VentureBeat

Jingle Networks, a provider of free telephone directory services, has raised $13 million in a third round of funding, according to VentureWire.

The service, called “1-800-FREE-411″, is pretty simple, and it’s completely automated: You dial a number, listen to an ad and then get the information you need. The Boston-based company has signed up around 150,000 advertisers.

When we covered Jingle back in 2006, the startup had just raised $30 million to build out its network — reaching a “critical mass” of between 10 million and 20 million monthly callers was key to attracting advertisers, chief executive George Garrick said. It looks like Jingle’s efforts were successful; it’s gone from around 13.5 million monthly calls (450,000 daily) to 20 million.

Investors include Goldman Sachs & Co., Hearst Corp., IDG Ventures, Liberty Associated Partners and Comcast Interactive Capital, and Jingle’s total funding to date is $70 million.

This is a crowded market, with lots of competitors offering similar free services, and Jingle competing against big players like Google, Microsoft and At&T. (We also hear that V-Enable has a big announcement coming tomorrow.) Google, for example, is better placed to deliver targeted ads, which is key to making ad-supported services pay off. If Jingle wants to take on companies of that scale, it will have to be innovative.

On the other hand, the startup must be doing something right already, because it reached profitability last month. I’m trying to reach Jingle’s investors to find out more about why the company has done so well, and how it will stay competitive in the future.

Here’s the latest action:

Lawyers finally sue Avvo – Earlier we reported the angry response of lawyers to the new site, Avvo, which lets users rate lawyers. Well, now lawyer John Browne has followed through on earlier threats to sue, after he decided he didn’t like the profile rating he was given. The rating noted he’d been disciplined by state authorities. The Seattle PI’s John Cook has the story. His suit is even going after Avvo backer, Benchmark Capital. Meanwhile, Avvo’s chief executive responds.

Google beats Cisco in acquisitions of start-ups — So far this year, Google has acquired five venture-backed companies, compared to Cisco’s four, according to VentureOne. (MarketWatch) Until now, Cisco has consistently been the most acquisitive company in Silicon Valley. The emergence of the Google glutton makes sense. With a high market value, Google has the currency to spend.

The bizarre story of Lifelock’s founder — Robert Maynard, founder of Lifelock, an Arizona company designed to help customers avoid identity fraud, has resigned. Turns out, a previous credit-repair company of his had been accused of false advertising and deceptive practices and shut down, that he’d been arrested because of an unpaid $16,000 debt in Vegas, and there’s talk he may have been performed ID theft on his own father — at least according to the reports. This comes shortly after a reported $6 million investment from Silicon Valley venture firm Kleiner Perkins into the company at a rumored valuation of $40 million (scroll down). Kleiner did not immediately respond to a request for comment.

Frontline Wireless may or may not be making progress — Depending on what you read, start-up Frontline Wireless may have gotten a vote of support, or suffered setback in its efforts to open a portion of wireless spectrum to build out a broadband network. Some said Sen. Daniel Inouye, D-Hawaii, chairman of the Senate Commerce Committee, endorsed it, but his words appear relative weak, when contrasted to the rather negative remarks by Alaska’s Ted Stevens and others.

Why few blacks, Hispanics and minority women are in venture capital — The NYT’s Matt Richtel takes a look.

Apple to sell music through Bebo’s social network — Details here on Apple’s first deal with a social network.

Benchmark backs three of the top-ten massively multiplayer online worlds (MMOs) — Details here. It has invested in Gaia, Habbo Hotel and Second Life, which are only three of the top ten that are venture backed.

Mahalo now paying users to write search engine results — Jason Calacanis is offering to pay $10 to $15 per search result written at his new Web site Mahalo. This follows his efforts at his former employer, AOL’s Netscape, to pay users in an effort to compete against Digg, and which didn’t seem to go very far.

Sony talks to acquire Club Penguin are off — So says Paid Content

AT&T works with Hollywood studios and labels to keep pirated films, music and other content off its network — the first major Internet provider to do so.

Microsoft announces deal with Linspire — Microsoft continues to strike deals with companies that offer services with the competing Linux operating system. The latest deal with Lindows offers interoperability, collaboration and intellectual property assurances (that Microsoft will not sue), and comes after Microsoft feuded with the company over its previous name, Lindows. The accord follows similar Microsoft deals with Novell and Xandros.

Jingle Networks wins patent – The Menlo Park, Calif. start-up, which operates the free directory assistance service 1-800-Free-411, has won a patent for answering such 411 calls while also offering recorded advertisements based on the information requested. The company’s statement is here. It could come in useful as much bigger players start to offer similar players. We’ve used the service, and find it helpful. However, we’ve found the ads more monotonous (they are often the same ones, over and over) than we expected.

(Updated below with comments from chief executive George Garrick)

Jingle Networks, a Menlo Park start-up which provides free phone directory assistance, has raised a whopping $30 million more in venture capital — upping the ante in what is now a crowded field.

This area has become popular because people find this an easy way to avoid the $1 to $3 they get charged using regular DA service.

Jingle, which markets itself as 1-800-Free-411, supports the free service by injecting advertising snippets in it responses. If you call them at 1-800-Free-411 looking for a particular local pizza company, for example, you may be offered a voice ad from a competing pizza company.

Competitors (see our early stories here and here), include San Diego’s 800ideas.com, which provides different 800 numbers depending on the city you are in, and Palo Alto’s 1-800-411-Save. (Update: InFreeDA, a San Francisco start-up that went live earlier this year with 1-800-411-METRO, has effectively closed shop. Thought he company told us in August it hadn’t closed down — and was just doing a major restructuring — we just tried using it, and got an “all circuits are busy” message, twice.)

The venture round is significant because it brings the company’s total funding up to about $30M over the past year (it got $26 million in April, and $5 million in December, three months after launching).

This latest third round was led by Goldman, Sachs & Co. and Hearst Corporation. Previous investors Comcast Interactive Capital, First Round Capital, IDG Ventures Boston and Liberty Associated Partners also participated.

Jingle says it now enjoys three percent of DA calls in the U.S., accounting for more than 13 million inquiries from more than four million consumers each month.

Among its advertising customers are CBS, which promoted its fall lineup with audio spots in the DA responses, and 1-800-flowers.com and 1-800-Mattress.

Chief executive George Garrick told VentureWire in a story (sub required) this morning that the company’s post-money valuation was “about $150 million.”

[Update: We just got off the phone with George Garrick, who confirmed the valuation was "slightly higher" than $150M. The large amount of cash is needed, he said, to build out the service. Advertisers come later, because they don't take a company seriously unless it can show five to ten million calls a month, he said. And he says Jingle has hit the tipping point, with about 450,000 calls daily. He expects revenue of between $1 and $5 million this year -- he wouldn't specify further -- and "ten times" that next year, he said. He said Jingle is the clear leader in free DA service, in part because of its more recognizable number. InFreeda has shut down, in part because of its less memorable name, he added. Palo Alto's 1-800-411-Save, meanwhile, is only placing between 5,000 and 10,000 calls a day, he said. We've reached out 1-800-411-Save for comment. No one else has raised close to this $30M, he pointed out. His real fear (he corrects; he did not say he feared them) assumption is that the carriers will unveil an ad-supported free DA service, he said.]

FBI investigators want to charge two men for spying in Silicon Valley to benefit China, and they say it is just the tip of a massive effort by the Chinese government to set up front companies to do this sort of thing.

In the latest case, they say Lan Lee, an American citizen, and Yoefei Ge, a Chinese national, stole chip designs and software from their employers NetLogic Microsystems of Mountain View and Taiwan Semiconductor Manufacturing Co. in San Jose, and planned to go into business with the Chinese government. The Mercury News has the story about it today (reg required):

The case highlights China’s role as the main adversary in a complex game of 21st-century espionage where many agents aren’t trained spies in trench coats but businessmen, students and researchers. Silicon Valley, counterintelligence experts say, is ground zero.

“Silicon Valley is a hotbed” of economic espionage, said Don Przybyla, who heads a FBI counterintelligence unit in San Jose. The valley is home to many of the estimated 3,000 Chinese front companies nationwide set up to steal secrets and acquire technology, according to the FBI.