VentureBeat

Here’s the latest action:

EBay’s Q1 is good but not great — The company’s net income grew 22 percent to $562 million compared to the same period a year ago, and its revenue climbed 24 percent to $2.19 billion. However, user growth has slowed, and the operating margin fell, largely because eBay’s growth is in its sites with low-profit like Skype and PayPal. EBay is trying to hold it own against Amazon’s auction features; John Donahue took over as the company’s chief executive in March, and has already instituted changes to the site’s fee system. Now the market turns its attention to Google’s earnings, which will be announced this afternoon and could provide more evidence that the Internet economy is slowing.

Diggers don’t dig tech stories — Tech stories’ presence on Digg has fallen from 76 percent to 20 percent, according to ReadWriteWeb. The site (with help from blogger and developer Richard Cunningmham) compared Digg’s front page during the first week of March in 2006, 2007 and 2008. Twenty percent is still a significant chunk of news, but the decline seems to indicate Digg’s shift away from tech and toward becoming a more mainstream news site.

Twitter message helps Berkeley student get out of jail — Egyptian police reportedly arrested journalism graduate student James Karl Buck while he was photographing a protest. Buck then sent out a short Twitter message on his cell phone: “ARRESTED.” His friends called Berkeley and the American Embassy, and the next day Buck was a free man. The San Jose Mercury News has more.

Google Maps predicts traffic — Not only does the site offer live traffic information, it can also predict conditions based on past coverage. Google says it has comprehensive traffic data in 30 major metropolitan areas, with partial coverage in others. I, for one, am grateful: This should be a huge help in deciding when to navigate the fearsome stretch of Highway 101 between San Francisco and VentureBeat’s office in Redwood City.

Chip maker Phiar goes out of business — The Boulder, Colo. company had trouble raising a second round of funding after recapitalizing and raising $9 million last October. GigaOM has the scoop, and says chief executive Bob Goodman hasn’t confirmed yet.

Londoners give passwords away to good-looking women — A study found that 21 percent of 576 London office workers were willing to give their computer passwords away to women offering them a chocolate bar in exchange. This sounds crazy to me (Who would do such a thing? Who would design a study like this, anyway?) but the Wall Street Journal says it’s true.

Ad network AdRoll now open to the public – AdRoll’s goal is to sell ads for community-specific networks of small web publishers. Silicon Valley Watcher says the startup’s “blend of social networking tools and marketing technologies” could be competitive against larger, existing networks like Federated Media.

Densbits, a small Israeli company, is working on turning flash, the type of memory used in devices like the iPod Nano, into the world’s standard memory type.

Flash, which is essentially a semiconductor that can store data, is much faster than the magnetic disk drive that currently stores your computer’s information. However, it can’t compete in terms of the large amount of data stored by magnetic drives.

As the name implies, Densbits is working on making flash memory denser. Once that problem is tackled, we may all be using ultra-fast flash for our main computer memory, which will speed computers overall.

The company has already had some success, working with Saifun, another Israeli company, to bring memory density to four bits per cell. Saifun is in the process of being acquired for $370 million by Spansion, a larger flash memory maker.

Smaller semiconductor companies like Saifun or Densbits typically work by developing a technology, then licensing it out to big manufacturers. In an interview with TMCnet, a Densbits executive says they will try to partner with companies like Samsung and Toshiba, while competing with Sandisk, the world’s largest flash memory maker.

The competition between venture firms to find such small firms with potential hit technologies is fierce. It’s the market’s potential size — projected to grow rapidly towards $50 billion in the early years of the next decade — that has investors interested.

Which technology will win out is not clear, though. Phiar, for instance, has a drastically different approach, which we reported on a month ago.

Densbits is based in Israel, was founded in 2006 by ex-Intel staffer Ilan Hen, and now has about 30 employees. According to our source, the company received between $8 and 10 million in funding entirely from Sequoia Capital.

Update: Phiar has shut its doors, according to GigaOm.

A competitor to semiconductors would break a 50-plus year monopoly on everything from processing power to communications. Yet that’s exactly what Phiar says it can do, with a new technology called metal-insulated electronics.

The new technology uses a phenomenon called quantum tunneling to achieve greater speeds and efficiencies than semiconductors. It essentially makes low-energy electrons tunnel directly through the insulating material of the electronics, whereas most semiconductors change the electrical states of electrons to channel them through specific bands. Think of it like pinball; semiconductors shoot the electron around the side, while Phiar’s technology prods it right through the barriers.*

However, there are decades of history behind using semiconductors. Even if it’s possible for Phiar to spark a computing revolution, it won’t happen overnight, or even in a decade. That’s why the company is starting off in two vital areas it thinks it can dominate: Short range communications and flash memory.

Take communications. Imagine, if you can, transferring a movie from your computer to a nearby television in as much time as it would take to slide a DVD into the player.

That’s possible today, using the 60 gigahertz wireless spectrum, but the materials used for the semiconductors, indium phosphate or gallium arsenide, are extremely expensive and difficult to integrate with silicon, the cheap standard material used in semiconductors. Several corporations are at work on modifying semiconductors for 60GHz, but Phiar says its devices will be much cheaper.

The metal-insulated chips used by Phiar will also be less power-hungry than semiconductors, meaning they can be used in devices like cell phones and laptops without quickly draining their power. And metal-insulated electronics can be “grown” on top of silicon. Phiar is currently in a co-development deal with Motorola for the devices, among partners.

For flash memory, Phiar similarly promises to make large strides forward, again in speed but also in miniaturization. There are currently two competing types of flash memory, NAND and NOR; the former being slow but densely made (and thus small), the latter being fast but less dense.

The company says it can bridge the gap between the two technologies, packing more cells into less space but using the innate properties of metal-insulated electronics to break through speed barriers that semiconductors have not yet reached.

Bob Goodman, Phiar’s CEO, told us that the company has a deal with a major flash manufacturer, but couldn’t disclose which one.

We’re talking about a potentially huge story for the computing world here — that is, if the company is successful in spreading its technology. However, it’ll be tough to break the existing relationships around semiconductors — a $200 billion industry — and create a new ecosystem for technology that is still unproven.

Goodman acknowledges that ongoing research in semiconductors could yield a breakthrough to challenge metal-insulated electronics. Everyone is eager to add 60GHz networking, the equivalent of Bluetooth sped up hundreds of times over, to their products. A partnership between IBM and semiconductor maker MediaTek is just one of the many projects chipping away at modifying semiconductors for 60GHz.

Phiar thinks its technology will win out, though, as it’s a physical impossibility for today’s semiconductors to achieve the speed feats of metal-insulated electronics. Mark Siegel, a partner at investor Menlo Ventures, told us it’s unusual to see a technology with as much potential, saying, “It’s very infrequent that we’d invest in something so early, but the technology really is novel.”

He thinks that the company has the potential to raise money through a public offering at some point in the future, which would help it to build production facilities and make the chips on its own.

A semiconductor market analyst we talked to,Vahé Mamikunian of Lux Research, said he thinks Phiar’s chances are good based just on its scientific expertise. “They seem to have a good hold on how physics work at the nanoscale, better than some of the leading companies in the markets they’re looking at,” he said.

Phiar received its first funding, for $9 million, from Menlo Ventures. It’s currently working on raising another round.

*(Continuing from the explanation above: This is just the tip of the diode. Phiar is actually a double take on an older single-insulator technology that’s been used for almost as long as semiconductors, creating their own metal-insulator-insulator-metal model — think of it like a sandwich. Where one insulator tends to raise its resistance to electrons passing through as they gain energy, with two, Phiar can cause the materials to create single-directional “quantum wells” that mimic empty space, allowing the electrons to perform their tunneling trick and pass through. For further information, go get a Ph.D.)