter clients in terms of functionality, but it isn’t an uber-dashboard that’s going to take up an entire monitor. If you’re okay with that, read on. At first glance, Tweetie is deceptively simple. The client consists of a single column displaying your latest stream of incoming Tweets, with four icons arranged on the left side where the majority of navigation takes place. Each icon is self-explanatory for anyone who has used the service before: an ‘@’ symbol represents replies; an envelope is for direct messages; and a magnifying glass for search. Navigating beyond this main menu, everything is intuitive - double clicking on a user name takes you to their most recent tweets, clicking on a hashtag runs a search for it, and so on. The application’s real appeal lies in the details. Every time you click to open an image from services like TwitPic, the app displays the picture in a nifty popup rather than opening a full web browser. To post one of your own images, you simply need to drag and drop it from the desktop into the Tweetie window. The app also supports global hotkeys (you can activate Tweetie with a shortcut even if you’re working in a different application). And from an aesthetic standpoint, everything looks great: navigating between sections activates a smooth transition, you can ‘endlessly scroll’ through tweets as the app continuously downloads new ones, and the interface is very clean. Also a big plus: Tweetie supports multiple accounts, which even some of the ‘power’ apps don’t do properly. And while the app doesn’t offer a true columned UI, it does offer a compromise: Tweetie allows users to break search queries into their own windows, which I actually prefer to having one giant unwieldily window taking up my screen. That said, a few of the navigation options are a little awkward, and the application will feel foreign for the first few days that you use it, especially if you’re coming from a multi-column client like TweetDeck . Aside from the initial foreignness, Tweetie does have some issues that may confuse new users. For one, while the app allows you to create as many new windows as you’d like for searching, they’re confusing to activate (you need to click the search button, then go to the menu bar and hit ‘open new window’) and there’s currently no way to pop out the ‘@mentions’ or ‘direct message’ columns into their own windows (this is coming in version 1.1). The option to ‘follow’ a user is tucked away in a drop down menu when it should be more prominent. And there’s also apparently no auto-complete for Twitter handles, which can make responding to friends frustrating. Minor gripes to be sure, but in an app with this much polish they stick out. For a long time I’ve been looking for a Twitter client that felt like it actually belonged on the Mac, and frankly I haven’t had much luck. Twitterific offers a native client, but it is fairly basic. So I turned to more robust clients like TweetDeck, and more recently Seesmic Desktop , which are both very powerful and have a dizzying array of options. But my fundamental issue with both of these apps is that they’re built on Adobe’s AIR platform, which seems to invaribly lead to excessive resource usage on my Mac, not to mention weird UI quirks. I’ve hardly been suffering, but they’re nuisances that have continuously irked me and I’m glad to be rid of them. Tweetie isn’t for everyone, but I suspect its mix of power and simplicity will appeal to quite a few people, particularly those who find other Twitter clients intimidating. Tweetie is available for free with advertising, or for $14.95 for an ad-free version (it will jump up to $20 in two weeks). If you are on a Mac and crave your multiple columns, be sure to check out Nambu , which I’ve also enjoyed using for the last few weeks. Crunch Network : CrunchBase the free database of technology companies, people, and investors
 
How Many New Twitter Users Post-Oprah? A Lot. Maybe Over A Million. Top
Late last night, former Engadget editor-in-chief Ryan Block tweeted out that he had done some research to attempt to quantify the “Oprah Effect” — that is, the number of users who signed up for Twitter after Oprah featured the service on her show on Friday. The number he came to? 1.2 million. So did 1.2 million people actually sign up for Twitter as a result of Oprah? It’s possible, but tracking down this data is a bit tricky. I asked Block what method he used, and he told me he looked at the user ID on a Twitter account from early Friday versus one from the afternoon on Sunday. You see, while most people only know their Twitter name, if you look at the RSS feed for your Twitter account, you’ll see a number assigned to it — that’s your user ID , and Twitter increments it upward as new people sign up. An account I created just now, for example, has an ID of 33471207. One I created on Friday night (a few hours post-Oprah) had an ID 32779621. Does this mean 700,000 signed up between then and now? Probably not. Twitter has a lot of users, but it does not have 33 million. The reason the user IDs are that high is because Twitter stopped incrementing the number sequentially in March 2007. While it’s not entirely clear what method it switched to, at least one theory had it going back and forth between sequential and increments of 10. If that pattern is correct — and there isn’t much to suggest that it is, but bear with me — then it would probably make sense to divide any number you get by 5 (half of 10 because it’s not always going up by 10). But, as I noted, my first number was from Friday night. That was a few hours after the show, and likely after many of the new users had finished signing up. So I went back to look at other users who likely signed up around the same time. Oprah, herself, isn’t a good one to use because while she started tweeting on Friday, her account was actually created in March — 2007, as Twitterholic notes . I’m pretty sure someone else had control of it until about a week ago when Oprah took it over. But Gayle King , editor of Oprah’s O magazine, did sign up right around then. She technically signed up on April 16, the day before the Oprah show. Her ID is 29546945. But, remember that Thursday was the crazy race between Ashton Kutcher and CNN to be the first Twitter user with a million followers. It’s likely that a lot of people signed up that day as well, just to join that race. So King’s number isn’t perfect either. But let’s just say that when Oprah started tweeting, the user IDs were probably around 30000000. That means that between then and now it has gone up nearly 3.5 million ID numbers. Divide by 5 and you get 700,000. Again, that’s all contingent on an assumption that Twitter is incrementing the numbers in this odd rotation — which is far from a sure thing. But it’s certainly not doing it entirely sequentially, so it’s not to unreasonable to think that the number of users that signed up between Oprah’s show on Friday and today is somewhere between 500,000 and 1.5 million. And that’s huge. Almost exactly a year ago, we noted that Twitter likely had somewhere just north of a million total users. The service has exploded in popularity since then, and recent estimates have it somewhere in the 5 to 10 million users range. That means that Oprah may have helped bring on a significant percentage of new users in just a few days. Not that it’s shocking in the least. Yes, some of those users would have signed up anyway, some were there for the Kutcher/CNN showdown, and a lot are likely spam. But a very good chunk are thanks to Oprah. Naturally, I asked Twitter for some actual numbers to share, and co-founder Biz Stone said they hadn’t planned to release any, but thought it might be interesting, and that he’d look into it this week. So you can probably expect a blog post from him sometime this week, though I’m sure it will be vague, showing spikes in sign-ups in relation to other days — rather than actual numbers. Crunch Network : CrunchBoard because it’s time for you to find a new Job2.0
 
Prezi Is The Coolest Online Presentation Tool I've Ever Seen Top
At last week’s The Next Web Conference , I was part of the 4-headed jury that evaluated all presenting startups and ultimately decided My Name Is E should be awarded the top prize . It was an extremely close call, since we ended up having to decide between the young Dutch company and a startup that built a simply amazing web application you’re really going to want to check out. The tool I’m referring to is called Prezi , and it allows you to create amazing presentations on the web. If you think you’ve heard that too many times, don’t stop reading just yet, because this one is just plain awesome. It’s an entirely Flash-based app that lets you break away from the slide-by-slide approach of most presentations. Instead, it allows you to create non-linear presentations where you can zoom in and out of a visual map containing words, links, images, videos, etc. This is similar to pptPlex , a Microsoft Office Labs project that aims to bring that type of functionality to PowerPoint. It’s really no use explaining how presentations come out without seeing it for yourself, so it pains me that there’s currently no way to embed the examples that are showcased on the Prezi website. Instead, you will need to jump to examples in another tab or window, but please do it: good examples are ‘AIESEC’ and ‘Technical Investigation ICYA’ . It takes a while to get used to the way Prezi lets you create presentations, although the interface is fairly intuitive once you’ve grown accustomed to using the ‘Zebra’. There are a number of tutorial videos to assist you in creating your first Prezi presentations. To get started, you can use the free version which brands every presentation with a Prezi logo, offers 100 MB of file storage, comes with an offline player but without the ability to make presentations private. For €39 a year, you get all that but 5x the amount of storage space and the option not to have your presentations made public. A third ‘Pro’ version costs you €119 per year but features a cool desktop application you can use to create and edit Prezi presentations offline. Besides offering paid versions of the software, Prezi also has other revenue streams, like selling DVDs and offering branding services. Try it out and let us know how your presentations come out! Crunch Network : MobileCrunch Mobile Gadgets and Applications, Delivered Daily.
 
TiVo To Sell Fresh, Localized Bad News To Advertisers Top
TiVo’s growth has stopped, and in fact, its user base is dropping. There’s too much competition in the DVR market from the big cable companies who offer the same service at a lower price bundled with the cable boxes you need to have anyway. So TiVo needs a way to make more money. Selling customer data is always a good way to do that. Now, to be clear, this data will be anonymous, and TiVo has actually been doing this to some extent for several years. But tomorrow, the company plans to unveil a better challenger to Nielsen, the leader in TV audience data, USA Today reports . This type of data is vital to television advertisers because it dictates their ad sales. And TiVo thinks it can provide better data for more markets by using its 3 million plus subscribers, to dish out data that can be broken down by the second. TiVo is trying to play up the fact that such data can be useful to not only advertisers, but to television shows themselves. This way, they can see what parts of shows people skip through — so news shows, for example, can better tailor key content. But this is really about the advertisers, who will want to know what ads people are skipping through, and at what times, during what programs. I’ll make this simple: While not all DVR owners may skip through all commercials, I would bet that anyone who took the initiative to buy a TiVo — a separate box that costs a few hundred dollars and requires a subscription fee on top of your cable bill — skips through just about all commercials, period. This data from TiVo will apparently come from all but the smallest of the 210 television markets. That’s nice, as it’s a lot more than Nielsen, which generally just offers constant in-depth reports for the largest markets. But Nielsen’s data undoubtedly covers a much wider range of the overall population. In fact, that idea led to the most curious line in USA Today’s piece as stated by TiVo’s audience research and measurement general manager, Todd Juenger. He says, that on top of being richer and better educated, TiVo owners tend to be “unfortunately, a little more white” (than the overall population). Perhaps TiVo should just publish its data directly to Stuff White People Like . Seriously though, as a former TiVo owner, I feel for the company. It offers a truly great product, but it’s simply hard for most people to justify paying to put yet another box in their increasingly cluttered living rooms — and asking them to pay yet another monthly fee for it. The cable companies DVRs are absolutely dreadful, but they are cheaper, and come in cable boxes. The company is making some right moves by offering other services , like Netflix Watch Instantly and Amazon’s streaming movie service on its boxes, but it still has to give a reason for users to pay a relatively high monthly fee for the TiVo service. TiVo can sell all the data it wants, but unless it can reverse the trend of subscribers leaving the service behind, none of that will matter. [photo: flickr/ flyinace2000 ] Crunch Network : MobileCrunch Mobile Gadgets and Applications, Delivered Daily.
 
Reid Hoffman: My Rule of Three for Investing Top
The guest post below was written by Reid Hoffman , CEO and Founder of LinkedIn. Reid, who’s been a prolific writer lately, is a strong advocate of entrepreneurism and the startup mentality. See his recent Washington Post article Let Our Start-Ups Bail Us Out , and the guest post he wrote here on TechCrunch, Stimulus 2.0: It's The Startups, Stupid . Reid has recently appeared on Charlie Rose, and we had a chance to sit down with him earlier this year for a video interview as well. Reid is an investor in over 60 web ventures including Digg, Facebook, Flickr, Friendster, FunnyOrDie, Ning, Last.fm, Six Apart and Technorati. He is also a member of the nominating committee of our upcoming TechFellow Awards with Founders Fund . TechCrunch and Founders Fund announced the first annual TechFellow Awards last week. This is a great time to stimulate investment and recognize and encourage tech entrepreneurs –starting up is cheaper, talent is more fluid, and people are more inclined to take calculated risks. If we can find more ways to spur investment, it will be good for the entrepreneur now and good for society later. As a serial investor, I've enjoyed backing some good Web 2.0 companies, and it's helped me develop a shortlist of criteria to cut the wheat from the chaff. After five minutes of a pitch, I know if I'm not going to invest, and after 30 minutes to an hour, I generally know if I will. Many entrepreneurs are product-focused, which leads them to pitch the brilliance of the product. Others are money-minded, so they can over think the business plan. But neither of these approaches answer the first few questions I want to know as an investor: 1. How will you reach a massive audience? In real estate the wisdom says "location, location, location." In consumer Internet, think "distribution, distribution, distribution." Thousands of products launch every month on hundreds of thousands of new Web pages. How does a company rise above the noise to attract massive discovery and adoption? YouTube did it through existing channels like MySpace, which already reached millions. Yelp had strong SEO, which found them a mass audience searching for restaurants and nightlife. Facebook's University-centric approach landed them 80% adoption across a campus within 60 days of launch. Every Net entrepreneur should answer these questions: How do we get to one million users? Then how do we get to 10 million users? Then how will you get deep engagement by your users. 2. What is your unique value proposition? The Internet space is crowded. A product needs to be sufficiently innovative to distinguish itself from the pack, but not so forward thinking as to alienate the user. Many entrepreneurs create incremental improvements on existing products. This can be big – Google revolutionized search when AOL and Yahoo! were presumed to have it locked up – but more often, the pitch sounds like, "It's a dating site, but for senior citizens…" I want to see innovation that is categorically distinct from existing propositions. Digg lets users decide which headlines are newsworthy. Last.fm tracks music listening with an iTunes plugin and buffer great music discovery. Flickr enables users to share and tag photos in new ways. 3. Will your business be capital efficient? This may be the most important of the three. Even if you have a mass audience and unique value prop, a business fails without cash flow. An initial round of financing is important, but how reliable is later financing? Will investors see the right elements in the next stage? Your product must scale intelligently – this is why I like software. A well-coded site can adapt to mass demand without its capital expenditures scaling out of control. A product like TypePad can grow to 10 million users without half the growing pains of a service like WebVan, the Web 1.0 startup that attempted to deliver groceries to users' doorsteps. Try reaching Facebook scale with a service like that. With these three elements in place – mass audience, unique value, stable funding – a startup has time to discover where it can make money. Few business plans ever pan out like their owners intend. PayPal started as a plan to beam payments between Palm Pilots. Google raised funds with a vision to capitalize on enterprise search and ended up in advertising. The formula is to build an audience with a great product – then secure enough funding to figure out how to make it pay. Since I'm focused on building LinkedIn, I'm not currently investing in new projects, but I firmly believe now is the time to take smart risks as entrepreneurs and investors. I hope these criteria help startups make better pitches as they fundraise, and maybe even encourage others to take the plunge. Good ideas need good strategy to realize their potential, and if these criteria help a few more companies find capital, it's a win for everyone. Crunch Network : CrunchBase the free database of technology companies, people, and investors
 
Kadoink Seized By Creditors Top
Kadoink , a text messaging marketing startup based in San Francisco, has been seized by creditor Hercules Technology Growth Capital after failing to maintain the financial requirements of a $2.5 million line of credit. CEO Scott Cahill says that there is still a “substantial amount of cash remaining” that is being returned to Hercules, and that they are looking for a strategic buyer to keep the service alive. The company has announced just $5 million in funding from Sutter Hill Ventures, but they may have burned through substantially more than that. There was rumored to be a previous angel round of nearly $2 million, and the founders took $3 million or so off the table in 2008. Sutter Hill may also have bridged the company an additional $2 million Along with the venture debt, the company may have raised as much as $14 million in capital. At this point, all equity holders other than the cashed-out founders are wiped out. The startup provided text messaging based marketing services on behalf of brands, similar to competitor Mozes . We’ve added it to the deadpool . Crunch Network : MobileCrunch Mobile Gadgets and Applications, Delivered Daily.
 
Now Even The New York Times Is Entering The URL Shortening Arena … Kinda Top
Earlier today I covered two new URL shortening services, UnHub and LNK.by , the latest additions to the plethora of basic web applications that many people are growing accustomed to for sharing links on micro-sharing services and social networking sites. And just when I thought I’d had it with that type of service for a while, we caught wind of one that made me raise my eyebrows. Enter NytUrl , the ‘trusted’ URL shortener for NYtimes.com articles. Update : The site and all the redirects were taken down “due to abuse.” According to the website, the service shortens URLs for NYTimes.com articles, although a quick test shows that it’s definitely not restricted to other websites (see http://nyturl.com/34 and http://nyturl.com/35 ), even if it occasionally says the URL is not valid for any other site. This of course defeats the entire purpose of the service, which is to reassure people clicking the links that they’ll wind up on the NYTimes.com website. My guess is that the ability to add links to other websites will be disabled soon enough. NytUrl also comes with a handy bookmarklet and a basic API , but the website claims this is just the beginning and that there are lots of new features coming soon. Here’s the strange part: this service is not operated or even endorsed by the New York Times. In fact, the official Twitter account @NYTimes uses bit.ly for links to articles, even if some NYT related accounts are apparently already using NytUrl.com, as evidenced by this Twitter search query (and these example tweets ). So what gives? A WHOIS search for the owner of the nyturl.com domain name doesn’t reveal a thing since his or her identity has been protected upon registration, but according to our source this is effectively the work of two NYTimes employees, namely one of the group’s Senior Software Architects, Jacob Harris and in-house developer Michael Donohoe . Which checks out, because Harris is a self-proclaimed Twitter fan and NYTimes aficionado, and according to the bio posted on the SXSW website (where he was a panelist for one of the sessions) he’s also the one who set up the Twitter feeds for a variety of NYTimes related accounts. Donohoe even lists the NytUrl service on his website , so no doubt he’s involved. Update: Donohoe got back to a request for more information but declines to share more details. And in case you’re wondering why Harris isn’t using nyt.com (which is owned by the NY Times and forwarded to the main website) for the service, which would knock another 3 characters off the shortened URLs: our source says this was likely a grassroots initiative which hasn’t been approved by any of the decision makers at the NY Times, and that it’s not clear if it’s even going to be in the future. It does raise interesting questions: is it a good idea for media companies to obtain control over the short URLs they broadcast across the net and link back to their content? Will netizens lend more credibility to media-owned URL shorteners? Or should they just be using what is out there instead of adding yet another one to the fray? (Note that we use tcrn.ch ourselves for our Twitter account, and that you can see the shortened URL for any of our posts right next to the comment box, in this case http://tcrn.ch/Lk ) Your thoughts on this? Crunch Network : CrunchBoard because it’s time for you to find a new Job2.0
 
The Spot Runner Saga Continues: Founders Accused Of A "Pump And Dump" Scheme (Updated) Top
TV advertising startup Spot Runner really is running on fumes. According to a lawsuit filed by one its irate investors, advertising giant WPP, Spot Runner has “expended all but approximately $20 million of its investor capital, while losing money at the rate of $35-$45 million a year.” The company has raised $100 million since 2006, and at one point employed more than 500 people before a string of layoffs cut that number down significantly. The lawsuit states that the company had a loss of $45 million in fiscal 2008, on revenues of only $9 million. And in fiscal 2007, it lost $35 million on revenues of $5 million. And here’s the zinger. While Spot Runner was losing all that money, its founders and two early investors (Index Ventures and Battery Ventures) sold shares worth $54 million. CEO and founder Nick Grouf took the lion’s share of those proceeds, netting $26.7 million in five transactions between Feb/March, 2006 and March, 2008. Battery and Index each sold $11.7 million worth of shares (nearly doubling their initial investments of $6 million each). While co-founder David Waxman walked away with only $3.6 million and investor Bob Pittman $365,000 worth of shares. The main complaint of the lawsuit states: Rather than working to make Spot Runner a successful and profitable venture, they perpetuated a "pump-and dump" scheme in which they aggressively promoted the Company to new investors (often by promoting that WPP was an investor in and supporter of the Company) and then sold new investors large quantities of their own secondary shares at ever-increasing valuations. WPP alleges that they did this “surreptitiously” and without disclosing it to other investors. As one of Spot Runner’s largest investors, WPP put a total of $11.8 million into the company. But it is hard to feel sorry for WPP. Basically, it argues in the suit that it should have been able to sell its shares to greater fools as well. It is suing because it wasn’t told about the secondary share sales and wasn’t invited to participate until the very last one, and even then only after it complained (WPP was allowed to sell $900,000 worth of stock at that time, while the defendants made off with $17.8 million). What is not clear from the suit is how much of that $54 million in proceeds, if any, came from fundraising rounds for the company itself versus private secondary sales. Spot Runner won’t comment on any of these numbers other than to say “the complaint contains many inaccuracies.” Update : In a letter sent out to employees on Friday, Spot Runner argues that its founders did nothing wrong and in fact were actually doing investors a favor by selling them shares from their own private stash (see full text of email below): When these sales occurred, there was overwhelming demand for Spot Runner stock and the company did not want to dilute existing shareholders by issuing new shares. Therefore, the founders (in 2006) and the board members and other preferred shareholders (in 2007 and early 2008) agreed to make room for important, new investors and respond to their desire to invest in Spot Runner by selling their own shares. In 2007 and 2008, WPP and other preferred shareholders were given notice that the sales were occurring, and they had the opportunity to participate in the sales. In fact, WPP signed various documents acknowledging this opportunity With the IPO window closed for many startups, secondary private sales of stock are becoming more popular, especially for founders. That practice is fine if the company succeeds. Nobody is going to care if the founders took some money off the table along the way if everyone gets rich in the process. It is when things don’t go so well that investors start to complain and the lawsuits start flying. Regardless of the merits of the case, it is not a good sign when one of the largest investors of a startup decides that the best shot it has at ever getting any of its money back is in court instead of in the market. WPP is seeking $13.2 million in damages. And it is not the only one who is angry. Both former and existing employees also feel shafted (read some of the 135 comments on my post about the last round of layoffs , which somehow became an unofficial forum for employees to vent). They never got a chance to sell any of their shares. Full complaint embedded below, via PaidContent . Update : Below is the e-mail Spot Runner sent out to employees on Friday, after word of the lawsuit broke: Team, As you may have heard, WPP, a minority shareholder (less than 3%) in Spot Runner since 2006, filed a lawsuit against the company and its board members primarily related to the sale of Spot Runner stock and Spot Runner's communications with WPP. This situation is unfortunate, as we appreciate and value the relationships we have with all of our investors and we had hoped for a long and supportive relationship with WPP. We believe these claims are without merit and will vigorously defend against them, including taking all necessary legal action to protect Spot Runner's reputation. We feel strongly that WPP's complaint contains many baseless accusations and want to give you a broader perspective on the matter. This lawsuit is unrelated to our products and services – it is centered on legal agreements entered into with WPP, a sophisticated investor, regarding the way that shareholder stock sales were handled. WPP alleges that Spot Runner's board members failed to disclose to WPP the stock sales by shareholders, allegedly in violation of the board's obligations to stockholders, among other things. We are confident that Spot Runner complied with all of its obligations under the various shareholder agreements. When these sales occurred, there was overwhelming demand for Spot Runner stock and the company did not want to dilute existing shareholders by issuing new shares. Therefore, the founders (in 2006) and the board members and other preferred shareholders (in 2007 and early 2008) agreed to make room for important, new investors and respond to their desire to invest in Spot Runner by selling their own shares. In 2007 and 2008, WPP and other preferred shareholders were given notice that the sales were occurring, and they had the opportunity to participate in the sales. In fact, WPP signed various documents acknowledging this opportunity. Spot Runner and all of its employees conduct business with the utmost integrity. Our team, technologies, and products and services are core assets of which we can all be proud. It is because of your hard work that we have come this far. To that end, we continue to drive hard toward successfully launching Project Malibu and realizing its full potential. You also should know that our board members remain majority shareholders in Spot Runner – a concrete sign of their commitment to and confidence in the business. Our outside counsel will work with the board and management team to develop a formal reply, which ultimately will be filed with the court. These legal proceedings should not affect our day-to-day operations. We are grateful that we can count on you to remain focused on serving our clients and partners to the best of your abilities. Thank you again for all that you do for Spot Runner. WPP Sues Spot Runner WPP Sues Spot Runner ContentNext Ad agency WPP sues TV ad firm Spot Runner in U.S. District Court. Filed April 9. Publish at Scribd or explore others: Business & Law spot runner WPP Crunch Network : CrunchGear drool over the sexiest new gadgets and hardware.
 
Bloggers: Let's Band Together and Stop the Hype Cycle Top
Silicon Valley is known for nurturing start-ups in a way no other place can. But it's not all kumbaya here. And one of the most destructive things about Silicon Valley is the hype cycle . And judging by the fact that some bloggers pronounced Twitter “done” the same week the company was featured on Oprah, it’s clear that hype cycle has spun ludicrously out of control. I'm sure you've seen the graphs. If not, it's to the left. In words: A company comes out and no one likes it. It starts to attain huge growth and buzz. Suddenly it's anointed the Messiah. Then something happens. A long time ago, that something was negative: A founder leaving, a down-round, growth that tailed-off or an inability to serve customers. Even then it wasn't necessarily deserved, but the backlash would begin immediately. This company was a laughing stock. What was wrong with them? They'd lost it. They were toast. Well….for another few years. During which a good company would  keep growing. And only later, would they get the true credit for what they'd built. Of course, "experts" would claim they got it all along. A great example is Google—a lauded company that was dismissed when it wouldn't immediately monetize with banner ads in the wake of the bust, then re-anointed when the numbers came out at the IPO, and it began its surge past $700 a share. But the hype cycle isn't confined to companies. It can describe waves of technology – like social networking, RFID or the consumer Internet itself—or people. One of the first examples I saw in the Valley was Marc Andreessen. He was built up as the young, shoe-less God of the Internet that the press brutally tore him down once the crash changed the viability of his second company, Loudcloud's, business. It's still deemed a "failure" in some corners of the Valley, never mind that it was painstakingly retooled as Opsware and sold for about the same amount as YouTube . People not only trashed the company, but they retroactively trashed Netscape, and Andreessen himself, saying he'd exaggerated his contributions to Mosaic. Of course, Andreessen kept his head down and kept working. Today he's widely regarded as one of the most important mentors and angel investors of the Web 2.0 movement and one of the only people to found two companies that would end up being worth more than $1 billion each. Sure a smug "I told you so" as you count your millions is the best way to silence and embarrass naysayers; it's the ultimate revenge. But start-ups can take a while to reach their final destination—whether that's bankruptcy or an IPO. Forget cold, in the Valley revenge is a dish served molding and with flies swarming around it. There's an element to the hype cycle that reflects human nature. We get excited about technology and tend to overestimate what it can do in a year and underestimate what it can do in ten years. That's not all bad: Being underestimated is why a lot of start-ups catch giant companies off guard. But the blogosphere has turned an already frustrating hype cycle manic. The famous example was Cuil—a company lauded in the morning as a "Google Killer" and trashed before our first cups of coffee got cold. Not quite as extreme is what we've seen with the giants of Web 2.0: MySpace, Facebook and– believe it or not– the three-year-old Twitter. As soon as Facebook launched its platform—as if in unison—the media world decided MySpace was a has-been and Facebook was the king. Sure, Facebook is poised to overtake MySpace in the U.S., but by many accounts MySpace is making more money , increasing engagement and is still one of the largest sites on the Web. That should count for a lot. In the last month, it's been happening to Facebook, and it’s even more absurd. The company is still growing, having passed the 200 million or 250 million user mark, depending on who you believe . And other reports , and my own sources, say the company is doing close to a $500 million revenue run rate. Did I mention we're in an epicly bad recession? How is that a failure? Frequently the people calling for Zuckerberg’s head because of recent “failures” have never run a company, and never even met Zuckerberg. I tend to agree with a guy who’s done both: Reid Hoffman, CEO of LinkedIn and one of the most successful Web 2.0 investors in the Valley. “Ultimately you judge a CEO by how well the company is doing, and Facebook is doing pretty well,” he told me a few weeks ago. “I think Mark should answer any criticism by saying, ‘Look at the company; I’m doing fine.’” Did Hoffman like the new redesign? Not especially. But he added this, “It’s good to be bold in what you’re doing; it’s good to be visionary. Personally, I don’t think it was right, but Mark may very well learn from that and the next step will be much more interesting in that direction.” Well said. Guess what, gang? Building a company is hard. No one gets every single thing right. Bloggers harping on each mistake are like the fat guy sitting in the bleachers at a baseball game berating a star player for not hitting a homerun in every at bat. Sure, Facebook’s valuation is coming down from $15 billion. But that was never a realistic valuation for the company. It wasn't even paid by traditional venture capitalists; it was paid by Microsoft and other strategics looking to get a piece of the hot company and not caring what it cost. The company itself didn't value Facebook at $15 billion when insiders sold stock. But is it worth $1 billion or more? Definitely. Even based on a reasonable multiple of revenues. Of the Web 2.0 wave you can count on one hand the companies that can claim that with a straight face. Even more absurd: Now bloggers are starting to say Twitter is done . I thought it was only now hitting mainstream ? It's one thing to take a company like Cuil—that arguably over-represented what it could do—from hero to goat in less than an hour. It's another thing to trash a company that's only a few years old, growing exponentially, well capitalized, and conservatively run with about 30-something employees. (Let's not even bring up the free Sprint ad and the barrage of John Stewart-Ashton-Larry King-Oprah free press.) Look, we all do it to a degree. We fall in love with technologies, and readers and editors suddenly get an insatiable demand for stories about them. It’s reporters’ and bloggers’ jobs to give them what they want, right? But that tips into link-baiting, blindly aiming for that TechMeme traffic and writing a provocative headline that the story doesn’t even necessarily back up. It’s one thing to be the early adopter who gets bored once something is mainstream. It’s another thing to write off a company for the sheer fact that it’s successful, and you’re bored writing about it. Here's the thing: Great start-ups can survive the hype cycle. Horrible companies were going to fail anyway. That may leave some marginal ones in the middle, but let's argue if the press tanks a company, it wouldn't have gotten far ultimately. So maybe the hype cycle doesn’t really do any harm . But who does it help? As bloggers and reporters we're supposed to bring people reality and truth. No phase of the hype cycle is reality: Not the messiah, not the goat simply because big press has grown weary of the topic. Crunch Network : CrunchGear drool over the sexiest new gadgets and hardware.
 
French Fury: Parisians Hit The Streets In Protest Against Facebook Redesign Top
Granted, Facebook’s recent redesign came with a couple of flaws, and lots of people were upset about the changes, but resorting to street protests to try and turn them around? Apparently, a few people have gathered in Paris to protest against the changes in Facebook, and Alex van Herwijnen was nice enough to send us some pictures he snagged while visiting the French capital. The protesters can be found at the Arche de la Défense , holding signs saying that they’re against the new version of Facebook and that they want the old one back. Clearly, they’re not happy with the redesign even if Facebook has already made some changes due to user complaints ( against Michael’s advice ), or maybe they’re just really pissed because it’s still confusing their mothers . From the looks of it, this is probably a prank or more likely part of a video shoot or something. TechCrunch France’s Alain Eskenazi and I looked around for reports in French media, but couldn’t find anything. I also did a quick search on Facebook to see if there were any related groups or events on the site, but had trouble finding anything in the messy new interface. Maybe I should head down to Paris and voice my complaints with the other protesters? CrunchBase Information Facebook Information provided by CrunchBase Crunch Network : CrunchBase the free database of technology companies, people, and investors
 
More Ways To Shorten Those URLs: UnHub And Lnk.by Top
URL shortening services are a dime a dozen, and despite wishes for them to vanish (with good reason) they’re here to stay and more popular than ever given the abundance of social services that thrive on short messages and links. TinyURL and bit.ly appear to be the more popular of the bunch, but we’re seeing other services use their own custom URL shortening services at an increasing rate. To name but a few, Digg uses its top domain for the DiggBar and associated links, Posterous uses post.ly to trim down links when they distribute them to other networks and Twitter toolbox HootSuite uses ow.ly . Update: shame on me for forgetting that TechCrunch also has its ‘own’ short URL (tcrn.ch), which you can view under every post and which we use for our Twitter account . We use awe.sm for this. The latest startup to add a URL shortening feature to its service is UnHub , which we covered last month . Paste any URL after unhub.com and if you’re registered for the service, you’ll get a custom short URL you can use to distribute links to articles and such. On top of the linked website will be an iframe (yes, yet another one ) where you can view the number of Diggs, bookmarks on Delicious, and redirects on bit.ly. You can also tweet, e-mail or share the link on a plethora of third-party services right from the toolbar. It’s also personalized, so people can jump to your own UnHub profile from the persistent bar, or straight to the source link. For an example, go to http://unhub.com/pC16 . Another one that just surfaced (in alpha mode) is Lnk.by , which adds a twist to URL shortening in the sense that you can pick a short URL that suits what you’re linking to i.e. it brings some context to what you’re sharing. You can share music files using Lstn.in, videos with Wach.it, photos with Seee.it and articles with Read.im. The service automatically maps known domains, protocols and file extensions so it will pick the most suitable one without the need for indicating it proactively. Other than that, there’s nothing really noteworthy about the service, apart from the fact it comes with an API and a toolbar bookmarklet, and that it was built by an Endemol executive with a friend in just one weekend. Feel to shorten the URL for this article with both services and tell us which one you prefer (or why you hate URL shortening services). Crunch Network : CrunchBase the free database of technology companies, people, and investors
 
UK Tech Icons Launch Seed Fund To Bridge The Gap For European Startups Top
Two icons of the UK’s tech startup world are joining forces to create a new fund to address the so-called ‘equity gap’ in Europe. European Founders Capital (EFC) is being led by Michael Birch, co-founder of Bebo , and Brent Hoberman, who set up the dotcom bubble era Lastminute.com but is better known more recently for being a serial angel investor and co-founder of MyDeco . EFC will have an initial $29.5m (£20m) of seed funding but is aiming for $74m (£50m) in total. The idea is to increase the availability of early-stage funding in Europe, which historically lags behind the US, and has led to a gap between early stage and Series A funding. Europe’s seed funding eco-system has never matched Silicon Valley’s in part because the business angel environment for technology is undeveloped and because European VCs have historically not reached much lower than Series A rounds, unless in syndication with other parties. Crunch Network : CrunchGear drool over the sexiest new gadgets and hardware.
 
Herebeforeoprah.com Asks The Important Question Top
It’s not yet clear exactly what effect Oprah had on Twitter by featuring the service (and its first million-follower user, Ashton Kutcher) on her show on Friday. Twitter co-founder Biz Stone tells me he’s going to try and get some numbers as to just how many people signed up thanks to Oprah, sometime next week. But, Twitter Search already reveals that it’s a massive amount. When anything gains mainstream popularity, there are always some early adopters who will start denouncing it. Some do this out of spite, some out of odd principle, some because they think they’re too cool to do something that a lot of other people do. But, I’m here to tell you that there’s another way. Instead of being a jackass and pouting about the “good old days of Twitter,” just visit herebeforeoprah.com . The simple service asks the question, “was _______ here before oprah?” Simply fill in the blank with your Twitter name and if you adopted early enough, you’ll get confirmation of your Twitter street cred. For example, I’m very pleased to get a response , “@parislemon was here before @oprah.” I understand why some of you are upset about Oprah “ruining” Twitter, I really do. I put in countless hours/days/months of mindless 140 character messages just like the rest of you. But suck it up, and get your revenge by letting Oprah know that despite her gaining over 300,000 followers in a day, you beat her to the service. Crunch Network : MobileCrunch Mobile Gadgets and Applications, Delivered Daily.
 
Hollywood Has A Great Online Distribution Model — If You Hate Selection Top
In a golf tournament, it can be advantageous to putt after another player because you learn the contours of the path to the hole. In a similar way, you’d think Hollywood would have learned from the rough path the music industry took in transitioning to the world of digital distribution over the web. Unfortunately, it looks to be on the verge of missing the putt as well. On the surface, it seems like Hollywood is doing a better job of getting consumers to use their approved methods for transferring content over the web — but the reality is that it’s a mess. And the only reason piracy isn’t so rampant in the US is that our broadband speeds, for the most part, suck. Sure, there are a lot of channels to get films legally over the web. iTunes, Xbox Live, Amazon, Netflix and Hulu are all doing a fairly good job at making the content they’re given, accessible. Unfortunately, it’s the content that’s the problem. If you go to any of those services looking for a specific movie, there’s a very good chance that it won’t be available. And that can be true even if it was available on the service in the past. It’s a nightmare. Farhad Manjoo had a good article yesterday on Slate outlining some of the major problems. One of the biggest ones is that Hollywood’s archaic syndication rules are in play with digital distribution over the web. For example, Hollywood now gives some movies to services like iTunes for rental immediately or soon after they’re released. But because of the deals studios have in place with premium content channels like HBO, after the pay-per-view window closes (iTunes and the other services’ rentals systems are considered pay-per-view), these movies have to be pulled off of the rental services so that the premium channels can get their exclusive rights to broadcast them. Those movies then stay exclusive to the premium channels for 15 to 18 months — let me repeat 15 to 18 months! And from there it only gets worse. After the year and a half in premium channel jail, movies then go to the regular cable channels and big networks for airing. As I understand it, some online rentals are again okay during this time, but then, they often go back to the premium channels for a second run. That means they get pulled once again . This whole process often lasts for seven years or more , as Manjoo notes. It’s only after that time period that movies are really free to be distributed a bunch of different ways. That includes Netflix’s popular Watch Instantly streaming feature — so now you see why the selection of movies on that service is mostly older films. In fact, basically, the only newer ones they offer is because of their deal with Starz, the premium cable channel. That deal may have been one of the smartest ones Netflix has made yet, because at least it gives us access to some movies this side of 2002. The fact that online distribution has to play in this foolish game of broadcast rights tennis, is of course, bullshit. The brick and mortar rental stores of yesteryear, like Blockbuster, don’t have to play by these ridiculous rules. Movies don’t vanish from their shelves because they’re playing on HBO for the next 18 months. If they did, Blockbuster would have been in trouble a lot sooner than its most recent woes (tied to its failure to get out in front of new forms of distribution). So how can anyone really expect any of the online movie services to flourish under such restrictions? They shouldn’t, because none of them truly will until Hollywood changes these rules. And with billions of dollars at stake, Hollywood probably isn’t going to do it anytime soon. In fact, I’d venture to guess that the only thing that will force their hands is if services like BitTorrent, which people use to distribute pirated movies, continue to gain popularity as broadband access and speeds improve. In other words, things may change when Hollywood starts getting screwed just like the music industry got screwed. Seriously, search for a bunch of new movies you want on iTunes rentals, Netflix Watch Instantly and a torrent tracker. Which has the best selection? It’s certainly going to be the torrent tracker — and that gives you the movies for free. The success of iTunes music store has proven that people are willing to pay for content (it’s now the largest music retailer, bigger than even Wal-mart), but the key factor is ease of use — of which, selection is a big part. It’s beyond frustrating to search a service for something you really want to pay to watch, only to find it doesn’t offer it. Hollywood is leaving money on the table. I could go on about other ridiculous things is doing to screw up online distribution. For example, the fact that while a lot movies are available to buy on the day they’re release, most cannot be rented online until a few weeks later. But it’s all part of the same problem. Hollywood is scared to embrace the move to online distribution. It’s still holding out hope that Blu-ray will catch on and become their next multi-billion dollar cash cow. That’s not happening. For most people, Blu-ray simply doesn’t offer enough of an improvement over DVD. Online distribution, with its instant access, does. Will Hollywood realize that too late? Crunch Network : CrunchGear drool over the sexiest new gadgets and hardware.
 
A Sign Of The Times: fbFund Shifts To Incubator Model Top
Earlier this week Facebook detailed some of the changes it is making to fbFund, its joint venture with Accel Partners and Founders Fund designed to help reward and foster the most encouraging applications on Facebook Platform, which launched 2007. In prior rounds, fbFund’s primary function was to distribute seed funding, with the last round’s 25 finalists taking home $25,000 and the final winners each receiving $225,000 cash grants. Now the program is expanding to include a new Incubator Program (no doubt inspired by the likes of Y Combinator and TechStars ), which will invite a few startups to interact with key Facebook personnel, as well as some of Silicon Valley’s most prominent entrepreneurs. Among the VCs and companies contributing their expertise to the program are First Round Capital, Tapulous, Zynga, Slide, and over a dozen other that can be found on this list . In addition, Facebook is also announcing today that Eric Ries will be taking part in the program. Facebook will be accepting applications to the program, which is being led by Dave McClure , until April 20th. While it’s still unclear how many startups will be invited to participate in the Incubator program, they will be drawn from a pool of 50 finalists. The program will run from June through August. Also interesting to note is that for this round winners can receive up to $100,000 in equity investment, while previous rounds have been ‘no strings attached’ - a change that may indicate, as VentureBeat notes , that Facebook and its partners may see the current round as being more lucrative than previous rounds (I also suspect, given the greater time investment involved with the new program, that they would like to see some kind of return). For more details, check out Facebook’s blog post here . Crunch Network : CrunchBoard because it’s time for you to find a new Job2.0
 
Networks In Motion Wins Mobile Incubation Week, Microsoft's "American Idol" For Mobile Applications Top
There’s a good chance you didn’t even know it was going on, but last week Microsoft hosted a competition for mobile application developers on its Silicon Valley Campus in Mountain View, and yesterday announced Networks in Motion as the winner. The startup was one of six finalists - selected out of a pool of 50 applications - invited by Microsoft to come present ideas for applications running on Windows Mobile and get certified for the upcoming Windows Marketplace for Mobile, which is supposed to become the big, central commerce and distribution point for WinMo apps that is currently lacking. The company is widely expected to introduce the latest iteration of Windows Mobile at next month’s TechED 2009 conference in Los Angeles (11 May), although devices running Windows Mobile 6.5 won’t start shipping until after the Summer. Microsoft’s a heavyweight in the smartphone OS market but is getting some serious heat from Apple and its iPhone / App Store (which is about to hit 1 billion downloads ), and is going to be facing even more stiff competition on the mobile application front from RIM / Blackberry, Nokia and Google Android in the coming years. Microsoft is hoping to up the ante with its new mobile OS and its own version of the App Store, but is evidently going to need a lot of good mobile applications once the Windows Marketplace kicks off, and in that sense hosting a competition was probably a good idea (there will be more of those in Europe and Asia in the near future by the way). Too bad for Microsoft, there was little buzz about the event and press coverage of the outcome is virtually nowhere to be found. Anyway, the six finalists were: Brighkite , the location-based social networking service Motolingo , a telematics solution that will monitor car diagnostics and report mobile phone behavior in the car VisTracks , enterprise app for real-time product location and tracking company shipments Networks in Motion , turns GPS-enabled mobile phones into full-featured navigation devices VoiceMuffler , real-time, two-way speech-to-speech translation designed for foreign military personnel and civilian travelers DJ Nitrogen , facilitates legal sharing of user-generated content, such as ringtones and music mash-ups Yesterday, Senior Business Development Manager on Microsoft's Emerging Business Team Brian Hoskins announced Networks in Motion to be the winner, on Twitter no less. The startup is the maker of Gokivo Navigator , an interesting application that brings real-time turn-by-turn visual and audible directions to GPS-enabled mobile phones, combined with hyper-local search and location-based services. In light of the event, Gokivo got some new features to its core offering, including the ability for users to update their Facebook profile with the specific place they are (address/map). They’re on our radar now. Besides the advice it received from and connections it made with Microsoft developers and external experts at the Incubation Week, Networks in Motion will receive ‘early placement’ in Windows Marketplace for Mobile once it’s launched, and also took home a Zune music player. (Via Digits ) Crunch Network : CrunchBoard because it’s time for you to find a new Job2.0
 
Venture Capital Down 50%. It's Not Just the Recession, Folks. Top
There's a huge difference between what venture capitalists say and what they do. For much of the last decade some of the same partners that keep saying Silicon Valley will never decline as the startup epicenter of the world are spending every month flying to China. And of course in the post-2000 years every partner said, "Oh we never really got into that whole dot com thing …" Huh. Wonder who did all those deals? Another classic is this one: "Recessions are the best times to start companies! We always invest in downturns! There are fewer competitors, and you get a better caliber of entrepreneur! Dollars can stretch further because salaries and rents are lower! We're not looking to take a company public for years, so why would we run our companies based on the public markets and macro economy?" Bullshit. It fell off a cliff in 2001 and 2002 and it's falling off a cliff now. (More on that in a second.) But there's a difference: Funding levels, returns and the percentage of that money going to new ventures never got nearly as high as they did in the 1999-2000 years. So when we talk about steep drops, we're talking about less of a bubble bursting and more of an industry correcting for more than a decade of scale and liquidity issues. And make no mistake—it's a steep drop. Venture funding fell by 50% nationally from the first quarter in 2008 to the first quarter of 2009, totaling to $3.9 billion, according to Dow Jones Venture Source. That's the lowest total since 1998. PricewaterhouseCoopers and the National Venture Capital Association had it falling farther to $3 billion. Information technology investments fell 53% year-over-year to $1.7 billion—the lowest since 1997, and the lowest volume of deals since 1995. And clean tech? Well so much for that being the future of the U.S. economy: It fell by 74% to a paltry $117 million. (These numbers according to Dow Jones, see the numbers from PWC/ NVCA in the chart below.) The results are so different than what we saw in the last downturn that I could spend eight posts writing about them. But I'll distill my take-aways to three points for now. 1.    Don't be fooled: This is not just about the recession. Investments in startups declined in the last downturn, but investments in VC firms didn't fall nearly as much. Mostly it was the firms themselves deciding to raise smaller funds. That means venture capital as an industry never had a shake-out from the go-go 1999-2000 era. It's no secret and every VC will admit it: There are a lot of clowns still throwing around a lot of venture money that have no business doing it. (Of course, it's a well-known industry joke that no one thinks he or she is the clown.) Returns, on the other hand, did go down. And they never really got back up, given the amount invested. But the industry is graded on a ten-year time horizon so that didn't matter much. Once returns from 1999 and 2000 fall off that scale, it will. Returns will look at or below the S&P 500 for what is supposed to be a niche, high-risk/high-reward asset class. It takes forever to correct because fund cylces are so long, and the asset class is so illiquid. But it won’t go uncorrected, and the witching hour is getting close. What does this have to do with money going out to startups? VCs are scared for the first time in a long time. There's no obvious high growth sector of the tech economy, and their investors are hit in nearly every nook and cranny of their portfolios. They're not sure how to do their jobs anymore when nothing can go public and acquisitions are few and far between. This is why the amount has fallen so precipitously, especially in Silicon Valley. In past cycles, VCs have pulled closer to home, and the percentage of money going to Valley startups has increased even as the volume of total deals has gone down. Not this time. According to Dow Jones, Bay Area deals fell by 57%– a faster rate than the rest of the country. In clean tech just one deal was done in the Valley. Now, this could point to a savvier Valley entrepreneur who saw the downturn coming. After all, most of the well-known Web 2.0 names like Ning, Slide, Facebook and LinkedIn raised huge rounds just before the economic crisis hit, just in case. That could have artificially boosted the 2008 numbers and artificially lowered the 2009 numbers. We'll have to see how the next two quarters shake out. I expect higher volume of deals in the next few quarters, but also a surge in recapitalizations. More concerning is the free-fall in the percentage going to new deals. During the last downturn it fell to 24%– down from more than 50% during the go-go days and 33% historically. They never got much above that. In the first quarter only 18% of deals went to new companies, according to Dow Jones. 2.    Revenge of the steady-eddy.  What didn't fall, comparatively? Health care and investments in New England. Both have become the reliable base hits of the venture business. When it comes to healthcare, the vast majority of exits are licensing deals with big pharma or IP acquisitions of device companies. There's almost zero expectation of anyone going public–even in better days– because Sarbanes Oxley has cut off the ability for small market-cap companies to go out. The next Genentech? Don’t hold your breath. Similarly, most Boston VCs never really got the consumer Web. Much of their expertise has remained in areas like telecom and healthcare, and many of their investors have morphed into more financial engineers than company builders. This meant that New England fell from the no. 2 region for venture investment for the first time in 2008, as Southern California and New York ascended. It's now solidly back at no. 2 and investments fell a comparatively tiny 16% in the first quarter, according to Dow Jones.  3.    Bye-bye Clean Tech Hyperbole. It's not that clean tech isn't a huge opportunity. It's not that it isn’t an important opportunity. But I've never believed it was the next wave equivalent to the personal computer, as several VCs and even President Barack Obama said during the campaign. For one thing, there's a lot of science that needs to be developed, huge amounts of money that need to be injected, and more government cooperation and subsidies than the US currently has. It's just not the type of investing that most VCs addicted to the crack of quick-to-market, hyper-growth Internet companies can adjust to. Maybe in another ten years, but it’s not the venture guys' salvation anytime soon. Hang in there, startups. Take a hike, clowns.   Crunch Network : CrunchBase the free database of technology companies, people, and investors
 
Obama Spurns Silicon Valley Vets, Names Virginia's Secretary of Technology As CTO Top
President Obama will be naming Aneesh Paul Chopra as his choice for CTO during tomorrow’s weekly address, as first reported by the Washington Post and confirmed in this press release posted to the White House’s official web site. Chopra currently serves as Virginia’s Secretary of Technology, and has previous acted as the Managing Director for the Advisory Board Company, where he advised executives on health care operations. According to Virginia’s state website , Chopra was recently recognized by Government Technology Magazine’s for excellent ‘use of technology to improve government’, and he was awarded Healthcare Information and Management Systems Society's 2007 State Leadership Advocacy Award. The choice comes after months of speculation, during which many of Silicon Valley’s most prominent figures, including Steve Ballmer, Jeff Bezos, Bill Gates, and Eric Schmidt (among many others) were named as possible candidates. Whether or not some of these people actually wanted the position is another story, but obviously President Obama chose a different route. According to this article published in the Washington Post in 2005, Chopra was not a career technologist before he became Virginia’s Secretary of Technology, but he has extensive experience in policy making. He also co-created a venture fund called Avatar Capital, which invested $11 million in 18 companies (though these figures are likely dated). While he may not be a lifelong coder, Chopra has previously stated that his “primary understanding is from customer need, not bits and bytes”. During his time as Virginia’s SoT, he drove the state’s partnership with Google to become sitemap compliant, and also partnered with Cox and Comcast to broadcast free GED classes to Virginian citizens. According to President Obama’s upcoming remarks, Chopra will “help achieve our most urgent priorities – from creating jobs and reducing health care costs to keeping our nation secure. He will work closely with Chief Performance Officer Jeffrey Zients (also being named tomorrow) and recently-named CIO Vivek Kundra. For another perspective on the news, check out Tim O’Reilly’s post Why Aneesh Chopra is a Great Choice for Federal CTO . Via Scobleizer . President Obama’s full remarks for tomorrow are below: It's not news to say that we are living through challenging times: The worst economic downturn since the Great Depression. A credit crisis that has made that downturn worse. And a fiscal disaster that has accumulated over a period of years. In the year 2000, we had projected budget surpluses in the trillions, and Washington appeared to be on the road to fiscal stability. Eight years later, when I walked in the door, the projected budget deficit for this year alone was $1.3 trillion. And in order to jumpstart our struggling economy, we were forced to make investments that added to that deficit through the American Recovery and Reinvestment Act. But as surely as our future depends on building a new energy economy, controlling health care costs and ensuring that our kids are once again the best educated in the world, it also depends on restoring a sense of responsibility and accountability to our federal budget. Without significant change to steer away from ever-expanding deficits and debt, we are on an unsustainable course. So today, we simply cannot afford to perpetuate a system in Washington where politicians and bureaucrats make decisions behind closed doors, with little accountability for the consequences; where billions are squandered on programs that have outlived their usefulness, or exist solely because of the power of a lobbyist or interest group; and where outdated technology and information systems undermine efficiency, threaten our security, and fail to serve an engaged citizenry. If we're to going to rebuild our economy on a solid foundation, we need to change the way we do business in Washington. We need to restore the American people's confidence in their government – that it is on their side, spending their money wisely, to meet their families' needs. That starts with the painstaking work of examining every program, every entitlement, every dollar of government spending and asking ourselves: Is this program really essential? Are taxpayers getting their money's worth? Can we accomplish our goals more efficiently or effectively some other way? It's a process we have already begun, scouring our budget line by line for programs that don't work so we can cut them to make room for ones that do. That means ending tax breaks for companies shipping jobs overseas; stopping the fraud and abuse in our Medicare program; and reforming our health care system to cut costs for families and businesses. It means strengthening whisteblower protections for government employees who step forward to report wasteful spending. And it means reinstating the pay-as-you-go rule that we followed during the 1990s – so if we want to spend, we'll need to find somewhere else to cut. And this Monday, at my first, full Cabinet meeting, I will ask all of my department and agency heads for specific proposals for cutting their budgets. Already, members of my Cabinet have begun to trim back unnecessary expenditures. Secretary Napolitano, for example, is ending consulting contracts to create new seals and logos that have cost the Department of Homeland Security $3 million since 2003. In the largest Department, Secretary Gates has launched an historic project to reform defense contracting procedures and eliminate hundreds of billions of dollars in wasteful spending and cost overruns. And I commend Senators McCain and Levin – a Republican and a Democrat – who have teamed up to lead this effort in Congress. Finally, in the coming weeks, I will be announcing the elimination of dozens of government programs shown to be wasteful or ineffective. In this effort, there will be no sacred cows, and no pet projects. All across America, families are making hard choices, and it's time their government did the same. That is why I have assembled a team of management, technology, and budget experts to guide us in this work – leaders who will help us revamp government operations from top to bottom and ensure that the federal government is truly working for the American people. I have named Jeffrey Zients, a leading CEO, management consultant and entrepreneur, to serve as Deputy Director for Management of the Office of Management and Budget and as the first ever Chief Performance Officer. Jeffrey will work to streamline processes, cut costs, and find best practices throughout our government. Aneesh Chopra, who is currently the Secretary of Technology for Governor Kaine of Virginia, has agreed to serve as America's Chief Technology Officer. In this role, Aneesh will promote technological innovation to help achieve our most urgent priorities – from creating jobs and reducing health care costs to keeping our nation secure. Aneesh and Jeffrey will work closely with our Chief Information Officer, Vivek Kundra, who is responsible for setting technology policy across the government, and using technology to improve security, ensure transparency, and lower costs. The goal is to give all Americans a voice in their government and ensure that they know exactly how we're spending their money – and can hold us accountable for the results. None of this will be easy. Big change never is. But with the leadership of these individuals, I am confident that we can break our bad habits, put an end to the mismanagement that has plagued our government, and start living within our means again. That is how we will get our deficits under control and move from recovery to prosperity. And that is how we will give the American people the kind of government they expect and deserve – one that is efficient, accountable and fully worthy of their trust. Thank you. Crunch Network : CrunchBoard because it’s time for you to find a new Job2.0
 
CrunchBoard Jobs: Product Manager, Technical Operations Manager Top
This week we saw quite a few new jobs on CrunchBoard , companies are still adding positions in New York, Silicon Valley, Boston, Philadelphia, and Austin. For job hunters in Europe, check out our Europe CrunchBoard . Dont’t forget we’re looking for a few good hackers here at TechCrunch. New jobs on CrunchBoard : Product Manager BillShrink - Redmond City, CA Software Engineering Manager- Core Site TripAdvisor - Newton, MA Software Technical Support Engineer Articulate - 100% Telecommuting Technical Operations Manager Yelp, Inc. - San Francisco, CA Junior Software Engineer doubleTwist - San Francisco, CA Crunch Network : CrunchGear drool over the sexiest new gadgets and hardware.
 

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