VentureBeat

Roundup of the latest action in Silicon Valley & tech:

PayPal’s origin explored, one more time — Online payments company Paypal has spawned more Internet entrepreneurs from its founding team than any other company we know. Yet PayPal had a rushed and tumultuous birth; if you’re curious about yet another version of PayPal history, this is worth a read: Co-founder Elon Musk (pictured here) rejects the version that suggests he was a lesser player.

Wikio, which looks remarkably like Digg, raises $5.3M — Aside from ranking stories in various theme areas, like Digg does, Wikio gives you ways to publish articles and personalize your news page. The Luxembourg-based company has closed a first round by Lightspeed Venture Partners and Gemini Israel Funds. Its team has big-name European new media types: Founder is CEO Laurent Binard, who was founder of Mediapps (European Software Publisher), and chairman is Pierre Chappaz, who was Yahoo Europe President and co-CEO of Netvibes. Wikio’s seed investors include Loic Le Meur (VP Sixapart Europe), Martin Varsavsky (CEO FON), Freddy Mini (COO Netvibes), Ouriel Ohayon (Editor Techcrunch France), and Jeff Clavier.

Infinera, the fiber optic company, to pull IPO trigger — This is the company with the power board, with folks like TJ Rogers and Vinod Khosla, that has raised a huge $315 million in venture backing so far. It is reportedly planning to file for an IPO, at a $1 billion-plus valuation, says LightReading, noting Infinera has sent lock-up agreements to shareholders.

Start-ups are killing big software companies — That’s the only conclusion you can draw if software sales are going up and sales of the big guys, SAP and Oracle, are falling. More here.

Stealth companies of the week — Thealarmclock mentions Ron Conway’s latest company, Portfolia, and Redwood City’s Twofish, but has few other details. Let us know if you know more.

Acquisition environment humming — Dow Jones (sorry, subscription only, so no link) cites analysts and others saying M&A activity remains robust for now. We wrote about secondary activity. There’s a notable quote of Foundation Capital venture capitalist Warren Weiss saying the firm sold five of its portfolio companies in 2006 - and “turned down an extraordinary five offers for every one it accepted.”

Good to have power players on your board — Video company Veoh has not escaped the shakeout happening among video start-ups now that YouTube has emerged as leader, but Veoh backer and former Disney CEO Michael Eisner has a way of making news. When Veoh announced a partnership with Wenner Media’s Usmagazine.com, to create a celebrity entertainment channel on Veoh, the NYT wrote about it (even though there are lots of celebrity entertainment sites already).

Google adds sponsored links to your search history — Details here.

Google in talks to buy Adscape Media, for ads in videogames — The search giant is in talks to acquire the San Francisco company, which delivers online advertising and also places ads within videogames, according to the WSJ. A deal could be reached next week. The company has a member of H.I.G. Ventures on its board. (The WSJ notes that Microsoft last year acquired Massive, a company that delivers in-game ads, for close to $200 million).

Kiptronic raises cash for ad-insertion in podcasts — Our story yesterday, in case you missed it, is here. Kiptronic inserts ads in audio and video files as they’re downloaded for off-line use; this is different from the broadcasting ad-insertion technologies. See Techdirt’s critique of broadcasting hype here. More analysis here.

IBM Joins social networking field — Details here.

ThinkFree wins Web-based office software comparison — Computer World compares various Web-based software packages, and rates ThinkFree (first) and Zoho (second) the winners. ThinkFree edged out Zoho because it is more compatible with Microsoft Office. In a significant partnership with Omnidrive, though, Zoho lets users open and edit documents directly within Web-based storage service, Omnidrive, and then save them too — a first, to our knowledge.

(Updated) roundup of the high-stakes game going on in Silicon Valley:

Brad Garlinghouse’s Peanut Butter memo — The Yahoo executive complained about the company’s “proclivity to repeatedly hire leaders from outside.” This is noteworthy, because he himself was hired from the outside. Before Yahoo, he’d served as chief executive at DialPad, and drove that company into the ground. We reached out to Brad Monday night, and hope to get comment soon.

Larry Sonsini can’t be at fault — Fortune does a long piece about one of Silicon Valley’s most powerful lawyers, Larry Sonsini, and provides good insight into his character. Much of the substance, though, has been covered elsewhere already. Still, a notable quote from entrepreneur TJ Rodgers about why Sonsini is innocent in the options back-dating scandal (reason: he’s too expensive):

“How to give options is well known,” says Rodgers, the Cypress CEO. “You hire outside counsel, they have their word processor kick up a bunch of documents, and they charge you 50,000 bucks. Then you and your HR person give out options according to the plan. You administer it; they’re not involved. You don’t want them [outside counsel] involved, because you don’t want to be sent a bill for $2,000 every time you give out stock options.”

Chris Tate takes back Zooomr sale price — Valleyway says Zooomr, the photo site that likes to think of itself as a competitor to Flickr, turned down a $2 million dollar offer from Google, citing Zooomr’s founder Kristopher Tate as the source: “We’re going to take over the world!” he allegedly told Valleyway, adding that his selling price today would be $15 million. VentureBeat checked with Tate, and he had a different tune. He said he didn’t comment, either way, on the price, but did say he’s going to take over the world.

Reid Hoffman kept out of YouTube by his own VC firm — Reid Hoffman, chief executive of LinkedIn tells the New York Times that he wanted to make an investment in YouTube, but that his own venture backer, Sequoia Capital, edged him out by offering better terms. Sequoia could make nearly $500 million from the Google-YouTube deal. The NYT reporter quotes Hoffman saying he is envious of YouTube. However, Hoffman now says he was quoted out of context, i.e, that he was referring to how other people could be envious, and the Times reporter changed his words. He’s sent a letter of protest to the NYT reporter, a copy of which was slipped to VentureBeat.

Blackstone places $36 billion bet on real estate — This is the biggest buyout ever. VentureBeat don’t usually write about later stage deals, but this is just the latest example of the huge amount of private money circulating the economy, and it is trickling down to the venture world too. As we’ve said before, great time to raise money.

Cisco’s acquisition strategy defies science — Here’s an amusing 16 minute podcast of an interview of Dan Scheinman, Cisco SVP of corporate development by Wharton management professor Saikat Chaudhuri. Once you get in a bit, Chaudhuri keeps pressing Scheinman on the “science” of Cisco’s acquisition strategy, because he’s teaching a class on it, but Scheinman keeps letting him down — diplomatically, at least — insisting its largely intuition. He says an acquisition’s success is all in the timing, and these days Cisco is almost always better off waiting. Cisco checks blogs and discussion boards for news about the start-ups its looking at, again an apparent surprise of Chaudhuri.

A degree from Stanford without actually attending — Notable story in the Merc today about increasing number of people getting a degree remotely, in places like China.

Two years later, California’s stem-cell institute is still on life-support — It gets loans while it fights of lawsuits. This is getting ugly.

Yahoo buying MyBlogLog? Nah –MyBlogLog is a site that helps bloggers see who their readers are. Yet no one took time to confirm rumors with either company. We looked up Scott Rafer, chief executive of MyBlogLog several days ago, and he said was just out talking to a bunch of people about options; he seemed miffed with the inaccurate reporting. But Yahoo did acquire Swedish mobile company Kenet Works.

Iconix and RockYou have apparently settled — Here’s update story about the suit we wrote about here.

Fenwick’s lawyer says founders may be going too far in this rosy VC environment — Ted Wang, an attorney for several Web 2.0 companies, suggests they may be overreaching in the terms they negotiate with VCs.

Infinera’s 100 Gigabit Ethernet demo — Just recently 10 Gigabit Ethernet had become the cutting-edge technology for optical data transport. Now, Sunnyvale’s Infinera has demonstrated the first ever 100 Gigabit Ethernet network across 4,000 kilometers.

Getting paid enough? — Salaryscout just launched a simple way for you to compare salaries. Downside is, there’s not much there yet to compare. Techcrunch has a review.