VentureBeat

Even spooks need their virtual worlds. Where else, after all, could they rehearse their training missions against the bad guys of the world?

Forterra Systems and IBM said today that they’re teaming up to create virtual worlds for U.S. intelligence-gathering agencies. The so-called “Babel Bridge” project will allow spy agencies to use virtual worlds and Web 2.0 technologies to share intelligence information. Last month, Forterra raised a $10 million round (our coverage).

The project will feature a 3-D “unified communications” world which ties together voice, e-mail, text messages and other forms of communication. Users would access intelligence data from computers or mobile phones with secure connections. The two companies have already completed a prototype and will begin development in the second quarter, said Chris Badger, vice president of marketing at Forterra in San Mateo, Calif.

Intelligence agencies could soon use a virtual world to rehearse how they could attack a location that houses a terrorist cell, according to Forterra. The same technology could be used to prepare a hospital’s staff on how to react to a natural disaster.

Forterra was founded as part of There.com in 1998. In 2004, Forterra spun out of There, while Makena Technologies focused on its own consumer-oriented virtual world, There.com.

Forterra’s backers include the CIA-funded In-Q-Tel venture firm and Jerusalem Venture Partners, Chichen Itza Ventures, and Sutter Hill Ventures.

While Makena Technologies pursued consumer technologies, Forterra focused on using the virtual world technology for military simulations. Video demos of its projects are available here.

Badger said the alliance with IBM gives it a stamp of credibility as virtual worlds have gone through their own cycle of hype and despair. Deb Magid, director of software strategy at IBM’s venture capital group, said in an interview that business and government applications are now clearly becoming viable as virtual worlds spread beyond entertainment and games.

Here’s a summary of the latest action. See below for more:
1) In-Q-Tel invests in Forterra Systems, a private virtual world creator
2) Appfuel, another Facebook ad network, but with better ad targeting
3) AOL to spin out advertising arm?
4) Project Playlist, for sharing music playlists on other sites, raises $3 million
5) Four Interactive, a local business review site, gets $10 million from Valley VC’s

In-Q-Tel invests in Forterra Systems, a private virtual world creator – San Mateo-based Forterra’s software platform lets developers quickly create private, online virtual-world scenarios for organizations that can be used to simulate potential real world events, such as a government’s secret spy missions.

After running a scenario, the software lets its users get integrated reports that analyze participants’ actions to figure out what when right and what went wrong.

Besides government agencies, Forterra serves organizations in healthcare, education and other industries.

The amount of funding was undisclosed. The company said a “technology advancement agreement” was part of the deal, which sounds like customization for the needs of the US government. In-Q-Tel invests in technology companies that in some way further the interests of the US intelligence community.

Appfuel, another Facebook ad network, but with better ad targeting – RockYou, VideoEgg, Social Media and other Facebook ad networks have already been active for months. Today, San Francisco-based Appfuel is launching with the claim that it can more quickly and accurately serve targeted advertising within Facebook applications

In one example, if you state you’re a fan of the band the FooFighters on your Facebook profile page, then you might see an ad that shows you information about the band’s latest shows or where you can buy band t-shirts. GigaOm has more.

The company has raised an undisclosed amount of angel funding.

In other Facebook news, chief executive Mark Zuckerberg has been spotted in Seattle, on his way to talk to Microsoft — possibly about selling them some Facebook shares (our previous coverage).

AOL to spin out advertising arm? – New Techrunch editor Erick Schonfeld has the potential scoop.

Project Playlist, for sharing music playlists on other sites, raises $3 million – Another social music site with a widget, the Beverly Hills company lets you create, embed and listen to playlists on MySpace, Facebook and other social networks; PEHub reported the funding, although no investors were named.

Four Interactive, a local business review site, gets $10 million from Valley VC’s — The Bangalore-based company owns AskLaila.com, a Yelp-like site in India where you can read others’ reviews about local businesses and add your own. It includes proximity search, SMS notifications and other services. More here.

Investors include Lightspeed Venture Partners, Silicon Valley Bank and returning investor Matrix Partners.