Facebook may be looking to buy browser maker Opera Software, according to a new report.

A source told Pocket-lint that the social network wants to expand into the browser space and is looking to acquire Opera to do so. VentureBeat cannot independently confirm Facebook’s interest in Opera, and Facebook declined to comment on this story.

Opera is a Norway-based public company traded on the Oslo Stock Exchange. The company reported revenue of $46.9 million in the first quarter of 2012, and has roughly 700 employees spread across eleven offices, including a satellite office in the U.S. Opera makes an extremely popular mobile browser, including Opera Mini for iPhone. Opera Mini had nearly 200 million users across Opera branded, co-branded, and operator-branded installs of the mobile browser in Q1 2012.

While details on Facebook’s Opera interest are slim, we are certain that Facebook wants a piece of the browser pie, especially on mobile. In fact, months ago we heard a whisper that the social network was actually building its own browser.

That rumor makes sense when you consider a few things. First, the company is expected to release a Facebook-branded phone this summer running some type of custom Facebook operating system, said to be a fork of the Android OS. It follows, then, that Facebook would want to control — read: profit from — how users browse and access its social network on mobile. A Facebook phone running a Google browser doesn’t sound quite right, now does it?

There’s also this key detail: Facebook’s director of product, Blake Ross, if you recall, co-founded Mozilla Firefox and helped build the Firefox browser. The browser guru came to Facebook after his startup Parakey was acquired by the then young social network back in 2007.

But back to Opera. Here’s the kicker: Opera makes money on mobile, the very place where Facebook desperately needs to monetize now that it’s a public company. The software maker said it made $3 million in first quarter revenue from its mobile consumers — up 253 percent year-over-year — and $1.8 million from mobile OEMs. The company also netted $6.9 million in Q1 2012 revenue, up 303 percent year-over-year, from mobile publishers and advertisers.

“Opera expects to monetize this user base and the billions of daily web page traffic generated by these users to a greater extent in 2012 compared to 2011 from advertising, applications and search,” the company said in its earnings report.

But the fat lady has yet to sing in this acquisition play, so stay tuned.

Dell is in talks to buy network applications maker Quest Software for more than $2 billion, according to a report from Bloomberg.

Quest originally agreed to be acquired by Insight Venture Partners for $2 billion, but those talks may have faltered. Quest’s backup and security software could complement Dell’s products well. BMC, Microsoft, and Oracle are all potentially bidding on Quest too.

Quest’s shares on the Nasdaq exchange are up nearly 4 percent in mid-day trading, bringing the company’s market cap to $2.12 billion. Dell would need to offer up a premium on this pricing to win over the company.

Dell photo: Flickr/Dell

Facebook CFO David Ebersman

The screw-up resulted in a major disappointment in Facebook’s stock debut: The stock’s 15 percent decline since the IPO last Friday may not in itself be tragic. But worse, lawsuits are flying saying that legal guidelines weren’t followed. And there’s the sad fact that regular mom-and-pop investors were apparently left with the more losses on average than large institutions who got privileged information. This all was aggravated by a separate annoyance: glitches in the Nasdaq stock market trading process, which caused delays in trade and cancel confirmations, among other things.

However, based on a number of interviews VentureBeat has had with observers and other sources close to the process, it’s apparent that Facebook itself may be most to blame for the fallout. Facebook chose to be more furtive in public announcements about its business than it was in private talks with large investors.

The “update”

The decisive action by Facebook came on May 9, three days into the “roadshow,” which is the time when Facebook and its bankers visit major investors in hopes of getting them to buy the IPO stock. On that day, Facebook’s executives, led by chief financial officer David Ebersman, signed off on new language in the company’s updated IPO prospectus.

In that May 9 update, Ebersman decided to use vague language when describing how the company’s second quarter was looking. It was extremely understated, considering what we would later find out. According to the filing, specifically on page 57, Facebook said that it was experiencing the same trend in the second quarter that it had seen in the first quarter, that growth in “daily active users” (DAUs) was increasing more rapidly than the growth in ad impressions, driven by many users’ shift to mobile devices.

The exact wording is here:

Based upon our experience in the second quarter of 2012 to date, the trend we saw in the first quarter of DAUs increasing more rapidly than the increase in number of ads delivered has continued. We believe this trend is driven in part by increased usage of Facebook on mobile devices where we have only recently begun showing an immaterial number of sponsored stories in News Feed, and in part due to certain pages having fewer ads per page as a result of product decisions.

Now Facebook is generally growing quickly — and its ads are growing, even if they are growing more slowly on mobile — and so this update itself didn’t send any alarm bells to most investors, and it shouldn’t have. After all, Facebook had long warned about this mobile problem, ever since the first IPO prospectus filing on Feb 1, that revenues could be negatively affected by its huge mobile growth, because monetizing mobile hadn’t been proven. (Indeed, VentureBeat was the first to report this on the day of the IPO filing.)

Facebook’s lawyers may, in the wake of the legal mess it has gotten into, try to argue that the new May 9 language about “DAU’s increasing more rapidly than the increase in number of ads delivered” pointed to something more significant than Facebook had released before. But the reality is that this wording was just too vague to be construed by normal people as meaning anything more than what had already been mentioned before. The sad thing is, if this was such an important update for Facebook, its team must have argued about it a hundred times before publishing. So why was it written as though it was purposefully trying to obfuscate? More on that in a sec.

First, there’s been sloppy reporting about the May 9 update, and it’s worth setting the record straight. The WSJ, the leading publication for many bankers, for example on Thursday implied that the May 9 update was the first time Facebook disclosed that the mobile risks “may negatively effect results.” But the WSJ is wrong. That wording had been in Facebook’s S-1s from the beginning. Take a look for yourself at the original February filing. (See pages 5 , 13, and 46.) The fact is, there is nothing within the S-1 update on May 9 that would give normal investors the sense that there had been a material change about Facebook’s revenue prospects.

The private guidance bombshell

The more significant point is, on the next day, May 10, Facebook made private statements to a select group of banking analysts, telling them the revenue prospects had changed. This was arguably material information at the time — a big no-no.

Here’s what happened on May 10: Facebook got on the phone with a select group of 21 analysts, including analysts of its IPO underwriters, and briefed them on what was really going on behind the S-1 update. Facebook executives guided those analysts through much more explicit material than the S-1 update contained, according to our sources, saying that Facebook now expected the second quarter to be on the “low end of the range” of the financial guidance Facebook had previously given them. VentureBeat has confirmed this wording with someone with direct knowledge of those talks.

Of course, this new information prompted the analysts to take a look at the guidance Facebook had previously given to them, then estimate where the “low end” was, and revise their own forecasts accordingly. They did this beginning on May 10, as disclosed by leaks to Reuters. The banks now forecasted 30.4 percent year-on-year 2012 revenue growth on average, instead of the 36.7 percent growth previously expected. (Compare that to 2011, when Facebook’s revenue grew 87.9 percent year-on-year to $3.71 billion.)

Let’s back up for a second. When Facebook gave its original guidance to analysts in March and April, at the start of the IPO process, it was on firm legal ground in doing so. Indeed, this guidance is a normal part of the process, described in good detail by Henry Blodget, himself a former Wall Street analyst, in his good post about the IPO process Tuesday. He covers a lot of ground that I won’t go over again here.

However, Facebook’s subsequent guidance to analysts, made on May 10, “to the low end” of the earlier guidance, was not on firm legal ground, because this was clearly new information not already in the S-1. It was also clearly different than the general guidance made originally to analysts.

The bankers’ downgrades beginning May 10 were significant, as we previously reported, and were shared with a limited circle of investors. The bank analysts also released lower earnings-per-share estimates, as well as lower revenue forecasts for the second quarter. The estimates ranged between 5.4 percent to 7.3 percent lower revenue for the second quarter than previously — very significant adjustments.

Here are the second quarter revenue estimates, as leaked to Reuters:

• Morgan Stanley — $1.111 bln (new) from $1.175 bln (old)
• Bank of America — $1.100 bln (new) from $1.166 bln (old)
• JPMorgan — $1.096 bln (new) from $1.182 bln (old)
• Goldman Sachs — $1.125 bln (new) from $ 1.207 bln (old)

This obviously was material information for investors. Following the changes, Facebook and its bankers, led by Morgan Stanley, were forced to respond to questions from key clients. We see that these key investors, once informed by these roadshows and reports, started to slash the number of shares they intended to buy. One example was Los Angeles-based Capital Research & Management which cut the number of shares it wanted after talking with the company and underwriters, according to the WSJ.

But not every potential investor was privy to these revised reports.

The mood of investors in IPO stock

Unprecedented territory

So lets summarize why this was so problematic. SEC guidelines prohibit a company from issing information that is materially different from that already in its S-1 prospectus. So what constitutes “material” information? The definition of material information is that “which would be likely to affect a stock’s price once it becomes known to the public.”

Now we’re hearing from sources that Facebook is arguing that guidelines around what constitutes materiality is disputed when it comes to the issue of financial guidance. Facebook could arguably say it didn’t know if its new guidance on May 10 was going to end up being material or not. Indeed, the Facebook IPO is unprecedented because this sort of change in guidance has never happened before, at least it has never happened this late in the IPO process. But precisely since that is the case, because Facebook was on shaky unknown ground, because SEC guidelines haven’t been tested specific around this particular area, Facebook should have made doubly sure to err on the side of caution.

Indeed, a source at one of the underwriting banks we talked with could not give us a clear reason why Facebook should not have updated the S-1 with firmer trend data.

(For more on this topic of materiality, see Bloomberg’s reporting on this. It’s good as far as it goes, but misses clear reference to the fact that Facebook chose a weaker statement in its S-1 update than what it gave to analysts afterward.)

Why did Facebook do it?

We’re seeing all kinds of reporting about how the IPO legal process is a mess, and it’s true that IPO guidelines are frustrating. SEC guidelines do not allow analysts to print anything between when an IPO prospectus is filed until 40 days after the IPO. Yet they’re allowed to speak verbally to a select few of their clients. The bizarre rules are a result of previous regulation, created a decade ago, after abuses made by investment bankers in written reports during the dot com era. These rules may need to be reformed, but Facebook needs to play by them for the time being.

So what Facebook should have done on May 9 is either update the S-1 with clearly stated quantitative data (and go forward with the IPO, and deal with the lower stock price), or else pull the IPO filing altogether and wait for a better quarter.

So why didn’t Facebook do either of those two things? Well, that’s the $100 billion question. One can only imagine the huge amount of pressure that the company was feeling. Facebook, a web site that prides itself on being able to see real-time data about users, traffic and advertising, clearly knew how the quarter was progressing. The roadshow came halfway through the quarter, and Facebook’s update on May 9 was clearly a sign that it realized it needed to say something about its deteriorating revenue situation.

Now the following is just speculation, but it’s possible Facebook felt that if the May 9 update were made more forcefully, the wording could torpedo the healthy IPO it had put so much work into (indeed, the CFO had been preparing for the IPO for at least a year).

Facebook bear Sam Hamadeh

This is interpretation taken by Sam Hamadeh, chief executive of PrivCo, a company that issues research about private companies. He says Facebook should have been clearer about the shift to mobile users, and tried to quantify the potential revenue in some way. Instead, he says, Facebook executives — led by Sheryl Sandberg and David Ebersman — initially appeared during the roadshow to blame the first quarter drop mostly on seasonal trends, and he bases this on sources he’s talked with who were present during the roadshow. He takes the skeptical view, which is that Facebook executives buckled under the pressure, and decided to try to sweep the seriousness of the mobile ad revenue situation under the rug, at least when it came to the S-1. It’s true that Hamadeh has been consistently bearish on Facebook, almost predictably so, and so it’s important to keep in mind he presents just one view.

Whether or not this is true — that Facebook decided to say the bare minimum because it feared the consequences of doing otherwise — it’s the events that followed that made Facebook’s fumble on May 9 look so devastating.

The subsequent analyst downgrades — and the realization that mobile problems were bigger than expected — suddenly shed a new light on a series of previous Facebook actions on the mobile front. And this light doesn’t make Facebook look so good.

Huh, Facebook was really obsessed with mobile

Instagram, for example. Back on April 9, already in the second quarter, Facebook announced a deal to acquire mobile photo-sharing site Instagram for $1 billion. Reports emerged afterward documenting that Zuckerberg had moved to seal the deal in a matter of days — almost unprecedented speed. Could this have been driven by panic reaction to internal metrics? The motivation driving the Instagram purchase is relevant because the site is so important in mobile. Facebook clearly had seen its own mobile usage growing quickly, and in particular had noticed Instagram’s mobile photo-sharing usage becoming a bigger and bigger portion of all stories posted on Facebook. This tied directly into the negative mobile trend in revenues, since photos are so hard to monetize with ads.

And then there’s the Facebook acquisition of AOL mobile patents that came on April 23 for $550 million. Was this another panicked move, driven by a growing mobile problem, the seriousness of which only Facebook was aware of?

That’s just the beginning. There are more questions than answers raised by the timeline released by PrivCo’s Hamadeh Tuesday evening on this site (scroll down).

So why did Facebook become so bullish?

Now forward-wind to Wednesday, May 16, two days before the IPO. Facebook chose to increase the IPO share offering by 25 percent. These 83.8 million extra shares came from insiders, including folks like Peter Thiel and Jim Breyer, who are on Facebook’s board, and who are almost definitely privy to the company’s true financial position. The two more than doubled the number of shares they intended to sell. The private equity arm of Goldman Sachs, one of the lead underwriters, doubled the number of shares it offered for sale. Of course, no intent can be drawn from these actions alone. There may be other reasons they chose to release the extra shares. But it looks really bad given that Facebook executives now knew that most U.S. investors weren’t fully privy to Facebook’s real, downgraded revenue outlook.

“This stinks to high heaven,” says Hamadeh, of the extra share allotment.

Facebook also set the number of shares it planned to offer to normal mom-and-pop investors — known as retail investors — to about 25 percent, much higher than is normal for IPOs. The cap was also raised for individual investors, so that they could now own 5,000 shares, up from 500 shares.

Finally, Facebook CFO Ebersman decided to set the price of the IPO at $38, at the very top of the price range, which itself had already been increased from an earlier range. This, even though Morgan Stanley has since made statements that the $38 price took into account the lower revenue guidance data.

Confused? You should be. The underwriting banks and Facebook have stayed mum on further commentary.

The big fall

The rest of the story is known: Since trading started Friday, Facebook’s shares have fallen hard. They opened at $42, and then fell and have languished in the low $30’s. Facebook shares closed at $33 yesterday, and they’re down again today, at around $31.50. Facebook had misjudged demand, and it now has a lot of angry investors. Facebook faces multiple investigations and lawsuits. Investors filed suit Wednesday in Manhattan federal court and in San Mateo county superior court in California, alleging that the company and underwriters failed to properly disclose changes to analysts forecasts made at the underwriting banks. Facebook faces claims that could be at least $1 billion or more.

To add insult to injury, as less-privileged investors complained about their investments going south, it emerged Wednesday that the main underwriting banks made $100 million in trades from the IPO, over and above the $176 million fee they charged for the process.

Facebook declined to comment for this story.

Yes, the legal process around IPOs is incredibly frustrating, and urgently needs to be looked at closely for ways to be reformed. But it’s also clear Facebook should have been more forthcoming about its real financial fundamentals. If it had, it could have avoided this mess.

[Chart image credit: Yahoo; Mood image: Kevin Dooley, Flickr]

Launched in 2011, Zebit’s mission is “to help people buy the things they want, when they want them, on terms that best suit their needs.” The company helps businesses work with customers with low access to credit and enables them to make purchases using a single, customizable platform by using Adaptive Data Fusion.

“This is a science that has been used traditionally in military and wireless sensor applications – taking big, complex streams of data from multiple sources and transforming them into actionable inferences that are superior to using the data streams individually,” Michael Thiemann, CEO, said in a press release. “We’ve applied this to Zebit, the first platform that performs underwriting on a per-transaction basis – because each customer transaction is inherently different, involving a unique purchase, unique variables and a distinct point in time — the holy grail of risk management.”

Global Analytics Holdings, Inc., a parent company, will use the funding to help Zebit grow its platform. To date, the San Diego company claims to have completed more than a million transactions.

Photo via 401K

Could Facebook improve the experience of its web and mobile applications? Most certainly, and now they’ll have the usability, user experience, and interaction design expertise of Bolt Peters to do just that.

The social network picked up some of the six-person team behind the ten year-old research and design firm in an acqui-hire deal, Bolt Peters announced and Facebook confirmed.

“For more than ten years, Bolt Peters has worked with our clients (plus a robot and clay dinosaurs) to improve the design of their sites, apps, devices, video games, and cars,” head honcho Nate Bolt said in a blog post. “But the time has come for our next adventure — at Facebook.”

Bolt Peters was founded in 2002 and has completed 238 projects, a book, and a real-time research recruiting application called Ethnio, according to its website. The firm’s client list spans automotive, finance, gaming, healthcare, music, and — ding, ding, ding, ding — mobile categories, and includes everyone from Twitter and Zynga to name brands such as Levis, Sony, and Volkswagon.

The Bolt Peters team will be joining Facebook’s design team, headed by director of design Kate Aronowitz. The company has spun out Ethnio into a separately held entity, but will be shutting down all other operations on June 22.

“We’re absolutely thrilled the Bolt Peters team is joining Facebook,” a Facebook spokesperson told VentureBeat.

Facebook’s talent get underscores the newly public company’s commitment to making its products better — especially its mobile apps, which could use a little work and a whole lot of creative ad placements. One of Bolt Peters expressed strengths is in mobile research; the company takes an ethnographic research approach to “uncover how people use mobile interfaces, the ways they adapt to the logistic and technological limitations of those interactions, and how the interfaces perform.”

The social network also recently acquired mobile, social-gifting startup Karma. Expect more strategic buys in the weeks and months ahead. With IPO money lining Facebook’s now deep pockets, we certainly expect the company to pick up the pace on its already aggressive acquisition and talent plays.

Liquid Metal Battery Corporation, which says it found the solution to storing energy from renewable sources, is getting a new charge in funding.

Led by cleantech investor Khosla Ventures, the battery tech company has raised $15 million in a second round of funding. LMBC has also attracted the attention of energy company Total and  investor Bill Gates, who returned for this second funding round.

The company is the brainchild of Dr. Donald Sadoway, an MIT professor who developed the battery technology to be low cost and easy to deploy.

“The way things stand today, electricity demand must be in constant balance with electricity supply,” Sadoway said in March during a Technology Entertainment and Design talk titled “The Missing Link to Renewable Energy.”

One big problem with renewable energy sources today is that there’s no good way to store power for when you actually need it (current battery technology hasn’t scaled well for this). LMBC’s liquid battery solves that problem, splitting energy demand from storage and allowing clean energy sources to have a hand in energy generation.

“With a giant battery, we’d be able to address the problem of intermittence that prevents wind and solar from contributing to the grid in the same way that coal and gas and nuclear do today,” Sadoway said.

One of the biggest advantages to the battery is that it can be added to existing systems, eliminating the need for further build outs. This, coupled with its flexibility, means that the system is cheap — a factor that has kept much of energy investment focused on established technologies.

“We need to think about the problem differently. We need to think big. We need to think cheap,” Sadoway said in the TED talk.

Senator Chuck Schumer (D-N.Y.) hijacked the senate floor today to address critics of his recently proposed Ex-PATRIOT act legislation, which would impose new taxes on people who give up their U.S. citizenship to avoid taxes and bar them from re-entering the country.

Schumer, along with Sen. Bob Casey (D-Pa.), introduced the Ex-PATRIOT act (Expatriation Prevention by Abolishing Tax-Related Incentives for Offshore Tenancy Act) last week after the public had caught wind of Facebook co-founder Eduardo Saverin’s decision to renounce his citizenship. The move ended up saving Saverin an estimated $100 million.

“When you renounce your citizenship to swell your bank account, you’re un-American,” Schumer said. “What Saverin is doing is free-riding on America, and dodging taxes from an IPO.”

The Senator also called out the Wall Street Journal for labeling him a vocal spokesperson in the “age of envy”, and scalded republican opponents of his legislation, saying “they make Eduardo Saverin into their patron saint.”

Honestly, I don’t think Saverin would argue with being called “un-American,” considering that he didn’t feel compelled to continue being a citizen. And while I agree that having the ultra rich dodge taxes is a bad thing for the country, Schumer’s plan for handling this situation is utterly awful.

Under the proposed bill, expatriates with either a net worth of $2 million or an average income tax liability of at least $148,000 (over the last five years) will be presumed to have renounced their citizenship for tax avoidance purposes. Any person who fits this description does have a chance to appeal to the IRS to prove they aren’t just dodging taxes. Anyone who the IRS determines was indeed dodging taxes by renouncing citizenship will be slapped with a new tax on all future investment gains — no matter where he or she resides. The senators said this stipulation would eliminate any tax benefit/financial incentive associated with renouncing one’s citizenship. Also, the rate of the new capital gains tax will be 30 percent, which is consistent with the current rate applied on non-resident aliens for dividends and interest earnings.

So to summarize, Schumer wants to tax people who give up their citizenship as if they were still citizens. And if they refuse to pay these taxes, they can’t come back into the country.

I highly doubt this is going to prevent people from giving up their citizenship. I do, however, think the Ex-PATRIOT act (if passed into law) would end up driving investment into Europe and Asia in the long run.

Please feel free to sound off with your own thoughts in the comment section.

Photo via Sen. Schumer/ Flickr

The dream of bringing a gigabit-per-second high-speed broadband internet connection is becoming a reality for at least six university communities in the U.S. — a country that’s known for the speed of producing its hamburgers and french fries, not its internet.

Gigabit Squared, a broadband internet startup, announced Wednesday that it has raised $200 million in funding to build out high-speed internet for these communities. The startup will be partnering with the Gig.U project to determine the universities that will get the new infrastructure, which will be deployed between November and March 2013.

“It’s time for a departure from the strategies of the past, strategies that merely looked at fulfilling current demand,” Gigabit Squared President Mark Ansboury at a recent press conference, reports ComputerWorld.

The new communities will also participate in a brand new program headed up by Gig.U and Gigabit Squared called the Gigabit Neighborhood Gateway Program. The program will essentially use the new super high-speed internet to drive innovation in education, heath care, and other sectors of the community, according to Ansboury.

It’ll be interesting to see how this particular initiative fares in the long run. If it’s extremely successful, it could be used to help rally the Federal Communications Commission (FCC) to relax its restrictions on broadband infrastructure.

Image via iQoncept / Shutterstock

BodyMedia grabs $12M to whip you into shape

BodyMedia announced a $12 million funding round led by Comcast Ventures. The company produces the FIT armband, which uses medical grade sensors to track movement and body temperature to help you lose weight. Read more on VentureBeat: BodyMedia’s weight-loss gadget analyzes your body temperature to keep you healthy.

Kony offers build-it-once, run-it-everywhere mobile app development

Enterprise-minded company Kony builds mobile apps for business and consumers and encourages the bring-your-own-device movement with an enterprise app store. Wednesday it announced a $15 million third round of funding. Insight Venture Partners led the $15 million round, which will help manage growth and hire new employees. Read more on VentureBeat: Kony grabs funding to build mobile business apps.

Stealth startup Airtime scores funding, then buys Erly

AirTime has received $25 million in second round funding led by Kleiner Perkins. The mystery video startup has also acquired social experience company Erly. Beta testers describe the company as Chatroulette with a layer of interest mapping. Other investors include Andreessen Horowitz, Accel Partners, Google Ventures, and Social + Capital. Read more on VentureBeat: Airtime nabs $25M weeks before launch, snaps up social experience startup Erly.

SunRun saves you money with solar panels, raises $60M

Solar company SunRun has raised $60 million in funding, the company announced Wednesday. SunRun installs panels on your roof, and you pay for the electricity you use. You don’t have to spend money on purchasing and installing solar panels, but you don’t own the system either. Madrone Capital Partners led the round, joined by existing investors Accel Partners, Sequoia Capital, and Foundation Capital. Read more on SunRun’s blog: SunRun Closes $60M Equity Investment.

Couple running image via Shutterstock

Add the House and the Senate to the growing list of parties with serious questions and concerns about how Facebook, its underwriters, and the NASDAQ handled the most anticipated initial public offering in recent history.

Both the Senate Banking Committee and the House Committee on Financial Services are now officially looking into issues surrounding the Facebook IPO. The committees will be conducting briefings with all involved parties, spokespeople confirmed in statements to Reuters.

The committees have yet to schedule hearings or publicly state what specific issues are under review, but we suspect they’re especially curious about whether Facebook and its underwriters violated securities law in the run-up to its offering, as has been alleged in a shareholder class action lawsuit.

“Effective capital markets require transparency and accountability, not one set of rules for insiders and another for the rest of us,” Senate Banking Committee member Sherrod Brown said in a statement. “There’s a lot that we don’t know about this IPO, but a lot that we do. We know that the SEC must fully investigate and take appropriate action if it discovers any violations.”

The Financial Industry Regulatory Authority and the Securities and Exchange Commission said Tuesday that they will review allegations of impropriety around Facebook’s IPO.

The congressional inquiries follow a tumultuous week for Facebook, which saw its share price plummet on Monday and Tuesday and only rebound slightly on Wednesday to close at $32. To make matters worse, as Wall Street shows signs of uncertainty about the company’s future, Facebook shareholders are more than a little disgruntled about being left out of the revised earnings estimate loop. They’ve filed a class action lawsuit against the social network and its underwriters for allegedly disclosing material information to select investors.

Facebook declined to comment on this story.

Photo credit: f-l-e-x/Flickr

Kony’s main platform, KonyOne, allows businesses to write one app that can run on multiple mobile devices. The service also caters to business-to-business and consumer-focused app building needs. The company recently launched pre-built industry-specific apps for industries such as automotive, media, and retail. Kony’s also working on a new platform for release next month, focusing on business-to-employee app building.

The company just finished its fiscal year and boasts a 200 percent growth in business. It also says it has added 30 customers in the last year, including Scottrade and Toyota.

Kony faces competition from other mobile marketing and application development companies, such as Netbiscuits, which counts Siemens and eBay as customers.

Insight Venture Partners led the $15 million round, which will help manage growth and hire new employees.

“FY2012 was another year of record growth for Kony. We made major extensions to our technology platform and application portfolio and won the business of dozens of new enterprise customers.  We also made strategic investments in operational and management infrastructure,” said Raj Koneru Kony chief executive in a statement.  ”This funding will help us continue managing the incredible growth we’re seeing in our business.”

Kony has raised close to $39 million since its launch in 2007. The company is based in Orlando, Florida.

iPhone app image via Flickr user TheMacGirl

Shankar Narayanan, chief executive of Spime, indicated on his LinkedIn page that Spime is now a Trimble company. A Wikipedia entry for him says that as of May 2012, Spime was “acquired by a multi billion dollar United States public Company.”

Spime specializes in GPS software platforms for use by smartphone app developers. Its MapMan LBS Platform integrates social and location services into GPS-enabled apps. Spime also offers a navigation service and map service under the names Northstar Nav and Northstar Map. Spime’s customers include mobile operators, manufacturers, developers, and platform and semiconductor providers, who use its platforms to build location-based apps. Nokia’s Navteq has partnered with Spime for its GPS technology.

On the other hand, Trimble builds GPS hardware for construction, surveying, government, and military uses. Its product offerings range from 3-D laser scanners and military survey systems to embeddable GPS antennas and GPS chipsets. Trimble’s mobile segment makes up a small part of the company, and offers devices for field service management, transportation, and logistics workers, who need to take portable GPS devices into the field.

Trimble may have snatched up Spime to flesh out its mobile business a bit more and take advantage of Spime’s GPS software.

Trimble’s founder, Charles Trimble, started the company after leaving HP in 1978. Since its founding, the company has been responsible for developing GPS technology for commercial and consumer use. In 1999, it became the first GPS to go public. Trimble recorded $1.6 billion in revenue for 2011. The company’s headquarters are in Sunnyvale, Calif.

Spime was founded in 2006 and has raised $3.86 million in funding from undisclosed investors. It recently closed a $3.2 million round in April 2012. The company is based in Newark, Calif. near Silicon Valley.

VentureBeat has reached out to Trimble and Spime for comment and will update when we get a response.

GPS on a map image via Shutterstock

The bungled handling of Facebook’s initial public offering by NASDAQ may have left the door open for a rival suitor to win over the newest technology company on the market.

The New York Stock Exchange (NYSE) is using Facebook’s NASDAQ opening day debacle — trading was delayed by 30 minutes as the NASDAQ’s electronic system faltered under demand — as a potential in with the Menlo Park-based company, according to various reports.

The NYSE has made “soft overtures” behind the scenes in an attempt to get Facebook to change its listing, Fox Business News reporter Charles Gasparino reported Wednesday.

“NYSE makes ‘soft’ pitch to Facebook to switch listing venue,” Gasparino first tweeted. “NYSE confirms FBN report that NYSE has made soft pitch to Fb regarding listing,” he tweeted later.

Several other media outlets, including CNBC, Reuters, and Bloomberg are running similar stories and are suggesting that Facebook may be looking to transfer its listing, though CNBC backpedaled a bit on its original story. “BREAKING NEWS: @BobPisani reports the NYSE has had ‘no discussions with Facebook’ on potential listing switch,” the CNBC Twitter account tweeted.

A jump from one exchange to the other is not wholly unusual on Wall Street, though most companies tend to stay put. The NYSE recently won over TD Ameritrade, which had been listed on the NASDAQ since its 1997 IPO. The dueling exchanges have been known to compete aggressively for significant listings, especially in the technology sector.

In a Fox Business News broadcast Wednesday, Gasparino said that the NYSE knows that its chances of convincing Facebook to move its listing are slim. Gasparino added that the NYSE is more aggressively going after social gaming company Zynga.

After a market thrashing on Monday and Tuesday, Facebook rebounded a smidgen Wednesday to close at $32 a share. The social network opened on the NASDAQ at $42 a share. The company and its underwriters are being sued by shareholders for allegedly passing along severe revised earnings estimates to select investors.

Facebook declined to comment. When reached for comment, a NASDAQ spokesperson did not provide a statement for this story.

Photo credit: Larimdame/Flickr

But in the aftermath of Facebook’s much-hyped and problematic IPO, can the momentum continue?

Tech-focused Silicon Valley law firm Fenwick & West has released a report called “Trends in Terms of Venture Financings in Silicon Valley” for the first quarter of 2012. The report examined 114 companies headquartered in Silicon Valley that reported raising money in the quarter one 2012. It compiles funding and investment information from  Dow Jones VentureSource, Thomson Reuters, the National Venture Capital Association, and Fenwick & West’s Venture Capital Barometer.

By the end of the first quarter 2012, 50 Silicon Valley companies had registered to go public, more than in any quarter since Q4 2007. How many IPOs happened and how much money they raised depends on which source you rely on:

• VentureSource reported 20 venture-backed IPOs collectively raised $1.4 billion in Q1 2012, compared to 10 IPOs raising $2.4 billion in the Q4 2011.
• Thomson Reuters and the NVCA reported 19 IPOs raising $1.5 billion in Q1 2012, compared to 12 IPOs raising $2.6 billion in Q4 2011.

During the first quarter, up rounds (a round where a company receives money at a higher valuation than it got during its last round) exceeded down rounds (a round where the company’s valuation decreases) by 65 percent to 22 percent. Thirteen percent of rounds were flat, with no valuation changes. This is slightly down from the fourth quarter of 2011, when up rounds made up 70 percent of funding.

Click to enlarge

Q1 2012 is the eleventh consecutive quarter where up rounds exceeded down rounds, according to the report. That means investors are gaining more confidence in the technology industry, prompting them to invest at higher valuations.

“The first quarter of 2012 was a mixed quarter for the venture capital industry, with venture valuations healthy but venture investment down, M&A valuations up but the number of deals down, venture fundraising mixed but corporate venture investing up, and IPOs and Nasdaq up, but Nasdaq down in the second quarter to date and global financial uncertainty continuing to be a problem”, said Fenwick and West partner, and co-author of the report, Michael Patrick.

However, while the number of IPOs was up, the overall amounts of venture capital investments were down in the first quarter:

• Dow Jones VentureSource reported $6.2 billion in 717 deals in Q1, down 16 percent from 2011′s first quarter.
• Thomson Reuters and the NVCA reported $5.8 billion of funding in 758 deals in Q1, with a 12 percent decline over last year.

The biggest issues moving forward is venture capital fundraising, according to the report. As VC firms struggle to raise money for their funds, venture capital investments decline. There were conflicting reports on VC fundraising:  Thomson and the NVCA reported a 13 percent decrease from Q4 2011 and Dow Jones reported a 35 percent increase over the same time frame.

Strong first-quarter IPOs may help the market in the near future. Mobile, cloud, security, big data and social media have attracted attention and funding, which according to the report won’t change anytime soon. But the longer-term prospects for IPOs may be hurt if venture capital firms have trouble raising money for their funds, or invest less in the startups that will eventually become future IPOs.

Empty pockets image via Shutterstock

Facebook shareholders have filed a class action lawsuit against the social network, as well as underwriting banks including Morgan Stanley, over its first-day trading slide, the law firm Robbins Geller Rudman & Dowd announced this morning.

The suit alleges that Facebook hid “a severe and pronounced  reduction” in revenue forecasts from its investors, due to a more widespread use of Facebook via mobile devices. Yesterday, Reuters reported that some investors were shocked when lead underwriter Morgan Stanley reduced its revenue forecasts of the company shortly before Facebook’s IPO, supposedly following an amendment to its S-1 filing on May 9 over increased mobile risk.

Even more scandalous, Business Insider’s Henry Blodget reported last night that a Facebook executive actually told the underwriting banks to cut their estimates, but didn’t share that information with smaller investors. If true, Facebook could be on the hook for violating securities laws.

The situation is admittedly confusing, because Facebook’s amended S-1 was quite pessimistic about revenues from mobile devices, as we reported at the time. Since the S-1 is a public document, it’s hard to argue that Facebook was hiding anything, unless it was privately giving different information to the underwriters.

That’s exactly what the complaint alleges: That Facebook was giving even more pessimistic revenue guidance to its underwriters.

“The true facts at the time of the IPO were that Facebook was then experiencing a severe and pronounced reduction in revenue growth due to an increase of users of its Facebook app or website through mobile devices … such that the Company told the Underwriter Defendants to materially lower their revenue forecasts for 2012,” the complaint reads.

The underwriters then subsequently lowered their estimates for 2012, “which revisions were material information which was not shared with all Facebook investors, but rather, was selectively disclosed by defendants to certain preferred investors.” That’s exactly how an IPO process is not supposed to work.

Meanwhile, those same underwriters earned a bonus $100 million last week by selling their extra allotment of shares in order to stabilize the price on the IPO day, an option known as the “greenshoe.” How does that work? Essentially by shorting the stock, as Reuters writer Felix Salmon explains in a lucid post on the Facebook greenshoe.

Separately, the NASDAQ has admitted that it had trouble processing all the orders for Facebook shares, delaying the opening of trading by about half an hour. That glitch has bankers hopping mad, and at least one has even sued NASDAQ over the delays.

The suit was filed in in a Manhattan U.S. District Court this morning, and it comes on the heels of a suit filed yesterday in California as well as a subpoena filed in Massachusetts yesterday. We’ve asked Facebook for further comment and will report if we hear back. Find the full complaint below.

Via Reuters; Photo via Facebook

Technology giant Oracle has acquired social media marketing software startup Vitrue, the company announced today.

Financial terms of the deal were not disclosed, however TechCrunch is reporting that Vitrue sold for $300 million.

Vitrue offers big (as in global) brands a service that helps them manage all the social media activity on Twitter, Facebook, Google+, and several others. Using these tracking tools, Vitrue’s clients can build campaigns to drive revenue all the way down to the local level. Some of Vitrue’s big-name clients include Kellogg’s, McDonald’s, and Disney. The company recently started providing tools to manage YouTube, Pinterest, and Instagram.

As part of the acquisition deal, Oracle will work with Vitrue to further develop a comprehensive social relationship platform that can both track social media behavior as well as provide analytics to show a return on investment.

Founded in 2006, the Atlanta, Ga.-based company had recently raise a $17 million round of funding from Scale Venture Partners and Advent Venture Partners to open new domestic offices around the country as well as expand into international markets. Vitrue has raise a total of $33 million to date.

Sean Parker’s mystery video startup AirTime is set to debut on June 5th, but that’s not stopping the company from making news today.

AirTime has received $25 million in second round funding led by Kleiner Perkins, and it has acquired the social experience company Erly, TechCrunch reported last night. The company later acknowledged the news on its blog (but didn’t reveal the funding amount). Other investors include Andreessen Horowitz, Accel Partners, Google Ventures, and Social + Capital.

Erly was founded by former Hulu CTO Eric Feng, who could potentially bring much to the heavily hyped AirTime. Beta testers have reported that Airtime is like Chatroulette with a layer of interest mapping, and with his experience building Hulu Feng could help the company to scale and build a robust community.

“Erly brings demonstrated consumer products expertise, video experience, and technical leadership to Airtime, and we couldn’t be more proud to welcome the newest members of our family,” Airtime wrote on its company blog.

Parker joined up with his Napster co-founder Shawn Fanning to create Airtime, which previously raised $8.3 million in funding.

Weight loss gadgets have evolved far beyond simple pedometers. We now have Up bands, Fitbits, and FuelBands that track our fitness levels (and make us look like athletes even when we’re not). One of these devices is BodyMedia‘s FIT, a series of armbands that use medical-grade sensors to track health metrics.

Wednesday, BodyMedia announced a $12 million funding round led by Comcast Ventures. The company plans to develop devices geared towards diabetes management, sleep disorder treatment, and elderly care assistance.

The FDA-approved medical/fitness device comes in three models and tracks movement, skin temperature, sweat, and heat dissipation to give an overall picture of your health and daily fitness levels. It won’t track individual workouts, but it will help you monitor your overall daily activity, log meals, and keep track of your sleep patterns. FIT is mainly for people who want to set specific weight-loss goals, not just get off their butt more often.

FIT competes with the other health tech gadgets I mentioned above. Jawbone’s Up band, the Fitbit, and the Nike+ FuelBand all tracks sleeping patterns and daily movement — such as steps taken or stairs climbed — and come with health-tracking software. The multiple health sensors on the FIT have earned it the FDA Class II medical device label and help it stand out from the rest.

Existing investors Draper Fisher Jurvetson, ePlanet, Draper Triangle Ventures, Ascension Health Ventures, and InCube Ventures joined Comcast Ventures in the funding round.

Founded in 1999, BodyMedia has raised a total of $49 million in funding. The company’s headquarters are in Pittsburgh, Penn.

Slow page loads are a drag and can even hurt your website’s SEO. Yottaa offers cloud-based optimization services to speed up websites and keep them secure. Existing investors General Catalyst Partners, Stata Venture Partners, and Cambridge West Ventures participated in the round. The full press release follows:

Yottaa Closes $9 Million in Funding for Mobile, Web and Cloud Optimization

Funding Enables Yottaa to Grow Its Market Leadership in Accelerating Website Speed and Web Application Performance

Boston – May 22, 2012 – Yottaa, Inc., the web optimization company, announced today that it has closed $9 million in Series B funding. This round of funding allows Yottaa to accelerate the delivery of affordable services that optimize, protect and monitor websites and critical web applications for any organization – in particular, for small- to medium-sized businesses (SMBs). Implementing Yottaa speeds web performance by up to 600 percent and improves conversions by up to 30 percent according to customer data. All existing investors, including General Catalyst Partners, Stata Venture Partners and Cambridge West Ventures returned for this round and were joined by additional undisclosed investors.

“At Yottaa, we optimize the web. We make speed, scale and security easy and affordable to our customers for their websites and critical web applications,” said Yottaa CEO Coach Wei. “There is a multi-billion dollar market opportunity that lies ahead for us. In the few months since we launched the Yottaa Site Speed Optimizer service, we have seen tremendous growth and are quickly proving to be the must-have service for mobile and web acceleration. As businesses of all sizes depend more on their web presence, Yottaa enables them to increase revenues and improve overall customer satisfaction.”

The Series B funding round comes on the heels of some key milestones that Yottaa achieved in the months since its Site Speed Optimizer service was initially launched in October 2011:

·In six months, Yottaa Site Speed Optimizer has grown to serve over 100 million unique visitors per month;
·The Yottaa Mobile Acceleration solution powers mobile websites and the HTML5 gaming experience for more than 30 million users;
·Five percent of the Internet population has visited sites accelerated by the Yottaa network in the last month;
·Yottaa recently announced its Content Delivery Network (CDN) service and Mobile Acceleration solution, continuing its rapid pace of innovation;
·Yottaa has been granted two patents in areas of web performance optimization (WPO), Front-end Optimization (FEO), web security and cloud routing. Several additional patents are pending.

Yottaa Optimizer delivers a significant advantage over other approaches to improving web performance. Yottaa not only improves website speed and web application performance, but it also dramatically accelerates both the delivery and execution of web pages. Yottaa’s innovative approach to web performance optimization ensures a consistently fast user experience regardless of where a site visitor may be, which technologies the primary web server is running, or what code makes up the web pages. Combined with integrated content delivery networks, Yottaa offers an easy-to-use and easy-to-adopt service, and is ideal for more dynamic sites that pull content from every corner of the Internet.

About Yottaa, Inc.
Yottaa optimizes, protects and monitors websites and web applications, delivering speed, scale, security and actionable insight. Yottaa customers benefit from websites with better user experience, improved SEO and higher conversions. Based in Boston, MA, Yottaa’s investors include General Catalyst Partners. For more information visit www.yottaa.com and follow us on Twitter at http://twitter.com/yottaa.

German business software titan SAP has agreed to acquire Sunnyvale, Calif.-based e-commerce business Ariba for an astounding $4.3 billion, the company announced today.

SAP will pay $45 per share for Ariba, a nearly 20 percent premium over its May 21 closing price. The deal is expected to close in the third quarter of 2012.

Many businesses (including SAP competitors) use Ariba’s cloud-based marketplace for goods and services to run everyday operations, which will make even more business depend on SAP solutions. The deal will also give SAP more leverage in the cloud space, following its huge $3.4 billion acquisition of human capital management player SuccessFactors this past December.

“The cloud has profoundly changed the way people interact,” said SAP Co-CEOs Bill McDermott and Jim Hagemann Snabe, in a statement. “The impact will be even greater as enterprises connect and collaborate in new ways with their global networks of customers and partners. Cloud-based collaboration is redefining business network innovation, and we are catching this wave in the early stage of its evolution. The addition of Ariba will create the business network of the future, deliver immediate value to our customers and provide another solid engine for driving SAP’s growth in the cloud.”

Photo credit: Andy Dean Photography/Shutterstock

Google has finally closed its much-talked-about $12.5 billion acquisition of Motorola Mobility, Google CEO Larry Page announced today on the company’s blog.

“Motorola is a great American tech company that has driven the mobile revolution, with a track record of over 80 years of innovation, including the creation of the first cell phone,” Page wrote. “We all remember Motorola’s StarTAC, which at the time seemed tiny and showed the real potential of these devices. And as a company who made a big, early bet on Android, Motorola has become an incredibly valuable partner to Google.”

As previously rumored, Google Senior VP Dennis Woodside (pictured) has been selected to become the next CEO of Motorola Mobility, replacing long-time CEO Sanjay Jha. Woodside started at Google in October 2003 as Director of Business Operations. He has also held the role Managing Director of Emerging Markets, Managing Director and VP of Google UK, and President of Google Americas.

“I’ve known Dennis for nearly a decade, and he’s been phenomenal at building teams and delivering on some of Google’s biggest bets,” Page wrote. “One of his first jobs at Google was to put on his backpack and build our businesses across the Middle East, Africa, Eastern Europe and Russia. More recently he helped increase our revenue in the U.S. from $10.8 billion to $17.5 billion in under three years as President of the Americas region. Dennis has always been a committed partner to our customers and I know he will be an outstanding leader of Motorola.”

We knew that the Motorola deal would close soon because Chinese antitrust authorities approved the deal Saturday. In February, both European Commission and U.S. Department of Justice cleared the deal, even though there were concerns that Motorola could be given unfair advantage when it came to the popular Android mobile OS, which developed by Google and embedded in Motorola phones and tablets.

Page’s announcement of the deal closing does not say anything about possible layoffs or how Google might reform Motorola. A Google spokesperson deflected questions we had about Motorola’s strategy going forward, saying via e-mail:

“Mobile is a huge opportunity for Google and Motorola Mobility. The world is going through a once-in-a-generation shift to mobile computing – and there are 800M smartphones in the world now, but there are 6B mobile devices in total – all of which will get smart.”

“Motorola Mobility will have a simpler, more focused strategy and focus on fewer, bigger launches.”

Machinima has raised a fat $35 round of funding led by search engine giant Google, the company confirmed yesterday.

News of Machinima’s new funding first surfaced earlier this month. Google’s involvement marks the first time the company has spent money on the production of content. Previously, it had focused its money on attracting original programming for its YouTube or  promoting those programs across its network.

Machinima is one of the most popular YouTube partners. The production company focuses on making videos about video games and players, and it has done extremely well on YouTube. Its YouTube channel brings in over a billion video views per month (1.5 billion in March 2012). And while this new funding may seem like a great deal for Machinima, it make end up angering other YouTube partners that already feel like Machinima’s channels were getting preferential treatment on YouTube from Google.

The new capital will be used to expand its content, global sales operations, international expansion, grow its distribution, and more. In addition to Google, the round included participation from existing investors Redpoint Ventures and MK Capital. Founded in 2008, the Los Angeles, Calif.-based startup has raised a total of $49.6 million in funding to date.

Photo via Greg Aronowitz

Allison purchased his first home at the young age of 17 and found out quickly how much paperwork can complicate the process. I had a similar experience helping my mom buy a house a few years ago — paperwork was emailed, printed, signed, scanned, and emailed or faxed between at least three people. Trying to follow the paper trail would make anyone dizzy.

DotLoop tries to cut down on all physical paperwork by creating one space, called a loop, where people can collaborate on documents. Especially in the negotiation process, this cuts down on the time spent sending documents back and forth.

“A loop is a virtual workspace in real-time, [it's like] Google Docs but with more permissions and versioning,” said Allison in an interview with VentureBeat.

Real estate agents, loan officers, and home buyers can all access a document together to hammer out the details of the deal. Once everyone approves a contract or loan document, it can be printed, signed, and processed.

Document sharing is a popular feature seen in Google Docs and Zoho Writer, services used a lot in small businesses. DotLoop only serves the real estate industry and offers a secure place for sensitive document sharing. It plans to expand into other industries in the future.

“Our vision is bigger than real estate, [we want to] eliminate paperwork in all fields,” Allison noted.

With the funding, led by Trinity Ventures, DotLoop is launching a free version of its service for individual real estate agents. It’s been serving entire real estate firms until now. It is also moving west from its headquarters in Cincinnati, Ohio to open an office in San Francisco.

Raining paperwork image via Shutterstock

Note: This is just an end-of-day roundup of the funding news. For more up-to-date deal flow, you can visit our Deals channel, where we post the latest funding news as quickly as we get it, or by adding the Deals Channel feed link to your favorite reader. And as always, send funding news our way at tips@venturebeat.com.

Xfire connects you with other hardcore gamers

Xfire, a social network for gamers, has raised $3 million in funding. The company connects gamers together to share videos, screenshots, and gaming prowess. IDM Venture Capital led the round, which will be used to expand the company into Asian gaming markets. Read more on VentureBeat: Gaming social network Xfire gets funding

Video on-demand gets a big round funding

Avail-TVN, a Video serving company, just closed a $100 million funding round. Avail-TVN specializes in providing on-demand video for cable networks. Carlyle Group led the $100 million round, which will be used to acquire UK-based On Demand Group. Read more on VentureBeat: On-demand video provider Avail-TVN grabs $100M investment

AnchorFree will keep you safe on public networks, won’t peek at your browsing habits

AnchorFree has raised a whopping $52 million third round led by Goldman Sachs. AnchorFree’s Hotspot Shield works by routing your web traffic through its own secure data centers. That makes your web browsing private, encrypted, and it also strips out and blocks malware sites. Read more on VentureBeat: Hotspot Shield maker AnchorFree lands $52M to protect you from the horrors of web browsing

Urbanara gets funding for its luxury goods

Urbanara raised €3.5 million in funding today. The German-based company is an online retailer of home goods and luxury textiles, sold directly from the people who make them. TA Venture led the round, with participation from Blumberg Capital and Brain-to-Ventures.

Women at coffee shop with laptop image via Shutterstock

Patents may not always rise to the top of tech news, but major companies are gobbling them up every chance they get.

That’s exactly what Google just did with a $10 million IP purchase from the now out-of-business TeraHop, a Georgia-based company that offered wireless asset management solutions, such as managing and tracking locations of inventory, vehicles, personnel, and equipment without using up wireless data plans.

The IP included a massive patent portfolio, according to Geekwire. The patents appear to focus on radio frequencies and other wireless solutions, which can be used for a variety of monitoring or data-collection needs.

For example, one patent involves visually capturing the contents of shipping containers. Another patent is for an antenna used within a container. A complete list of the patents can be found via public records.

The controversy surrounding the patents stems from a Seattle-based investor named Mark Spangler, who allegedly funneled some $46 million into two companies he held interests in, including TeraHop. Spangler was indicted last week on 23 cases of fraud and money laundering.

Google is said to have secured 115 patents in total, and it looks like that might have been the company’s entire portfolio as the still-active website reads, “To date, 30+ patents have been granted to our team, and 85+ additional patent applications have been submitted.”

Image courtesy of Joseph, Shutterstock

Avail-TVN specializes in providing on-demand video for cable networks. It works with major TV networks to process and deliver content.

Carlyle Group led the $100 million round, which will be used to acquire UK-based On Demand Group. The full press release is below.

AVAIL-TVN RAISES $100 MILLION OF FINANCING TO FUND GLOBAL EXPANSION AND DOMESTIC SERVICE DEVELOPMENT;
ACQUIRES ON DEMAND GROUP

The Carlyle Group Invests in Leading Global Digital Media Services Company

Reston, Va., (May 21, 2012) – Avail-TVN, the largest global provider of advanced digital video services, today announced that global alternative asset manager The Carlyle Group (NASDAQ: CG) will lead $100 million of new investment funding enabling Avail-TVN to acquire UK-based On Demand Group, a provider of video on demand services to some of the biggest television brands outside of the United States. Carlyle joins existing Avail-TVN investors including Columbia Capital, Valhalla Partners, Novak Biddle and Pioneer Ventures. Equity for the investment comes from two Carlyle funds: Carlyle U.S. Growth Fund III and Carlyle Europe Technology Partners II. Debt funding is provided by Silicon Valley Bank, RBS Citizens, N.A. and Bank of America, N.A. With this investment, Carlyle is now Avail-TVN’s largest investor.

Avail-TVN will use this investment to fund international expansion and the development of new products and services for the company’s global client base of content providers and multichannel video service providers. The first investment from this new financing, the acquisition of On Demand Group from SeaChange International (NASDAQ: SEAC), expands Avail-TVN’s reach to more than 25 countries, serving more than 70 million households globally.  Major markets include North America, the Caribbean, Latin America, Europe, Middle East and Asia.

“Our strategy has been to invest in leading players across the digital media ecosystem and incorporate them into one company to build Avail-TVN into the largest provider of advanced digital video services worldwide,” said Ramu Potarazu, Avail-TVN’s chief executive officer.  “The Carlyle Group’s investment supports that vision, and provides the capital and global network to build upon this foundation both domestically and internationally.  With the integration of On Demand Group, we broaden our capabilities, extend our distribution and are able to further develop monetization opportunities for our customers in the rapidly-changing digital media space.”

“The market opportunity for Avail-TVN continues to grow,” said Phil Herget, Avail-TVN’s chairman.  “With new partners on board and an expanded global reach, the company is poised to capitalize on trends and generate revenue across the video value chain.”

On Demand Group which provides digital media services for some of the biggest television brands outside of the US, will continue to service its customer base of leading broadband, television and mobile service providers.  The company provides transactional video offerings to operators in 20 countries. Merging the two companies brings together a diverse customer base, strong content relationships with leading entertainment and media companies around the globe, highly developed and proven workflow and delivery systems, a wealth of entrepreneurial management talent and the finance and scale to drive aggressive revenue growth. Tony Kelly, CEO at On Demand Group, will now report to Avail-TVN CEO, Ramu Potarazu, and serve as a member of the executive management team.

“We see tremendous revenue value creation opportunities in the global digital media space as technology continues to revolutionize the way consumers access premium video entertainment,” said William Darman, principal, The Carlyle Group.  “Avail-TVN is an innovator helping organizations across the value chain to continue to monetize video content in new ways and this joint investment by The Carlyle Group’s U.S. and European growth funds is testament to the growth prospects we see in this sector over the coming years.”

“With the addition of the On Demand Group, Avail-TVN becomes the largest provider of digital video in the world, reaching more households in more countries than any other company in the space,” said Will Smales, associate director, The Carlyle Group.  “As the digital video market continues to evolve and mature, the company is poised to capitalize on opportunities around the globe.”

Stephens Inc. was an advisor to Avail-TVN on the transaction.

Simply browsing the web can open you up to a ton of malware or privacy risks. And let’s not even get started on the dangers of public Wi-Fi.

With 60 million downloads and more than 100 million monthly user sessions, AnchorFree’s Hotspot Shield has emerged as one of the easiest ways to protect yourself from dangers online. Today the company is announcing that it has raised a whopping $52 million third round led by Goldman Sachs.

“We’ve created the world’s most popular free VPN [virtual private network],” AnchorFree CEO David Gorodyansky said in an interview with VentureBeat. “We’ve created a VPN for the masses.”

Hotspot Shield works by routing your web traffic through its own secure datacenters. That makes your web browsing private (even AnchorFree can’t track your IP address when using the service), encrypted, and it also strips out and blocks malware sites. It’s like a condom for all those dirty public wireless networks we log into (because seriously, you don’t know where those routers’ DNS entries have been.)

With the availability of easy hacking tools like Firesheep, Hotspot Shield seems like an increasingly essential program for the average web surfer. It can also help citizens in places like China gain access to sites that their countries censor.

Gorodyansky tells me the company has three main goals with the funding: to hire many more people (especially engineers), build more data centers throughout the world, and open up its platforms so third parties can run their apps on AnchorFree’s servers. Hotspot Shield currently has more than 10 million monthly active users (who log in around 10 times a month), and Gorodyansky has set a goal of reaching 100 million active users, driving 1 billion secure sessions, as soon as possible.

The company has been profitable since 2009, Gorodyansky says, and its revenues have grown 100 percent just about every year since then. AnchorFree didn’t really need this massive infusion of funding to survive, but now the company can expand quickly to cement itself as the best way to secure your web browsing.

AnchorFree offers an ad-supported free version of Hotspot Shield, as well a premium version with added security for $30. The company currently scans over 2 billion pageviews a month, and it protects against more than 3.5 million malware threats. It look less than six months for the Hotspot Shield iOS app to reach 1 million users, and I’m told an Android app isn’t too far away.

Gorodyansky launched the company at 23, straight out of college in 2005, with his friend Eugene Malobrodsky (CTO). Mountain View, Calif.-based AnchorFree now has 35 employees, and with today’s funding it has raised a total of $63 million. Goldman Sachs will join AnchorFree’s existing investors and advisors, including Esther Dyson, former MCI CEO Bert Roberts, and former Huffington Post president Greg Coleman.

Photo via Shutterstock

Tumblr CEO David Karp announced today at that the Michael Arrington-led CrunchFund has joined as an investor in his popular blogging company.

Karp was speaking with CrunchFund partner MG Siegler on stage at the TechCrunch Disrupt event in New York. CrunchFund has also invested in Yammer, Highlight, Voxer, and a host of other startups.

Karp also said he will not rule out adding new promoted and advertised content on Tumblr, which could help build revenue streams. He said there is a precious balance that needs to be maintained between original and promoted content.

He also said he’s sad that he has moved away from coding day-to-day and transitioned to a true leading-vision-CEO role. While it’s tough to be out of the developing trenches, he said he’s come to appreciate white-boarding an idea and seeing a team develop an idea.

“It’s an amazing feeling,” Karp said.

Concerning Pinterest, which just raised a new round of funding, Karp said he doesn’t view it as competition and that other social media properties also help Tumblr grow. “We’ve tried to promote content across networks,” Karp said. “Facebook and Twitter are now driving more traffic to us than Google.”

David Karp photo: Sean Ludwig/VentureBeat

The company connects gamers together to share videos, screenshots, and gaming prowess. Gamers can post about the games they’re playing and the achievements they’ve received. Members can also watch live streams of game play, so you can decide if a game is worth picking up.

IDM Venture Capital led the round, which will be used to expand the company into Asian gaming markets. The full press release is below.

Xfire Secures $3 Million in New Funding to Expand in Asia

SANTA MONICA, Calif. and SHANGHAI – May 21, 2012 – Xfire, a feature-rich online community
platform that transports gamers’ social networks into thousands of PC games, secured an additional
$3 million in funding to continue its expansion into Asian territories. Led by Singapore-based firm
IDM Venture Capital, the latest influx of financing comes shortly after Xfire’s recently announced
partnership with CHINA YOUTH GOYOR TECHNOLOGY (BEIJING) CO., LTD., which is bringing
the company’s service to more than 400 million gamers in Asia. The investment from IDM Venture
Capital, a venture capital firm investing in early- to mid-stage interactive digital media companies, is
expected to be part of a larger funding round.

“Xfire’s Asian expansion and product pipeline are a key focus for our firm, and indicate the company
is poised for exponential growth,” said Denis Gamobramov, managing partner, IDM Venture
Capital. “Gamers yearn for the type of broad-based social connections, content creation and in-
game experience that is only possible through Xfire.”

Providing the tools for online gamers to take screenshots, record video, chat across multiple games
and share content to social networks in one streamlined application, Xfire is a free utility. The new
funding will aid the company in integrating Chinese character support to the application’s in-game
chat, helping millions of hardcore gamers in Asia improve their gaming experiences with native
support for Xfire and its suite of tools.

“The funding from IDM Venture Capital will allow Xfire to continue to add new features and support
as we adapt our services for the Asian markets,” said Malcom CasSelle, CEO, Xfire. “This interim
round of funding directly benefits our team in the U.S. and China as well as our strategic partnership
with CHINA YOUTH GOYOR TECHNOLOGY (BEIJING) CO., LTD.”

This latest round of funding brings Xfire’s total amount raised to $7 million. The initial $4 million
investment was led by Intel Capital in 2011.

Before Friday, almost every Silicon Valley insider was saying Facebook stock would finish its first day between $50 and $60 per share.

In reality, the share price at the closing bell was a pathetic $38.37.

How were these masters of the universe — some of them the most powerful investors on the West Coast — so woefully inaccurate in their predictions?

Facebook closing price predictions were coming in fast and furious over the past several weeks, but as Facebook’s pre-trading pop fizzled, estimates dwindled lower and lower.

Still, few thought the price would dip as low as it did — almost a full $4 below the $42 opening price and just 37 cents higher than Facebook’s offering price.

Here’s a graph we made to name and shame (just kidding … sorta) those who aimed way, way too high on Facebook’s value in the open market.

If you don’t recognize the last names, you probably don’t have your head deep enough inside the navel of startup culture, in which case, good for you! If you’re still curious, they are, from left to right:

• Lars Hinrichs, Xing founder, predicting $45
• Michael Yavonditte, FF Ventures partner, $49
• Chris Dixon, angel investor, $50
• Josh Felser, Freestyle Capital founder, $50
• Shakil Khan, Spotify investor, $50
• Jason Calacanis, serial entrepreneur and investor, $52
• Chris Sacca, Lowercase Capital founder, $56
• Josh Kopelman, First Round partner, $57
• Ryan Sarver, Twitter dev guru, not an actual investor, $60
• Shervin Pishevar, Menlo Ventures partner, $63

Interestingly, in the week before the IPO, all the Wall Street analyst types we talked to were not nearly as optimistic as their tech-obsessed counterparts on the West Coast. As the opening bell rang, we published their conservative estimates — low $40s, maybe $44 by the end of the year.

Of all the Valley dudes and dudettes we called, however, only one man gave an accurate estimate of Facebook’s closing price. Ladies and gentlemen, the winner of this guess-how-many-jellybeans-are-in-Facebook’s-jar contest is … Menlo Ventures managing director Mark Siegel!

Siegel told us the day before the IPO that he thought the company’s $38 asking price “certainly fully values the company based on today’s financial metrics. I think they know how oversubscribed their book is, but I don’t think it’s going to leave too much money on the table.”

When we floated the $60 figure by him, he practically snurffled his coffee in surprise, saying there was “no way, not a chance” Facebook’s numbers would get that high any time within the next year or so.

Siegel bought his Facebook shares today, as did fellow Menlo Ventures VC Shervin Pishevar (who guessed $63) and Chris Sacca of Lowercase Capital (who guessed $56).

But for those of you who didn’t hit your closing-price target Friday, don’t dismay. Facebook still has a long way to go, and we’re just at the beginning in almost every way.