VentureBeat

ZeroG Wireless is announcing today that it has raised $17 million in a second round of funding for its business of designing embedded Wi-Fi chips. This company is looking for the day when billions of everyday gadgets and sensors are connected to the Internet.

John Cummins, chief executive of the Sunnyvale, Calif.-based company, says it’s able to get off the ground because it’s going the opposite direction of other wireless broadband chip makers. Others are focused on the 3G and 4G networks of the future by building chips that will be used in phones and laptops, but those chips often consume a lot of power in their efforts to deliver wider range and faster connection speeds.

ZeroG wants to extend Internet connectivity to everyday objects. The company is targeting Wi-Fi connectivity at the embedded market, meaning it will go into as yet unconnected sensors and other simple gadgets. The company emphasizes low cost and low power in its chip designs, which can be grafted into a wide variety of electronic systems.

After a pretty dry year, chip start-ups are coming out of the woodwork. Recent fundings include Silicon Blue, Advanced Micro-Fabrication, Movidia, Samplify Systems, Achronix, and Altair Semiconductor. Most chip companies take a lot of money, which is why venture firms have shied away from the deals.

Embedded Wi-Fi chips aren’t quite as cheap as radio frequency identification tags. For instance, an Internet stack of software runs on the chips to enable Wi-Fi. But that will enable applications that RFID chips are being used for, such as sending sensor data to a central server. Cummins considers this to be the “long tail” for Wi-Fi technology. As the wireless chips get cheaper and cheaper, they can bring connectivity to more devices, enabling a sea of interconnected digital devices known as “the Internet of things.”

“In five years, it will be hard to find a device that is not connected to the Internet,” Cummins said.

It may sound like it’s undertaking a gargantuan task, but the company has a credible crew. It was founded in 2006 by Tom Lee, a Stanford engineering professor who previously founded Matrix Semiconductor, a company that sought to build memory chips in three dimensions. SanDisk bought it in 2005 for $250 million. But much of Lee’s expertise has been in wireless radio.

Lee took a year off from Stanford to start ZeroG Wireless until Cummins joined as CEO in January 2007. Now Lee splits his time between the two jobs. Cummins has 20 years of management experience, including six years at Agere Systems and Lucent Microelectronics.

Battery Ventures led the round. Morgenthaler Ventures and Greylock Partners, which invested in the first round, also participated. Another investor is Miven Venture Partners. The company will use the round to bring its product to market, expand its sales, and build out its executive team. Alex Benik of Battery Ventures will join the board. Altogether, the company has raised $30 million. It has 40 employees.

Cummins said that he expects to launch the company’s first products in the first quarter of 2009. While it’s been tough to start chip companies, Cummins said he has been frugal and it isn’t as hard to design a simpler chip that goes after a wide range of markets.

Potential competitors include Atheros, which developed a tiny Wi-Fi chip that was used last year in the Eye-Fi memory cards for cameras. Those cards can upload pictures directly to the Internet because of Atheros’ Wi-Fi connectivity. Other potential competitors include other makers of Wi-Fi chips, such as Broadcom. Another Campbell, Calif.-based low-power Wi-Fi chip start-up is G2 Microsystems.

Here’s the latest action:

More job cuts coming at Yahoo? — Chief executive Jerry Yang has hired consultants from Bain to get the organization “fit.” It’s not likely that means more exercise. SAI has more.

More food benefits slashed at Google – While Yahoos may be losing their jobs, Googlers are just losing select food privileges. Valleywag has more.

Broadcom wins another battle against Qualcomm — The chipmaker scores another victory after a judge rules that Qualcomm is infringing on two of Broadcom’s cell phone patents. CNET has more.

Feds play politics with renewable diesel get rebates — They axed a $1 credit for biodiesel made from left over animal fats, in favor of soybean biodiesel. VentureBeat cleantech writer Chris Morrison says: “Stupid.” Gas2 has more.

Tipjoy raises $1 million — The startup which does micropayments for blogs and other sites hopes to replace the PayPal model which TipJoys’s chief technology officer Ivan Kirigin says is broken for small transactions. The round was led by Betaworks. TheDeal.com has the story.

Tesla plans Bluestar family car – Priced at $20k - $30k, the electric car manufacturer is considering partnering with a bigger company to make it. Unfortunately, this is likely more than two years away from actually happening. CNET has more.

VentureBeat finishes as the most accurate tech blog — This according to Pundit Watch, a service that tracked predictions bloggers made for the past four months.

Major Xbox Live update coming next week — The service may be offline for as much as 24 hours on September 29 as Microsoft implements new features like 3D avatars. It looks like this update won’t include the Netflix “Watch Instantly” feature though, that’ll come later this fall. Gamasutra has more.

Evri launches public beta — We’ve covered the semantic web navigation service before. MarketWatch has more.

Microsoft shuts down Ensemble Studios — The game studio was supposed to make a massively-multiplayer online game set in the Halo universe. No more.

The state of the mobile web — Browser-maker Opera has just released some stats. ReadWriteWeb has them.

Advanced Micro Devices will sell its digital TV chip business to Broadcom for $192.8 million.

The move is part of chip company AMD’s attempt to raise some cash and regain its footing in its core microprocessor business where Intel has been eating AMD’s lunch.

AMD needs the cash since it has been losing money for seven quarters and is in the process of switching to an “asset light” strategy where it will likely lease its factories rather than own them outright. The digital TV chips will broaden Broadcom’s focus on entertainment chips and allow it to enter the market for low-end TV screens. This is one of those things that is akin to tossing out baggage when a plane is approaching mountains and it’s still too heavy.

The deal is expected to close in the fourth quarter of this year and could cut Broadcom’s full-year earnings by four cents to five cents a share. The boards of both companies have approved the deal, which still requires regulatory approval.

Sunnyvale, Calif.-based AMD is selling off the digital TV division which it acquired the business along with its acquisition of a graphics chip business of ATI Technologies. At the time, AMD executives touted how the digital TV chips would allow the company to diversify beyond the PC chip business into consumer electronics. Intel, meanwhile, refocused on microprocessors and is now forcing AMD to do the same.

Irvine, Calif.-based Broadcom will ask 530 AMD employees, mostly engineers, to join the company. This is really only the first step of creating a leaner AMD. The company will have to do more to improve its balance sheet as it comes up new ways to finance its capital-intensive chip factories. AMD has to be ready for whatever a newly competitive Intel will toss its way.

It’s painful to get satellite TV service installed at your home because technicians have to spend a lot of time wiring multiple set-top boxes to a single dish antenna.

Entropic Communications has a solution that eliminates that problem. And today, the San Diego, Calif. company is announcing that DirecTV is adopting its chips.

The company’s chip is called a “channel stack switch” and it will be built into a new DirecTV satellite dish. Earlier this year, DirecTV said it would include the Entropic chips in its newest set-top boxes. Now you don’t have be shy about adding three or four DirecTV boxes to your home because the switch chip lets all of those boxes use the same wire back to the satellite dish on the roof. It used to take six cables to hook up four units — a high-definition digital video recorder, a standard DVR, and two standard set-tops. These days, about three set-tops per home is the average. Read the rest of this entry »

Vinod Dham has lived the quintessential Silicon Valley rags to riches immigrant story. Born in Pune, India, he came to the U.S. in 1975 as an engineering student with just $8 in his pocket. He became a chip engineer and helped invent Intel’s first flash memory chip.  He went on to manage Intel’s microprocessor projects, including the breakaway Pentium chip that debuted in 1993 and cemented the company’s position as the world’s biggest chip maker. He handled the bad press on the Pentium’s bug and later joined Intel rivals NexGen and Advanced Micro Devices. He became the CEO of Silicon Spice, which he sold to Broadcom for $1.2 billion in 2000. Then he became a venture capitalist, first at NewPath Ventures and now at NEA-IndoUS Ventures, where his aim is to give something back to his native India.

VB: What inspired you get into electronics when you were growing up in India?
VD: When I graduated in 1971, at 21, I ended up at the only semiconductor company that existed in India. It was a start-up that spun out of Teradyne Semiconductor and it happened to be in New Delhi. My home was seven kilometers away. It was perfect for me to live at home with my parents and work. It wasn’t until I worked at this company that my love for semiconductors bloomed. I found it to be a very exciting field because it brought in physics, chemistry, mathematics, and mechanical drawing. I moved to the U.S. and studied for a master’s degree in solid-state sciences at the University of Cincinnati, where I studied silicon germanium and compound transistors. I was doing that back in 1975.

VB: You came with very little money?
VD: I came with $8. In the 1970s, the government of India had little money to spare for foreign travel. They gave $8 to foreign tourists. As a student, I could get an additional $20. You had to go to the reserve bank of India. You had to apply. But it was such a corrupt country at the time; you had to bribe somebody to get the $20. I refused to do that. I said I’ll just go with $8.

VB: How did you get off the ground in the U.S. with just $8?
VD: That was the most amazing part. I kept it with me. There were many distractions. Even on the plane, they would sell cartons of cigarettes. People used to smoke. I used to smoke. The carton cost about as much as I had. The hostess offered me just one. I said I could live without smoking for a day. I went to the foreign student office. There was a lady named Mary Campbell. She had been corresponding with me for a year. She asked what she could do for me. I asked about my research assistant job. That was supposed to pay $325. She said I don’t get that money until I did a month of work. I told her I needed $75 to get into an efficiency and $15 for health insurance. I needed $90 to survive, and I needed more for food. She went to a room and came back with $125 in cash. She said it was a distress fund. I paid it back at zero percent interest at about $25 a month. She saved my butt. Read the rest of this entry »

Former Broadcom executive Henry Samueli to plead guilty in backdating case — The Broadcom flameout saga continues, with former chief technology officer Samueli admitting that he previously lied to SEC investigators about whether or not he had illegally back-dated stock options.  Among Broadcom’s two founding Henrys, Samueli was the good cop. That’s why it was surprising that Samueli pleaded guilty to avoid jail time. But the other Henry, former CEO Henry Nicholas, is up for a raft of criminal charges from drug dealing to using prostitutes. [Samueli photo via Forbes.]

Game association trumpets games in the workplace — It’s no surprise that the Entertainment Software Association, the industry cheerleader for companies that publish video and computer games, would produce a positive report about games in the workplace. The ESA-sponsored study, carried out by KRC Research, shows that 75 percent of U.S. organizations that use video game-based training are getting positive results, and looking to expand their usage of games. Meanwhile, more than 75 percent of those without work-focused video games plan to introduce them in the next five years. If we didn’t enjoy any excuse to play games, we’d probably be a little more skeptical. Instead, we think this survey sounds about right.

More than one billion PCs now being used in the world — Research firm Gartner guesses that number and projects it to double by 2014.

Sony has lost $3 billion plus on the PlayStation 3 so far — “Even if the platform is ultimately successful,” an annual Sony company report says, “it may take longer than expected to recoup the investment, resulting in a negative impact on Sony’s profitability.”

LinkedIn may be coming to China — More here.

Review: Psystar’s unauthorized Mac clone is just like a real Mac — Psystar provoked excitement among many bloggers, at least, in April, as it promised to deliver a Macintosh operating system in a machine that it sells for far cheaper than the products that inspired it — in possible violation of Apple’s terms of service. No legal challenge has come from Apple, though. Now, Tom Krazit at CNET has a review of it here, after having used it for a month. He says it’s like using a Mac. [Photo via CNET.]

Five previously-undisclosed features due for Mac’s latest operating system, “Snow Leopard” — According to a scoop published by blog Apple Insider, the new features include a new multi-touch framework, smaller-sized applications, more advanced word processing features, auto activation of fonts, and support for the ZSF file system. Snow Leopard is due next spring. Also, we’ll see how fast Psystar implements it once it’s out.

Old iPhones worth as much as new ones on eBay — Blogger Jason Kottke breaks down observed sale prices on the auction site. And I quote:

- A lot of five never-opened unlocked 16Gb iPhones went for $2,755 ($551 per phone)
- A used unlocked 8Gb iPhone went for $405
- A used unlocked 16Gb iPhone went for $585.

Sun has a massive 256-thread Niagra processor coming in 2009 — The details here.

New York Times: Google News is not growing very fast – This article talks about issues at Google’s automated news aggregator. Although it’s not disclosed in the article, I suppose the New York Times would prefer its readers to use its own automated news aggregator, Blogrunner.

The news about Broadcom’s former chief executive, Henry Nicholas III, is just stunning. It’s a rise-and-fall story with salacious details of prostitutes and ecstasy that will make the tabloids, not just the tech pages. It’s all the more stunning to me because I met “Nick” at his company and witnessed his imperial brilliance.

The FBI accused him in a 21-count indictment of fraud, conspiracy and drug charges. The agency alleges that he spiked the drinks of other executives with ecstasy. It also said he had several residences that were used to distribute illegal drugs, including cocaine and methamphetamine, and allegedly threatened to kill people if they talked about his activities. One of the nuttiest details is that Nick and his companions were smoking so much marijuana on a private jet flight to Las Vegas that the pilot had to wear an oxygen mask.

The FBI also accused Nicholas and former chief financial officer William Ruehle of improperly backdating stock options. Both men have said they are innocent of the charges, according to press reports. What’s stunning to me is that the shadow has even extended to Henry Samueli, who has always played the role of the good cop as Broadcom’s chief technology officer. In May, Samueli resigned as chairman and took a leave as CTO after the Securities and Exchange Commission named him and others in a backdating complaint. To fix its books, Broadcom took a $2.2 billion charge to account for the backdating.

I read profiles of Nick and was astounded at the details about temper tantrums. When I interviewed Nick, he was polite and answered questions directly. He was polite, but intense. He was a lot like Andy Grove in that way, almost making me feel like I was the one on the spot. I couldn’t put anything past him. But I could tell that people walked on egg shells around him. You could tell that the PR people were wondering if they were going to have some kind of media nightmare on their hands.

You have to wonder what it was like to work in such a place. Could employees have not known about the kind of behavior that Nick allegedly engaged in? Would they have to cover it up? What should the board of directors have done? When there is poison at the top, it flows down and touches everything. It leads to tip-toeing, shielding, evasion, rationalization, and, at worst, cover up.

Broadcom was always a different kind of company. It was one of Orange County’s few home runs in chips, started by a couple of brilliant, tall men with electrical engineering doctorates. Samueli was the college professor who, with Nicholas, first started PairGain Technologies and then Broadcom in 1991. Nick was the former Air Force pilot who ran things. Samueli had a great sense of humor and was always gentlemanly when he gave his technical speeches.

They designed chips for the emerging era of wired and wireless communications. Profiles painted Nick as a kind of Darth Vader character, driving his engineers to be more paranoid than Intel engineers. Samueli inspired his people to be brilliant and he helped contain Nick’s rages. They became billionaires. Broadcom’s stock price had so much momentum that Intel had to start worrying in the 1990s. It’s easy to see why people put up with the tough behavior of Nick, because he was making everybody else rich too.

Broadcom could simply buy up networking chip start-ups by giving them stock. It paid $2 billion for tiny little SiByte, during November 2000, just as the tech bubble was falling apart. Intel countered, spending $30 billion of its own on communications acquisiitions. That led to poor execution in Intel’s core business and an opening for Advanced Micro Devices. Broadcom’s stock value thus distorted the whole chip market. Broadcom’s chips went into almost everything, from set-top boxes to mobile phones and Wii consoles.

But the heady days came to an end, the stock collapsed, and growth slowed. By 2003, Nick dropped another shocker. I listened to that analyst conference call as he said he was resigning as CEO so that he could save his marriage. Nick’s wife had filed for divorce.

Now the government alleges that Nick kept an “equestrian estate” in tony Laguna Hills, where he had ordered built a series of tunnels and underground rooms including a “secret and convenient lair” to practice his “manic obsession with prostitutes.” This story is a tragedy all over. You can measure that by the brilliance of the people involved, the potential of what they created, the gravity of their mistakes, and the bottomless abyss that now awaits them as they work through the justice system.