VentureBeat

Sprint and Clearwire have confirmed yesterday’s reports that they’re teaming up to create a new wireless broadband company. The new company, which will also be called Clearwire, should be the first to create a national mobile network using Intel’s WiMax technology, delivering broadband Internet at a much higher speed than existing 3G networks.

Intel, Google, Comcast, Time Warner and cable company Bright House Networks will invest $3.2 billion in this new company, while wireless veteran John Stanton’s Trilogy Equity Partners will invest directly in the new Clearwire’s common stock, which has a target price of $20 per share. Sprint will own 51 percent of the new Clearwire, existing Clearwire shareholders will own 27 percent and the strategic investors will collectively own 22 percent.

As we wrote yesterday, this looks to be a big win for all companies involved — particularly Sprint, which has been struggling, and WiMax, which is competing with rival technology LTE. (Others, however, argue that the situation risks becoming a “too many cooks in the kitchen” fiasco.)

The new Clearwire plans to cover between 120 and 140 million customers in its network by 2010.

The announcement includes a bunch of related partnerships between Sprint, Clearwire and the strategic investors. Google, for example, will work with Clearwire to develop Internet services, and Google applications like Google Maps and Gmail will now come preloaded on Sprint devices. Comcast, Time Warner and Bright House have made wholesale agreements with Sprint and Clearwire, and the two companies have also struck wholesale deals with each other.

Google Product Manager Larry Alder says his company invested $500 million, and he touts the deal’s potential for more open network policies, such as an open Internet protocol for mobile broadband devices.

Here’s the latest action:

The WB rises from the dead with a new website — The television network, famous for launching teen-aimed shows like Buffy the Vampire Slayer and Dawson’s Creek, merged with UPN to become the CW network in 2006. But now the WB is returning as a website. And while the nerd in me is most excited about the ad-sponsored Buffy reruns, the most interesting news is that the site will also feature original content. older shows. The goal is to attract 16- to 34-year-old women, particularly those whose TV viewing habits have already moved online.

Microsoft cutting XBox 360 prices in Asia — Prices will fall between 5 percent and 20 percent in Singapore, Taiwan, Hong Kong and South Korea. That’s four out of the five Asian markets where Microsoft has officially launched the game console (the fifth is India). A Microsoft spokesperson tells us that these price adjustment are normal as foreign exchange rates fluctuate.

Metacafe owners cash out with for $5 million — Co-founders Arik Czerniak and Ofer Adler, who together owned shares representing 5 percent of the company, have left the video startup. (TechCrunch cites Israeli newspaper The Marker, whose article is in Hebrew.) The site’s traffic hasn’t grown much, which means that online video king YouTube continues to widen the gap. Czerniak stepped down as chief executive in February 2007, but he continued to serve on the company’s board — until now, apparently.

Did MSN Music betray its customers? — The Electronic Frontier Foundation says it did. Microsoft announced last week that it will stop issuing digital rights management “keys” for the defunct MSN Music service at the end of the summer, meaning that customers won’t be able to transfer their music to new computers. The EFF argues that Microsoft should apologize and compensate customers. If this story doesn’t persuade online music buyers that DRM (which also comes with most of the songs available on iTunes) can be very bad news, even for music fans who aren’t interested in illegal sharing, I don’t know what will.

Newest Morgan Stanley report finds that social applications are growing – Sure, that’s not exactly surprising news, but the report presents some pretty compelling facts to illustrate the point. For example, six out of the top 10 Internet sites are social.

Monsanto and startup Mendel Biotechnology to develop biofuel crop — It’s nice to hear the two companies say their partnership could reduce greenhouse gas emissions. On the downside, biofuels appear to be a mixed bag economically and environmentally, and Monsanto isn’t the most Earth-friendly corporation in the world.

Here’s the latest action (updated):

Struggling cell phone manufacturer Motorola announced it would split itself into two different companies. Under pressure from activist investor Carl Icahn, the company will divide itself into a cell phone company and a company with broadband and mobility equipment operations. The latter firm would create infrastructure equipment for wireless networks as well as build television set-top boxes. The company had said in January that it would consider a breakup, mainly since its stock has plunged in the past year amid loss of cell phone market share to Nokia, Samsung and Apple.

Comcast and Time Warner are talking about a joint venture in WiMax wireless Internet technology. The Wall Street Journal reported that the cable operators would diversify their business by setting up a WiMax company operated by Sprint Nextel and Clearwire. Under the plan, Comcast would invest as much as $1 billion in the venture while Time Warner Cable would contribute $500 million. Bright House Networks, the sixth-largest cable operator, would contribute $100 million. Gigaom called it the $3 billion WiMax Rescue Act. They’re plowing forward in spite of questions about the technology, including a failed trial in Australia.

Take-Two formally rejected an offer from Electronic Arts. As expected, the beseiged video game maker rejected EA’s $26 a share, or $2 billion, tender offer. Take-Two, the maker of the upcoming game Grand Theft Auto IV arriving in stores April 29, also amended its proxy statement to adopt anti-takeover measures such as a stockholder rights plan.That sets the stage for a grueling battle with EA, which could nominate its own slate for Take-Two’s board.

Yahoo! joins Open Social Alliance led by Google. The Internet company said that the move will make it easier for programmers to write software that can run on the pages of many social networks and other web sites. Meanwhile, David Morin, senior platform manager at Facebook, reiterated at the Snap Summit 2.0 conference that his company isn’t joining Open Social now but isn’t against it in principle. Google said Tuesday it would give up control over the alliance and turn it over to the nonprofit OpenSocial Foundation.

Facebook confirmed it lured away another Google executive. Ethan Beard, former director of social media at Google, will join Facebook. He’s the second high-profile executive to leave Google this month. Facebook now has more than 500 employees.

$19 billion deal to privitize Clear Channel Communications nears collapse. The Wall Street Journal reported that the private equity deal is a victim of the credit market crunch. The leveraged buyout apparently is imploding as private equity firms and banks failed to work out differences over financing terms.

Imeem, the playlist company, opens up its platform — The company has opened to third-party developers, giving them tools to integrate their applications into Imeem. Imeem says calls itself the third largest social network, with more than 24 million unique visitors a month, though its users are mostly checking out each other’s music, and its not considered by most to be a full-fledged social network. The API lets developers access its users’ music tracks, which is a powerful thing because Imeem lets users run complete tracks for free (it got rights to do this from labels, after Imeem said it wanted to try an ad-based model). Developers can also access any videos and photos on imeem, access the social graph of users, modify the metadata for the content and customize the imeem video player.

Update

Gaia Online, the virtual world for teens, siad media conglomerate Time Warner has invested an undisclosed amount in the company. Update: The amount was for a couple million, I’ve heard, and it was part of the previous round the company raised.

San Jose, Calif.’s Gaia says it has nearly three million monthly users. It also has a growing population of users on Bebo, who sign into the Gaia OMG application and play a miniature version of the virtual world (see our article from earlier today).

Time Warner movie studio Warner Bros. has previously shown movies within Gaia, via a virtual theatre.

Gaia has more than $1 million in virtual goods sold per month, and it sees around 100,000 completed transactions per day, it said.

The company has previously raised more than $20 million in previous rounds from DAG Ventures, which led the last round, as well as earlier investors Benchmark Capital and Redpoint Ventures. Update: It also raised a round last year from Sony.

Here’s the latest action:

1) IAC splitting into five companies
2) Sea change ahead for Time Warner
3) Google’s merger plans may be foiled by the EU
4) Synthasite launches website creation
5) Whrrl opens local opinion site
6) Internet users like their free stuff
7) Andersen exacts revenge on PR flacks

IAC to split properties into five companies — IAC, the large parent company of Ask.com, is splitting into five separate publicly traded companies: Home Shopping Network, IAC, Interval International, Lending Tree and Ticketmaster. CEO Barry Diller characterized the move as a strategic one, intended to allow the disparate units to concentrate on their own respective businesses. He will remain on as chairman of IAC, which will control a number of well-known web properties including Ask.com, Citysearch, Evite and Match.com.

Sea change ahead for Time Warner with new CEO — The media firm’s leader of the last six years, Dick Parsons, is no longer at the helm. A recent board meeting resulted in the ouster of Parsons and nomination of Jeff Bewkes, the president and chief operating officer, as a replacement. Both moves have been expected at the company for some time; Parsons is commonly described as a diplomat who helped keep Time Warner in one piece through difficult times and smoothed the process of merging with AOL, but is no longer helping the company grow. Bewkes, on the other hand, has a more aggressive management style. Time Warner is notorious for being a slow-moving behemoth, and AOL is mostly known for failing at everything it puts its hand to. Whether Bewkes can change the institutionalized culture at the $75 billion company remains to be seen.

Google acquisition of DoubleClick faces biggest hurdle in EU — The European Union, which famously hounded Microsoft for years over anti-competitive practices, may well set its sights on Google as the next giant up for kneecap-bashing. We’ll skip the legal details here, but this insightful post on ClickZ covers most of them, concluding that “the parties cannot complete the deal unless both EU and FTC approve it.” The European commission is set to decide DoubleClick’s fate a little over a week from now, on November 13.

Synthasite launches beta, but is late to the table – The do-it-yourself website creation company now allows you to publish the sites you build with it, offering free hosting. Synthasite had an early start when it came onto the scene in the beginning of this year, but has since lagged behind its competitors, Y-Combinator graduate Weebly and Germany’s Jimdo, which both have simpler interfaces and offer more ways to customize your site. Synthasite’s big ambition — to open a platform for third-party developers — is likely to collide with similar efforts from the competition, but the market is still anyone’s game. Synthasite generated some controversy (and a spike in traffic) when it offered stock to users (scroll down) in exchange for website templates.

Whrrl, a mobile social network for sharing opinions about locales –Like Yelp, users can find information about restaurants, bars, and other retail joints and share reviews with other Whrrl members or your friends. You can download the application on your mobile phone or use it with SMS. It carries maps, too, so that you can scan your screen and pull up reviews from the dots on it representing your favorite places. You can select only those places recommended by your friends, for example. You can also filter for places based on type of restaurant or other keyword. It will soon let you track friends by GPS, and so is a lot like Loopt. There’s tension here. Loopt is backed by Sequoia Capital. Whrll, meanwhile, is backed Sequoia’s chief Silicon Valley rival, Kleiner Perkins.  KP led a $7.4 million investment last year, joined by Amazon’s Jeff Bezos and Trilogy Equity Partners. Seattle PI first wrote about the company last year. Techcrunch also reviews it here. Robert Scoble interviews the CEO of Whrll parent company, Pelago.

Most internet users still expect to freeload – At first blush, it appeared that an experiment by popular band Radiohead to offer their music for donation-only download had resulted in most users choosing to pay. Oh, really? A comScore study begs to differ: Only 38 percent of downloaded decided to lay down any dough, and on average it was only $6. The upshot: Don’t expect big media companies to stop the fight to charge full rates and stop free downloads on the internet.

PR flacks get spammed following Andersen post – The New York Times has a good retrospective on last week’s scuffle between Wired editor in chief Chris Andersen and 300-plus press relations people he claims spammed him. The latest: Since Andersen posted the email address of every one, the accused spammers are now, themselves, being spammed.

Trion World Networks, a company promising to deliver new kinds of interactive online games, has raised a whopping $30 million in capital without having launched a single product.

The huge financing is a bold bet that an unproven company, formed early last year, can nevertheless exploit a “disruptive cycle” in the media and entertainment world to produce new online games of value. Nate Redmond, a partner Rustic Canyon, the company’s lead investor said the company will distribute “dynamic games” across multiple devices.

Here’s the statement.

Lars Buttler, a former Electronic Arts executive, co-founded the Redwood City, Calif. (Silicon Valley) company along with Jon Van Caneghem, a video game designer. We mentioned last year it had raised a first round of capital from Doll Capital Management and Trinity. The team hasn’t disclosed many specifics, other than they want to build the games and entertainment around “channels” of live programming — and that there will be elements of virtual worlds and social networking thrown in.

The $30 million comes from venture capitalists and media giants. Venture firm Rustic Canyon led the round, which included Time Warner, GE/NBC Universal’s Peacock Equity and German publishing giant Bertelsmann’s investment arm, BDMI Invest.

Live, original programming costs money, and there’s a multitude of other companies — new and old — already producing video and game content. Presumably, therefore, Trion will be drawing upon the content of the media giants among its investors, and seek to deliver their content in new, more dynamic ways. There are a scores of new game and media companies emerging to do similar things.

Before the Google-YouTube merger was announced, it didn’t sound ludicrous for Yahoo’s Terry Semel or Microsoft’s Steve Ballmer to speak boldly of competing against Google.

But Google has become so big, with advertisers willing to pay such a premium to place ads on the search engine, that a virtuous “network effect” has finally pushed Google out of their reach. EBay did it with auctions. YouTube enjoys the same effect — people flock to post videos there because they know it has the most users, and they want their videos to be seen by the most people. The biggest player wins. With the “two kings” (GooTube) together, there’s no stopping it. The concessions from Google’s competitors are eye-opening.

Here’s Microsoft chief executive Steve Ballmer speaking to BusinessWeek, admitting that that it is almost game-over:

The truth is what Google is doing now is transferring the wealth out of the hands of rights holders into Google. So media companies around the world are all threatened by Google. Why? Because basically Google is telling you how much of your ad revenue you get to keep. They better get some competition. Us. Yahoo!. Somebody better break through or you can short all media stocks right now.

As long as there are two, you can hold onto media stocks. Google understands that. And that’s one reason why they’re willing to lose money up front. Just look at some of these deals. That MySpace deal (where Google provides the ad engine for MySpace). We bid a lot of money on that MySpace deal. And we got outbid. We wanted to win that MySpace deal. At some point, we said we can’t do this. Now Google can afford to spend more than us and Yahoo because they have more people in their ad system, so they’re getting better yield, effectively.

There are fierce competitors on the content side, the folks who compete with YouTube for video hosting — such as News Corp., which owns MySpace. MySpace users can load videos at YouTube and link to them — something that MySpace apparently considered prohibiting. MySpace makes a ton of money from Google ads, and so News Corp. looks like it wants to work out a deal — but it could team up with Viacom and GE’s NBC and demand up to billions of dollars in copyright penalties (see WSJ).

The sabre-rattling Dick Parsons, chief executive of Time Warner (which own AOL), said his group would pursue its copyright complaints against the video sharing site YouTube.com But he too complains about Google’s size: “..Google can do that better than anyone and I didn’t have Google dollars,” he said.

(Keep in mind that Justin Uberti, AOL’s top AIM Developer, was recently poached by Google, which adds to the wounds.)

In other notes about Google’s reach:

–Essayist Nick Carr is known for his sensationalism, but he suggests a case for Justice Department intervention on GooTube on antitrust grounds. (Sen. Stevens from Alaska will agree with Carr about the need for action, now that Google owns the “tube.”) Chad Hurley, Carr notes, argues in a recent interview that YouTube enjoys a “natural network effect” that should allow its share to continue to rise strongly.

–Statistics, and damned lies: The data about Google’s market share is unreliable. Google has a 43 percent share of the video market, after acquiring YouTube, Carr says, citing Hitwise. However, Comscore, which says it considers more sources and has more reliable methodology, has got GooTube with only 10 percent market share. Hitwise is now saying that GooTube has almost 60 percent! Yeesh.

–And what does it mean for Limelight, the content delivery network (CDN) that distributed a lot of YouTube video around the world? It just raised $130 million from Goldman Sachs Capital Partners, in part because it was showing so much growth. Limelight had YouTube as a customer, which clearly was helping drive some of that growth. It was placing large numbers of servers around the world to carry the video traffic. Google has its own network so won’t need Limelight (though we’ll have more next week about why this may not be a real problem for Limelight long-term.)