VentureBeat

Here’s the latest:

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Sabio Labs raises second round — Sabio is a secretive Palo Alto, Calif. start-up building a new design process for analog chips. It’s likely up to something significant, because Andy Bechtolsheim, the brilliant engineer and co-founder of Sun Microsystems has led a round of investment into the company. Investors in the earlier, first round include individuals like Art Reidel (CEO Scintera – on the board ), Bill Unger (of Mayfield), Barr Dolan (of Charter Ventures), Rajeev Madhawan (CEO Magma), Carl Showalter (of Lightspeed Ventures), Marc Friend (USVP and Summit Partners), Bobby Yazdani (CEO SABA), Amidzad (Palo Alto investors) and Harry Cheung. We plan to follow up with the company’s chief executive, Mar Hershenson.

The blog search engine Technorati has bought PersonalBee — PersonalBee (see our coverage) lets experts and others create their own news page for others to follow along. See Technorati’s statement here. Meanwhile, Technorati continues its search for a chief executive, something we’ve heard started several months ago. Technorati could have moved into providing blog and stat features, but the nimble MyBlogLog moved more quickly (our coverage). After more than $14 million in venture capital, Technorati appears still to be searching for a business model.

Is Photobucket in negotiations with Fox Interactive Media, owner of MySpace? — That’s what we’ve heard from a source, who says the two are working through Lehman Brothers in talks. Even if true, it’s another thing to speculate whether the recent scuffle between MySpace and Photobucket is related to deal jockeying. Apparently, Diller’s IAC is also interested in Photobucket. (See our update here)

Competitious has raised an angel round — Competitious is a start-up company that gives users tools to compare themselves against competing companies, using a number of variables, such as Web traffic, feature lists and news articles. Paul Colton, the founder and CEO of Aptana, which recently took over the RadRails project, is one investor. The company is still early, and has yet to release its main product. (See our earlier coverage).

Traits of successful entrepreneurs — Venture capitalist Ryan Floyd reports on the qualities of the best entrepreneurs he has funded.

Aggregate Knowledge raises cash, but ChoiceStream raises more — Following our report yesterday about Aggregate Knowledge, a behavioral search company raising $20 million, we learned competitor ChoiceStream, of Cambridge, Mass. has raised more, $25.79 million. The company hasn’t responded to requests for comment. Dan Primack has more details and speculates the company’s valuation exceeds $250 million. Rumor we’ve heard is ChoiceStream rejected a $150 million or so buyout offer, so Dan’s reasoning is sound, though SEC filings can also be misleading. Investors are General Catalyst, Sutter Hill Ventures and a family trust affiliated with ChoiceStream CEO Stephen Johnson. The company has more than 100 employees, and so is burning $1 million a month.

You’re familiar with Amazon.com’s recommendation feature: “People who bought this book, also bought these books.”

Aggregate Knowledge is a Menlo Park start-up offering such a recommendation service on a mass scale — to any Web site. But it does Amazon one-better by watching consumer reading patterns online, and giving recommendation feedback immediately. (Amazon updates its recommendations once a month)

By all accounts, AK is doing very well. It started in April, and is already making $2 million in annualized revenue, according to chief exec Paul Martino. Tomorrow, it will announce it has won $5 million from Silicon Valley venture capital firm Kleiner Perkins Caufield & Byers. First Round Capital and others invested $500,000 in an earlier seed round. It employs 21 people, up from three in April. Recommendations are hotter than many people realize. Amazon says 35 percent of product sales result from recommendations. Martino, formerly at Tribe, said he noticed the power of recommendations while working at his previous company, Tribe — and thus his decision to launch AK.

We last wrote about AK here

Overstock.com is one of several sites that have implemented it. Shoppers of a gift basket (see image below), will see items that previous readers have gone on to view after viewing that item — saving users time, and helping them get to their likely destination quicker — since AK knows what previous readers ended up viewing.

In his earnings call last month, Overstock’s chief executive Patrick Byrne says integration with AK was easy, and that it’s providing a “nice, measurable lift” despite being up only a few weeks.

AK offers the service for news sites, too: It links to articles that previous readers of the same article went on to read. It also helps find more relevant ads, tracking which ads are popular based on the behavior of past viewers. This is where AK hopes to beat Google. Take, for example, a reader of Fox Sports, who learns their team going to the Super Bowl. Google might offer an ad for ticket merchant RazorGator. However, AK would skip RazorGator altogether and offer a way to buy Super Bowl tickets directly. In other words, it will offer an ad, a product, or a service - depending on what the reader is most likely to want, based on previous behavior. AK tracks click streams during sessions on a Web site; it does so anonymously, aggregating data so it knows what readers are most likely to do.

AK gets paid based on performance. If the customer is a news site, AK gets paid for increasing page views. If the customer is a product site, AK gets paid if it sells more products.

AK takes several days to customize its product for sites. By first quarter next year, Martino tells us, he wants to make it plug and play. VentureBeat, for example, could get a widget that allows its readers to see what other readers have also read. Sphere does something similar now. See the “Sphere it” button at the top of this article. If you click it, you’ll see mostly other blog related material. However, Sphere’s recommendations are based on related sites and content, not necessary on where people have actually gone.

AK’s competitors include Boston’s ChoiceStream. Its software reportedly takes longer to deploy. Loomia, of San Francisco, is another player.