VentureBeat

Diane Greene was ousted as chief executive of VMware today.

Just a few weeks ago, Greene was beaming with pride when she received a “visionary award” from the SD Forum. Her chief scientist, Mendel Rosenbaum, introduced her as proof positive that you don’t have to be a jerk to be a successful CEO of a multibillion dollar company.

Things can change fast. VMware announced today that Greene has been replaced by former Microsoft executive Paul Maritz as president and CEO. Joe Tucci, CEO of EMC, which owns a big stake in publicly traded VMware, said in a statement that VMware is in a position to extend its lead in virtualization, or the ability to run more than one operating system on the same computer. Virtualization has taken the server world by storm because it enables much more efficient use of a fleet of servers in a data center.

This change is rich with irony. Microsoft just began its frontal assault on VMware with the launch of Windows Server 2008 Hyper-V, which was in the making for years. Now Microsoft will go head to head with Maritz, a former key architect of Microsoft strategy and the guy made famous in the government antitrust case against Microsoft for saying in an email the company should cut off Netscape’s air supply.

Maritz retired from Microsoft in 2000 and comes to VMware via Pi Corp., a cloud computing start-up which he founded in 2003. EMC bought Pi Corp. in February, and Maritz became head of EMC’s cloud division. There was no hint in the release about why Greene was removed. The company said it expects revenues for 2008 to be modestly below the previous estimates of 50 percent growth over 2007.

It’s never a good sign when a founder leaves a company, particularly when it’s someone like Greene, who did so much to shepherd VMware through its early years, its acquisition by EMC for $600 million in 2004, and then its initial public offering in 2007 that raised billions of dollars. But it’s a turbulent year with a tough economic environment. It’s easy to see how stability at the top can be fragile. Greene lasted for a decade, far longer than most founders do.

Rosenbaum credited Greene with establishing the culture of VMware and recognizing the value of virtualization technology. Greene said that she persevered, even when the company was sold to a big storage firm, and that she was allowed to let VMware grow “unfettered.”

“The last chapter remains to be seen whether we will be allowed to pull off a full spinoff,” she said. “I hope so.”

The stock has tanked 27 percent so far today, down $14.36 a share to $38.79.

Here’s the latest action:

Dow Jones has its worst June since Depression: U.S. stocks tumbled on Friday and sent the Dow Jones Industrial Average to its worst June performance since the Great Depression. Record oil prices, credit-market write downs and the the economic slump spooked everybody. Goldman Sachs told investors to sell GM stock, sparking a sell-off as crude prices rose again. The broader S&P 500 index fell 2.9 percent on Friday. The Dow is at its lowest since September 2006. It has fallen 9.4 percent so far this month, its worst June since an 18 percent drop in 1930.

Rupert ready for another bite: Rupert Murdoch’s News Corp. and Permira Advisors made a $970 million bid to buy NDS Group, a provider of digital technology for pay-TV services. NDS Group said it would evaluate the $60 a share offer, which is 21 percent above Friday’s closing price of $49.70.

Take that, VMware: Microsoft unveiled its long-awaited virtualization technology to compete against VMware. Its Windows Server 2008 Hyper-V product has been in the works since 2003, when Microsoft acquired Connectix, which made software to run both Windows and the Mac OS on the same computer.

Palm stock heads to bottom: Palm’s stock fell eight percent Friday a day after the company reported a worse-than-expected loss for its fourth fiscal quarter. The company dropped $43.4 million, compared with a profit a year earlier. Revenue was down 26 percent to $296.2 million. It also expects to lose money in the current quarter. Plam’s Treo continues to lose ground to Research In Motion’s Blackberry and Apple’s iPhone.

Attention, K-Mart shoppers: Microsoft may have something up its sleeve for the E3 trade show starting July 14. The company is rumored to be cutting the price of its Xbox 360 Premium unit from $349 to $299. The latest rumor comes from a purported K-Mart ad. It’s been a long time since Microsoft last cut its game console prices by $50 in August, 2007. The price cuts say a lot. It shows Microsoft is the aggressor in driving down prices, putting pressure on both Sony and Nintendo to do the same. It also says that Microsoft sees a need to cut prices, perhaps because of slowing sales of its consoles. And the fact that it isn’t cutting $100 shows that the company isn’t crazy and doesn’t want to lose lots of money on each console sold.

Sony promises a big overhaul, new PlayStation 3 video downloading: Sony has been restructuring for three years but now CEO Howard Stringer is proposing an aggressive strategy built around video downloading and products that can talk to each other across the Internet. Video downloading will be part of products ranging from TVs to the PlayStation 3.

iPhone will debut in Canada with underwhelming prices: Rogers unveiled some not-so-popular prices for Apple’s Jesus phone for its scheduled debut in a couple of weeks.

Google speeds Blackberry search results: Google said that it has improved the speed of its mobile search results pages for Blackberry web browsers.

Once a year venture capitalist Heidi Roizen and her husband Dave Mohler open up their Woodside villa to host the SD Forum’s Visionary Awards honoring pioneers of Silicon Valley. Each time I attend, I’m mesmerized by the estate and its furnishings, from the Moroccan guest house with its old rifle collection to the Tuscan villa architecture with its zany mix of animal head trophies.

Upon walking up the long driveway into the foyer of the mansion, I was greeted by Ann Winblad of Hummer Winblad and met with some of the night’s honorees: tech writer Steven Levy (who just moved from Newsweek to Wired), Qualcomm founder Irwin Jacobs, Netflix founder Reed Hastings, New Enterprise Associates general partner Forest Baskett, and Diane Greene, founder of VMware. They were the latest to join the Visionary list for the group, which promotes tech entrepreneurship in the valley and has given out the awards for 11 years now.

This was one of those events where the who’s who of Silicon Valley shows up, though gray hair was fashionable since the list included a lot of past visionaries. San Jose Mayor Chuck Reed told the crowd they were welcome to set up their innovative companies, particularly cleantech firms, in his town.

Baskett, former chief technology officer at the once-high-flying graphics supercomputer company Silicon Graphics and an ex-Stanford professor who played a big role in getting MIPS Computer Systems and Sun Microsystems off the ground, said he was as enthused as ever about tech in the valley. Cleantech is his latest investing obsession. Read the rest of this entry »

VMware has acquired San Francisco company Thinstall, which sells a so-called “desktop virtualization technology,” continuing VMWare’s efforts to maintain its leadership position in the hot virtualization arena.

Desktop virtualization is considered the next wave of virtualization. In Thinstall’s case, it lets companies put applications more rapidly on PCs, and then pull them off again without trace. It works by packages up any Windows application and placing it on a PC without actual installation (it run on the PC as a single .exe), so that the host PC gets no files or other data from it. PCs stay cleaner, making it easier for IT professionals to manage the PCs. It decreases security risks too, as employees become more mobile, and move around with laptops with multiple and sometimes conflicting configurations.

Founded in 1999, Install was privately held (we’re not sure it had any venture backing; anyone know?) and counted as customers the US Department of Defense, Intuit, Qualcomm, Lucent, Fujifilm, Northrop Grumman, Morgan Stanley, T-Mobile, and Toshiba.

Stacey Higginbotham has more, listing Endeavors Technologies Kidaro, and InstallFree as Thinstall competitors.

Here’s the latest action:
1) Warner CEO praises Apple, DRM-free music
2) VMWare is after your engineer blood
3) Berners-Lee warns of walled gardens
4) Microsoft completes $47M acquisition
5) Another VC speaks in favor of taxing himself
6) Joost rolls out new ads
7) Billeo raises $7M for easy payment

Warner Music CEO now supporting DRM-free music, iTunes – “We used to think our music was perfect just the way it was … of course, we were wrong,” said Warner Music CEO Edgar Bronfman at a recent conference. The media chief is now singing praises for iTunes and Apple, and the Warner online music store has also begun selling DRM-free tracks. These supportive comments and others from Bronfman, who just a few months ago was spouting rhetoric against online music sharing, may herald the way to a new era of cooperation between record labels and online retailers.

Silicon Valley engineering talent getting ever scarcer – VMWare is prepared to battle it out with Facebook and Google for the Valley’s top engineering talent, according to GigaOm. Combine the boom in the number of local startups with the growing companies’ endless thirst for talent, and you’ve got serious shortages — all the more reason to relax H1-B visa rules for skilled workers from other countries.

Microsoft closes $47M MusicWave acquisition – The Redmond giant paid $47 million for the French mobile music company. Not a bad deal, when compared to the $121 million that Openwave paid for the same company two years ago.

Yet another VC backs VC tax – First it was Fred Wilson. Now it’s another one, though with smaller name. William Stanhill of Trailhead Ventures testified in front of Congress that the carried-interest tax rate should go up, against the objections of his partners. The bill passed Congress, but will reportedly be be blocked in the Senate. Stanhill is unapologetic; of course, at the age of 71, he has every reason to be straightforward, and even calls himself a “depreciating asset.” Score one for the “nothing to lose” crowd. For more on why VentureBeat thinks the tax should pass, see this post.

Joost gets creative with the ads – A new “advertising widget” called Coke Bubbles has debuted on Joost, which has so far only run pre-roll ads on its videos. Advertising advocates are pushing for more creativity online, and that’s what Joost appears to be after. Whether the widget is particularly creative is another matter; it’s essentially a video sharing app with Coca-Cola branding. The reception in the blogosphere was lukewarm at best, with CNET’s Caroline McCarthy comparing it to “those Pop-Up Video shows that VH-1 did back in the ’90s, except not quite as customizable.” Ouch.

Berners-Lee speaks out against walled gardens in the mobile space – Mobile phones are in danger of being locked into walled gardens, says Tim Berners-Lee, one of the inventors of today’s Internet. “An open platform means using standards,” Berners-Lee said. “The mobile internet must use the same standards as the Internet.” More from the New York Times here.

Billeo raises $7 million for online payment – Billeo offers online bill payment software for use by consumers and small businesses. It assists by auto-filling forms for online shopping, offering single-password logins, saving receipts, and helping organize finances. The funding is the Santa Clara, Calif. company’s second, and was led by ATA Ventures. Altos Ventures, Claremont Creek and the Pacifica Fund also participated.

Here’s the latest action:

Sprint doubles bet on WiMAX –- Sprint doubles its investment pledge on the untested WiMAX technology (WSJ, subscription required), which Sprint will use to provide widespread broadband over its network. It now plans to spend $5 billion by 2010.

Twitku, the Meebo for twittering — Twitku is a new service that lets you post a single message about what you’re doing simultaneously to Twitter and Jaiku. Those two services are rivals in letting people send one-line messages to their friends, and some people have become torn about which one to use. So Twitku lets them avoid the problem. Like Meebo does for instant messaging, Twitku brings your accounts into a single screen.

Meebo now tailored for the iPhone — The popular online instant messaging company has finally unveiling a version designed for the iPhone. Other IM startups, such as Heysan!, were iPhone-compatible when the iPhone launched and saw traffic surge. Since launch, IM companies of all shapes have introduced their own iPhone-compatible versions. One that we’ve covered is FlickIM, which boasted at the time it was better than the then-existing Meebo on the iPhone. Meebo is one of the most used instant messaging services in the world. Like the Facebook app for the iPhone, this move was predictable.

VMware’s $750 million mistake — While everyone was getting suckered into raving about VMware’s whopping IPO Tuesday, few people stood back and realized what the company’s robust stock rise (from $22 to $51 in the first day) really meant. Essentially, the company flittered away about $750 million to investors who had nothing to do with the company’s success. Had it sold its stock at a higher price, say $45, it would have doubled its proceeds, and still given initial investors a decent incentive to buy the stock. Press accounts marveled at the stock’s rise, but hey, had the company priced its stock at $10, it could have seen a five-fold increase, and gotten even better press coverage! Great press, but completely destitute. What it should have done was use the open-IPO process that prices stock at market rates to begin with, which is what Google did. Investment bankers hate it. But its better for the companies. (Thanks to Techdirt, for the reminder).

Final nail in Bolt Media coffin — Bolt Media, the video site that launched in 1999, absorbed more than $60 million in venture backing, precariously survived the burst of the Internet bubble in 2000, slaved through the dark years of 2001-2003, travailed through a management buyout in 2004, and then almost got sold in February to GoFish, has finally met its end. The acquisition didn’t go through, because of Bolt’s myriad of lawsuits, giving it no other option than to fold.

Reporters sue HP — Three reporters for CNET Networks sue Hewlett-Packard, accusing the company of violating their privacy in its hunt for the source of boardroom leaks.

Here’s the latest action, about 80 percent of it in Silicon Valley:

Introducing Twickr — This is Flickr photos on Twitter, the messaging service that lets you send one-liners to your friends. Web guru Dave Winer came up with it , and Twitter investor Fred Wilson writes more about how it works.

Introducing Yappd — Which is similar. It is a Twitter copycat, also with picture messaging.

VideoEgg unveils EggNetwork — ads for Facebook applications — VideoEgg, which lets publishers serve ads in videos on their Websites, has announced a new ad platform that lets partners place video ads in any Flash video player, widget or Web page. It offers a product designed specifically for Facebook applications. You can see a demo here. It shows an example of a normal text ad, with a video playing inside of it.

Facebook opens its feeds to RSS — The status updates and other posts of your friends are now retrievable by RSS. In other words, you don’t have to go to Facebook to see them. This may not seem like a big deal, but Facebook had been slow to open up this feature. David Winer pointed it out.

Apple launches My iTunes Widgets, a social version of iTunes — Details here. Niall Kennedy had an early look.

Apple’s new software: iMovie - iMovie lets you load video from a camera in a console, and then, as writer Dean Takahashi describes: …Here’s the magic. If you position your mouse arrow at the edge of the video’s cover photo, a vertical red line appears. Move the mouse and slide the red line from left to right. As you do so, the contents of the video are revealed to you on a larger video window. Move the red line to the left or right and you’re “skimming” through video at a high speed. Within a second or two, you can find the exact spot in the video clip that you want to use. Then you can snip it out and use it in your home movie. You can’t do this with a Windows Vista machine. When Jobs showed this at his press conference Tuesday, everyone let out their “oohs and ahhs.” “Isn’t this incredible,” Jobs said…

Classmates.com, the gaudy old school social network, files for IPO — Classmates.com, that site owned by Internet service provider United Online, is being spun off and wants to raise $125 million in an IPO. However, this one smells of desperation. Several social networks have emerged to overtake it in popularity, Facebook foremost among them. So perhaps Classmates sees this as a now or never, especially since markets are looking favorably on social networks right now. Look at its filing, and you’ll see it has been losing money for the last couple of years, including $250,000 on $42 million in revenue for the quarter ending March 30.

Something Simpler buys assets of PubSub — PubSub was the briefly popular service (among geeks, at least) that let you specify keywords of subjects you were interested in following, which directed it to send you news about those keywords via RSS. It was a perfect way to track blog content on subjects you cared about without having to visit the blogs. The service went defunct. Now telecom executive Ian Bell, president and founder of a quiet company Something Simpler, of Vancouver, has bought the technology, but isn’t saying much about his plans other than he’ll launch in about six months. (GigaOm has more).

VMware, the Palo Alto, Calif. virtualization company, surges to $51, or $22 above the initial IPO price of $29 — This makes it the hottest tech IPO since Google’s in 2004. The company raised $900 million in the offering. Early Mercury News story here.

Founders: Time is on your side! — Great post by venture capitalist Fred Wilson, counseling entrepreneurs that time is on your side. Hang in there, if you can.

Cerberus, the self-effacing private equity firm — Portfolio has the story about the firm of Stephen Feinberg, which has the following philosophy: Reveal as little as necessary; be anonymous; be invisible. “We try to hide religiously,” he says. “If anyone at Cerberus has his picture in the paper and a picture of his apartment, we will do more than fire that person. We will kill him. The jail sentence will be worth it.” There are a few nervous laughs…

The “Quant” funds doing terribly, amid liquidity crisis — The Dow keeps getting pummeled. It loses another 200 points Tuesday. It’s notable that the Quant funds are all doing poorly. Makes us wonder how FatKat is doing. Remember FatKat, the Quant fund backed with $2 million from Silicon Valley hotshot investor Vinod Khosla, and Nasdaq chairman Michael Brown, and built on the work of technology futurist, Ray Kurzweil? We wrote about it in March, before its launch. We’ve inquired, and will update if we get a response. Meanwhile, Goldman and others inject $3 billion into a faltering quant hedge fund backed by Goldman.

Tesla Motors replaces CEO — The Silicon Valley electric-car startup has seen number of exec changes over the months. It changed it PR/marketing team several months ago, and now it has replaced Martin Eberhard, its chief executive officer, with Michael Marks. Marks, an early investor in Tesla, is the former CEO of Flextronics. No reason was given.

General Motors’ electric car — GM is building a car that will travel 40 miles a day on a single electric charge, and has signed a contract with battery maker A123Systems to develop lithium ion batteries for the Volt plug-in hybrid vehicle.

Here’s the latest action (updated):

Airborne mash-up: lawn chair travels 193 miles –Oregon resident Kent Couch tried to fly to Idaho last weekend — in an apparatus made out of his lawn chair carried by 105 large helium balloons. He carried instruments to measure altitude and speed, and also a parachute. He didn’t make it, though. (Image courtesy of AP)

More adult supervision at Facebook — Chamath Palihapitiya, a former AOL executive turned venture capital investor at the Mayfield Fund, will be joining the company as VP of product marketing and operations. Known for helping to turn around AOL’s instant-messaging division, his job now will include helping the company to figure out how to make more money.

Rumors have emerged that Facebook wants to public, and so filling out senior ranks is important. Facebook now says it has 30 million active users. It is reportedly making $30 million annually from $150 in revenue. We’ve heard a big portion of this comes from Microsoft payments for banner ads on the site. Palihapitiya caused controversy earlier this year, when he commented in a French video about a “white male circle of insiders” running Silicon Valley (our coverage here). Facebook also recently hired a new chief financial officer, Mike Sheridan, formerly CFO of video game publisher IGN Entertainment Inc.

MSN search engine market share actually grows — After steady decline, it has grown of late, driven by online games like Chicktionary, Compete reports; analyst Steve Willis has the full explanation:

A good portion of the additional Live searches are coming from the Live Search Club, where you can apparently play games for points which you can redeem for fine Microsoft products. All of the games involve using Live’s search engine - to get the points, you have to search with Live.

Google brings Map mashups to its platform — Tomorrow, Google brings Map mashups of data from external sites like Zvents and ChicagoCrime.org to its own platform, Mashable reports.

Index Ventures and 3i launch Seedcamp in Europe — Details are here. Entrepreneurs apply with their “big ideas” before August 12 and the top 20 will be chosen to spend a week in London with industry professionals (VCs, lawyers, marketers, HR people, etc), and from there, the top 5 winners will be announced and they’ll receive 50,000 euros in funding and continued mentorship to get their businesses started.

Nielsen/NetRatings, a leading online-measurement service, scraps rankings based on page views — Instead, it will begin tracking how long visitors spend on Web sites. The move comes as page views lose their value in expressing a site’s importance. Many sites, such as Friendster, have boosted page views with simple networking features. Others, such as those using online video and new technologies such as Ajax, reduce page views.

AOL releases new test version of myAOL — It offers new personalized tools such as myPage, a personal dashboard offering access to content and applications from AOL and other sites; Mgnet, which lets users find new sites and information based on personal preferences; and Favorites, a feed reader that combines user feeds and bookmarks in one place.

Users of TiVo can order movies from Amazon.com directly from their TVs — Details here.

Intel Corp. invests $218.5 million in virtualization software maker VMware – The investment will give Intel ownership of about 2.5 percent of VMware’s outstanding shares after VMware completes its initial public offering. Details here.

Will the video start-ups ever stop coming? — United Talent Agency and advertising start-up Spot Runner have jointly created a company called 60Frames Entertainment to finance and distribute original professional videos online. 60Frames, of Los Angeles, has raised $3.5 million in funding from investors including Tudor Investment Corp. and the Pilot Group, and says it wants to provide higher quality videos than YouTube. Its videos will run a few minutes and cost “in the thousands, not hundreds of thousands” of dollars to produce, the NYT reports.

Talking of video sites, Revision3, another one, finally gets CEO — Recently departed PC World editor Jim Louderback will become CEO at video site Revision3, replacing interim chief exec, Jay Adelson NewTeeVee’s Liz Gannes reports.

Sequoia Capital, which recently invested in video site, Funny Or Die, now says there’s too much content — Roelof Botha, the Sequoia Capital partner who also invested in YouTube and Joost — video companies that only help to propagate more content — now says there’s so much information out there that it is overwhelming, and so you need humans to help (thus Sequoia has invested in Jason Calacanis’ human-assisted search engine, Mahalo). See video below, conducted by WSJ’s Kara Swisher (RSS readers will have to go to site):

Ning’s ridiculously large venture capital round — Ning, the company that provides tools for people to create their own social networks, co-founded by Netscape founder Marc Andreessen, has raised a whopping $44 million, on a reported $170 million pre-money valuation. That values the company at a mighty $214 million. Andreessen says on his blog the round was “orchestrated” by the wealthy family firm Allen & Co, of New York, and was led by Legg Mason of Baltimore, with a number of others participating. Andreessen is smart. Large East Coast firms are flush with cash, and are also somewhat removed from the valley, and so won’t realize just how competitive this market is. If you’re curious to know more about Allen & Co., here’s an impossibly long story in Fortune about the firm.

Digg released an application for the iPhone — The news ranking site’s founder Kevin Rosen announces it here.

A link-exchange network for Facebook apps — Developers of applications on Facebook’s platform can exchange links in order to get more attention and traffic, by using FbExchange. More details at GigaOm.

Hey!Spread, a video uploading service that delivers your videos to multiple sites — Upload your video to YouTube, MySpace, Google Video, Yahoo Videos, Dailymotion and Blip.tv all at the same time. (Techcrunch).

TwitterGram lets you deliver voice message on Twitter — It comes from Dave Winer, the Web guru who also created the RSS protocol. You can leave the message with a phone.