VentureBeat

Dell doesn’t get cloud computing — A bid by computer maker Dell to trademark the term “cloud computing”, a broad term generally used to describe services and software that live on the Internet, has been preliminarily rejected by the US Patent Office.

SoCal Edison signs for 900MW of wind — Following close on the heels of PG&E’s announcement of an enormous 800 megawatt solar power plant, Southern California Edison, which serves the other half of the state, has made a deal for up to 909MW of wind. But wind, unlike solar, is a well-proven strategy, and plans for much bigger wind farms are already in the works.

Is open source a real business model? — Taking a look at several large open source vendors and support services, including Red Hat, Novell and SpikeSource, BusinessWeek concludes that open source is not defensible, and not a good business for many companies. A broader view, however, suggests that while companies like Red Hat have had some execution challenges, the growth of the sector as a whole has been staggering.

Verizon’s fiber optic bets paying off — Expensive fiber optic cables being installed by Verizon in urban areas have proven profitable, contrary to the expectation of many, the New York Times reports. Users like them for the ultra high-speed Internet and bundled services, including TV and phone. However, the article also notes that Verizon’s investment is still costly, and has years before it truly proves wise (or not).

Chinese company exporting hydrogen scooters — For $2,600, you too can have a hydrogen-powered scooter with a 60 mile range. Hydrogen not included.

Apple gives 60 day extension for MobileMe users — In order to make up for a rocky start to its online MobileMe service, Apple is giving users two more months for free.

Mint gets a facelift — The fast-growing personal finance website has revamped its service with a new look, and started a new how-to series for financial decisions.

IBM makes memory chips smaller, faster — Futuristic RAM memory made with a 22 nanometer process (vs. today’s 45 nm chips) has been demonstrated by IBM. The SRAM memory is also faster, which will help multi-core computers perform well.

How to scam your way through life — While not a Silicon Valley story, the saga of the German man calling himself Clark Rockefeller is instructive for local investors. The Boston Globe reports on how Christian Karl Gerhartsreiter, who kidnapped his own daughter and was subsequently caught by police, passed himself off as a wealthy investment professional despite a complete lack of knowledge or ability in the field. The article also notes studies that show entrepreneurs pitching for money become more or less likely to win an investment based not on the merit of their ideas, but on voice tone, posture and other factors.

SpikeSource, a startup that helps companies build, test and integrate software, is partnering with Intel to launch the SpikeSource Solutions Factory Platform. For SpikeSource, it’s a big strategy change — instead of partnering with independent software vendors, the startup will now provide its technology to major players like Intel so they can certify products in their ISV networks.

The new platform could catapult SpikeSource into the big leagues. When SpikeSource launches a new product, it normally signs up around 30 ISV customers, says Dominic Sartorio, SpikeSource’s senior director of product management. With the Intel deal, the Redwood City, Calif.-based startup hopes to reach 200 customers in the next few months, then hold a bigger launch and reach out to the full pool of 12,000 ISVs that’s already registered with Intel.

To help SpikeSource meet the increased demand, the company has raised a new round of funding. Intel’s investment branch Intel Capital contributed $10 million, while Kleiner Perkins, Fidelity Ventures, CMEA Ventures and DAG Ventures — who are all prior investors — also contributed undisclosed amounts.

Sartorio says SpikeSource’s platform allows ISVs (namely, companies making software, usually niche software) to assemble, test, package and update their products automatically. It combines the different offerings that SpikeSource has developed since it was founded in 2003, and creates a single package that Intel — and, eventually, other big vendors — can use to give its seal of approval to new software.

Each of the platform’s components (security, inventory, updating, etc.) faces real competition, but Sartorio says SpikeSource is the first company to bring everything together in a commercial product. The only real competitors are do-it-yourself, in-house solutions developed by big tech companies, he says.

The new approach should help software vendors to get their products to market, because the platform makes it easy for them to use Intel’s branding and distribution network. Sartorio hopes to eventually sell the platform to enterprise IT departments and to the developer community as well, although the company is still figuring out the details.

SpikeSource first made a name for itself as an open source company, but the new platform is compatible with proprietary and hybrid software, Sartorio says. At the same time, it still serves open source developers, and parts of the platform are open source too.

The startup has a high-profile chief executive — Kim Polese, who was the original product manager of Java, and who was declared “the web’s 1997 It Girl” by Time Magazine.

Read our previous coverage of the company here.

This new funding should be SpikeSource’s last before it becomes profitable or makes an exit, Sartorio says.

[This article is expanded from a VentureBeat Wire story posted earlier today.]

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:

Updated

SkyRider, the Mountain View start-up developing an aggressive search engine for peer-to-peer traffic, has raised another $12 million in venture capital.

The round, led by ComVentures, comes just two months after it raised $8 million (see our earlier story here)

The company also showed its hand on strategy for the first time (it had been mum on specifics). It will essentially hijack the user software accessing the peer-to-peer networks, and force its own ads very high up in the search results when a user is searching for something. An intriguing play, indeed.

The company aims to monetize popular peer-to-peer networks content just like Google monetizes the Web with ads besides search results. SkyRider’s focus on peer-to-peer is noteworthy because these P2P networks have become increasingly popular as a way to distribute and access large files such as video — a particularly sexy area right now.

The company’s platform spans across P2P platforms.

Chief executive Ed Kozel, former chief technology officer at Cisco, gave us an example of how it works.

Let’s assume someone is using the popular client Limewire to search the Gnutella file-sharing network, one of the top three global P2P networks. Assume further the person is searching for music from the Dave Matthews Band. When LiveWire begins looking for the info, SkyRider’s technology has the network route the queries to SkyRider. It then serves ads in the search results. See image here.

In this case, the ad shows the Dave Matthews Band is playing at the Vegoose series in Vegas over Halloween weekend. Note that the ad is part of the results, but is marked by capital letters. This keeps it from being considered spam, Kozel said. The ad will be listed among the top three results, and if the user clicks on the ad, a browser page opens to show them the full ad. It will be a sponsored link only, keeping to the format found on Google, Kozel said.

SkyRider is compelling because it appears to be the only company doing search inside P2P infrastructure — and it’s boasting some impressive numbers. It is processing tens of millions of search queries a day, and will use the latest capital to help it handle “a couple of hundred of millions of queries a day,” Kozel said.

Kozel said SkyRider’s technology remains its secret sauce, so would not say exactly how it attracts queries to itself (Update: Nik Cubrilovic, in comments below worth reading, reveals more about how SkyRider’s tech works). But Kozel said the technology requires no partnerships.

Beside ComVentures, other investors in the round include existing backers Sequoia Capital and Charles River Venture Partners

The company chose ComVentures because its partner, David Britts, was an investor in the SkyRider founders’ previous company, Narus.

P2P networks encounter as many searches per day as Google or Yahoo, Kozel added, suggesting there’s huge potential for advertisers to reach consumers on these networks.

Like Google does, he’s seeking to help businesses connect with consumers by letting them serve advertising through SkyRider’s platform.

According to Comscore, more than 60 percent of backbone Internet traffic and up to 90 percent of upstream traffic from users is now consumed by P2P applications, he said.

Finally, while this latest effort focuses on search and monetization, SkyRider will also be developing ways to better mine information — such as peoples’ watch behaviors and histories, and geography — to improve advertising relevance, just as Google does with its technology, he said.