VentureBeat

Plenty of people are skeptical that enterprises will embrace virtual worlds as a venue for doing serious business. IBM, on the other hand, is a total believer that 3-D worlds such as Second Life augur the future of online commerce.

IBM is announcing a partnership with Second Life producer Linden Lab today to create an enterprise-class version of Second Life behind a corporate firewall. IBM and Linden Lab believe that the move will strengthen the security of the virtual world, and thereby make it more attractive to corporations who are considering using it as a business platform, said Jim Spohrer, director of service research at the IBM Almaden Research Center in San Jose.

With the added security, businesses can enable employees to login into Second Life for corporate training purposes. (No, they’re not going to use their avatars to have virtual sex or pretend to be the opposite gender.) Spohrer said that businesses can rent areas known as “islands” in Second Life and run dress rehearsals for everything from a fire drill to a hospital emergency.

IBM has more than 5,000 employees using Second Life for purposes such as sales training or collaborating across different geographic regions. The company will also allow the employees to explore Second Life. And whey will be able to cross into IBM’s secure firewalled corporate network, much like users do with a virtual private network, which creates a secure connection from the Internet into a corporation so that users can log into enterprise applications from their homes.

The firewall will also prohibit regular users of Second Life from gaining access to portions of Second Life that are available only to IBM employees. Spohrer said that the companies have to work out exactly what to move behind the firewall to guarantee security.

It will be interesting to see whether the productivity of IBM employees goes down because they’re goofing off in a virtual world, or if it goes up because they’re using training applications in Second Life.

Spohrer said that a group of IBM researchers at Almaden have built an application dubbed “rehearsal studio” that allows professionals to hold online collaboration sessions with each other to talk about real-world problems. They can use the studio to do “what if” analysis or learn how to make presentations to executives. The sessions are recorded to provide feedback to the employees.

Here’s the latest (updated) action:
1) Kyte.tv raises $15 million
2) Electric Sheep Company lays off 22
3) FCC receives 700MHz auction applications
4) Microsoft signs $500M ad deal
5) GPS devices fly off the shelves
6) Netsuite sets high price for planned IPO
7) Eric Eldon, celebrity at large?

Kyte.tv raises $15M second round — An online startup that offers a video player allowing near-live communications by video, photo and chat, Kyte has picked up some steam online, attracting a decent-sized audience and celebrities like 50 Cent to its service. The $15 million second round was provided by Telefonica, Nokia, DoCoMo, Swisscom, Holtzbrinck and Draper Fisher Jurvetson, according to Robert Scoble. Quite a hefty amount, in comparison to the $2 million investment into live streaming video company, Ustream that we reported in yesterday’s roundup. However, Kyte still has some work to do in competing against newer, sharper-looking rivals like Qik, which says it can stream live video straight from your phone, something Kyte doesn’t quite do (though is working on).

Electric Sheep Company lays off 22 employees — It’s time to cull some lambs from the fold for the Electric Sheep Company, which builds software that third-party companies can add to virtual worlds Second Life. It had planned to build an ad network within these worlds. Instead, it has cut almost a third of its workforce, and is giving up on the ad plans for now. It plans to branch out beyond Second Life to worlds like Metaplace (our coverage). More details are at ClickZ News.

FCC receives applications for 700MHz auctions — More than two hundred applications were filed to bid on the upcoming Federal Communications Commission auction for the 700 Megahertz wireless spectrum, planned to begin January 24th. Although some applicants must correct and finalize their applications, the list contains some notable names — Google, of course, but also Microsoft co-founder Paul Allen’s venture firm Vulcan Capital, and startups like Frontline Wireless (expected). Check out the lists of finished and unfinished applicants yourself for more.

Microsoft signs $500M ad deal with Viacom – Taking a first step toward becoming a viable competitor to Google in the online ad market, Microsoft signed a deal with Viacom that it says is worth about $500 million, over a contract period of five years. Google, in turn, immediately claimed that the deal is proof that Federal anti-trust watchdogs should allow its merger with DoubleClick to go through. Microsoft may well be kicking itself, because as Bloomberg reports, the Federal Trade Commission will likely approve the Google-DoubleClick merger this month (although it must also find approval with European regulators).

NetSuite sets high price for planned IPO — First the expected range for NetSuite’s initial public offering was $13 to $16, then underwriters boosted it to $19 to $22. Now the final price has been set at $26, almost double the original range. That means that Larry Ellison, the billionaire CEO of Oracle whose family owns over 70 percent of the company, will make out like a bandit. NetSuite, of course, is a competitor to Salesforce, whose own stellar performance on the markets likely helped improve NetSuite’s outlook. Ellison was also at one time an early investor in Salesforce, which is now run by a former employee of his, Marc Benioff.

GPS devices becoming cheaper, more ubiquitous — Many GPS devices have dropped below $100, and even the better units often retail for little more than $200. Sales of the devices at local malls are through the roof, according to Dean Takahashi. Cell phones, likewise, are providing an ever-cheaper way to find your way around. Excellent news for the dozens of startups that have sprung up offering to show you the way to the nearest store, friend or event — now the question is, which will come out on top?

VentureBeat’s own Eric Eldon becomes a celebrity — Admittedly, those are the words of Speedddate.com, a dating startup that ran a session with eight “celebrity bloggers.” We (or he) will take the compliment. Way to end those lonely nights of blogging, Eric.

So much for Second Life, the virtual world, being a place you can escape real-life constraints.

Second Life, the San Francisco company owned by Linden Lab, has banned “broadly offensive” sexual and other acts between avatars. It has also banned gambling.

Now, IBM is posting rules of conduct for its more than 5,000 employees who inhabit Second Life and other virtual worlds where Big Blue hosts meetings with clients and partners. Guidelines including things like “Be a good 3-D Netizen,” and “especially sensitive to the appropriateness of your avatar or persona’s appearance when you are meeting with IBM clients or conducting IBM business.”

Here’s the latest (ahem) action:

Second Life avatar sues another avatar, over virtual sex bed — We should have predicted this. Second Life entrepreneur Kevin Alderman has filed a copyright infringement lawsuit against Second Life resident Volkov Catteneo. This is apparently the first time an avatar has sued another avatar in the virtual world. Alderman, who has made money before in Second Life by selling a virtual island for $50,000 (real money), says his avatar, Stroker Serpentine was doing quite well selling a SexGen bed, which allows avatars to have sex, for L$12,000 (US $45.11), but that Catteneo has copied it and is selling it for a third of the price.

Geni uses viral messaging to grow quickly – Family-tree company Geni (our
review) claims five million profiles have been created by users in five months. The secret? Instead of making you sign-up, and then start creating a family-tree, it combines the two steps. Its user interface cleverly inserts your initial data into your first family tree — leading a new user to immediately begin inviting their family members to also build out the family tree. We noted in March that the site had over 100,000 users that had added about 2 million profiles; this was when the company closed a funding round valuing it at around $100 million. The surge in growth since then can only be good news for the investors.

Bill Gates’ investment arm backs Gay.com — His Cascade Investment Group invests $26.2 million into the gay, lesbian, bisexual and transgender online community PlanetOut, which owns Gay.com. More from John Cook in Seattle.

Russia shuts down Allofmp3.com, or tries to at least — Russia shut the music download website, a leader in music and video piracy, to placate the U.S. concerns about Russia’s copyright protection policies. However, an alternative site run by the same Moscow company has emerged: Mp3Sparks.com.

Netvibes, one of the more popular start-page companies, sees departure — With Google and other big players pushing their own start-pages (pages that you can customize and make your home page as you surf the Web), there’s growing tension at the many start-up companies that launched similar features early on. Paris-based Netvibes has lost Pierre Chappaz, who was co-CEO and said he had disagreements on strategies of “distribution and monetization.” See his post here.

Helio reportedly to get more life-support — Earthlink and South Korea’s SK Telecom plan to pump $100 million each in Helio, their money-losing U.S. mobile telecom network. Helio is a so-called MVNO, or networks that pay to use the infrastructure of other carriers to offer their services, and they’ve had a poor track record. Amp’d Mobile recently filed for bankruptcy, and ESPN’s mobile network failed. Helio is getting costly. It has already soaked up $440 million, and expects a net loss of $330 million to $360 million this year, compared with a $192 million shortfall in 2006.

Netsuite 74 percent owned by Larry Ellison, and it competes with Oracle — Netsuite, software company that just filed to go public, undercuts Oracle by selling dirt-cheap online software for ERP (Enterprise Resource Planning) for CRM (Customer Relationship Management). And yet it is 61 percent owned by Larry Ellison, chief executive of Oracle. Ellison owned another 13 percent, which he has given to trusts related to his family. Netsuite’s products sell at a loss. (See WSJ story for more; subscription required).

KKR is latest buyout firm to file for IPO — KKR has filed for an IPO that will let it raise $1.25 billion. This follows the much hyped IPO of another buyout firm, Blackstone. Lately, the sector has drawn scrutiny from lawmakers, who are now considering levying a new tax on buyout professionals. Blackstone’s stock has dropped 4.1 percent since its IPO. Blackstone’s Stephen Schwarzman and Peter Peterson have pocketed $2.56 billion between them. Now, will individual investors fall for another buyout IPO? Probably.

Yahoo’s personalized SmartAds — Yahoo has released new ad tools that allow for better “behavioral targeting.” Called SmartAds, they let advertisers create custom ads, using information Yahoo has about where the user is located and which sites they are visiting. The NYT has a good description of how it works:

This is how Yahoo’s new system works: the advertiser (or its agency) would provide Yahoo with the components of its display ads — including the logos, tag lines and images. The retailer would share information from its inventory databases that track the items on the shelves in each of its stores. Next, Yahoo would combine that data with the information it has about its users’ demographics and actions online to create a product-specific advertisement. For airlines, SmartAds uses Yahoo’s information about its Web surfers to create display advertisements for each person that feature ticket offers with actual prices listed. In time, Yahoo plans to offer rich media advertisements where users can buy the ticket at that price right within the ad unit, rather than having to click through to another Web site.

Departures at Technorati — The blog search engine, which has lost some of is focus lately, has suffered three more departures. The company’s chief executive Dave Sifry said its top engineers Adam Hertz and Tantek Celik have gone. They had been there for three years, and were responsible for Technorati’s effective evangelizing of its tags and of microformats. Two months ago, the company drew another $1 million from its investors. The departures are a setback; we reached out to Technorati and Tantek for comment, but neither responded. Also, product manager Liz Dunn, who had helped build the company’s latest site, has left, to join Will Farrell’s comedy video site FunnyOrDie, backed by Sequoia.

EBay opens US version of its classifieds site Kijiji — Auction site EBay has quietly opened the cute-sounding classifieds Web site, a clone of Craigslist, in all 50 states (see WSJ story, subscription required). The service had been operating in Canada, Europe and Asia. Its name, though, is harder to spell, and there’s not much difference from Craigslist. Posting is free, but the company will explore ways of charging for display ads and premium services for sellers. This is notable, too, because eBay owns 25 percent of Craigslist. EBay owns a number of other classifieds site in other countries.

Feedburner makes two premium services free — After getting bought by Google, Feedburner is offering for free its Stats PRO service, which provides statistics such as click-through tracking and podcast downloads; and its MyBrand service, which allows users to control the URL of their feed. See Search Engine Land for more details. Danny Sullivan wrote about the importance of owning your feed name here.

Craig Venter’s company transplants entire genome from one bacterium cell to another — This technique could possibly lead to the creation of ‘designer’ microbes producing fuel or help cleaning toxic waste. The company has a way to go yet. The ultimate plan is to stitch together artificial chromosomes, proteins and other building blocks with the aim of jumpstarting their designer microbe to life. (More here.)

T-Mobile’s phone, lost in the iPhone hype — T-Mobile picked a tough week to release its own new phone service. Offered on Samsung and Noka phones, the service lets you place and receive calls over both the regular T-Mobile GSM network and virtually any WiFi wireless network. Called HotSpot@Home, it uses a technology called UMA (unlicensed mobile access). It lets you switch seamlessly between the two networks. It’s quite expensive (minimum $50 a month), so you’d have to be a power user for this to make sense. Calls originating from WiFi zones are free (don’t go against minutes). It works in Starbucks hotspots, without forcing you to log in. It doesn’t work in other areas with registration pages, such as airports, however. Good for use abroad, too, since WiFi calls are free. More details from Larry Magid and the NYT’s Pogue.

Korea’s LG agrees to develop a YouTube-focused mobile phone — LG said the model will allow users to upload, view and share video clips without the need to use a computer. The 3G phone will be offered first in Europe in the second half of this year (Forbes). LG began selling “Google phones” in Europe last month with software installed for directly using the Google service. It offers one-click access to Google’s search engine, Gmail and Google maps.

Videocountner lets you track how may time your video has been watched across various sites — The sites tracked by the service include YouTube, Revver, Daily Motion, MySpace and iFilm (via Techcrunch).

HP’s Presto photo service for elderly isn’t working — It was supposed to be really easy to use, allowing people to set it up for the elderly relatives to receive photos. But the Mercury News’ Dean Takahashi says it doesn’t work. After two tries, his mother gave up. We covered the company here. The Mountain View, Calif. company has $10 million in backing from Kleiner Perkins and Clearstone.

IBM, one of the nation’s largest companies, sees a big future in 3D worlds — but it probably won’t be with Second Life.

IBM has been eager to try out 3D marketing, for reasons we’ll get to. Like other companies, it created a virtual Business Center in Second Life (you’ll need to have an account at SL to go there), staffed by live sales avatars during business hours. It had more than 2,000 visitors in the first two weeks it was open and IBM’s island was rated first among corporate islands by at least one study. It has led to at least two sales leads, the company says. Visitors can pull down technical manuals and click to download PDFs straight from Second Life.

However, it chose Second Life only because the San Francisco company is the most popular virtual site; other corporate marketers were trying it out too.

However, IBM doesn’t care much about Second Life, and is now looking for other venues. A virtual world that offers companies like IBM an open architecture, or interoperability with other virtual worlds and sites, would be a big hit, suggested Lee Dierdorf, VP of web strategy and enablement, in a conversation with VentureBeat Friday. “What started me down this path wasn’t Second Life,” he said of his desire to experiment with 3D, but rather “Tom Cruise in Minority Report.” He recalls watching Cruise creating vignettes from different action movies, and realizing how powerful the visual experience can be for researching. “Do I think anonymous avatars dressed in funny clothes are the future of business? No, that doesn’t interest me.” Second Life remains too closed and quirky, he said, for IBM to settle on it long-term.

His comments come as Forbes publishes an article suggesting that corporate islands haven’t had many visitors. Erik Hauser of Swivel Media, Wells Fargo’s digital agency, says in the piece: “Going into Second Life now is the equivalent of running a field marketing program in Iraq.” David Churbuck, Web-marketing vice president for computer maker Lenovo, the company that bought IBM’s personal computing division and which doesn’t have a presence in Second Life, adds: “There is nothing to do in Second Life except, pardon my bluntness, try to get laid.”

Now, IBM’s corporate homepage ranks among the top seven globally, with 24 million visits to its domain in April.

So Dierdorf is giving plenty of thought about how to structure the site. He showed us the latest features during our meeting. They’re impressive: AJAX lets you drill from the IBM.com homepage down three levels of hierarchy, by simply mousing over links — getting you directly to the division you want, with a single click. There’s more, such as tracking features that note your interests and then providing personalized tips on the right side of the page. We looked at HP.com, IBM’s chief rival, and it doesn’t offer the same degree of navigation.

However, despite all this stuff, Dierdorf is convinced that a 3D technology is even more powerful for customers.

3D offers a way to search with periphery vision, and breaks out of the scroll-up-down-click-and-maybe-get-lost mode. If IBM offered customers a virtual archive, complete with stacks of shelves, where customers can stroll into this archive room and pull out any information the want — or ask a virtual librarian for more help — efficiency would be increased substantially. IBM has twice the content of Google, Dierdorff says, enough pages to fill an average small town library (37,000 80-page books). So far, the 3D experiment has worked in Second Life, but he’s looking for something easier and more open.

(Image courtesy of CNET)

Here’s the latest action:

Feed Crier gets bought — Feed Crier, the service that lets you subscribe to blogs or other content within your instant messenger (IM), has just been bought by IMified. That company, meanwhile, says it plans to do more on mobile front. It’s just the latest in a crazy-full day of IM stuff.

VCs have produced less profit than they invested, since 1997 — In other words, the industry is negative for the past decade. The vast majority of profits come from a few dozen firms. Other firms are bleeding red ink. See NYT story: For instance, in the first nine months of 2006, venture firms invested $20 billion but paid out $10 billion; in 2005, they invested $23 billion but distributed $20 billion… Diana H. Frazier, a managing partner of Flag Capital Management, a limited partnership, who mediated the limited partner presentation at the venture capital association meeting, estimated that from 1986 to 2002, only 32 firms accounted for 56 percent of money distributed. Ms. Frazier and other limited partners said the success for investors depended on being among the top-tier firms. “This is an access class, not an asset class,” she said.

Facebook has launched classifieds — It’s called Marketplace, and it launched this weekend. We’ll be writing about it more. For now, here’s the NYT story. It will allow users to create classified listings in four categories: housing, jobs, things for sale, and other. Facebook told us over the weekend that Oodle and Jobster do not have exclusive classifieds relationships with Facebook, despite previously announced partnerships. Jobster does offer job related products that go beyond Marketplace’s listings. Facebook users who create classifieds can show them to only chosen friends or to anyone in one of their “networks” — their high school, college, company or geographic region. They can choose to make the listings appear on their profile pages, and send them out on “news feeds,” the automatic updates that appear when users log in to the site. Buyers will be able to see how they’re connected to sellers. Get ready for some serious Facebook road-kill: The handful of stand-alone college classifieds start-ups (we hinted this might happen, here).

MySpace announces “Take Down Stay Down” — MySpace said it is using the technology of Audible Magic, a Los Gatos, Calif. company to prevent users from re-posting video content at MySpace after that content has been removed at the request of the copyright owner. MySpace is the first company to launch this feature. Google reportedly also has a deal with Audible Magic, and says it offer similar filtering technology at its YouTube property, but hasn’t commented on specifics. It’s hard to believe YouTube’s traffic won’t get hit when it implements the technology.

Sergey Brin, Google co-founder, gets married — …quietly, to his girlfriend, Anne Wojcicki, in the Bahamas last weekend. Story here. As mentioned before, Wojcicki is a biotech analyst who just started her own company. She’s a Yale graduate in her early 30s. Her sister Susan rented her Menlo Park, Calif., garage to Brin and Larry Page — which became Google’s first office.

Last.fm announced video service — Here is the company’s announcement. Last.fm has gotten buzz for its music recommendation technology, and social networking that lets you connect with users with similar tastes. It will let users create personal videos channels, just as they can create music channels. Recommendations will come from its partnership with indie labels such as Ninja Tune, Nettwerk Music Group, and Domino. Now people are calling Last.fm the “MTV of Web 2.0.”

Tagged fastest growing social network? — Michael Arrington has an update about the Silicon Valley social network, Tagged, which is now profitable, and perhaps the fastest growing. However, it’ll be worth checking back to see if it is sustainable, because the traffic spurt happens mainly over a single month.

Shopping widget mania — Seattle’s Mpire is rolling out about 80 new e-commerce “widgets,” which allow bloggers and publishers to post shopping related content on their sites and make money by passing leads onto Amazon.com and eBay. More details here, by John Cook. The company is similar to Tumri (see our coverage).

Child porn ring on Second Life — Bizarre, but serious.

Wallstrip, a financial video site, sold for $5M? — So say the rumors, but venture capitalist Fred Wilson is emphatic he did not invest $500,000 into the company.

Amazon’s stealth company, Lab126 — The company appears to be focused on digital media for consumer electronic devices. And its president is Gregg Zehr who was VP of Hardware Engineering at PalmOne, VP Engineering at VA Linux and VP PowerBook Engineering at Apple.

Car engine redesign may reduce pollution — See story here, about Purdue researchers who say they’ve created the first computational model to track engine performance from one combustion cycle to the next for a new type of engine that could dramatically reduce oil consumption.

Clean-tech sector summarized — Here is a good summary of details from the Lux Report.

China is out of control — Pundits have been shouting “China bubble” for years, only to see China keep growing with no major setback. This time, though, the mania has hit and China appears headed into the equivalent of Silicon Valley’s euphoric bubble and burst. The stock market has tripled in value since early 2006, and is up 51 percent this year. There’s talk of shares in China’s Bank of Communications jumping 50 percent on first-day IPO trading Tuesday.

Blackstone’s bridge too far? — Orbitz, Blackstone’s latest IPO candidate, does look shaky. See Gigaom story here.

Google’s strategy in three words: “Our next strategy evolution is to really think about three components,” Mr. Schmidt said, in comments picked up widely. “Search, ads and apps.”

Who’s afraid of Google? — That’s the headline screaming from the San Francisco Chronicle, featuring a graphic of a scary Google creature. The real answer, of course, is that Chron itself just as scared of Google as the start-ups it writes about — reeling from a decline in advertising and more layoffs.

iPhones coming earlier — They’re already being sold on eBay for more than $1,000, and apparently coming June 14 or earlier

Blackberry fans, check out the Curve — Slimmer than the 8800, but fatter than the Pearl. Details here. No launch date or pricing yet, but it will launch with AT&T.

Here’s the latest action:

The fast rise of Gideon Yu — Gideon Yu has reportedly become a junior partner at Sequoia Capital, one of Silicon Valley’s most respected venture capital firms. What a ride he’s had: He was a Yahoo treasurer until September of last year, when he was scooped up by YouTube to be their chief financial officer, a month before the acquisition by Google, where he apparently played a major role. When negotiating the sale to Google, Yu admitted to Time that he told Google different things about YouTube’s budget than he was telling his own team at YouTube. That’s the sort of brass-knuckles Sequoia likes. Thus, he follows the path of Roelof Botha, chief financial officer of Paypal, who did something similar before joining Sequoia. (Via Valleywag). We’ve requested confirmation from Sequoia.

Google releases Web History; you getting scared yet? — We almost skipped over this news when it was released Friday, thinking that Google was simply relaunching its search history feature, which has been around for a while. But Web History lets you track everything you do on the Web, not just search. From now on, you can carry around your entire surfing identity — so that when Google finally creates that chip in the brain, you will be a perfect, intelligent, non-forgetful machine human being.

Microsoft couldn’t get DoubleClick, despite being willing to spend the cash — How did Google make off with DoubleClick, a major banner advertiser that strengthens Google’s positioning considerably? How did they do it while spending less money than Microsoft was willing to pay? Questions are still unanswered, but John Battelle has post on this, and promises a follow-up. He’s got a summary of Microsoft’s argument that the GoogleClick merger goes against antitrust laws, because it can now control ad pricing. (Also, merger document here).

Stumble while on your favorite site — StumbleUpon recently released a new feature that lets you stumble from specific sites, without leaving them– called StumbleThru. More here and here.

How much is Second Life worth? – Half a billion? A venture capitalist told us Friday evening that he’d heard from “three independent sources” that the virtual world company is close to raising a new venture round valued at $450 million or greater. Now, he’d been drinking some wine, and perhaps he was thinking of a virtual funding round — because Second Life is officially adamant that it’s baloney: “Utterly untrue!” says Second Life spokeswoman Catherine Smith, after checking with management. She said such a funding would “go against everything the company has been talking about for the last six months,” which itself is a clue. At which point she shut up. What do you think? Is it about to be sold?

Key online advertising industry group blasts comScore and Nielsen — The Interactive Advertising Bureau, a grouping of major publishers and online advertising networks has criticized the two major Internet audience measurement services, comScore, Inc. and Nielsen/NetRatings, asking them to submit to a third-party audit of their measurement processes. It referred to their “outdated measurement methodologies,” including a panel structure that was “developed in the 1930s and still relied on today.”

Dot-bomb chronicles still playing out today — David Hayden, the entrepreneur behind the dot-com darling Critical Path, the boom-era email provider, went from thinking he was worth $200 million to a nasty lawsuit with bank Robertson Stephens threatening to leave him $38 million in debt. “If we lose, we’re done,” he tells the NYT. We talked with Hayden a year and a half ago, when we wrote about his latest company, Jeteye, the future of which is also in question.

Institutions are increasing their hedge-fund holdings — …while the smart people are getting out. Are they smelling trouble ahead?

Here’s the latest action:

Netvibes offers Netvibes2go — Netvibes, the company that has gotten buzz with its cool personalized home page service, is offering a mobile version called Netvibes2Go. It lets you access all your info — contained in useful modules, including email, calendar, to-do list and any RSS feed — while you’re on the go. To get it, you have to configure your Netvibes account on a PC first (creating a new tab, called “mobile” and then putting in compatible modules). Founder Tariq Krim tells us an announcement will be coming shortly. Was discovered by bloggers.

Check out VentureBeat Newswire for latest stories — They include John Doerr’s latest company (physician software), video-sharing company Fliqz’s latest VC round (surprising, for us), Sequoia’s latest investment (in PopularMedia), secretive home telecom company Ooma’s latest round (from Sean Parker and others) and more.

Google adds real-time traffic to maps in several cities — Cities include San Francisco, New York and others. Image at left is a partial screenshot of what SF traffic looked like at 9:30am this morning. In other words, be glad if you don’t live or work in the East Bay.

Wesabe, personal finance site, raises $700,000 — The Berkeley company that lets you manage your financials, with things like tagging, and then lets you communicate with others about it (apparently, some people want this), raised the cash from O’Reilly AlphaTech Ventures, which itself just raised a new fund for hacker-driven companies (see our NewsWire story here, from yesterday). Here’s our earlier story about Wesabe from last year.

Second Life adds voice — You’ve been able to chat via IM before. But now the virtual world company is offering ways to talk with others, taking into account three dimensions to adjust volume, that is, how far away you are from other people (in the room or region where you’re conversing), and what direction you’re facing.

Hyped product of the day: Buzzword – Virtual Ubiquity, a Boston start-up, has created some buzz with its online word processor, BuzzWord. It isn’t out yet, but see here for details. Lots of effusive coverage elsewhere.

Another news ranking site, Spotplex — Techcrunch has a story about the Silicon Valley start-up Spotplex. At Spotplex, news stories aren’t submitted by users. Rather, blog and other news sites wanting to be featured at the site submit some javascript code, and it culls the most popular read articles on those sites, and then features them. We’re not sure how this is going to work, because by default, stories from the most popular sites are going to get read (and thus featured at Spotplex), even if they’re crappy stories. Also, there are other sites that do similar things, such as Topix. The company has accepted VentureBeat as a source. We’ll send in our code and see.

Adobe Systems to release Web version of its Photoshop image-editing application — It will do so within six months.

Invalid clicks on Gooole’s Adwords under 10 percent — Or at least, that is what Google tells us. Google adds that, in general, undetected fraud is less than 0.02 percent. However, there’s just no way for Google to know that for sure.

The latest in Silicon Valley:

Doppelganger raise $5M more for virtual world focused on teens — Doppelganger is the San Francisco start-up taking aim at the teen, or MTV audience (see our earlier coverage). It launched last year with a virtual club featuring the band the Pussycat Dolls, and is signing deals with other bands. Teens can design their avatars, chat with other sexy avatars, including of the band members themselves, and dance. Chief executive Andrew Littlefield says (listen to podcast) there’s a void between SecondLife, which he says appeals to a slightly older sci-fi crowd, and Habbo Hotel, which appeals to the Nickelodeon crowd. Doppelganger’s lounges integrate with AOL’s Instant Messenger, allowing teens to use existing Buddy Lists. It has raised $5 million in a third round led by Greycroft Partners, a New York-based firm whose West Coast office is run by former VSP partner Dana Settle. This follows $11 million in earlier rounds from Trident Capital and Draper Fisher Jurvetson. Of course, there’s the ongoing legal battles around VSP that are ongoing (Primack has latest).

Draper backs sex toy company — Speaking of DFJ investments, turns out DFJ’s party-hardy extrovert partner Tim Draper is behind the new San Francisco sex-toy company, JimmyJane, we wrote about recently. Alex Haislip has the scoop. Draper is joined by Phil Schlein, a venture partner at U.S. Venture Partners. Things are apparently livening up on traditionally conservative Sand Hill Road.

Another DEMO mention: Jaman — This site, just launched, lets you download a video player so you can watch “world cinema” online, or foreign movies you can’t get easily. We downloaded the player, and it is nice enough. It costs $1.99 to rent the movies, and $4.99 to buy, but we’re not sure how this rises above the noise, or how it got to DEMO. There are lots of other movie companies, and players. More at GigaOM (which links to a full history of this Palo Alto company)

(Updated) Round-up in Silicon Valley:

Google working on a Google Earth version of Second Life? — So says venture capitalist Michael Eisenberg, a partner at Benchmark capital, the firm that invested in Second Life, citing a rumor from the “PhD grapevine.” [Update: Google spokesman Daniel Pastor says: "We're continually exploring opportunities to expand our offerings, but we don't have anything to announce at this time."] Google co-founders have always been about having “impact.” This would give them a chance to act as virtual central bankers, a function Second Life has been having problems with. See the latest allegations, for example, that Second Life is akin to a pyramid scheme, and that it’s much harder to pull your money out than you’re led to believe.

Marketclusters, latest effort to filter blogs for corporate clients — It is the old lemming play. Monitor110, of New York, and TechDirt, of Belmont, Calif. (Silicon Valley) are doing versions of this, and have just raised capital to sign up clients. And so Marketclusters, of London, has raised $3 million from New Media Spark. It serves corporate and financial clients. Notably, it lists among its clients Silicon Valley venture firm Benchmark Capital, which happens to be an investor in Seeking Alpha, a company that aggregrates information from financial blogs, and so is somewhat related. Benchmark has been known to hedge (for example, investing in both online loan marketplace competitors, Zopa and Prosper).

The world’s densest memory circuit — Researchers at Caltech and UCLA said they have created a circuit 100 times denser than today’s standard memory circuits — while remaining as small as a human white blood cell.

Adobe’s curious acquisition of a peer-to-peer networking company — Om speculates on why Adobe, the giant software and Flash multimedia maker, has bought a Santa Cruz, Calif. P2P networking start-up, Amicima though we’re still left scratching our heads about exactly why.

Bix, the little $41M web site? — Bix, you’ll recall, was the light-weight Web site that let people compete in online karaoke, hot or not and other contests. It raised $6.7 million, and then was snatched up by Yahoo, apparently for a 6-fold return (according to one rough account), within six months of launching. Not bad. [Update: A credible source close to Bix tells VentureBeat the actual price was higher than $41M]

CleverSet latest online behavior monitoring company — This company joins a number of other players, including Aggregate Knowledge, that try to predict what people will want to buy based on their behavior. CleverSet watches what you click on, what information its clients have about you, your purchase history, all to help their online retail clients make better merchandise recommendations to you. The Seattle company just raised $2 million. On its advisory board are Dr. Peter Norvig, director of research for Google, and Dr. Andreas Weigend, former chief scientist of Amazon.com.

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?

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.

Here’s a round-up of the latest tech stuff:

Jobster may cut a significant portion of its 145-person workforce? — Reports of major pending layoffs at Jobster are ironic, not merely because the company helps employers find employees. But because the company appears to doing the cutting to attain profitability, five months after boasting to VentureBeat that it would be profitable were it not hiring so many people so quickly all over the place. This company got very big very fast. Could this be another example of how massive amounts of venture capital do strange things to companies? We caution that we haven’t confirmed the layoff reports, and that note the CEO says “a lot of falsehoods are being bandied about.” But John Cook of the Seattle PI, has talked with the company, and confirms a review is underway, and job cuts could be part of the announcement in early Jan.

IBM cooling on Second Life hype — Shortly after IBM launches 12 islands on virtual world Second Life, complete with press conferences from its chief executive, tour guides and trains to show visitors around its virtual complex and auditorium, David Berger, manager of strategic communications for Big Blue concedes it’s time to ask questions about Second Life claim it has two million residents. Why wasn’t he more skeptical in the first place? (Update: Forgot to add, and why does it take gossip site Valleywag’s debunking of a good part of mainstream media’s coverage of Second Life to push him there?)

Shotspotter actually works — Earlier this year, VentureBeat wrote about Santa Clara start-up Shotspotter, which said it could help police locate the origin of gun shots, to help them combat crime. It is working. It helped Minneapolis police nab their first suspect, a mere seven hours after implementing it. This is the company backed by Gary Lauder, scion to the Estee Lauder fortune. It has since raised more than $10 million.

News ranking sites Megite and Tailrank launch video — With news-ranking site Digg bolstering its photo and video offerings recently, you’d expect competitors Megite and Tailrank to follow. The difference is, Digg method relies on voting by users, whereas Megite and Tailrank measure popularity by the number of links a video gets. All this is leaving another player,