VentureBeat

Here’s the (updated) latest action:

Marc Andreessen getting taste of what it’s like to be a blogger – The Netscape co-founder launched a blog last week. The NYT ran a story about one of his earliest posts. Then he did a good piece about how to hire. And now all the attention has him racing out more posts, including a three part series on The truth about venture capitalists, all very good reads (here, here and here). I recommend reading the last of these, to understand why the debate about the bubble will continue. Marc, welcome to the blogger treadmill.

Video-sharing site Revver’s CEO Steven Starr steps down — This is the second shakeup in six months. No more details given about the change, other than the obvious context: Lots of competition. The company has been losing executives. (CNET)

Xing to buy Plaxo? – Unlikely. A rumor at Techcrunch says Xing, the German version of professional networking site LinkedIn is buying Plaxo, the contact updating service. However, we’ve been told that this isn’t happening. There could be big announcement over next week or so from Xing, though.

Eye-Fi raises $5.5M for camera Wifi — We have the story on VentureBeat NewsWire (for our hard-core readers, here’s another reminder to check that left-hand column).

Apple in talks with major Hollywood studios to get more new films for rental service — The WSJ has details: Will be launched in the fall, and cost $2.99 for 30-day rental of movies. Details are still speculative, though, on who will be participating.

Yigg.de, a remarkable rip-off of Digg.com, gets funding — This is German clone, in both name and presentation. The amount raised is undisclosed but comes from angel investor Roland Metzger and Baytech Venture Capital, the German company says on its blog. It reports 1.4 million unique users a monthly.

SplashCast, the multimedia Flash player, raises angel funding from poker celebrity Phil Hellmuth — Its funding is now about $2 million, according to NewTeeVee

Chris Yeh takes CEO job at Ustream — The company is a competitor to Justin.TV, which is the permanent webcam of a guy named Justin. Ustream wants to let anyone do that. We’ve mentioned them before in our story about Justin.TV’s move to try to do the same. (See Yeh’s blog)

Google worst on privacy? – If you read this report by Privacy International, you should also read the response by search expert Danny Sullivan, who tears it to shreds. Obviously, Google has its own issues with the report, quite emotionally so.

What happens when you piss off attorneys? – Well, you get sued. We reported how Avvo, a site that rates lawyers, had launched, and that some lawyers were upset. Now, one of them is close to suing.

Internet radio station companies fight back — The U.S. Copyright Royalty Board ruled to increase royalty rates earlier this year, starting July 15. RealNetworks, Yahoo, Pandora and Live365 say they’ll be paying more than $1 billion per year.

Gamemaker of popular Desktop TD leaves to run company full-time — He’s joined with another guy, Kottke reports. They’re blogging here.

Private equity riches, will you be picking up the tab? — Blackstone Group, the high-profile buyout firm that plans soon to go public, filed more papers with the SEC that show it could be valued as high as $33.62 billion. Also, the filing shows Blackstone CEO Steve Schwarzman pulled down $398.3 million in 2006 which, according to Dan Primack, would place him only behind Steve Jobs on the Forbes list of highest-paid public company CEOs. So, as Blackstone issues shares to the public at the top of the private equity bubble, will you be the public investor to buy shares?

Yourminis, which are the widgets offered by Goowy Media, are now more easily compatible with desktop — Previously, you had to download Apollo from Adobe and a widget manager from Yourminis to use that company’s widgets on your desktop. Now, they’re compatible with Micrsoft’s Vista sidebar, without that step. Yourminis’s widgets can easily go anywhere, from blogs to social network pages to personalized homepages like iGoogle Pageflakes, Netvibes and now your Vista desktop. The interface for adding widgets, however, is a bit confusing, and could be simplified by reducing the number of necessary clicks. Goowy CEO Alex Bard assures us that improvements, including support for OSX, are in the works. More here.

Updated

CBS has bought music recommendation website Last.fm for $280 million, the extremely popular London-based company that lets users search for and listen to music based on their past preferences and recommendations of other users.

Last.fm says it has around 20 million active users each month, four million of which are in the US. The purchase comes at a time when services such as Last.fm are growing extremely quickly. Other private competitors showing growth are Pandora and iLike. The deal is significant because it gives Last.fm greater distribution, by integrating with other CBS channels.

The CBS deal is a win for London’s Index Ventures, which has been on a roll with investments in companies such as Skype and Tellme. Index invested a mere $5 million into Last.fm exactly a year ago. The deal nudges Index’s Danny Rimer, who is on Last.fm’s board, closer to the top of the VC pack, in terms of track-record — and most certainly seals his place at the top of those under 40.

CBS has been on a rampage lately, striking deals and partnerships with more than a dozen Web 2.0 companies to seek distribution through new Web channels in order to access younger viewers, including buying video site Wallstrip last week.

Viacom was earlier rumored to be in talks with Last.fm. (update: Investor Neil Rimer tells us this rumor was a load of crock.)

Last.fm focuses on user preferences, sorting music based on user feedback, whereas Pandora recommends music based on song characteristics that are similar to ones you have previously chosen. iLike is more similar to Last.fm, and is showing tremendous growth on Facebook’s platform, heading toward 1 million new users within the first week of integrating with that service — though works only with iTunes recommendations. Last.fm also submits recommendations from music from other players, including on your desktop. There are more than 500 monthly track submissions on Last.fm.

Under the accord, Last.fm co-founders Martin Stiksel, Felix Miller and Richard Jones will remain in east London.

Last.fm, just four years old, has struck deals with with EMI and Warner Music.

Pandora, meanwhile, has raised more than $20 million from Crosslink Capital, Labrador Venture Partners, Selby Venture Partners and WaldenVC. iLike has raised $13.5 million from IAC’s Ticketmaster five months ago, giving Ticketmaster 25 percent of the company — a deal that may make Ticketmaster look pretty smart based on Last.fm’s $280 million valuation.

The deal will only add to the frenzy we’re seeing in M&A right now. In addition to iLike and Pandora, Santa Clara, Calif.’s Mercora, another music discovery site, is also in play.

Update: We just talked with Index’s Neil Rimer (Danny’s brother), who said Last.fm will be in an even better position to serve music, because of CBS’ range of partnerships.

Internet radio site Pandora announced tonight the launch of a new service for mobile phones, finally taking the popular music site beyond its core internet audience.

Pandora’s site is a favorite among music lovers: It lets you discover new music based on your tastes and create custom playlists. However, until now, it hadn’t offered a decent mobile service — which raised questions about how it plans to maintain its edge, given the emergence of the Apple iPhone and others, such as Microsoft’s Zune.

Now you use it on your Sprint phone. Clumsily called the Pandora Everywhere Platform, it also integrates with a music-streaming hardware system made by Sonos, designed for home entertainment systems — and soon, with a new wifi-connected portable music player powered by another startup, Zing.

Pandora claims around 7 million users, and no doubt some of them will like the service. However, the move to hardware does put it in competition with the iPod and the iPhone, raising questions about the uptake; in fact, Sprint’s involvement suggests that this is an also-ran move on the part of the carrier, in reaction to AT&T’s 5-year deal with Apple.

Indeed, this has the signs of being hurried. At a product launch presentation tonight, the company said the deal was wrapped up over the over the last week and a half. Maybe Pandora’s cave to the record labels earlier this month made the company look like a less risky partner: As we reported, Pandora recently agreed to their demand that it block foreign listeners due to the difficulty in enforcing US-based licensing agreements abroad.

The Oakland, Calif. company is a classic start-up story that will be helped by these new partnerships. The service is a great way to find new music that you’ve never heard of. However, as mentioned, we have to wonder if these additional ways of accessing Pandora will be so valuable that people will choose to use it in addition to (or even instead of) iTunes.

The company is also losing money, despite running display advertising on the web. These services are a new revenue stream. The Sprint service is free for the first 30 days, then costs then costs $2.99 per month on top of a Sprint Power Vision data plan.

It has been two days since the controversy began at Digg.com, when users started submitting stories to the news site containing the HD DVD encryption key. If there’s one lesson learned, it’s that the Web tends toward radical openness, and that aggressive censorship is futile. A related story may unfold at music site Pandora, which we’ll get to shortly.

Here’s what happened: After Digg.com received a cease-and-desist letter from the group of companies that use the copy protection system (AACSLA), Digg momentarily tried to remove the stories.

But its users revolted, and covered the front page with links to the HD DVD encryption key, and Digg relented. Even as we write, the front page is still dominated by these stories. There are four on the front page. People are now debating whether Digg will survive or not, with supporters saying that the event showed that Digg’s users were in charge, but others saying Digg was tarred because it was defaced by the story (most regular readers would like to read a variety of stories).

The real story goes beyond Digg. People everywhere were writing about the key. One site up went up with the key in its URL, and another person sang a song with the key in the lyrics (click on image above to see the YouTube video). Search Google, and you’ll find some 300,000 pages containing the number with hyphens, and 10,000 without hyphens. It shows that the AACSLA shouldn’t have contacted Digg with the take-down letter, which only inflamed the situation, brought more attention, and therefore backfired. (We’re not sure of the original source of the key, but presumably the AACSLA could have dealt firmly but personally with the original source of the story.) Complete censorship is impossible. Digital rights management of music can be stripped. And most other censorship efforts can be bypassed if someone does enough works.

The latest example is unfolding at Pandora, the popular Web radio company that lets you discover new music based on your tastes and create custom playlists. After months of pressure, the music labels have finally forced Pandora to block access to foreign IP addresses, so that people outside the US can’t access the music streaming. It goes into effect today (Thursday).

However, the more it is talked about, the more people tend to mention how to end-run the censorship. After all, presumably all a foreign user has to do is change their IP address so that it is not recognized, using something from ProxyBlind, as is being pointed to by thousands of sites.

Slacker is an ambitious new music service created by some industry veterans that takes aim at the iPod.

Slacker is a music player device, but it is also a music delivery service. It is path-breaking because it wants to let you take it anywhere: It will be the first service to use satellite to deliver music constantly to your device.

Slacker’s service is essentially a personalized Internet radio station, similar to popular services Last.fm and Pandora.

On Slacker, your “station” refreshes automatically with new music. It plays music that matches your tastes, which you determine by clicking “love it” on a song you like, and “ban it” for one you don’t like. Slacker then constantly updates the music it plays for you, finds new songs that match the bands you like, and songs from bands that are similar in style to those bands (those that have say, a similar energy level, popularity, or era; Slacker does not, however, assess “acoustic characteristics,” like Pandora does, to decide what music to send you). It reshuffles songs just like a radio station, but it feeds you newly released songs, and also other songs that match your updated tastes.

Slacker has licensed two million songs, so it has depth.

Slacker is so named because it is designed for the estimated 70 percent of people who like music, but who can’t be bothered to constantly update their playlists.

It is different from Last.fm and Pandora in other ways. You can go mobile with those services, but can play them on your device only if you’re within WiFi coverage.

The Slacker device, by contrast, is designed to be used anywhere. The device is about the size of a blackberry. So you can carry it around like you do an iPod. However, Slacker’s servers will communicate with your Slacker device constantly. It uses commercial satellites, and WiFi, refreshing your device’s drive with new songs when they are available. The communication happens every 15 seconds. If a new song found by Slacker matches your preferences, your device caches it. Then, if you do enter a place where satellites and WiFi can not reach the device, you can still listen to music from the cache. Slacker has a car dock.

This is an impressive team. Dennis Mudd, chief executive, was CEO at Musicmatch, a company he took to $70 million in revenue, and which he sold to Yahoo for $165 million. He has brought in Jim Cady as President (ex-CEO at Rio), and Jonathan Sasse as VP Marketing (ex-CEO iriver America).

The basic Slacker account will be free. A premium service of $7.50 a month lets you save tracks, and avoid ads. The hardware devices, depending on the model, will cost $149, $299 and $399. They’ll ship during the second half of the year. Slacker wants to integrate its music service within other devices, too, such as cellphones. You’ll be able to download up to 2,000 songs on the low-end device. Downloads will be $1 a track.

You can track your account on a Web player too (see image, at bottom).

The Web site will open tomorrow (Wednesday).

Based in San Diego, Slacker has raised $13.5 million in venture capital from Sevin Rosen, Austin Ventures and Mission Ventures.

Seperately, Marshall Kirpatrick points to news emerging from the SXSW Interactive conference in Austin, Tex.: Last.fm is developing a music video recommendation service based on the company’s Audio Scrobbler technology. More details here.

Roundup of Silicon Valley news:

Google’s Larry and Sergey were more interested in technology than Yahoo founders — There’s a revealing 2000 interview with venture capitalist Michael Moritz posted by PodVentureZone, comparing Google’s co-founders and Yahoo’s. He was an investor and on the board of both, and says Larry and Sergey were closer “to the sheet metal, closer to the hardware.” He calls Sergey a “tough, little guy”:

I think Larry and Sergey have a much more pronounced interest in the core technology than Jerry and David. I think Jerry and David had and have an extraordinary and fervent interest in having a fabulous service for their customers, but they’re less interested in developing the raw underlying technology that I think Larry and Sergey are. I think there’s a reason that Larry and Sergey stayed longer grinding through their PhD stuff at Stanford than Jerry and David. And Larry and Sergey are much closer to the sheet metal, closer to the hardware. Don’t forget, Yahoo has never had its own search technology….

Google leases San Francisco office, finally — The search engine has been looking for an SF property for some time, in order to retain young workers who prefer to live and work in the City — instead of trekking down to boring Mountain View. It has now leased 210,000 square feet, for about $35 a square foot, at the waterfront property south of Market St., Hills Plaza. It could host 800 of Google’s employees.

Berkeley regulates nanotechnology — The city of Berkeley, Calif. is regulating nanotechnology, fearful of the new properties generated by the clusters of atoms or molecules sized at a billionth of a meter. At that small size, compounds can take on different, sometimes unpredictable characteristics, leading scientist and Kleiner Perkins venture capitalist Bill Joy, among others, to fret about the potential for nanotechnology — when combined with biology — to self-replicate uncontrollably. This threatens to make humans an endangered species. Here are more details (via NYT) on Berkeley’s efforts to regulate the “molecular foundry.”

NetSuite appoints Billy Beane to board — Netsuite, the maker of online software for small businesses, is considering going public, and has added Billy Beane, the Oakland A’s general manager, to its board. Beane was made a legend in Michael Lewis’ book MoneyBall: The Art of Winning an Unfair Game, which explained Beane’s strategy of picking players using unorthodox metrics and minimal amounts of cash. Beane says he is drawn to Netsuite because it is backed by Larry Ellison, and has an unorthodox means of selling software — doing it online, instead of via disks that must be installed on PC. We hope Beane doesn’t really think selling software online is that revolutionary. It’s been around for a while.

Newspaper industry forms two opposing camps — The newspaper industry remains in decline, but the newspaper companies can’t seem to stop squabbling. It appears two rival camps have emerged. The three largest newspaper publishers, Gannett Co., McClatchy Co. and Tribune Co., are reportedly forging plans (WSJ sub required) to sell advertising jointly on their newspapers’ Web sites — to attract big advertisers that don’t want to hassle with dealing with each company separately. Currently, national advertisers buy the bulk of their online display ads from folks like Yahoo, Time Warner’s AOL or Microsoft’s MSN, the story correctly reports.

However, Yahoo has announced plans to work with nine other newspaper publishers to build a similar one-stop-shopping spot for advertisers, as we reported. And ClickZ reports there’s bad blood between these smaller publishers and the big three, stemming from the fact that the Yahoo group was excluded by the big three from their CareerBuilder and Cars.com/Apartments.com properties.

OpenView Venture Partners spams web sites — A bizarre thing for a venture firm to do, but maybe not. Gossip site Valleywag reports that Boston’s venture firm, OpenView, spammed it. It seems OpenView sent a computer generated email to Vallewag, saying the firm wanted to invest without really knowing what Valleywag does. This is the modern version of the cold-calling that many later-stage firms have done over the years. We’ve sent emails and made calls to OpenView to confirm, and will report if we hear back.

Venice Project, based on Mozilla framework, but where will it get content? — More details from Om and the WSJ on the Venice Project, the TV-video company being created by the Skype/Kazaa co-founders. We can’t shake the feeling, however, that this project is deluged with competition in ways that Skype and Kazaa were not when those services became popular.

Flock co-founder Geoffrey Arone leaves — Arone, who was holding the fort at the new browser company, Flock, after former CEO Bart Decrem left last year, and other key developers departed, has also gone. We haven’t talked with Flock, but this may suggest the new version of the Browser, due out soon, may not be everything its investors had hoped. We’ve tried reaching Arone, but he did not respond. He is becoming Entrepreneur in Residence at Bessemer Venture Partners (via Techcrunch).

Music recommendation service, Pandora, ruins it, with advertising — Ads on a Web page are fine, but not when they are spliced into music you’d like to listen to. Geek Limit has the latest on Pandora, which tailors music to your tastes, which is inserting short audio commercials inserted into your audio streams. This is part of Pandora’s effort to experiment for ways to make revenue, at a time when music sites are consolidating (see news on AOL Music and Napster)

Second Life hype spurs odd behavior — Banks Wells Fargo and ABN AMO bought islands recently within the virtual world. Feeling the pressure, BNP Paribas decided it needed to buy an island too, VentureBeat has learned. More bizarre is the answer given by Sun Microsystem chief executive Jonathan Schwartz, when asked by the NYT about why Sun bought land in Second Life. He essentially didn’t have an answer, making vague references to how Sun was a new media company and needed to have presence online (read whole response here). His conclusion:

…I’m not going to advertise during the Super Bowl. What a waste of money. Where am I going to advertise? I’m going to buy land in Second Life.

iPhone reality setting in — Some good coverage lately of the Apple iPhone’s similarity to the Macintosh Computer which, like the iPhone, was designed in secrecy, introduced with wild hype and at a high price. But the shortcomings of the Mac eventually cost chief executive Steve Jobs his job. The Mac’s predicted sales never materialized in part because of expansion limitations, and now people are pointing to the iPhone’s limitations. It won’t allow third party applications to be installed. According to Jobs in the NYT, “These are devices that need to work, and you can’t do that if you load any software on them.” He said some outside software may be introduced, though it will be controlled by Apple. Others say this may not be a big deal. Install an Adobe Flash player that allows a bunch of Web services, for example, and Apple may get around some of the shortcomings.

Skype a disappointment? — Here’s a good summary in BusinessWeek of how Skype may not qualify for the $1.5 billion in earn-outs that were part of its deal with eBay, given lackluster performance. This is off-topic, but we also noticed an intriguing ad placement in the BusinessWeek story. Check out screenshot below, which shows an ad for Branson’s Virgin right next to a paragraph staying Branson is a visionary. Has contextual advertising really gotten this good? Or did this involve a human being?

The NYTs’ Pogue runs a story singing the high praises of the Squeezebox, a product from Slim Devices which lets you play your computer’s music anywhere in the house.

This is an intriguing company, based in Mountain View.

Beginning next week, the Squeezebox will do something no other hi-fi component can do: it will hook into Pandora… a sophisticated music-recommendation site. You name a band, singer or song that you like. Immediately, you hear a new “radio station” that plays…only musicologically similar songs. If you type “Billy Joel,” Pandora plays songs with “mild rhythmic syncopation, mixed minor and major tonality, a dynamic male vocalist and vocal harmonies.”

…But in the case of Slim Devices, you get a real taste of the creators’ personalities. The company bends over backward to make itself an open, transparent, right-minded outfit. The server software is open source, meaning free and open to the public to modify; as a result, you can download Squeezebox plug-ins that give it even more abilities…

We say intriguing, because the company is not a product of today’s hyped-filled moment. Two years ago, it was already focused on this area. The founder is Sean Adams, who now can’t be more than 26, and who started an Internet service provider in high school. Backers are Charles River Ventures’ Bill Tai and former Xoom.com CTO Vijay Vaidyanathan, who contributed $330,000 in an angel round.

Other cool tidbits here about the company:

Sean Adams aims to find out just how much traction a small design team can get leveraging the open-source movement. With the assistance of hobbyist code developers, the 25-year-old engineering-school dropout has secured a small foothold in the market for music-streaming systems. Now he’s courting investors to help take his 12-person startup, Slim Devices Inc., to the next level….A couple of employees working in a small back room handle final assembly and test of Squeezeboxes in batches of a few dozen units. Another room serves as a workbench, piled high with prototype circuit boards, where Adams sometimes tinkers well into the night.

And like some of the PC industry’s forebears, Adams never got an engineering degree but has had a lifelong passion for discovery and invention…”Without spending any money on marketing, we got the word out about the product,” he said. “The first 80 systems I soldered by hand, with parts I ordered on my credit card and pre-orders I logged myself.”