VentureBeat

(Update: The amount is $2.5 million, according to regulatory filings.)

4INFO, a Silicon Valley company that lets you search for information using text messaging, has become the official service partner for media giant NBC Universal. It has also received an undisclosed financial investment from the media giant’s arm, Peacock Equity.

While questions remain about how popular text messaging, also known as Short Message Service or SMS, will remain as more mobile broadband services are introduced, 4INFO is on a roll.

This deal means all of NBC’s SMS alerts for information published from its websites, including iVillage, NBC Sports, its mobile sites, and of all of its movie and interactive TV sites will go through 4INFO. SMS ads — text ads that appear with SMS messages — will be sold by both companies. Advertisers will be able to place ads across NBC’s TV, web and SMS ad inventory.

San Mateo-based 4INFO already has similar deals with Gannett and six other media properties, but this deal is wider-ranging, and NBC already has SMS inventory that can feature SMS ads.

More than 500 other companies and developers also use 4INFO.

4INFO is also taking a strategic investment from NBC’s Peacock Equity as part of the deal. The amount wasn’t specified, but Peacock said it was in the range of its typical investment of between $3 million to $25 million. The investment was made at on same terms as 4INFO’s previous round of capital, which included Gannett. Previous backers include DFJ and US Venture Partners. Sand Hill Capital also invested in the latest round.

We asked chief executive Zaw Thet about the long-term prospects for SMS. With more advanced mobile data services exploding around the world, its possibly people may upgrade from SMS to use richer or more complex communications systems like mobile IM, or email — to date, hampered by the state of cellular networks. He says that even in European and Asian countries that have more advanced mobile services, the number of SMS messages sent continues to rise. The reason: text messages are still the fastest, easiest way to contact a mobile user and SMS software is installed on every handset.

Down the road, the company hopes to use its connection with users to gather more demographic and behavioral data about its users so it can offer them more targeted advertising.

4Info, the Palo Alto mobile search company we feared might become roadkill by Google and Yahoo, has surprised with solid progress in serving ads in text messages.

It’s on track to serve 50 million ad units for the next quarter, at a whopping $50 dollars per thousand messages (equivalent to $50 CPM in advertising parlance). This is remarkable since the service was only launched last month. Indeed, 4Info has sold out its entire inventory of messages. Do the math: This gives 4Info $2.5 million in revenue next quarter.

That’s good enough for its backers to provide more money for expansion. Gannett, the nation’s largest newspaper chain, led the $10 million fourth round of financing. Sand Hill Capital also participated, as did existing backers USVP and Draper Fisher Jurvetson.

We’re hearing the company was valued at just under $100 million after the round, giving it a higher valuation than its third round last year. It has now raised nearly $28 million. We’re also hearing 4Info may raise more money from a large strategic investor within the next month or two. Chief executive Zaw Thet declined comment.

4Info is different from Google and Yahoo because it relies on texting. It lets you text its code 44636, to inquire about things like sports, news, stock prices and weather, and lets you set up alerts for such information.

Last month, we reported 4Info’s move to create what it claimed is the first SMS ad marketplace. Ads in SMS, we asked? The format doesn’t exactly offer much artistic freedom for advertisers.

From Thet’s comments, advertisers are not only putting up with the plain ad format, they can’t get enough of it. Its partners include USA Today (Gannett), TV Guide, Tribune Company. It has 700 publishers using the platform to send out SMS messages.

Companies like Chevrolet, Citibank, 1800-flowers! exploit information 4Info collects on users — such as their location and interests — for better targeting. 4Info also gathers user information from publishers, such as age and gender. The publishers get this information from users through registration forms, and these are pegged to the phone number identities that 4Info tracks.

Because of 4Info’s bulk SMS usage, it doesn’t have to pay carriers for the service, meaning it is free for big companies like Evite to send out SMS alerts to users, containing ads. 4Info splits the revenue 50-50 with the publisher.

Thet says 4Info’s ads have a 15 to 20 percent reply rate, which is very high.

4Info will announce next week that it has signed a deal with a big payments vendor — PayPal, Obopay or Google Checkout.

4Info will also introduce video ads into text messages.

People can also use 4Info by visiting http://mobile.4info.net on their phone’s browser.

In the U.S., the promise of the future in accessing mobile information via WAP or a rich client application casts a shadow on SMS, better known as text messaging or “texting”.

According to conventional wisdom, WAP and downloaded client applications are the holy grails of mobile, with their ability to deliver splashy, colorful landing pages, images and videos to consumers on their mobile phones. Companies like AOL are snapping up WAP advertising startups like Third Screen Media with the belief that, as devices and networks improve, increased consumer adoption will follow.

But SMS is no underdog. It has huge adoption now, is very versatile and useful and is going to persist, even if the handsets and networks catch up to the hype being created around WAP and clients. It’s not like the industry is slamming text messaging, most just ignore it for the razzle-dazzle of newer technology. But some are realizing where the real volume is. Maybe more importantly, SMS has the highest overall usage rates in the US (37%) compared to WAP (14%) or rich clients (6%).

Why are people going to keep using SMS?

1. My mother can use SMS

SMS is simple. My mom can text message, but she doesn’t have a clue how to go to a website on her cell phone or download a client application. As much as people think they want the cutting edge technology, when you want information right now, you’re going to go straight to the quick and easy feature that you know how to use, which is text. Answers come quick, efficiently, and on any device, not just the newest and hottest.

2. People (including my mother) are using it NOW

I think the market’s default assumption is that it will eventually be able to replicate the web or a desktop experience on a cell phone. That assumption overlooks the widespread adoption of what’s already in most people’s hands. Unlike the new, and more expensive technologies, text messaging works for almost everybody, right now. People don’t change when they have a tool that already works. Eighty-eight percent of US Internet users said they used text messaging; WAP and clients didn’t even make this list.

3. SMS is asynchronous

That’s fancy talk for being able to do the following (not possible with WAP or a client): You can send an SMS, then turn off or put away your phone and get the response later. You don’t need to keep your phone open to wait for a page to download. You can also store the information from an SMS permanently in your inbox

4. Check out Europe and Asia

Take a look at how SMS has taken off in Europe and Asia. In the UK, you can get local election results via SMS. You can order a pizza or a taxi via SMS. Despite access to faster networks and more advanced handsets, in Asia as much as 72% of mobile revenue comes from text messaging.

5. Pushing the Possibilities

The fact that SMS is the only true “push” mechanism for mobile information makes it quite powerful. Want sports updates or traffic information sent to you automatically? The only mobile medium for this type of service is SMS. Although users can visit WAP sites or receive email on their phones, SMS has both the simplicity and the immediacy to encourage ongoing usage and wide adoption. Also, anyone can receive a text message alert. They can set it up on the web and still get the value of staying in the know on the go. They don’t even have to know how to send a text message!

Today, SMS accounts for approximately 75 to 80 percent of non-voice service revenues worldwide. Despite all the noise around WAP and the latest technologies, most of the action is in SMS. Traditional media companies (online, print, TV) and advertisers are taking notice. I’m not saying that browsing the web on your phone isn’t going to become better and that new handsets won’t continue to offer great experiences. You absolutely need to be able to browse for some things. Just don’t overlook SMS: this technology isn’t going away.

Here’s the latest action:

News Corp makes $5 billion takeover bid for Dow Jones — If the bid is accepted, the owner of Fox News would own the old, gray business media icon, the Wall Street Journal. What next?

PropertyShark takes property snooping a step further — If you thought Zillow, the housing site that slapped a value on your house, was controversial, take a look at PropertyShark. The four-year old New York company outdoes Zillow on the snoopy factor, displaying owners’ names as well as things like title history, building permits and code violations pertaining to any property (See Mercury News story). It has launched in California, New York and 14 other states.

Google chooses to fight Viacom — Here’s the story about Google’s response to Viacom’s lawsuit for copyright infringement. The Google lawyer says the companies are not engaged in settlement talks, so looks like this is going all the way.

Google’s chief culture officer — See interview with Google’s culture czar and how she looks for “Google-y” people, or those who don’t worry about their titles but focus on getting stuff done.

Companies to use plankton to help global warming — At least two ventures are seeking to grow floating fields of plankton to absorb carbon dioxide from the atmosphere and carry it to the depths of the ocean. The New York Times has the story. Foster City, Calif.’s Planktos is already working on a project in the Galápagos and the South Pacific. Planktos says corporations seeking to offset their carbon emissions under new treaties and regulations make need its services. It thinks it can make a profit if it gets $5 a ton for capturing carbon dioxide. There’s also San Francisco’s Climos, which we contacted several weeks ago, but which has remained secretive. Dan Whaley, founder of GetThere, is involved, as is a group of respected scientists on its advisory board.

Supreme Court issues ruling that reforms patents — Most experts say this was much needed. It rules that lower-court rulings have given patent holders more power than the patent law intended. Some patent awards are for innovations that are too obvious, and may stifle innovation.

Google making comeback in China? — After ceding ground to Chinese search engine Baidu over the past couple of years, Google is gaining market share, says Google Chief Executive Eric Schmidt.

Meanwhile, Myspace China encourages tattlers: Members of MySpace’s new Chinese version are being told to report any “misconduct” by other users, including actions such as “endangering national security, leaking state secrets, subverting the government, undermining national unity, spreading rumors or disturbing the social order.”

EBuddy launches mobile application – Ebuddy, like Meebo, is a company that aggregates IM accounts, so that you can use any of them — AIM, Yahoo Messenger, Google Talk, etc — from any Web site. Now it has taken its service mobile. Meanwhile, Meebo has decided not to do it, the company’s chief executive Seth Sternberg told us last week. GigaOm has a piece on Ebuddy’s latest momentum. We’re wondering where these stand-alone IM companies will head, now that IM aggregation is becoming easier to do and that we’re hearing of several other companies about to unveil products in this area. We’ll get back to this story shortly.

Phenomenal growth of Zwinky and Gaia, virtual worlds for kids — Zwinky, part of the Fun Webs group at conglomerate IAC, is the latest virtual world to explode in popularity. It has 4.7 million worldwide unique visitors in March. Techcrunch has the latest on Zwinktopia - where users can use their avatars to roam around the world, chat and earn Zbucks, a virtual currency.

Targetspot to let advertisers create commercials for Internet radio — Advertisers can create ads for their tailored audience. It is financed by CBS radio. (Times has the story).

4Info creates SMS ad marketplace — Speaking of new advertising models, Palo Alto company, 4Info, has launched a test program for an SMS marketplace. Chief exec Zaw Thet tells us his is the only company offering a market place. Because of 4Info’s bulk SMS activities, it doesn’t have to pay carriers for the service, meaning it is free for a company like Evite to send out SMS alerts to users, containing ads. 4Info splits the revenue 50-50 with the publisher. Question is, are SMS ads going to be pretty enough?

The Army’s plasma shield — The Army hopes soon to deploy a machine that generates a protective screen of dazzling mid-air explosions – to stun and disorient an enemy. It uses a laser pulse that creates a ball of plasma, and a second pulse that generates a shockwave. It is being build by a company called Stellar Photonics, about which we know very little. Its apparently also working on a portable laser rifle weighing fifteen kilograms with a range of more than an mile. Anyone know more about this company? Send email or leave comment, please.

Jobs disses subscription/rental music model — “Never say never, but customers don’t seem to be interested in it,” Jobs told Reuters in an interview, with new authority in the wake of Apple’s stellar earnings report. “The subscription model has failed so far.” People want to own their music, he said.

Jason Calacanis’ real project, a search engine — Calacanis, a media entrepreneur who sold a group of weblogs to AOL for $25m, has a new search engine project, backed by Sequoia Capital. It’s a cross between Wikipedia and Google, says Valleywag, which carries the speculative piece. Sounds a lot like Wikia’s search project, which has gotten a lot of attention. So it would make sense, though VentureBeat hasn’t confirmed any of this.

Microsoft releases more info on Silverlight — Nik Cubrilovic has a good review of the announcement, explaining how Silverlight includes a mini-CLR (Common Language Runtime) for the .NET platform that can be accessed from within the browser. As with the usual .NET runtime, it can support a number of programming languages, including Python and Ruby. Says Cubrilovic: The most remarkable part of the CLR are its speed and its size. First of all, the full Silverlight download with CLR and everything else will weigh in at around 4MB - which with current broadband penetration is effortless….

Jeff Nolan leaves Teqlo, a mashup company –The Silicon Valley start-up Teqlo just wasn’t ready to go to market, and chief executive Jeff Nolan explains his departure today. In remarks to us, the former SAP executive noted that companies delivering APIs as part of their offering find it difficult to make money. How will they share revenue? Moreover, for any of these businesses to achieve scale, as a platform, a significant amount of capital, “upwards of $60 million,” will have to be invested. Moreover, what happens when Microsoft, Google and Yahoo enter the area (indeed, Yahoo already has Pipes, and Google has entered with My Maps)? Not to mention SAP, Oracle and IBM, all of which are heading there too.

Mohr Davidow Ventures hires software entrepreneur Bryan Stolle as partner — This is the latest in several hires recently by the Silicon Valley venture firm. Stolle is co-founder of Agile Software, a company backed by MDV.

See our latest news stories in VentureBeat’s News Wire — including the latest on mobile wireless network company Sonopia, and all the clean-tech deals lately, such as Vinod Khosla’s latest investment.

Venture capital performance turns positive — At least, according to the latest day released by Thomson Financial, for the period ending December last year. Overall, venture capitalists investing over the past five year years saw a 1 percent annual return each year — not very good, but positive for the first time since 2003. The only people losing money, according to the survey, are early/seed-stage investors who have been investing for the last five years. Everyone else is making dough. However, these numbers should be taken with skepticism. The data has long been criticized for being too rosy, i.e, not factoring in the results of firms doing so terribly that they’ve shut their doors. See table below for the performance of VCs over different time horizons.

Here’s the latest action:

March Madness alerts — Palo Alto mobile search company 4INFO will send you an alert in the final minutes of any of NCAA March Madness game that looks like it could be an upset. It sends final scores too. To sign up, text TOURNEY ALERTS to 44636, or signup at the company’s site.

Coffee-house entrepreneurs — The SF Chronicle has a piece about the SF entrepreneurs who launch companies at coffee houses, exploiting the WiFi connections at places like Starbucks. Problem is when the competition finds out. We remember once meeting wiki company Jot’s founder Joe Kraus at Coupa Cafe, a place where Ross Mayfield, of competitor Socialtext, often had his alter-office.

Dick Costello, chief exec of Feedburner, starts blog — He focuses on entrepreneurship, and has some good tips about how to raise cash, and how to manage hiring, among other things.

AskCity’s map tools are nifty — We’ve already mentioned the useful local map, direction, movie, restaurant and other features offered by AskCity. Here’s the latest: You can now circle places on a map, such as an intersection, and then search for say, that coffee shop that your friend told you about, but which you forgot the name of — because it lets returns in its results all of the coffee shops within the circle you drew.

Google’s bus system — Every Google employee gets a ride to work, with a WiFi-equipped bus so they can work while commuting. (See NYT story).

Paul Mercer, interface guru, hired by Palm — Mercer, a former Apple employee, who designed the interface of the nano-sized Samsung YP-Z5, has been hired by Palm, to help it regain momentum in the face of Apple’s iPhone launch.

Forbes’ list of the world’s billionaires — The latest list is out, and Google’s showing is impressive. Co-founders Larry and Sergey are the two youngest on the long list of Californians.

Freebase reality check — Lot of excitement Friday about the launch of Freebase by Metaweb Technologies, billed by some to be the “synapses for the global brain,” but some people are yawning at the idea.

Even as global warming concerns grow, oil companies are getting more efficient at producing more oil — Which means more global warming. (See NYT story.)

Clearwire’s woes — Clearwire, the company that went public last week to raise more cash to build out its costly WiMax network, sees continued downward pressure. It went public at $25 last week. See graph at left, from this morning, where it dipped below $20 briefly. However, it rose at the end of the day.

FraudWall raises $1.01 million — We reported on the click-fraud company, Fraudwall, launched by Ron Conway and Jim Pitkow, in January. It has now raised $1.01 million of a $1.5 million planned first round, from Sherpalo Ventures and Baseline Ventures, according to PE Week. Sherpalo’s Ram Shriram is a new investor. Shriram, still on the Google board, is especially likely to have good insight into how important the click-fraud problem is for Google to solve.

Yet another photo/video site, Zannel, launches — Zannel is designed for mobile users. You can upload your camera-phone’s photos or video to Zannel’s web site, and you can send them to friends, through Zannel’s peer-to-peer network. The recipient gets an SMS (text message), opens it up and a link takes them to their WAP browser. We reported on its $6 million in funding here.