VentureBeat

The VentureBeat team is mostly taking a much-needed holiday break this week. In the meantime, here’s some of the latest news:

1. Apple devices to offer payment service?
2. Digg tells BusinessWeek that “no acquisitions are in the works” but we’re sticking by our story
3. Amazon Music Store to sell Warner Bros. music
4. Apple’s iTunes to rent Fox Studios movies
5. Web analytics service Compete examines Kayak-Sidestep travel site merger

Apple devices to offer payment service? — The company has recently filed a patent for “a wireless system that would allow customers to place an order at a store using a wireless device such as a media player, a wireless personal digital assistant or a cellphone,” Brian Caulfield reports. Phones in other countries, most notably Japan, can already be used to make credit card purchases at stores. Here in the US, we are still looking forward to this feature. (Image via Phone Different.)

Digg tells BusinessWeek that “no acquisitions are in the works” but we’re sticking by our story – Earlier this month, a well-placed source told us that social news site Digg has hired a bank to help it sell itself for $300 million or more. However, companies that are looking to sell usually won’t admit it publicly. Instead, they like to talk about how they’re focused on building a big business. True to form, Digg chief executive Jay Adelson only tells BusinessWeek about a number of new Digg features, and the potential for the company’s international expansion. He also says that Digg’s new advertising deal with Microsoft has been “great” since it started a few months ago.

Amazon Music Store to sell Warner Bros. Music — For some time, we’ve been hearing that Amazon’s music service has been growing quickly, as users are able to purchase songs and albums from it that don’t have restrictive digital rights management (DRM) software in place. DRM software technology is unpopular because it prevent you from buying a song then freely copying it to multiple computers and music-playing devices. Now, Warner Bros. will also sell music without DRM (press release here), following similar moves by EMI and Universal Music Group, who already sell large portions of their music catalogs DRM-free on Amazon. Apple’s iTunes has also begun to sell some DRM-free music — it has a DRM-free partnership with EMI, but not Universal. No word, yet, on whether Warner Bros. will offer DRM-free music through iTunes.

Apple’s iTunes to rent Fox Studios movies – Despite the competition from Amazon, Apple has more plans in the works for iTunes, the Financial Times reports. Apple will let iTunes users “rent” the latest DVD releases from Fox Studios — which means you can pay to download a digital DVD copy of the movie from iTunes for a limited time. Apple already lets you purchase Disney movies (Apple chief executive Steve Jobs is Disney’s largest individual shareholder), as well as a few Paramount titles. Aside from these companies, most studios have, like the record labels, balked at Apple’s efforts to cut deals with them. See the Wall Street Journal for more.

Web analytics service Compete examines Kayak-Sidestep travel site merger — Lots of detail on what Compete says is “among the most significant news items of 2007,” here. Our previous coverage of the deal is here.

Amazon’s music store has only been in business for a month, and rumors are flying that it’s already the #3 online music seller.

It’s still far behind Apple iTunes, but that might change. One rumor even pegs Amazon passing the second largest download site, eMusic, in revenue by the end of this year.

That leaves companies that don’t have a large online presence in a difficult position. Napster, Wal-Mart, Rhapsody and eMusic are all looking vulnerable and likely to lose out if Amazon’s growth continues.

Besides not DRMing its music, Amazon’s early apparent success can be chalked up to a clean interface, lower prices and most of all, the ability to easily transfer music to the iPod. Arguably, Amazon’s MP3 store has pressured Apple to recently drop prices and increase selection for DRM-free music on iTunes, called iTunes Plus.

Until recently, iTunes was by far the easiest legal way to buy digital music, as users could both buy music through iTunes and sync it effortlessly with their iPods.

Besides Amazon, the major record labels have also begun to test-sell music without DRM this past year, because they’ve had trouble negotiating song prices with Apple. What’s more, the DRM software used by the labels does not play on the iPod directly and none of the labels wanted to switch to Apple’s own DRM software, called Fairplay.

EMI was the first label to sell their catalog without protection and the results from their first quarter experiment have tentatively proven a success. The largest music label, Universal Music Group, followed suit a couple months ago and began selling DRM-free music files in a six month trial.

These four services need to take advantage of the new no-DRM world, or risk elimination:

1. eMusic
As the self-described number two company in the download business, eMusic surpassed the 150 million download mark recently. The most popular alternative to iTunes as well as most other services, eMusic’s catalog is comprised strictly of independent labels catering to knowledgeable music fans. It’s also
DRM-free. There’s a pattern here. Offerings that are simple (ie. DRM-free) or that are cheap, or both, do well. eMusic’s success shows that when the price is right (at $9.95 for 70 songs per month) and the music iPod compatible, digital download services can even flourish without major labels. Another success of eMusic is how it couples an intuitive web-based interface with insightful editorial content to guide users.

Beside the lack of major labels, eMusic gets negative marks for letting labels periodically drop out of the collection (when they decide the compensation is insufficient) as well as the service being shoe-horned into a subscription-based format that’s increasingly losing out to the pay-as-you-go model. Despite these shortcomings, Emusic is currently head and shoulders above the other offerings. It’s future is harder to predict, given its unconventional model, but eMusic provides the most comprehensive and gratifying user experience for the serious music lover.

2. Rhapsody
By selling its resounding failure of a service, URGE, and merging with Rhapsody, MTV has finally positioned itself in the role it knows best – advertising. With Rhapsody, MTV may be able to take advantage of its brand with a service worth promoting. While the Rhapsody software allows nice music management (for PCs only), Rhapsody’s website is far more crucial to its success. It’s generally intuitive and wide-ranging but still requires users to download software to stream music from the site.

Rhapsody is also tentatively throwing itself into the DRM-free market with select offerings from Universal artists. Along with the push in publicity for the service, Rhapsody offers files compatible with iPods and is beginning to branch out into the cellphone music business with Verizon. These are all good signs for future success for the service, but currently the company is too busy trying to sell its niche Rhapsody-to-Go subscription service and undersells its compatibility with iPods.

3. Walmart
Walmart began advertising DRM-free downloads a couple months ago, also with the intention to undercut Apple’s standard prices - the same selling point as when the Walmart first entered the digital download industry. The first sell doesn’t to appear to have worked, but Walmart is nothing if not persistent, and really big. They do annoying things like only offering edited versions of their music, a practice that might as well render popular genres like hip-hop useless.

Although Walmart’s service has often been described as sterile, more noteworthy is that it forces users to shop with DRM-afflicted preview clips even for DRM-free music. If Walmart’s online store is expected to blossom in an iPod-dominant market, the service’s interface will need to be re-hauled from the ground up to reflect it. Currently the site is unhelpful at best and aggravating the rest of the time. Without serious changes, Walmart will maintain its dominance as a price leader, without leading anything else.

4. Napster
The web-based service allows streaming of music for even non-subscribers, but has few other positive aspects worth mentioning, so we’ll focus on the negative. The site is stripped-down and offers few editorial notes to help discover new music and nothing beyond mere lists of artists as “recommendations.” Napster is actually clunkier than Walmart’s bare interface and is nowhere near as cost effective, considering the DRM restrictions. Perhaps the most damning aspect of the service is the frequent note found when attempting to buy music – “Napster is not compatible with the iPod.” For a company that’s already been killed off once before, this zombie will most likely get sawed apart.

Here’s the latest action:

Google adds search to Reader — In an obvious but very useful move, Google Reader, the company’s web-based RSS feed reader, has added the ability to search through your RSS subscriptions, or the categories and tags you use to organize them. So you can search for words in articles in RSS feeds you’ve subscribed to, without actually having the articles on your screen. Cool!

First venture capitalist to sell his blog: Rob Day — We’ve been a fan of venture capitalist Rob Day’s blog Cleantech Investing from the day it started. It’s about clean technology. Greentech Media Inc, a company that has just launched to focus on the clean-technology sector, has acquired the blog for an undisclosed amount, and now runs it on its site. By the way, Greentech Media is also pulling feeds from VentureBeat’s articles about clean-technology. It provides links to our full stories. Day told us about the purchase last week, but we were waiting for Greentech to launch and get its feeds squared away, which it did yesterday. Day now works for @Ventures.

Quattro Wieless raises cash to help companies adapt their Web sites to mobile versions – The Waltham, Mass. company serves businesses by providing them with mobile versions of their sites. This field has many competitors now. The year-old Quattro has raised $12.3 million in a second round of funding from Globespan Capital Partners and Highland Capital Partners, bringing its total funding to $18 million. It provides online software to let companies see what their mobile site would look like. If the publisher likes it, they can join Quattro’s network, which customizes it for most mobile devices. The company helps publishers serve advertising on their mobile site, and takes a cut while doing so.
reword:

Universal sues Veoh — Universal Music Group, a record label that has been actively suing music and video-focused startups, is at it again. It is suing Veoh, a site where you can upload and share videos, for letting users upload and share videos that Universal claims a copyright to. Veoh received threatening letters from Universal earlier this summer, and actually counter-sued for court protection against Universal in August, saying that it should not be held liable for what users do on the site. Universal was not deterred. Paid Content has more.

Groxis, the company with a visual search engine, now gets third CEO in little more than a year — We profiled Groxis and its search engine Grokker here and here. It was an early challenger to Google’s search format. Instead of giving you pages of results, it provided spheres, breaking out result by categories. Search for Paris, for example, and you’d get spheres titled “History,” “Museums,” “Universities,” “Hotels” and so on. It was always a bit complicated, however, and it has struggled to find direction. It has moved away from the sphere format, and is clearly still experimenting. We’ve heard almost nothing new from this company in years. Here’s the announcement of its latest CEO, Randall Marcinkio. He replaces Brian Chadbourne, who replaced founder and CEO R.J Pittman last year. Groxis raised $16 million for its search engine Grokker from investors including Draper Fisher Jurvetson, Jackson Boulevard Capital Management and Draper ePlanet Ventures.