VentureBeat

Updated

Today the arrival of the iPhone will leave time for little else.

Here’s a smattering of companies already exploiting the iPhone’s launch for a little publicity of their own:

Zoho offers iPhone version — The Pleasanton, Calif. online web application company is offering its Zoho office applications for the iPhone, called the iZoho. This allows users to view documents (and edit docs), spreadsheets and presentations. Zoho says it has simplified its interface especially for the iPhone.

Visto Mobile announces support for iPhone — Corporate email can be accessed through an IMAP connection to the iPhone’s built-in email application (announcement here).

Etelos has customer relations management (CRM) for the phone — See here, and here.

Updated to correct for an error in the New York Times piece:
EMI Music and Snocap announce MyStore partnership — Snocap will sell the label’s music through its MyStores, online stores that people can add to blogs or Internet sites. This time, it will play music from a major label that is compatible with the iPod. So far, Snocap has only sold independent label music in the MP3 format (NYT has details.)

More here from Read/WriteWeb on the iPhone development frenzy.

Update: Cellswapper lets you exchange your phone contract, letting you get out of your current plan by finding someone else who will take it over — so that you can afford the rather expensive iPhone, and not pay a termination fee. (Our coverage here.)

Latest round-up in the world of tech:

Defense Department’s Grand Challenge moves downtown — The great annual race of robotic cars, until this year held in the desert, is moving downtown. The DARPA-sponsored event awards the winner $2 million. Unmanned vehicles will attempt to avoid people and buildings instead of boulders and sagebrush, with no remote control or other human interference. (See Merc story here.) The goal is to help the Defense Department fulfill a Congressional mandate: that one-third of combat vehicles be unmanned by 2015. Guess this is a sign of the times: While the U.S. military rolled through the Iraqi desert with no problem, managing street warfare is more of a challenge. Meanwhile, a Jon Feiber, a venture capitalist sponsoring one of the competition’s entrants, suggests the project could help with traffic congestion. Another possible payback my be fuel efficiencey, if cars are pacing themselves at optimal distances from each other, and at optimal speeds.

Speaking of traffic, look at Wikipedia’s — Google traffic going to Wikipedia is exploding, with Wikipedia now the No. 3 website in Google’s downstream, after Google Image Search and MySpace, according to HitWise. That’s phenomenal, for a non-profit company that has less than ten full-time employees (Ars Technica has good summary. It’s costly, too. Wikipedia’s bandwidth this year is expected to cost up to $100,000 a month, and it’s running more than 350 servers. With annual costs at about $5 million a year, but incoming donations at barely $1 million, something might crack soon — the company says it only has three to four months of cash left. Put two and two together: If Wikipedia’s getting that much traffic, all is has to do is put up a few Google ads. If anything, Google will look more favorably at sending even more searchers over to Wikipedia — and monetizing the site would be easy. We don’t know founder Jimmy Wales’ personal motives, but publicly at least, he’s proclaiming he doesn’t want to let ads onto the site.

Fancy that, hedge funds are actually useful — The NYT cites a study showing that hedge funds boost the value of companies they invest in, at least in the very short run, on average, and holding on to the gains for at least a year.

For the green tech fans — William Hudson writes an engaging piece about the challenges faced by ethanol and other forms of alternative energy. He concludes with what we all should know, i.e., that the sun is where the magic is. Future breakthroughs will be around how we harness its immense power. That’s why investor Vinod Khosla is pitching the benefits of solar lately, and this goes beyond the solar panels we traditionally associate with solar.

Visto gets $35 million more, to sue? — When we asked the mobile messaging company Visto last Wednesday whether the Redwood City, Calif. company could comment on reports it had gotten $35 million more in venture capital, a spokeswoman said she couldn’t comment on “speculation.” Two days later, on Friday, the company issued a press release confirming the investment. So why was Visto so secretive, seeking to avoid acknowledging the December funding? Well, as Valleywag points out, the lead investor, Altitude Capital Partners, turns out to be a specialist in investing in companies with patents and “historical litigation.” We’ve already mentioned how Visto appears to be going down litigation path. It hasn’t made money in ten years, so perhaps this is the only way?

New York is back — Here’s a good story about New York’s reemergence as a technology hub, given its weight in the publishing and advertising worlds.
This, though, after the NYT recently wrote about Silicon Valley as the new hegemon.

Sparter, offers virtual currency trading — While auction giant eBay decided to ban sales of virtual property, there’s a new company, called Sparter, that is stepping in to let gamers trade virtual currency. The company has received venture capital funding from Bessemer Venture Partner, and while it wants to work with IGE, a service that lets gamers trade in their virtual currencies for one game in exchange for another, Sparter apparently wants to also let you bypass IGE, letting you trade directly with other gamers. (Via Virtual Economies.)

The mobile email company, Visto, has become one of the most controversial companies in Silicon Valley.

The Redwood City company has reportedly raised another $35 million in venture backing led by new investor Altitude Capital Partners, adding to the whopping $350 million the company has already raised. It is in the red, after ten years, and hasn’t announced a major customer in several months. Its penchant to file lawsuits is also worrying, and we’ve said before that is a reason why bias has crept into our reporting about this company.

Valley gossip site, Valleywag, says the company is on the rocks, but has no facts to back it up. PE Hub’s Dan Primack says the $35 million in cash, raised in December, would seem to contradict that, however there is no one on the record explaining the terms of that cash — and it is somewhat odd it wasn’t announced. Moreover, the company has a large cash burn rate, as Dan points out, caused by service contracts it pledged to.

Now we’re hearing its investors are spreading word that a 2007 acquisition is better than 50-50 odds. Yet we’re skeptical too, given that the company had said it planned to go public last year — and nothing happened (indeed, read that previous link for notes about the company’s questionable marketing). Indeed, with its huge cash burn, it may have to be sold.

Has this company hit the wall? We’ve contacted the company, and will report back if we hear anything.

Investors include Allegis Capital, Blueprint Ventures, Draper Fisher Jurvetson, ePlanet Ventures, GKM Ventures, Meritech Capital Partners, Oak Investment Partners and Rustic Canyon Partners.

(Updated with confirmation that Kleiner and others made money)

Motorola will buy Santa Clara wireless messaging company Good Technology for an undisclosed amount, in an effort to compete for big business clients.

Research In Motion’s Blackberry has dominated the corporate mobile email market, and Motorola’s Q device has failed to make significant traction. Moreover, Motorola’s rival, Nokia, bought mobile email provider Intellisync in February.

The market for wireless email has been brutal, with players like Visto, of Redwood City and NTP, the Virginia-based patent-holding company, filing suit against others and extracting large licensing fees. NTP forced RIM to pay a $612.5 million settlement. While Good has licensed technology from NTP, it is still the subject of a lawsuit from Visto, which itself has raised fresh cash even while losing money.

That competition and costly legal battles most likely pressured Good to sell, though it’s unknown whether all investors made money from the deal. Investors Kleiner Perkins, BA Ventures, Crosslink Capital and several other firms collectively invested more than $200 million into the company. (Update: We since confirmed that Kleiner, at least, made money from the deal.)

Here’s the Mercury News story about the deal, which shows there is disagreement about how well Good is doing. Here is Good’s annoucement on the deal.

(Updated) end of week roundup:

Peoplesoft founder Dave Duffield launches new company, Workday — Some details have already leaked out, but the launch announcement coming is Monday. No surprise that it’s related to his former love, Peoplesoft, which got gobbled by nemesis Oracle — something he says he he took pretty hard. Duffield, who always loves to rally the troops, is back at it again: Workday is doing the sort of back-office software stuff that Peoplesoft was known for: It’s an “enterprise resource planning” (ERP) company, and will deliver its software online. It was founded in March 2005 by Duffield and Aneel Bhusri, a former Peoplesoft exec and partner at venture firm Greylock. Last time we checked, it was based in Nevada, and Duffield was being accused of evading taxes while jetting to the slopes. (Update: More details about the company in this Merc story: Duffield and and Greylock Partners invested $15 million into the company in 2005. They plan to kick in an additional $20 million next year.)

YouTube planning mobile phone version — You can already load videos to YouTube from your phone, but now YouTube apparently plans to bring YouTube to you, according to comments from CEO Chad Hurley. You’ve heard of YouTube to Go service, launched in May, which lets you send a video you’ve taken with your phone to a YouTube email address, which then uploads the video. These latest comments suggests they want to bring YouTube videos to your phone — and thus tricky streaming requirements.

Microsoft making big, some would say desperate moves lately — Microsoft has partnered with Novell to make the Windows operating system work with open-source Linux software, which is a significant move — it risks eating into Microsoft’s revenues if people start relying on the open-source version. Earlier this week, Microsoft announced a partnership with Cupertino’s PHP software company, Zend, conceding that many developers aren’t using the .Net platform. And its Zune music player goes on sale Nov. 14 for $249.

Visto’s hard-headed chief — Wireless messaging company Visto has sued just about everybody, but is still losing money after ten years and after raising $267 million; the the Merc has a good summary of the company. Venture capitalist Stewart Alsop, once a backer of the Visto’s chief executive Brian Bogosian, but who ended up pulling his support, calls Bogosian a “hard-headed son of a gun.” We’ve heard he’s one a tough guy. Indeed, he’s just persuaded Oak Investment to pump in give him even more cash. Latest, though, is that competitor RIM is now fighting back, suing Visto. Meanwhile, Visto is announcing it has signed deals with carriers in…. Nigeria? And while Visto is still fighting its legal battles, Google’s out there, delivering email via an application you can download straight to your Java-enabled phone (which includes most new phones).

Venture Capitalist Peter Rip moves to SF for contacts — Venture capitalist at Leapfrog Ventures has joined Crosslink Capital in San Francisco as a General Partner. He writes he’s changing because of “relationships,” noting that SF-based Crosslink invests in everything from start-ups to buyouts, and he’ll have 15 people to help him out — instead of two guys. Yes, perhaps its a coincidence that Crosslink is in SF, but there are more and more companies up in SF these day, and more people telling us that’s the place to be. Sure, until the latest Web bubble bursts! ;)

Turns out, employees are getting the short end of the stick lately at venture-backed companies.

Check out this report from Cooley Godward, a big Silicon Valley law firm, which shows the “rule of three” is being discarded. In former years, venture capitalists got about one-third of the company, the founders held on to a third, and another third was set aside for employee stock options. Today, investors get about 40 percent, founders get about 40 percent, and only 20 percent is set aside for employees. “…The old ‘Rule of Three’ is a thing of the past,” said Jim Fulton, a Cooley partner.

Take the $51 million just raised by wireless email service company, Visto, a story we reported last week. Well, turns out Visto is “washing out” common shareholders. By giving venture backers more ownership of the company, large venture rounds like this usually come at the expense of employees. In the Visto case, we’re hearing many employee shares have become essentially worthless. The company has also started layoffs.

MojoPac flawed?: Last week, we wrote about MojoPac, a notable PC virtualization tool that pushes things forward in letting you carry around all your applications in your pocket. We just saw this report, which suggests there are serious bugs MojoPac will need to fix. We’ll be talking more with the MojoPac folks next week.

We reported last week that wireless email company, Visto, looked to be raising $50 million in new financing. Turns out, the amount is $51 million, according to this Dow Jones report. We’ll be talking with the company’s chief financial officer, Stephen Anderson tomorrow morning.

The investment was made mostly by insiders, and suggests the company’s value hasn’t increased that much. As expected, it was led by previous investor Oak Investment Partners, and included existing investors Draper Fisher Jurvetson, Meritech Capital Partners, DFJ ePlanet Ventures, Rustic Canyon Ventures, GKM and Blueprint Ventures. A new investor is DFJ Growth Fund, participated. Barry Schuler, a partner of that fund, and former AOL chief exec, will join the board.

We will ask the company tomorrow about how it plans to make money, now that it has sued just about everyone, from Research In Motion (maker of the Blackberry) to Microsoft, Seven and Good Technology.

The company tells Dow Jones that Visto has tripled its subscriber base in the past year — but it still is not profitable. The company has now raised $350 million over ten years. We will try to find more answers to why investors keep supporting this company.

Update: Chief Financial Officer Steve Anderson said the company is counting on a massive expansion in the mobile email market. He says we are at an “inflection point,” with three factors driving users to adopt wireless email: (1) More email enabled devices, such as the latest Nokia, Motorola and Samsung phones; (2) mobile carriers are pushing their own brands and offerings, which means more opportunities for Visto to cut deals; (3) the service is getting easier to use. In many cases, depending on its carrier relationships, Visto will come pre-installed on the phone, and the user will merely need to enter an email address and password to load Visto. Finally, Visto can get subscribers to pay an “attractive” price for these email services, he said.

He said Visto gets a fixed monthly fee per subscriber, but wouldn’t say how much that fee is. He said Visto’s plan is to sell its service by undercutting RIM and Good, which he said are serving executives at major companies. At the same time, Visto will go for medium or small sized corporate customers, which will differentiate Visto from Seven, which Anderson said is going for the low end of the market, and is focused more on individual consumers.

The Radicati Group predicts 120 million corporate email users by 2009, up from 6.5 million in 2005, he said. Analysts predict 167 million email enabled phones by 2009, up from 45 million last year, he added.