VentureBeat

Here’s the latest action:

Six Apart evolves into an ad network — The blogging company behind MovableType, TypePad and Vox is offering a new advertising program which will give publishers more control over ads and revenue from their sites. The company claims its ad network will be better than the many others out there (with more popping up everyday) because it has the best experience with advertisements specific to blogs. The company also launched Six Apart Services after acquiring Apperceptive, a New York-based company that has helped build communities for large sites such as The Washington Post, The Huffington Post and Boing Boing. Six Apart vice president, Anil Dash has more.

Microsoft acquires Xobni, maybe — The email startup, which Bill Gates has called “the next generation of social networking,” has supposedly signed a letter of intent to be purchased by the software giant, sources tell TechCrunch, apparently for $20 million. But not so fast,  we reached co-founder Matt Brezina on his cell, who said it was too early to comment. He said the company remains focused on rolling out product for general release. He did seem remarkably relaxed, suggesting the deal may not yet be in final stages, but it was hard to tell. He was sauntering on the Penn State campus, about to start a lecture to students, providing tips about entrepreneurship. Now we’re seeing other sources say no letter has been signed and that the company plans to remain independent until it gets its product out. Our guess is that Microsoft has offered, but that no deal has been signed yet. Xobni works as a plug-in for Microsoft Outlook and allows users to easily view past related conversations and search quickly through mail — which sounds a lot like Google’s Gmail.

Sequoia adds another partner to start broader investment initiatve — The WSJ’s Rebecca Buckman follows up on rumors that Sequoia is seeking to broaden its activities, confirming the hiring of Eric Upin and Keith Johnson, both of the Stanford Management Company. They’re creating an investment fund that would “invest in multiple asset classes, instead of just venture capital… The new vehicle — if it gets off the ground — likely would mimic the investment style of university endowments and other private funds that put money into stocks and bonds but also ‘alternative investments,’ such as buyout funds, venture capital and natural-resources investments.”

23andMe admits personal genetics have no medical purpose — Google raised eyebrows when it made investments in both genetic screening company, 23andMe (started by Google co-founder Sergey Brin’s wife) and Navigenics, another company that allows you to see your genome. Now under scrutiny in states like New York, services like these are being forced to admit they are little more than a vanity. “23andMe’s services are not medical … they are educational,” 23andMe spokesman Paul Kranhold told Forbes.

Attack of the Mac clones — Computer maker Psystar continues to grab headlines with its OS X-enabled (Apple’s operating system) computer. Apple does not allow 3rd parties to create Mac computers, whereas dozens of manufacters make Windows-based PCs. But with Apple’s market-share and demand on the rise, there certainly seems to be a market out there for a very low-cost Mac. Apple’s Mac Mini is currently the cheapest they offer at $599, but this Psystar system would be $399 with no software installed. Naturally, the legality of making these systems without Apple’s blessing is an issue.

John Battelle is first “John” in Google, shows Google is broken — Look, we all like John Battelle, the founder and chairman of Federated Media (which runs some of the ads on VentureBeat), but come on, he’s the number one result when you type “John” into Google’s search box? “I mean, I am ahead of Lennon. The Gospel. Er…McCain,” Battelle himself notes. I could go on: John Adams, John Hancock, John F. Kennedy, etc. With all due respect, I think it’s fair to say that most of the world has no idea who John Battelle is, yet that’s who they’ll find when they search for one of the most common names in the English language.

Here’s the latest action:

1) Classmates.com IPO called off
2) Microsoft buys Multimap for $50M
3) StyleHive picks up StyleDiary
4) Toshiba’s new lithium-ion released
5) Venture Hacks on legal fees and VCs
6) Zoho Show adds on functions
7) Six Apart sets Movable Type free
8) Guardian Analytics launches product

United Online cancels Classmates.com IPO — One less for the story books of internet success: United Online has nixed the nearly $180 million Classmates.com public offering, planned to take place on the Nasdaq. PaidContent points to an analyst forecast that sums up the lack of investor excitement over Classmates: “We expect the Classmates.com subscriber base to peak in the first half of 2008, followed by a steady decline to zero by 2012,” opines Cowen & Co.’s Jim Friedland. If he’s a betting man, we’d guess his money is on Facebook.

Microsoft buys Multimap for $50 million — Multimap is a U.K. company that offers interactive online maps, much like Google Maps or Microsoft’s own, less successful Live Search Maps. Multimap also has two mobile apps with rather self-explanatory names: Storefinder4Mobile and Multimap2Mobile. Microsoft likely has plans to use the company to flesh out its mobile advertising efforts. The company’s founder, Sean Phelan, cashed out to the tune of $25 million, according to the Times Online.

StyleHive pulls StyleDiary off the rack — StyleHive, of San Francisco, is one of a handful of social bookmarking sites for fashionistas. It acquired StyleDiary, of Los Angeles, for an undisclosed amount, to provide professionally produced editorial content as a complement for its user’s contributions. Our past coverage on StyleHive’s $2.62 million funding is here.

Toshiba releases fast-charging lithium-ion battery — Toshiba’s Super Charge ion Battery (SCiB) contains an advanced lithium-ion technology that extends the life of the battery up to 10 years and allows charging in as little as five minutes. The battery should be especially useful for motorcycles, automobiles and construction equipment, and may help foster the market for fast-charge electrical stations, as well as the vehicles that visit them.

Sneaky VCs trying to pass off their legal fees — Venture Hacks has a good post on a tricky practice that new entrepreneurs should look out for. “When you pay your investor’s legal bill, you’re paying their lawyers to negotiate against you. You’re paying their lawyers to make your deal worse,” goes one piece of cautionary advice. For other nuggets of wisdom, go read the original post.

Revamped Zoho Show released – Zoho, an online office suite that we’ve covered several times before (here, here and here), has continued to be just as active in releasing new iterations of its products. The latest is Zoho Show 2.0, an upgraded version of their online presentation application, which is similar to PowerPoint. The new features include a new interface, support for shapes, symbols and clip art, and integration with their chat and meeting applications. For a video of it in action, look here.

Six Apart sets Movable Type free — The popular blogging platform will henceforth have an open-source license, much like larger competitor Wordpress. Some have speculated that Movable Type’s smaller market share had much to do with remaining proprietary, while Wordpress remained completely open, although Movable Type always allowed user modifications to its code. Six Apart will continue to offer paid licenses for bloggers who need professional support.

Guardian Analytics launches anti-fraud product — Guardian Analytics (previous coverage) released FraudMAP, one of a number of new applications aimed at preventing identity theft. It’s one of a new generation of startups using web analytics to identify online activity not consistent with a user’s normal behavior patterns, with FraudSciences Corp. (previous coverage) being another. Given the rising incidence of identify theft (read a Dean Takahashi rant on the topic here), we’d expect this field to grow fairly quickly.

SUP, a Russian media company, has bought online blog community site LiveJournal from San Francisco blog company Six Apart.

LiveJournal claims to have more than 18 million unique visitors per month, worldwide, with 28 percent coming from Russia. Six Apart previously cut a deal with SUP in 2006, where SUP was allowed to manage LiveJournal in Russia.

The links between Russia and Silicon Valley are growing, along with Russia’s economy. We’ve recently covered the increasing number of venture capitalists investing in Russia, hoping to fund the country’s well-trained technical workforce in building high-tech companies.

However, there are political issues. Critics slammed SixApart in 2006 for ceding control to SUP over LiveJournal in Russia. LiveJournal had by then become a main venue for free speech in Russia. SUP, as this International Herald Tribute article details, has deep connections to the Russian government. The Russian government, in turn, is regularly accused of pressuring media outlets to provide it with favorable coverage.

As part of this latest deal, SUP has sought to address such criticism through the creation of an outside advisory board that will include LiveJournal founder Brad Fitzpatrick. Fitzpatrick founded LiveJournal in 1999 and sold to Six Apart in 2005. He left SixApart for Google earlier this year. Here’s SUP’s description of what the advisory board’s role will be:

The Advisory Board will represent the users, offering you a voice and a forum regarding your role on LiveJournal, as well as LiveJournal’s role in the online world. It will be independent of the LiveJournal, Inc. management team and will oversee issues such as honoring LiveJournal’s community traditions, ensuring privacy, creating user policy and protecting security.

KnowNow, a Sunnyvale company that has made early inroads selling RSS technology to companies, has agreed to help sell and support WordPress blogging software.

The deal is significant because KnowNow has quietly been selling nicely priced software systems — both hosted and server systems — to companies that help those companies track transactions, news and other events via the RSS protocol. KnowNow has lacked its own blogging software, and this gives San Francisco’s Automattic, the company which owns WordPress, one more way to infiltrate companies — at a time when cross-town rival Six Apart’s TypePad is among those with an early lead, and which recently got a boost from an alliance with Intel (more below).

RSS is the protocol, which can be used for sending electronic updates of just about anything, including things like sensitive banking transactions. It is also used to deliver blog posts to readers’ blog readers, whether it be BlogLines, Yahoo or some other company. KnowNow is in serious sales and marketing mode now that it has raised $13M in fresh capital from Kleiner Perkins and others. VentureBeat was surprised at that amount of capital, as RSS platforms should be relatively cheap to build. We talked with chief executive Todd Rulon-Miller, who comes across as confident but focused — he has been in the enterprise software game for years. He said that the systems being built for companies are managing many sensitive needs. Wells Fargo, for example, is among the companies that have bought at least one of KnowNow’s $75,000 sever licenses. He has ten large customers, and will be announcing more, he said.

We don’t know how well they are really doing, but with WordPress this becomes a serious combination — serious enough to match the Intel alliance (scroll down, and see here too), which pulls together Six Apart, Newsgator (for RSS reading), SimpleFeed (for RSS technology) and Socialtext (wikis).

Updated

Web 2.0 start-up activity is hot, and here’s the latest data.

Venture capitalists invested $455.5 million into Web 2.0 companies in the first three quarters of the year, more than twice the amount invested over the same period last year.

This comes from the latest survey by Dow Jones VentureOne, which continues to do the best research on the Web 2.0 area. It gets help from accounting firm Ernst & Young.

Overall, more than $1.63 billion has been invested so far this year into 198 “consumer technology” companies headquartered in the U.S., but 79 of those companies were classified as “Web 2.0.” (See our earlier story here, for VentureOne’s definition of Web 2.0 — scroll to blue quote box)

Notably, the group finds investment valuations have remained fairly steady for Web 2.0 companies over the past two years. But it contradicts the moaning we hear from VCs and individual angel investors about how high valuations have become. (See chart at very bottom of the post; note that the valuations don’t include the angel rounds).

Below are charts outlining where the investments are going, and listing the biggest recipients and investors.

Btw, Intel Capital should be moving up the list as a big investor, based on the recent announcements it has made. We heard that Intel Capital’s Eghosa Omoigui, who has had his ear to the ground attending all the Web 2.0 conferences and parties over the past year, internally floated the idea of looking at an investment in YouTube back in March, but that the idea didn’t get much traction internally. Too bad. Intel is still one of the largest venture capital investors overall.

Intel yesterday also announced it is distributing SuiteTwo, an integrated Web 2.0 software suite for small and medium sized companies, in a hosted or self-hosted format. The package includes Socialtext (wiki software), Six Apart’s Movable Type (blogging software), Newsgator (RSS reader) and Simplefeed (RSS distribution).

It has wrapped them into a single sign-on software, through direct sales from Intel, but also via partners like Dell and NEC, Intel Capital’s Robert Rueckert told VentureBeat in a briefing Monday. Cost will be from $150 to $200 per seat per year.

SpikeSource, a company that helps integrate software, has guaranteed the suite works on Novell, Linux or Microsoft operating systems, and that they run on Intel servers.

(Update: We’ve confirmed with Intel has invested in all five of these companies — Socialtext, Six Apart, NewsGator, Simplefeed; however the amount remains undisclosed).

(Update II: To clarify, Intel has made equity investments in Six Apart and SpikeSource, but has only signed warranty deals with the other companies, essentially giving Intel the right to purchase equity if they meet certain performance guidlines.)

Valuations of Web 2.0 deals:

Roundup in Silicon Valley:

FON exploits opportunity to stir up WiFi interest in San Francisco — Search engine company Google is having a heck of a time getting “crazy nut job” local SF residents to agree to its plans for a city-wide WiFi project. So while big Google is stymied, another company, FON, is hoping to slip under the regulatory radar with a grassroots campaign: Offering hundreds of its La Fonera wireless routers at an event it calls “Freedom Friday,” to be held at SF’s Union Square from Noon to 2 p.m. tomorrow. FON’s been having its own challenges drumming up interest in its product, so perhaps this will create some viral buzz? As mentioned, Google is an investor in FON.

Williams buys back podcasting company Odeo — As mentioned elsewhere, Evan Williams, who started San Francisco podcasting site Odeo after selling his blog software, Blogger, to Google, has parted ways with his his venture capitalists.

You knew things were choppy at Odeo when Williams suddenly started giving candid assessments last month about having tried too much too quickly with Odeo. He then shut down Odeo’s Audioblogger, which had let users post audio to a blogger.com blog via a telephone call.

Now we find out he’s bought Odeo from his venture capitalist backers, and renamed it Obvious. Though, from his comments on the site (”We’re not sure how it’s all going to work”), it isn’t entirely obvious. Included in the assets is Twitter, another service we’ve mentioned before — which lets friends know what you’re doing. He says it is “going to be huge.”

George Zachary, the venture capitalist at Charles River Ventures who had invested in Odeo, tells us he actually made money on the deal.

Which reminds us, Zachary has launched a blog — Perhaps the Odeo story is what made investor Zachary decide to launch his own blog, called Sense and Cents. He tells VentureBeat his goal for the blog is to navigate the core of “who we are as humans and what we need.” He notes how technology advances in communications are letting us do things we’ve never done before. He says he wants to “talk about and connect interesting sociological issues and how they integrate and show themselves with technology and experiences of consumer internet.”

Wonder if he’ll try his hand at podcasting? ;)

Are there enough shopping search engines? — Ok folks, we’ve got at least a dozen shopping search engines now, of every stripe and flavor. We just wrote about TheFind.com last night, and now we see yet another one launching: Ugenie. GigaOm has a write up. It has an office in Silicon Valley, among other places, and was founded last May by two Amazon.com alums. It has raised $5 million in funding from BlueRun Ventures and Sierra Ventures and now has 15 employees, but it is not clear what new it is bringing to the table.

Revenge of the server farms — After disappearing after the first Internet bubble burst, the server farms are back. The NYT has the story: Equinix of Foster City, Calif., is building its first new center in Chicago for $165 million and expects to open it late next year. When it opens, the server farm will be 95 percent occupied and demand 30 megawatts of power, enough electricity to power 30,000 houses.

Check out Palm’s colorful new Treo 680 — They’re getting thinner too. See image here at left.

Six Apart launches Vox, another blogging tool — Sigh, do we need another blogging software? The answer is no. But if you’re someone who has been on the sidelines, a non-techie fearful of taking the blogging plunge, this one is worth a good look. The first generation of blog software was clunky, but this latest, called Vox, has a easy and good looking finish to it. It is latest software from company Six Apart, and is free. We created this blog in three minutes, no more.

Oracle kills RedHat — Oracle introduced its open-source Linux operating system (see our wire story from this morning), and the market killed RedHat today. It lost a quarter of its value in trading. Despite the likely dire consequences for RedHat, some people are skeptical that it will help Oracle, though:

I really don’t see why anyone would pay $50,000 per CPU for a license to use a tarted-up version of Oracle Fusion Middleware when so many clever subversives on the edges of organizations are already doing all these cool Web 2.0 things now for pennies a month and there are so many really sensational, and far less expensive, enterprise-level integration solutions available or in the works.

eBuddy raises 5 million euros — See the story here on VentureBeat’s wire, from earlier today. (Another reminder to subscribe separately to our news wire, which is the RSS button on the left of homepage, if you haven’t done so already).