VentureBeat

updated
The Generations Network, operator of Ancestry.com has just received $300 million from Spectrum Equity Investors, a Silicon Valley buyout firm, which will take a majority stake in the company.

Ancestry.com has also just launched DNA testing of its 5 billion records, so that family members can resolve mysteries about their ancestors, i.e., find out for sure who they are and are not related to. This is smart, because it exploits peoples’ keen interest in their own histories. By charging people up to $200 for the privilege, it hopes to make the sort of money that will justify Spectrum’s investment. It comes at a time when a number of other companies are offering sophisticated DNA services, including Silicon Valley’s 23andMe.

We’d heard Provo, Utah-based Generations had been shopping itself around for some time, but Spectrum had already been a minority investor since 2003.

Ancestry.com lets people create family trees, submit family photos and stories and allows them browse their collections. The deal comes as Ancestry is facing competition from fast-growing family tree companies such as Geni, which boasts hip Ajax-filled interactive technology. Another is MyHeritage. See our coverage of Geni and Generations Network here.

Generations operates a number of other sites too, including myfamily.com, Rootsweb.com, Genealogy.com, Family Tree Maker and Ancestry Magazine. It reportedly makes $150 million in revenue a year.

Ancestry.com’s DNA service combines DNA testing with Ancestry.com’s collection of 5 billion names in historical records. The company says it has 15 million users, and lets them take a cheek-swab test and compare DNA test results in its database, so that they can “prove (or disprove) family legends, discover living relatives they never knew existed.”

It offers Y-DNA and mtDNA tests — ranging in price from $149 to $199. The Y-DNA test analyzes the DNA in the Y chromosome, which is passed virtually unchanged from father to son. Women can have their father or other related male take the test. The mtDNA test analyzes DNA in an individual’s mitochondrial DNA, which passes from a mother to her children. The company says test results can provide better estimates of an ancient ancestors’ origins and “migration route from Africa and can aid in identifying living cousins.”

It said DNA results will soon integrate with online Ancestry.com family trees, so that users with similar last names can see how they are related, or not related.

Update: More from David Hamilton about this trend.

Update II: Other reports, including from VentureWire, say the company had previously raised $95 million in venture funding since 1998. The company’s four largest shareholders are now Spectrum, Sorenson Media, CMGI@Ventures and EsNet Group, according to the company.

[Disclosure: To my surprise, I've seen Ancestry.com running ads on VentureBeat this morning, including ads running along this story. This was arranged by our advertising partner, Federated Media, without our knowledge. That's fine (indeed, the purpose of having FM involved to arrange such deals, and why not make it targeted), but just wanted to let you guys know that there was no connection between editorial coverage and advertising!]

Here’s the latest (ahem) action:

Second Life avatar sues another avatar, over virtual sex bed — We should have predicted this. Second Life entrepreneur Kevin Alderman has filed a copyright infringement lawsuit against Second Life resident Volkov Catteneo. This is apparently the first time an avatar has sued another avatar in the virtual world. Alderman, who has made money before in Second Life by selling a virtual island for $50,000 (real money), says his avatar, Stroker Serpentine was doing quite well selling a SexGen bed, which allows avatars to have sex, for L$12,000 (US $45.11), but that Catteneo has copied it and is selling it for a third of the price.

Geni uses viral messaging to grow quickly – Family-tree company Geni (our
review) claims five million profiles have been created by users in five months. The secret? Instead of making you sign-up, and then start creating a family-tree, it combines the two steps. Its user interface cleverly inserts your initial data into your first family tree — leading a new user to immediately begin inviting their family members to also build out the family tree. We noted in March that the site had over 100,000 users that had added about 2 million profiles; this was when the company closed a funding round valuing it at around $100 million. The surge in growth since then can only be good news for the investors.

Bill Gates’ investment arm backs Gay.com — His Cascade Investment Group invests $26.2 million into the gay, lesbian, bisexual and transgender online community PlanetOut, which owns Gay.com. More from John Cook in Seattle.

Russia shuts down Allofmp3.com, or tries to at least — Russia shut the music download website, a leader in music and video piracy, to placate the U.S. concerns about Russia’s copyright protection policies. However, an alternative site run by the same Moscow company has emerged: Mp3Sparks.com.

Netvibes, one of the more popular start-page companies, sees departure — With Google and other big players pushing their own start-pages (pages that you can customize and make your home page as you surf the Web), there’s growing tension at the many start-up companies that launched similar features early on. Paris-based Netvibes has lost Pierre Chappaz, who was co-CEO and said he had disagreements on strategies of “distribution and monetization.” See his post here.

Helio reportedly to get more life-support — Earthlink and South Korea’s SK Telecom plan to pump $100 million each in Helio, their money-losing U.S. mobile telecom network. Helio is a so-called MVNO, or networks that pay to use the infrastructure of other carriers to offer their services, and they’ve had a poor track record. Amp’d Mobile recently filed for bankruptcy, and ESPN’s mobile network failed. Helio is getting costly. It has already soaked up $440 million, and expects a net loss of $330 million to $360 million this year, compared with a $192 million shortfall in 2006.

Netsuite 74 percent owned by Larry Ellison, and it competes with Oracle — Netsuite, software company that just filed to go public, undercuts Oracle by selling dirt-cheap online software for ERP (Enterprise Resource Planning) for CRM (Customer Relationship Management). And yet it is 61 percent owned by Larry Ellison, chief executive of Oracle. Ellison owned another 13 percent, which he has given to trusts related to his family. Netsuite’s products sell at a loss. (See WSJ story for more; subscription required).

KKR is latest buyout firm to file for IPO — KKR has filed for an IPO that will let it raise $1.25 billion. This follows the much hyped IPO of another buyout firm, Blackstone. Lately, the sector has drawn scrutiny from lawmakers, who are now considering levying a new tax on buyout professionals. Blackstone’s stock has dropped 4.1 percent since its IPO. Blackstone’s Stephen Schwarzman and Peter Peterson have pocketed $2.56 billion between them. Now, will individual investors fall for another buyout IPO? Probably.

Yahoo’s personalized SmartAds — Yahoo has released new ad tools that allow for better “behavioral targeting.” Called SmartAds, they let advertisers create custom ads, using information Yahoo has about where the user is located and which sites they are visiting. The NYT has a good description of how it works:

This is how Yahoo’s new system works: the advertiser (or its agency) would provide Yahoo with the components of its display ads — including the logos, tag lines and images. The retailer would share information from its inventory databases that track the items on the shelves in each of its stores. Next, Yahoo would combine that data with the information it has about its users’ demographics and actions online to create a product-specific advertisement. For airlines, SmartAds uses Yahoo’s information about its Web surfers to create display advertisements for each person that feature ticket offers with actual prices listed. In time, Yahoo plans to offer rich media advertisements where users can buy the ticket at that price right within the ad unit, rather than having to click through to another Web site.

Departures at Technorati — The blog search engine, which has lost some of is focus lately, has suffered three more departures. The company’s chief executive Dave Sifry said its top engineers Adam Hertz and Tantek Celik have gone. They had been there for three years, and were responsible for Technorati’s effective evangelizing of its tags and of microformats. Two months ago, the company drew another $1 million from its investors. The departures are a setback; we reached out to Technorati and Tantek for comment, but neither responded. Also, product manager Liz Dunn, who had helped build the company’s latest site, has left, to join Will Farrell’s comedy video site FunnyOrDie, backed by Sequoia.

EBay opens US version of its classifieds site Kijiji — Auction site EBay has quietly opened the cute-sounding classifieds Web site, a clone of Craigslist, in all 50 states (see WSJ story, subscription required). The service had been operating in Canada, Europe and Asia. Its name, though, is harder to spell, and there’s not much difference from Craigslist. Posting is free, but the company will explore ways of charging for display ads and premium services for sellers. This is notable, too, because eBay owns 25 percent of Craigslist. EBay owns a number of other classifieds site in other countries.

Feedburner makes two premium services free — After getting bought by Google, Feedburner is offering for free its Stats PRO service, which provides statistics such as click-through tracking and podcast downloads; and its MyBrand service, which allows users to control the URL of their feed. See Search Engine Land for more details. Danny Sullivan wrote about the importance of owning your feed name here.

Craig Venter’s company transplants entire genome from one bacterium cell to another — This technique could possibly lead to the creation of ‘designer’ microbes producing fuel or help cleaning toxic waste. The company has a way to go yet. The ultimate plan is to stitch together artificial chromosomes, proteins and other building blocks with the aim of jumpstarting their designer microbe to life. (More here.)

T-Mobile’s phone, lost in the iPhone hype — T-Mobile picked a tough week to release its own new phone service. Offered on Samsung and Noka phones, the service lets you place and receive calls over both the regular T-Mobile GSM network and virtually any WiFi wireless network. Called HotSpot@Home, it uses a technology called UMA (unlicensed mobile access). It lets you switch seamlessly between the two networks. It’s quite expensive (minimum $50 a month), so you’d have to be a power user for this to make sense. Calls originating from WiFi zones are free (don’t go against minutes). It works in Starbucks hotspots, without forcing you to log in. It doesn’t work in other areas with registration pages, such as airports, however. Good for use abroad, too, since WiFi calls are free. More details from Larry Magid and the NYT’s Pogue.

Korea’s LG agrees to develop a YouTube-focused mobile phone — LG said the model will allow users to upload, view and share video clips without the need to use a computer. The 3G phone will be offered first in Europe in the second half of this year (Forbes). LG began selling “Google phones” in Europe last month with software installed for directly using the Google service. It offers one-click access to Google’s search engine, Gmail and Google maps.

Videocountner lets you track how may time your video has been watched across various sites — The sites tracked by the service include YouTube, Revver, Daily Motion, MySpace and iFilm (via Techcrunch).

HP’s Presto photo service for elderly isn’t working — It was supposed to be really easy to use, allowing people to set it up for the elderly relatives to receive photos. But the Mercury News’ Dean Takahashi says it doesn’t work. After two tries, his mother gave up. We covered the company here. The Mountain View, Calif. company has $10 million in backing from Kleiner Perkins and Clearstone.

Updated

Here’s the latest action:

USA Today launches new social networking features, but stiffs Google — The newspaper has offered an array of new features, letting registered readers have their own profile pages, where they can recommend articles, solicit comments — and there’s more. Alas, the new content of all these users won’t be tracked by Google or found in Google’s search results, because USA today has used Javascript technology to defy it. That hurts USA Today’s traffic. VentureBeat contacted Steve Kurtz, director of IT at USA Today. He said use of Javascript was intentional, explaining the company is being careful “about what content is associated with the brand…We’re still a newspaper.”

Reuters wants to start a financial Myspace — Details here.

Latest Google tidbits — Here are the latest items emerging from Google’s latest filings: It has 30 subsidiaries and many international offices ; it has about $11 billion in cash and other liquid assets to spend; it paid 100 times YouTube’s $15 millon annual revenue when it bought the photo sharing site last year for $1.65 billion. Meanwhile, the troika of leaders at Google (Sergey, Larry, Eric Schmidt) earn $1 salaries again, while four other Google executives will get $450,000 this year, or $200,000 more than last year: Robert Eustace, senior VP of engineering and research; Omid Kordestani, senior VP of global sales and business development; Jonathan Rosenberg, senior VP of product management; and George Reyes, the company’s chief financial officer.

Google criticized — Google hasn’t had a very smooth early marketing of its paid software application package. Meanwhile, its chief foe, Microsoft goes on the attack, its lawyers saying Google is “cavalier” when it comes to copyright protection. Google, in response, points people to a comment by the CCIA, which says Microsoft is out of line, and that it should consider its own practice of reverse engineering products under “fair use.”

Latest Newswire stories — There’s Peer39, which wants to bring natural language technology to an ad marketplace. It has backing former Shopping.com CEO, Dan Ciporin, and $3 million from Dawntreader, VentureBeat has learned.

There’s Clearspring, a company that says it serves 30 million widgets a day (!), and which has just raised $5.5 million. It’s smart, going after mainstream users. For example, its widgets are being offered by the NBA to fans, giving them a way to feature NBA all-star dance team members (see photo left) on their sites, scoreboard tables and more.

Finally, Ticketsnow gets $34 million for event tickets online.

Rockyou raises $11 million — Speaking of widget companies, Rockyou, which provides a way for you post your photos/slideshows on other sites, has raised $11 million in venture backing, led by Partech International, a VC with offices in SF and Europe, and including Sequoia and Lightspeed Venture Partners. Rockyou has a valuation of more than $50 million, or around the same as competitor Slide, according to Techcrunch. It raised $1.5 million earlier from Sequoia and Lightspeed.

Webcasters to get snuffed by music royalties? — The music industry has pushed up royalty rates paid by Internet radio sites like Pandora and Last.fm, potentially causing them serious pain.

Yahoo’s Mixd shuts — Wow, that was quick. The SMS group networking service launched by Yahoo at test in November, rendered some lessons, but has been discontinued — though it might live on in future mobile products, Yahoo tells Read/Write Web.

Geni, the Web site for family trees, raises a $10 million second round of financing — It is led by Charles River Ventures. See our earlier coverage here. By all accounts, Geni is doing well. The Los Angeles company got unexpected traffic from people abroad, clamoring to use it in their native languages. [Update: David Sacks, the chief executive, confirms that company is valued, after the investment, at $100 million, a significant jump from the $10 million valuation of the company after it raised money in June. Some 100,000 users have input about 2 million people on the site (themselves and their relatives).]

Geni, a new start-up in Los Angeles, wants to do for families what LinkedIn does for business contacts: Create one giant tree that shows you who is connected to who.

The world may be getting smaller; Geni, if successful, will make it tinier still.

Geni has just launched, and we found it easy to use. The company is led by co-founder David Sacks, a former chief operating officer at PayPal, who more recently started Room 9 Entertainment, a production company that financed the movie Thank You For Smoking. Geni has raised a first round of capital of “more than $1 million” from the Founders Fund, which is led by Peter Thiel, former chief executive of PayPal.

Geni has been in private testing for several weeks.

Geni is focused more on networking of living family members, giving them a friendly user interface they can play with, letting you drag the family tree around on your screen, like you can with a Google Map. Once you make an entry for a relative (see screen shots below), Geni lets you email the relative to prompt them to join, so they can make entries. Thus, it is viral.

For now, Geni lets users see only the trees they build for themsleves, or those to which they’ve been invited. This is for privacy reasons, Sacks said. However, Geni will eventually allow users to merge their trees, creating larger numbers of people in a network, and where the nature of privacy changes. Geni wants to build additional features as these trees grows, and is contemplating creating an overall global tree that has some locked features, and edited only with users with certain permission.

Geni is the latest in a long list of genealogy sites. One of the biggest is The Generations Network, which last week changed its name from MyFamily.com. That company owns Rootsweb.com and Ancestry.com. There are also TribalPages.com, OneGreatFamily.com, Genealogy.com and Allfamilytree.com. Some of these, like Ancestry.com, have built impressive record databases. If you type in an ancestor, they’ll search census, birth, death and immigration records.

Sacks said he was driven to build the site because his parents were immigrants from South Africa, and wanted to track family origins in Lithuania and elsewhere — he’s used Geni to connect with relatives from Canada, Australia, France and Israel. Humans have a fundamental need to know where they come from, and who they’re related to, he said.

He plans to make money from advertising. Geni may know more about its users than any other site, and should be able to target advertising better than most, Sacks said: “We’re going to know how old they are, whether they are male or female, where they live, family structure, whether they are single or recently married, whether they have kids, newborn or in college, whether they are divorced…” He may also charge for premium services, even if the basic site remains free. He says the model has worked at LinkedIn.

Sacks wants to make it a family social network, just as MySpace is a network for friends, and LinkedIn is a network for business contacts. People want a different network for each aspect of their lives, he says.

The company was formed last year. Co-founder Alan Braverman most recently co-founded Xoom.

Roundup of the latest tech action in Silicon Valley:

Young start-ups pouring into the South of Market (SOMA) area in San Francisco. Deja-vu? — The region’s real estate prices are lower, at least where large companies like Looksmart are able to sublet expensive buildings to new copycat video sites like Cuts. With the territory comes late-night sleepovers, punching bags and yoga. See story in WSJ. Deja-vu, the same thing happened during boom #1.

Yahoo’s assumptions on Facebook — Techcrunch has scoop on Yahoo’s acquisition talks with Facebook, and Yahoo’s assumptions about Facebook’s performance. Notably, Facebook will have about $50 million in revenues this year, and would hit $1 billion in profit in 2015 according to projections — and thus justifying a $1 billion acquisition price. More remarkable is that Yahoo predicts Facebook will have a penetration rate of 60 percent among all young Internet users, up from 18 percent his year. Unfortunate for Yahoo, this justifies Facebook CEO’s Zuckerberg’s inclination to hold on to the company.

Do VCs cut good entrepreneurs? Perhaps, but rough going — Here’s a good story about latest on VCs-turned-entrepreneurs. Poor guys. They have to decide what chairs to put in their office.

Google’s smokescreen innovation — There’s an insightful piece in the Chronicle, printing a Q&A with Google’s Sergey Brin in 2000, where Brin says Google wouldn’t do anything besides search. Brin also made a statement several months ago that Google was rolling out too many features, and not honing the ones it already has. And remember CEO Eric Schmidt saying Google Payments wouldn’t compete with PayPal? Right. There’s a pattern emerging here. Google is releasing as many features as possible: There’s Google Maps with Wikipedia and user notations (see icons). There’s Gmail Fetcher, which lets you get email from other non-Gmail accounts in one place, just as you can do with Outlook. Only thing missing now is getting your Gmail offline. And there’s very extensive additions to Google Finance, worth checking out for all the tools it offers. And, of course, there’s radio advertising.

Although perhaps Google isn’t as innovative as you may think — Yahoo’s Jeremy Zawodny says Google copied its IE7 download feature, and has pretty good evidence. Google has since changed the look, but we’re wondering if someone’s head is rolling as a result. And the radio program looks similar to Voice.com’s. Suppose there’s a chance Google merely didn’t see it, though that’s unlikely because Google’s radio product managers surely would have soured the market.)

Easy in-video tagging and clipping — There’s a new product called Scenemaker that launched today. It lets you clip and tag any portion of a video, and the user interface looks good. Demo here.

61 video sites compared — This is a nice effort at taxonomy, but somehow not too helpful.

iTunes sales collapsing? — The Register is a notoriously unreliable source. But it cites a Forrester analyst here, who may or may not have pinpointing evidence of a collapse in iTunes sales. If true, could it have something to do with all the innovation going on, music rights getting cut with other sites, from YouTube, to Grouper?