VentureBeat

Here’s the latest action:

Increase in joblessness spurs stock decline — After the Labor Department reported that applications for jobless benefits exceeded expectations, the Dow fell more than 80 points.

Reviews surface on BlackBerry Storm — CNET’s verdict: The touchscreen is nice, but corporate users are better served by the BlackBerry Bold.

AT&T funds privacy nonprofit — The Future of Privacy’s backing from the telecom giant is just one reason why GigaOM’s Stacey Higginbotham is skeptical that the nonprofit group actually has consumers’ privacy in mind.

Amazon creates mysterious online ad company — The connection between Amazon and Adzina was just discovered by TechFlash, but an Amazon spokesperson says Adzina has actually been around for a year. Earlier this week, Amazon also launched its content distribution network, dubbed CloudFront.

Christmas apps growing fast on Facebook — Even though Thanksgiving isn’t even here yet, it looks like some Facebook users can’t wait for Santa to arrive.

Qik and Strands lay off 10 percent of staff — Social recommendation service Strands let go of 14 employees, while mobile video company Qik laid off five people.

Virgin Mobile may get de-listed from New York Stock Exchange – The mobile company doesn’t meet the NYSE’s criteria because its market cap has fallen below $100 million.

European venture investment has second-lowest quarter on record — A slump in IT deals accounted for much of the decline.

Sony loses a patent suit on PlayStation Portable — A Texas jury said the PSP violates Agere Systems’ patent on storing music headers on a memory chip and awarded Agere $18.5 million.

IRS auditing Mozilla’s nonprofit status — At issue is how to classify the money Mozilla receives from Google, which made up a whopping 88 percent of Mozilla’s revenue in 2008.

Microsoft lets Zune owners keep 10 songs permanently for subscription fee — The move is supposed to tempt users who are hesitant to rent their music instead of buying it outright.

Can anyone save Yahoo? — As the company searches for someone to replace chief executive Jerry Yang, Yahoo faces a “triple whammy” of strong competition, an economic downturn and a falling stock price.

EA closes mysterious Blueprint division — EA never made an official announcement about the division, but it was known that the studio’s purpose was to deliver original intellectual property.

Mobile voice network operator Virgin Mobile USA has finished absorbing rival Helio — We heard a rumor, more than once, that “massive firings” were being considered, but Virgin Mobile tells us that this won’t happen. Instead, some employees have been “rebadged” to work at its IT partner, IBM.

Amazon is developing a student version of electronic book-reading device Kindle — The question many students surely want to know: Will electronic textbooks on Kindle be any cheaper than the physical ones? In the meantime, colleges are buying students iPods.

Did Goldman Sachs shut off its employees access’ to Facebook? — That’s according to a Wall Street gossip blog; shutting off social network access at work is a relatively standard practice for large companies. This rumor wouldn’t be surprising. But neither the company nor employees I spoke with would comment, so I put the item here in roundup. Email me at eric (at) venturebeat (dot) com if you know more.

IList, a stealthy online classified competitor to Craigslist, raises $1.5 million — “Good luck“

Study: More than half a million “gold farmers” in developing countries — In a real-world gold rush, people flock from everywhere to mine the ground or sift the river rocks. In online games like World of Warcraft, they “farm,” meaning they play mundane tasks within a game, like killing an important bad guy (see the screenshot of a pitched battle). This earns them virtual gold that they can sell to players with less virtual wealth but more of the real stuff. There’s more than half a million people doing this, the BBC reports, citing a British study [image also via the BBC].

The Economist calls Google Lively a flop, but it’s only a month old — Lively is a 3D avatar service that one day may be a more full-featured virtual world. Right now, though, people are having trouble using it due to numerous bugs. Google is well-known for releasing products as early as possible in their development. The company does this to test out what products are actually popular before spending too much time and money on them. This is a common practice for software startups, in general. We’re reserving judgement on Lively for now.

Ning shuts down WidgetLaboratory — The widget-maker had repeatedly violated Ning’s terms of service by offering widgets that affected Ning’s own site performance and by collecting private user data. Before that information came to light, WidgetLaboratory had accused Ning of eliminating it for competitive reasons only, according to Techcrunch. 

Venture firm EDF files suit against anonymous commenter on TheFunded — The commenter had criticized the firm on the site. EDF earlier responded to the commenter with a subpoena against TheFunded itself, trying to gain more information about who this person is. [Note: We have a business relationship with TheFunded, including links to each other's sites.]

updated
Virgin Mobile, the first company to prove you could offer wireless service to people for a profit using other carriers’ infrastructure, may soon announce up to 300 layoffs.

Virgin Mobile USA’s management is mulling the plan, given the deterioration of its business outlook. If implemented, the cuts would impact jobs in the company’s Northern California operations the most, VentureBeat has learned. A few marketing and sales jobs may be cut at the company’s New Jersey headquarters. The company last month gave employees a heads-up about the possible cuts, spokeswoman Jayne Wallace confirmed in an interview, though she did not say how many cuts were being considered.

She said the Virgin Mobile USA has a total headcount of 450. That makes a cut of 300 from the group’s US operations alone extremely high, and we’re scratching our head where they would come from, if they don’t include the wider group.

Virgin Mobile USA hasn’t done very well since its initial public offering in Oct., having lost 85 percent of its worth in a steady fall (see chart). Virgin offered a “pay-as-you-go” model, which provides customers more flexibility, but U.S. carriers have responded with similar plans and Virgin has seen serious defections. It is losing money, and last month it provided a grim outlook, citing both competition and the downturn in the economy for its woes.

That comes even though Virgin Mobile until now has often been pointed to as an example of a successful MVNO (mobile virtual network operator), or operator that pays to use the backbone of other carriers.

Virgin was the first successful MVNO, when it launched in the UK a decade ago. It has more than 4 million customers there. It came to the U.S. six years ago, and was soon considered one of the few MVNOs to have solid operations here.

The trick for MVNOs is that they have to make a profit by charging customers more than they pay out to the carriers for use of the lines. The U.S. doesn’t have too many success cases, in part because U.S. carriers are relatively entrenched.

Many MVNOs have struggled. There’s Helio which, after denying it was making layoffs (in response to a story we wrote about them), soon made the cuts anyway. Amp’d Mobile crashed into bankruptcy last year, and other mobile networks from ESPN/Disney to Voce have also failed.

Virgin has given its four top executives pay raises of up to 30 percent percent, even as the stock has declined (and in part, because the stock has declined; their options are now worth nothing). The chief information technology officer position has been unfilled for months, after two CTOs quit within a year. [The company tells me Jim Gamm is now the CTO.]

The layoffs, if they happen, could impact the company’s Walnut Creek, Calif. offices the most, according to our source. The plan would call for the layoffs to happen over nine months. Under one scenario, the company would outsource much of its operations to IBM. Our source said the deal with IBM has actually been signed, but spokeswoman Wallace wouldn’t comment on that, and wouldn’t confirm or deny whether IBM has a role or not.

She said the company is exploring a number of ways to make its service better, and also wants to keep its shareholders happy, which means reducing costs when necessary. She said no layoffs have yet happened. “No final decision has been made about whether or not to do this,” she said.

Indeed, we’re hearing the company is considering a number of options, and may yet avoid the cuts. Private equity firms have been sniffing around, but Virgin’s options are somewhat limited because of its structure: Virgin Mobile USA is a joint venture between Virgin Group Ltd. and Sprint Nextel. Sprint, struggling itself, also owns the youth-oriented Boost Mobile MVNO.