VentureBeat

PayPerPost, the site that pays bloggers to write content about advertisers, and then gets paid by those advertisers, has raised $7 million more in financing.

This is a controversial site (see our earlier coverage. Bloggers writing rave reviews about products can sway readers into thinking that a product is actually good, but in reality it may be terrible.

In response, PayPerPost later implemented a policy forcing bloggers to disclose whether or not they’ve received money for their post.

Some five to seven percent of PayPerPost’s users dropped the service after that change, but these were replaced by ten times as many people who welcomed the change — both advertisers and bloggers, said Ted Murphy, chief executive officer of PayPerPost.

ReviewMe is a competitor. That company’s latest numbers suggested it had 750 posts, compared to PayPerPost’s 7,500 posts around the same time, according to Murphy. That’s why he’s taking so much cash: “We intend to keep it that way,” he tells VentureBeat.

He says he expects to meet this year’s revenue target of $5 million dollars, and possibly even exceed it. The company has 28,000 bloggers participating and being paid, he said. It has signed up 6,500 advertisers, he said.

Leading the latest round is Draper Fisher Jurvetson, which also led the company’s first $3 million round a few months ago. Additional participants included existing backers Inflexion Partners and Village Ventures as well as new investor DFJ Gotham. With this investment, DFJ Managing Director Josh Stein also joins PayPerPost’s Board of Directors.

Apple’s Steve Jobs dealt setback — Former Apple finance chief Fred Anderson now says Apple chief executive Steve Jobs misled him about stock option accounting. Story here, and statement by Anderson here. Question: Will this bring down Jobs?

Ram Shriram weighs in on FCC vote on wireless rule changes — See the Google investor’s VentureBeat column, where he advocates the FCC should take the first step toward opening wireless standards and access when it meets later today (Wed). He says the innovation gap will grow, if it doesn’t. Separate but related: India added 67 million mobile phone users (WSJ sub required) last year alone, more than the 41 million land lines in the entire country.

Google Maps have limited reach — Indian streets, along with the village masses of the Indian countryside, defy Google’s search for order, and so Silicon Valley venture firm Kleiner Perkins, and its investing scout in India, Ram Shriram, have invested in Mapmyindia, according to Content Sutra. Although even Mapmyindia has trouble in India’s own capital.

Blackberry users get VoIP — Iotum’s Talk-Now feature lets Blackberry users see who in their contact list are available to chat with. Now, Iotum has incorporated Jajah’s VoIP service, letting users make low-cost global phone calls with an Internet call.

…while other phone users can get Blackberry features — Users of Windows Mobile 6 phones, including Palm Treos, will this fall be able to use software from BlackBerry that makes these phones work like a BlackBerry. It will load applications like its push email, phone, address book, calendar, browser and so on. We remember Silicon Valley’s investors dismissing Blackberry a few years ago, saying it didn’t understand software. Despite its recent outage, this company isn’t going away.

FunnyOrDie.com continued — Turns out, the comedy site, run by Will Ferrell and Adam McKay, got its capital from Sequoia Capital partner Mark Kvamme. Kvamme became interested, he tells Forbes, when his 17-year-old son, an aspiring stand-up comedian came to him and said there weren’t any good comic sites online. Kvamme’s explains why this is a venture-backed company: On one hand, you have the talent of Ferrell and McKay driving things but they can only do so much, so you also draw on user generated content and voting to do the rest. (Photo via Valleywag).

Chinese video clones keep coming — Ku6.com has received $5 million from DFJ ePlanet Ventures and some others, according to Bill Bishop. Meanwhile, Tudou.com has raised a very large (for China, and for video) $18 million from JAFCO in its third round of financing, and is reportedly valued at about $70 million. This comes after it got more than $9 million from IDG, Granite Global and others.

Check out Zude — It launches May 1. Mashable says it is a better version of the homepage Netvibes, but it is really just a convenient way to drag and drop any content from the Web onto your page.

Peace between MySpace and Photobucket — The announcement is here, but we don’t know how they resolved it.

The proliferation of Twitter continues — When a company spreads virally, it’s a good sign. Twitter, the service that lets people update their friends with their latest goings-on, is finding itself being pulled into various plug-ins for your browser — from 30boxes’ feature, which lets you share Flickr photos, Youtube video and URLs via Twitter, to TwittyTunes, which lets you send a message to Twitter telling friends what music you’re listening to, with a link back to the song and artist.

Controversial company, PayPerPost, now seeking readers — PayPerPost, the company which pays bloggers to post articles about advertisers, just acquired Zookoda, which gives those bloggers another way to distribute their paid posts to readers. Announcement here. Zookoda, of Australia, lets a bloggers update their readers via email whenever they blog a new post. (Presumably, paid articles won’t draw hordes of readers — so now the strategy is to push the posts on people). Zookoda is the second company that listed on our VentureBoard to be sold.

Here’s the latest wrap-up of Silicon Valley tech news:

Cisco sues Apple over iPhone name — Who cares? If Apple loses, it will come up with a different name. Like, ApplePhone, or iPodPhone. Details of suit.

Yahoo signs deal with Akimbo to deliver video to televisions — Just the latest move in a huge number of deals pushing video to your TV. More details here.

Avvenu shares music via link in email — Avvenu, a Palo Alto start-up has been around for a while, but has introduced a new service for sharing music. By downloading a free music player, users can select tracks they wish to share (250 for free) and send links to friends via email. Recipients click on the link to listen for up to five days. Users sharing their music must have iTunes software downloaded, though recipients don’t. Works on Windows mobile software, too.

The latest on Jeff Bezos’ space project – Here’s the scoop from Amazon.com’s Bezos on Blue Origin, which reveals a cone-shaped vehicle to be used “to lower the cost of spaceflight so that many people can afford to go and so that we humans can better continue exploring the solar system.” Tests have already been made, though the program has some ways to go.

MyBlogLog sold for reported $10M, after no venture capital, and then spammed — The service, which lets bloggers and others see who is reading their blogs, and where those readers tend to go afterward, has sold to Yahoo for a reported $10 million. MyBlogLog became popular last year, after its little widget started showing up on blogs with the pictures of their readers. Some 45,000 bloggers had signed up for it. Om talked with chief exec Scott Rafer. Lately, though, some have showed it is relatively easy to spam.

Update on Techdirt’s analyst service — As reported (see here), Techdirt raised $600,000 to build out its Insight Community product, which hooks up expert bloggers with companies that seek their advice. Mike Masnick (left), of Techdirt, who has built the company without outside investments over the past decade, tells VentureBeat he finally bit the bullet, realizing it made sense to raise money to help build out the project — given all of the interest he’d received in it. It is still in testing mode, but he’s now building more interactive features, letting people in the network communicate with each other, rather than limit it to one-to-one relationship originally envisioned. Entrepreneur Mark Fletcher, one of the investors, joins the board. Also, investors were all outsiders. Insiders didn’t participate, as suggested earlier by the PEhub report, Masnick said.

Slideshow company Slide raised $20 million — We’d reported Slide’s venture round last year. Reports suggest Slide raised $20 million, giving it a valuation afterward of $60 to $80 million. This gives it some runway, even as competitor Filmloop lays off most of its workers. Here is our earlier story.

Weatherbill, an online site to sell weather insurance policies to individuals and businesses — Sounds boring, but it has all the Map mashups and other Web 2.0 candy to make it worth a look (via Techcrunch)
It has raised a first round of round of financing from NEA, Index Ventures and a number of angel investors.

Second Life has opened its application to developers — Many people find the virtual world Second Life difficult to get the hang of, which has no doubt limited its growth. Now it has opened its software for developers to provide alternatives. It isn’t clear whether this will spark a vibrant developer community or not.

Podzinger searches words in YouTube videos — Podzinger gives you a way search for words that are mentioned in YouTube videos. Podzinger has a tab letting you do this on its front page, and it tells you how many minutes and seconds into the video the reference is (although we couldn’t figure out how to zip automatically to the reference, like Pluggd does). More details here, at Splashcast blog. Blinkx is another company that searches audio and video files.

PayPerPost drops its purchase of Perfomancing assets — Details here.

Aaron Swartz, of Reddit, not done dreaming — Good piece in the Chronicle mentioning the impressive rise of Swartz, who built his first web site at 13, got bored, and then, circuitously, ended up building Reddit, which was bought by Wired Digital. Now 20, he says he’s headed back to academia soon. Re hanging out: “I’m so shy I don’t even hang out with the people I know now.”

Hype at Asiatech? — Days ago, we reported on the purchase of software developer Mediabolic by Macrovision. Sources told us the return was marginal, giving later investors slightly more than the money they invested. But it was no where near a two-fold return claimed by AsiaTech investor Katherine Jen in an interview with VentureWire recently, they said. Jen did not respond to a request by VentureBeat for comment about her “2x return” claim.

See Jobs’ demo of iPhone — It is striking, and worth it. See here, and click on “touch navigation” for starters.

PayPerPost, the controversial start-up that lets advertisers pay bloggers for writing positive pieces about them, has acquired assets of Performancing.com — giving it access to about 28,000 bloggers.

The bloggers are mostly individuals with small blogs who may feel vulnerable enough to consider PayPerPost’s enticing, yet ethically-challenged offer.

VentureBeat wrote about the Florida-based PayPerPost here. It is backed by Silicon Valley venture firm, Draper Fisher Jurvetson, among others.

Here is the announcement. The assets include Performancing Metrics, a blog analytics service, and Performancing Exchange, an online “classifieds” for bloggers, which provides a way for advertisers to reach the bloggers based on subject matter, readership and pricing — and now a good way for PayPerPosts’s advertisers to reach the pay-hungry ones.

Recently, in conjunction with U.S. legal moves, PayPerPost forced its bloggers to disclose when they have received money for a paid post.

Here’s another story (Mercury News) about the differences between the venture and start-up communities on the East and West coasts.

Separately, note that the most ridiculous examples of self-absorbtion do not necessarily hail from Silicon Valley, as some might assume.

The start-up that filmed itself during the boom era of 2000, Govworks.com (the company of Kaleil Tuzman’s, pictured top, which became the documentary Startup.com) was based in New York City. And this year’s self-absorbed company, PayPerPost, is based in Florida (we wrote about PayPerPost here). It has launched Rockstartup to video-chronicle its journey. It has the obligatory episode of the founder Ted Murphy in the car, before and after meeting with venture capitalists (click on image above for video). Of course, Murphy comes back after the meeting, boasting he’s raised $3 million in three meetings, and is going to make his partner so rich. Both PayPerPost and Govworks raised money from Silicon Valley VCs (Govworks raised $60M, including from Mayfield, PayPerPost from DFJ), so valley VCs are partly responsible for this sort of excess too. What do you think? Will PayPerPost bomb, like Govworks did? Techcrunch also takes note.

Also, not sure what the Mercury News meant by the East Coast having an advantage in biotech. There’s evidence that the Bay Area is ahead of the Boston area in this field too.

PayPerPost is a Florida start-up that lets bloggers get paid for writing about products and other companies.

It has just got $3 million in funding from Silicon Valley venture firm Draper Fisher Jurveston and others.

People have said this is a controversial company, because regular readers can get duped if bloggers don’t disclose they are getting paid.

Others have said that the real intent of the service is to help the advertisers paying for the blog posts to boost search result rankings for their companies (the more bloggers writing about their company, the more incoming links the company is likely to get, and thus the higher it will go in results).

We talked with Josh Stein, venture capitalist with DFJ, who led the deal, and he’s steadfast in his belief that the company is doing a “good, valuable” service. He concedes it’s controversial: “Like many things, if you look at the most cynical interpretation of it, you could see how it could be a source for bad.”

But he said that some companies feel so much pressure to get more users — no matter how many users they may already have — that they’ll want to generate publicity for their new products. And they should have the right to pay someone to write about them. Bloggers, Stein said, have to decide what sort of disclosures they want to make with their readers about this, and whether it fits with their ethics. But the market should decide that, not PayPerPost. “The blogger knows better than we do what their social contract is with their reader base.”

The ethics question arose today in the Blogosphere, when it emerged that public relations firm was writing a fake blog on behalf of Wal-Mart (UDPATE: Although see comments below about dispute on this):

In case you missed the story, a blog ostensibly authored by a couple traveling across America in their RV and spending nights parked in WalMart parking lots turned out to be a fake blog, the brainchild of WalMart’s PR counselors at Edelman. While fake blogs (and other fake social media) are nothing new, it’s dismaying to see it emerge from Edelman, which has some of the smarter new-media people on its staff (Phil Gomes, Michael Wiley, Steve Rubel and more), and which touts itself as the PR firm that truly gets social media. This is the third time (as Todd Defren noted in his post) that Edelman has botched the whole social media thing on WalMart’s behalf…

DFJ’s Stein said PayPerPost is about to release some tools that give bloggers a variety of disclosure policies to put on their blogs if they use PayPerPost. These can be badges on their blog that say the blogger is paid for some posts, but doesn’t disclose which ones, or it can say the blogger discloses when any post is paid for, and so on.

PayPerPost launched three months ago, and Stein says the response has been “dramatic.” Even before the publicity emerged this month after DFJ invested, the company had made $100,000 in revenue. Every day, ten or fifteen new advertisers arrive at the site, looking for more bloggers to pay, he said.

Notably, what got Stein excited about PayPerPost, he said, is his recollection of his own scorn for search engine Overture, when it launched. That site was for paid results only, and he remembered thinking all the same thoughts that PayPerPost is getting criticized for: “I thought it was the sleaziest, dumbest idea I’d ever heard of.” Of course, Overture went on to become a popular company, when Google borrowed many of its aspects, and the model was refined. “I told myself, ‘I’m not going to make the same mistake again,’” he said.

Techcrunch first wrote about the company here.

Below is an example of a PayPerPost listing: