VentureBeat

Moka5, a Redwood City, Calif. startup that wants to give businesses and consumers a way to carry a virtual computer around with them on an iPod, USB stick or other storage device, has raised $15 million more in a second round of financing.

The round was led by Highland Capital Partners and included an additional investment by existing investor Khosla Ventures. We first mentioned this company last year, when it raised $3 million from Khosla. The company also announced Bill Demas, a former Microsoft and Yahoo executive, is chief executive.

We talked with Demas today, and he made clear the company is in its early days. It is still testing its product with a limited number of people, and will launch openly later this year or early next. We’ll be getting a USB stick so that we can test it out. We’ll be sold if Moka5 can really let us carry around the contents of our dream computer — from operating system, to applications, to files — on a little stick. Just think if we never have to worry about configuring a new computer again. Moka5 would let us insert the stick in any computer — new or old — and voila, our system is up and running.

Demas clearly tried to underplay the ability of the company to deliver on that vision right away. There’s a lot of work required to let us tailor our system like that, not to mention to be able to take our content from an existing computer and put it into the USB stick. The company currently has a limit on storage it can support. The consumer test version will come out later this year. Right now, it has let developers create their own configurations for a computer, which Moka5 calls LivePC (more details here).

Demas also stressed it will be secure. If a virus hits your system, Moka5’s virtual technology can rewind so that you can get to a place before the virus hit.

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Two companies likely to get a lot of attention at DEMO when they announce this week are MojoPac and Moka5.

First, an update on MojoPac, a Mountain View start-up that has created a way to essentially carry around your computer in your pocket, which we mentioned last week. We couldn’t say everything we wanted, because the company’s product was under wraps until DEMO started. We wrote vaguely about how lets you carry around your PC contents in a tiny storage device, and then access it on any PC you plug the device into.

We said MojoPac lets you run on a PC “any application” stored in a removable storage device, such as a USB drive, a micro drive (an iPod, for example) or flash drive. It also works with networked storage.

May sound similar to other products you’ve heard of. But MojoPac seems to push the envelope with its ambition. Here are a few more details garnered from a conversation with chief executive, Shan Appajodu. It was started in 2004, when he and few colleagues started thinking of a way to give people their computing powers (or mojo) anytime they wanted them. They decided to separate the computer hardware from the software for this product, and find away to put that entire software offering onto a storage device.

There are lots of other products that let you save almost any file on a storage device, for example Sandisk’s U3. However, most of these, including U3, are doing so with proprietary hardware and software. U3, for example, is asking application vendors to rewrite their applications to store them on U3’s platform, says Shan Appajodu. With MojoPac, that rewriting doesn’t need to happen.

With both MojoPac and U3, you have to install applications on your device before transferring data, to safeguard intellectual property.

Once you’ve made these installations, though, it takes two minutes to transfer data, via your iPod to any other PC. That means you can use the same iTunes music wherever you go. And if you install your Outlook and VPN solution, it becomes your virtual office — where you can check your email, for example.

Appajodu says he expects MojoPac to have good adoption in Asia, where people have fewer laptops, and rely on public computing facilities, such as cyber-kiosks.

Also of note is that MojoPac distinguishes between the operating system and processes (shown on task manager). It only talks with the operating system of a PC. That way it can stave off some computer viruses, said Appajodu.

MojoPac will be worth checking out.

Then there is moka5, a Redwood City company backed with about $3 million from big-name venture capitalist Vinod Khosla, which is releasing LivePC, a product that is apparently doing much the same thing.

This is a Stanford group. The team leader is Monica Lam, Professor of Computer Science, currently on leave, from Stanford, and who started virtualization research in 2001. More details will come later.

Finally, we note the still-secret San Jose-based startup, Calista, which has raised several million (exact amount undisclosed) dollars from a group led by venture firms Greylock Partners and Lightspeed Venture Partners. That company will be late, but at least have the benefit of hindsight — and launch next year.

(Update: Corrected name of company acquired by News Corp. It was Newroo)

Roundup of latest Silicon Valley action:

One of Digg’s top diggers, p9, has quit, and Netscape is grinning — When Kevin Rose, founder of the news-ranking site, Digg, said he wanted to make the voting process for stories more democratic, he apparently alienated some of the site’s top users. One top digger has left, and slammed the door loudly in protest. Here’s a good description of how Digg works, by the way, and a discussion about the changes underway. Of course, all this is giving Jason Calacanis (pictured above, with dog) fodder for saying he was right all along to offer to pay the top users at Digg and other news sites to leave join him at Netscape. Calacanis’ site competes with Digg. This has also sparked a debate about how long users can volunteer their time and energy digging sories for Digg without getting some reward or other form of recognition.

Now Calacanis is suggesting his parent company, AOL, consider stealing away top users from competitiors to AOL’s other sites, for example at Uncut Video, AOL’s clone of YouTube. He’s suggesting Uncut steal from YouTube’s best 1 percent of video posters: (Wow, this copying behavior is becoming quite a trend over at AOL):

So, I’m wondering if the folks on AIM pages or Uncut are seeing something similar and if similar strategies might work. Maybe Uncut should hire the top 20 video producers on YouTube to work for us? Maybe AIM Pages should hire the top 20 folks on MySpace to be part of our “leadership program” (or something like that). Have them train the user base and give feedback to the developers.

Video ads really that popular? — Fred Wilson, a venture capitalist at Union Square Ventures, has produced rosy set of calculations for the revenue video-sharing site YouTube can bring in from advertising. He estimates 80 percent of YouTube’s 100 million vidoes being watched daily can be monetized, with advertisers paying an average of $12 per 1,000 times these video are shown. He assumes YouTube will give users a cut for sharing their content, and arrives at a total $153 million net revenue per year. He says this is just back-of-the-envelope, and not meant to be exact, but even then we find it hard to agree with the analysis. Let’s face it, ads become a turn off at a certain point. The joy of YouTube is sitting there gawking at vidoes run over and over again. Forcing forcing people to sit through ten-second ad will radically change the experience. Here’s a Business Week article about the topic which shows much more skepticism.

InterActive Corp (IAC) the latest to media giant to move into deal-making mode –The big media companies are upgrading their buyout strategies. Sumner Redstone, chairman of media giant Viacom Sumner M. Redstone last week fired Viacom’s chief executive, Tom E. Freston, and replaced him a Philippe P. Dauman,a deal-maker. As the NYT reported, investment bankers scrambled to make lists of possible acquisition targets to pitch, including folks like YouTube, FaceBook and Bebe. In fact, even Viacom itself showed up on the list — as a candidate to be taken private by all the hungry private equity companies out there. This is the era of the acquisition, baby, and it Silicon Valley is getting its fair share. The latest comes from IAC, which has hired Kara Norman, the young associate with Battery Ventures, as its “vice president, mergers and acquisitions.” We teased Kara for chasing entrepreneurs through the NY’s Central Park, and now she will be based in New York where she can chase full-time, though she promises to visit the valley often — where there are plenty of acquisition possibilities.

Kara’s hire comes on the heels of IAC’s hiring of Jason Rapp, who will be her boss at IAC. Rapp was VP of online development and associate GM at New York Times Digital. He has joined Barry Diller’s IAC as senior VP, mergers and acquisitions. IAC, which owns properties like Evite, Ask, Ticketmaster, is giving the new hires a pretty broad mandate Kara said. IAC, of course, is smaller than NewsCorp, where Ross Levinson head of NewsCorp’s Fox Interactive division is making all the waves buying up Web 2.0 companies, such as MySpace and Webaroo Newroo.

Mendel Biotechnology has new ethanol technology — The NYT has a good summary of the various approaches to cellulosic ethanol production, which is where the great expectations are right now. Instead of corn stalks, perennial plants like grasses that require far less energy-consuming irrigation and fertilization than corn are looking promising. On this blog, we’ve mentioned most Silicon Valley companies active in the clean-tech already, but not Mendel, a Hayward company. According to the NYT, it is:

…looking more at miscanthus, a perennial grass native to China, where Mendel has set up an operation.

The company said miscanthus could produce well over 20 tons an acre each year. “No planting, no fertilizing, no irrigation,” said its chief executive, Chris Somerville, who is also the director of plant biology at the Carnegie Institution and a Stanford University professor. “You can just cut it every year for 10 years.”

Silicon Valley green-tech Young Innovator, Christina Galitsky. Technology Review pays tribute to Christina Galitsky — The publication has made Galitsky, 33, “2006 Young Innovator.” She left a chemical engineering program UC Berkeley with her master’s in 1999, and found work testing California’s water quality. She recognized contamination was coming from the power industry and, eager to fight pollution, joined Lawrence Berkeley National Lab. There, she began diagnosing energy waste in nearly a dozen industries, from concrete to beer, and is helping companies like wineries to spot their energy waste more easily.

New life for the Segway? — The high-tech scooter company’s chief executive James Norrod is taking “a much more expansive view of what Segway is about.” Instead of limiting the Segway to the two-wheeled personal transporter we’ve all gotten comfortable with — and, frankly, tired of — Segway can put its technology “into anything that moves.” According to a BW story:

That means unmanned vehicles with potential military or industrial uses, or multiperson vehicles that use Segway’s computers and electric engines to glide smoothly over obstacles. And Norrod thinks Segway’s efficient electric motors could be central to a new generation of hybrid cars (yes, cars). Segway has already built a four-wheeled, multiperson prototype. “If people want four wheels,” says Norrod, “I should give ‘em four wheels.”

Second Life database gets hacked – There have been several major Internet privacy snafus lately, and this one at Second Life is just the latest. A hacker apparently accessed account names, real life names and contact info. Sadly, it seems there’s nowhere really safe to play online anymore, even in the ultimate escapist world of Second Life.